- (1.) THE Court : THE petitioner, Union of India made an application to this Court on 8th March, 1994, under Section 30 and 33 of the Arbitration Act, 1940, inter alia, praying that this Court has no pecuniary jurisdiction to entertain, try and determine or to pass a judgment upon the award in the above Award Case No. 7 of 1994. It was also prayed that the award be declared null and void and set aside and for other consequential orders.
(2.) IT has inter alia been stated in the petition that the Executive Engineer, Gangtok, Central Public Works Division, Gangtok, Sikkim, by letter dated 9.10.1986 accepted the tender submitted by the respondents which was for the site development work of construction of staff quarters for A.G. Sikkim at Syari Busti, Gangtok. The accepted contract price was of Rs. 17,04,652.50 paise. The date of commencement of work was 24.10.1986 and the work was stipulated to be completed by 23.8.1987. The said contract agreement being No. 23/SE/86-87 contained an arbitration clause being Clause No. 25 which provided as hereunder : "Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Central Public Works Department, in charge of the work at the time of dispute or if there be no Chief Engineer the administrative head of the said Central Public Works Department at the time of such appointment. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he has to deal with the matter to which the contract relates and that in the course of his duties as Government Servant be had expressed views on all or any other of the matters in dispute or differences. The arbitrator to whom the matter is originally referred or vacating his office or being unable to act for any reason, such Chief Engineer or administrative head as aforesaid at the time of such transfer, vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was felt by his predecessor. It is also a term of this contract that no person other than a person appointed by such Chief Engineer or administrative head of. the C.P.W.D. as aforesaid would act as arbitrator and if for any reason, that is not possible the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000 (Rupees fifty thousand) or above, the arbitrator shall give reasons in the award. Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply in the arbitration proceeding under this clause. It is also a term of the contract, that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute. It is also a term of the contract that if the contractors do/does not make any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the Government, that the bill is ready for payment, the contractor(s) will be deemed to have been waived and absolutely barred and the Govt. shall be discharged and released of all liabilities under the contract in respect of these claims. The arbitrator(s) may from time to time with consent of the parties enlarge the time, for making and publishing the award".
(3.) ACCORDING to the petitioner disputes and differences arose between the parties and the respondent requested the Chief Engineer, Central Public Works Department, having its office at Calcutta, to appoint an arbitrator and to refer the disputes to the, arbitration in terms of the arbitration agreement. The said Chief Engineer, Central Public Works Department, Calcutta, by his letter dated 5th December, 1990 appointed Sri V. Nainani, as the sole arbitrator. The said Sri V. Nainani vacated his office on 8th July, 1992. Thereafter, the said Chief Engineer, inter alia by his letters dated 20/24th August, 1992 appointed Sri T. K. Misra as the sole arbitrator to determine the disputes and differences between the parties.;