P.C.Mallick, J. - (1.) This is an application challenging the existence of an arbitration agreement in respect to the dispute raised by the respondent. There is an alternate prayer for revocation of submission.
(2.) The petitioner is a contractor who executed certain construction works for South Eastern Railway. The terras o contract are usual and are evidenced by an agreement numbered 129/Con/ S. E. Rule (sic)/56. The work was completed on July 31, 1958. As usual, in the case of such contracts, there were running bills followed by a Final Bill. The various items in the final bill of the contractor having been disputed, the contractor by his letter dated November 20, 1961, invoked the arbitration clause in the agreement and requested the General Manager to appoint an arbitrator to adjudicate the contractor's claim fully set out in the said letter. The total claim of the contractor amounts to Rs. 3,66,642/-. This consists of claim for works done, refund of deposit amounting to Rs. 24,000/- and liquidated loss for withholding payment for more than four years assessed at Rs. 2 lakhs. Pursuant to this request the General Manager appointed Shrj U. G. K. Rao, Chief Engineer, D. B. K. Railway as arbitrator on or about November 25, 1961. In the state of facts filed by the contractor before the arbitrator, the claims as made in the contractor's letter were stated with reasons therefor. In the counter state offsets filed by the respondent each and every claim 50 made was disputed. It appears that during the arbitration proceedings the respondent purported to make a counter claim against the contractor for Rs. 56,761/-, on the basis that the contractor was wrongly paid the said sum for "spreading work" to which, he was not entitled under the contract. This claim was admittedly not made in the counter state of facts filed by the respondent. The arbitrator did not allow the respondent to put forward this counter claim, on the ground that the General Manager did not refer this dispute to him. In consequence he was not competent to adjudicate this dispute. Ultimately the arbitrator gave an award in favour of the contractor for Rs. 105,257-55 nP.
(3.) On June 18, 1962, the Chief Engineer, South Eastern Railway requested the General Mana ger to appoint an arbitrator to adjudicate the claim of the Railway Administration for the said sum of Rs. 56,761/-. The letter concludes with the following observation : "During the last hearing of the above arbitration, the fact that the Railway has a claim against the contractor under the instant contract was brought to the notice of the Sole Arbitrator, Shri U. G. K. Rao, who decided that he could not entertain the said claim of the Railway Administration as it was not included in the instant reference to him. It is therefore, requested that the Railway's claim for Rs. 56,761/- as stated above be referred to the Sole Arbitrator for decision." Thereupon, the General Manager appointed the same arbitrator, namely Shri U. G. K. Rao, Chief Engineer, D. B. K. Railway Project, as the sole arbitrator to adjudicate the claim of over-payment. In the statement of claim filed by the Union of India, the case made will appear from paragraphs 7 to 11 as set out hereunder: "7. It is submitted that the payment for spreading as a separate item of work as paid in this case is not payable for the reasons explained hereunder. 8. Item A. 40 i.e., the appropriate item for spreading charges is a specifically separate item meant to cover cases where levelling of earth, moorum, cinder etc. is involved in Station, platforms or football grounds. If the rate against item A. 40 (3/12/- per cent cft. ) is compared with the rate against item R/3 (-/6/- per cent cft.) it is obvious that the work contemplated against this item is more or less similar to spreading moorum etc. as a topping on road. The work involved in this case namely forming a bank from the original grounds to the formation, is quite different from that contemplated in the work of spreading earth. 9. The contractor has been paid the appropriate lead charges which includes the cost of leading into truck/tram on one end and unloading the same at the other end and also stacking after unloading. It is, therefore, obvious that as the contractor could take the material directly into the truck/trams and also take them to the exact site where it was required to be delivered there was no additional operation of spreading as envisaged in this item A. 40. The amount of effort required for dressing the banks was more or less the same as would be required for stacking the earth, cost of which is already included in the lead rates. 10. The claimant, therefore, submits that an amount of Rs. 56,761/- calculated at 350% above tender percentage on item 6 of bill No.--C. C. 8 and Final dated 4.2.61 (Converted to O/A bill) was overpaid to the Opposite party through inadvertence and the claimant is entitled to the refund of the said sum of Rs. 56,761/-. 11. The claimant, therefore, prays for an award of Rs. 56,761/- as per paragraph 10 above and also cost and further relief." In the counter state of facts filed, the case of the contractor has been made out in paragraphs 2 and 3 which read as follows : "2. The opposite party contends :-- (a) That the General Manager has no power under Clause 34 of the General conditions to make successive nominations of arbitrators in respect of different disputes under the same contract -- all in existence at the tune of the first nomination of proceedings. (b) That the nomination of an arbitrator in this case is without jurisdiction, incompetent and illegal, (c) That the proceedings are illegal ab initio and the opposite party does not/submit to the jurisdiction, if any, of the arbitrator, 3. Without prejudice to the contentions aforesaid, the opposite party further contends : (a) That the claim herein is barred under the principles of res judicata. (b) That the claim had been made in the said earlier proceedings and rejected, (c) That the amendment of the Union of India's defence to the opposite party's claims in the previous proceedings was not allowed by the said learned arbitrator. (d) That the claim herein cannot be permitted to be raised at all.";