- (1.) THE firm, M/s. Engineers Collaborated, preferred this appeal under Section 39 of the Indian Arbitration , act,1940, against the judgment and order dated 15th July, 1982 passed by the learned Subordinate Judge, 5th Court, Alipore, 24-Parganas setting aside in part an award of Sri A. K. Sen, Arbitrator, in respect of certain disputes between the appellant contractor firm and the respondent No. 1, Institute, relating to a contract for construction of the Institute's boy's Hostel at 206, Barrackpore Trunk road, Calcutta.
(2.) IN response to the tenders invited by the respondent No. 1 Institute for construction of the Boys' Hostel, the appellant had submitted tender which was accepted. Under the terms and conditions of the said building contract, the appellant was to complete the works within twelve months from the date of the receipt of the instructions from the respondent No. 1 to commence the work and that in view of the urgency of the work, the claimant| appellant submitted his tender stipulating the time limit of 10 months and based his rates accordingly. The accepted value of the contract was rs. 2216541. 35 p. The date of commencement of work was 13th May, 1978 and the time allowed for performance was 10 months - thus 12th March, 1979 was the scheduled date of completion. Admittedly, the works could not be completed within the time specified and that the same was completed on 30th May, 1980. According to Clause 17 of the Instructions to the tenderer "no variation in the rates of materials and labour will be entertained". Clause 27 of the said tender agreement provided that in case of any delay on the part of the contractor|claimant in the matter of completion of work, the claimant|contractor would be liable to pay liquidated damages at certain specified rates. According to the appellant|contractor firm the aforesaid delay in completion of the works was because of failure on the part of the respondent No. 1, Institute, to ensure the complete site at the date of commencement and because of its failure to supply departmental materials, like, cement and steel in proper time as also failure to convey decision, drawing etc. in proper time and other lapses and|or negligence on its part. t
(3.) FOR the aforesaid reasons the claimant appellant was prevented; from completing the work within stipulated period. As there was delay in the matter of completion of the said works because of failure and|or delay on the part of the respondent No. 1 and in the mean time the prices of materials and rates of labour had increased, the appellant firm had lodged a claim before the respondent No. 1 by its letter dated 21st March, 1979 for enhancing the rates along with a detailed analysis. The claimant appellant by its letter dated 23rd April, 1979 reiterated its said demands and also informed the respondent No. 1 that there had been further increase in the prices. Pursuant to the claimant|appellant's request, the architect of the respondent ?no. 1, M]s. Ballardi Thompson and Mathews, under the direction from the respondent No. 1, recommended 10% increase in the rates in of about May, 1979, but the respondent No. 1 had- kept silent over the matter. When the claim ant appellant was making repeated requests for enhancement of rates, the officer on Special Duty (Administration and Finance) of the respondent No. 1 by the letter dated 2nd November, 1979 informed the claimant|appellant that regarding the claim for bailing out water, the Works Advisory Committee had recommended that compensation to the extent of additional expenditure due to unprecedented rain on 27th, 28th and 29th September, 1978 could be paid to the claimant appellant. Regarding the price escalation the said letter stated "regarding price escalation, you will appreciate that there is no provision in the contract for allowing escalation price. We have, however, taken note of your desire to refer the matter to an arbitrator in case the escalation claim is not admitted by the Institute. Accordingly, director will appoint an arbitrator to go into this issues as per the terms of the contract". Thereafter, Shri A. K. Sen the respondent No. 2 herein was appointed by the Director of the respondent no. 1 as the sole Arbitrator with the" following terms of the reference i) Whether the Contractors firm is entitled to any payment on account of escalation in the prices of building materials, labour rates etc during the period of construction. ii) If the answer to item (i) is yes, the amount that may be payable. iii) Whether the Contractors firm is entitled to any payment for pumping out water from the foundation and removal of such over and above, the value provided in the tender. iv) If the answer to item (iii) is yes, the amount that may be payable. v) The amount that may have to levied as penalty on the firm in terms of the contract. ";