Ramendra Mohan Datta, J. - (1.) THIS is an application for an order that the award dated April 29, 1971 be declared null and void and/or be set aside.
(2.) THE facts are that on or about 1955 the then National Life Insurance Company Limited (hereinafter called the said company) accepted the tender of the respondent for the construction of a building at New Delhi. THE work orders were issued and the respondent was asked to commence the work on the understanding that the formal contract would be issued in due course. In the matter of the said agreement the petitioner's architects Messrs. Ballardie, Thompson and Matthews acted as the agent of the petitioner all throughout. THE petitioner from time to time made various payments against the running bills submitted by the respondent on the certificate of the said architects in terms of the said agreement. In 1956 the Life Insurance Corporation of India came into existence and the said Corporation duly took over the said contract on behalf of the said National Insurance Co. Ltd. The building was admittedly completed in April, 1959. On or about October 7, 1959 the respondent made out the final bill wherein it claimed for the balance price of work by calculating the price of the additional work and the deviations and described the said claim as their claim under category "A". The respondent also put forward another claim by describing the same as claim under category "B". As stated above, under the terms of the said agreement the said architects were to give a certificate to enable the respondent to receive payment. On or about June 1, 1960 the said architects issued a certificate for payment of Rupees 3,70,632.44 paise in respect of the claim under category "A" and in respect of the claim under category "B" the said architects recommended the sum of Rupees 1,14,385.06 paise. The said architects recommended payments in respect of various items which were mentioned in their letter dated June 1, 1960 addressed to the petitioner. Out of the total sum so recommended for payment the petitioner agreed to pay a sum of Rs. 3,50,107.00 and actually paid a sum of Rs. 3,50,000.00 by leaving a balance sum of Rs. 107.00 but refused to pay the balance sum of Rupees 20.632.44 paise claimed under category "A". As regards category "B" the petitioner did not act in terms of the said recommendation of their architects and rejected the entire claim, of Rs. 1,14,385.06 paise.
(3.) THE Formal contract was executed by and between the parties herein on or about October 26, 1960, i.e., long after the work was completed. THE said formal contract provided various terms and conditions including the arbitration clause as follows:-- "30. Provided always that in case any dispute or difference shall arise between the employer, or the architects on his behalf, and the contractor, either during the progress of the works, or after the determination, abandonment or breach of the contract, as to the constructions of the contract or as to any matter or thing arising thereunder (except as to the matters left to the sole discretion of the architects under Clauses 1, 4, 5, 16, 19, 19A and 29, and as to the exercises by them under Clause 18 of the right to have any work opened up) or as to the witholding by the architects of any certificates to which the contractor may claim to be entitled, then either party shall forthwith give to the Other written notice of such dispute or difference, which notice shall specify the matters which are in dispute, and such dispute or difference of which such notice has been given, and no other, shall be and is hereby referred to the arbitration and final decision of the chief engineer C.P.W.D. department, Government of India if he is able and willing to act otherwise to some person to be mutually agreed upon between the contractor and the architects, and the award of such arbitration shall be final and binding on the parties. Such reference shall not be entered upon until after the completion, or alleged completion., of the works, or until three weeks or more shall have elapsed after the practical cessation of the works arising from any cause unless with the written consent of the employer or architects and the contractor. THE arbitrator shall have power to open up, review and revise any certificate, opinion, decision, requisition or notice, save in regard to the said matters, expressly excepted above, and to determine all matters in dispute which shall be submitted to him and of which notice shall have been given as aforesaid. Upon, every and any such reference the costs of, and incidental to, the reference and award respectively, shall be in the discretion of the arbitrator who may determine the amount thereof, and shall direct by whom and to whom and in what manner the same shall be borne and paid. This submission shall be deemed to be a submission to arbitration within the meaning of the Indian Arbitration Act, 1899, and any statutory modification thereof for the time being in force. THE employer and contractor hereby also agree that arbitration under this clause shall be a condition precedent to any right of action under the contract with regard to the matters hereby expressly agreed to be so referred to arbitration.";