- (1.) The Court : The West Bengal State Electricity Board issued a notice inviting tender for fabrication and erection of structural steelwork for Kolaghat Thermal Power Project. The respondent Texmaco Ltd. submitted its tender quoting the prices with specific price variation terms, covering certain items, the said structural steelworks. A formal agreement was executed between the West Bengal State Electricity Board and the Texmaco Ltd. on 20th September, 1980. The said agreement contained an arbitration clause which, inter alia, provides that in the event of disputes and differences between the parties the same shall be referred to the arbitration of two persons, one to be nominated by the purchaser and the other by &e contractor. The arbitrators thereafter nominated an umpire who shall be appointed before they enter upon the reference.
(2.) Disputes and differences having arisen between the parties, the same was referred to the arbitration in terms of the said arbitration agreement. -The respondent nominated Shri R. K. Choudhury, a partner of Khaitan & Co. Advocates and the West Bengal State Electricity Board nominated one Shri S. K. Datta a retired District Judge, to act as Joint Arbitrators. The Joint Arbitrators thereupon nominated and appointed Shri Salil Kumar Roy Chowdhury, a retired Judge of this Court as the Umpire before the said Joint Arbitrators entered upon the reference. During the pendency of the arbitration before the said Joint Arbitrators the Government of West Bengal in or about November, 1986 directed the said State West Bengal State Electricity Board to make over the Kolaghat Thermal Power Project, stages I & II with all its assets and liabilities as on 1st April, 1986 to the West Bengal Power Development Corporation Ltd. subject to the terms and conditions contained in the notification dated 4th November, 1986 which, inter alia, provides that all suits, cases, applications or arbitration proceedings pending in any Court and any Arbitrator relating to the generating station against the Board shall, with effect from the date of the notification, be deemed to have been instituted against the West Bengal Power Development Corporation. On 5th February, 1987 the said West Bengal Power Development Corporation made a formal application for substituting the Corporation instead and in place of the West Bengal State Electricity Board.
(3.) After the execution of the formal contract on 20th September, 1980 the work of fabrication was completed in or about middle of September, 1985. It appears that the said work order which formed part of the formal agreement contains amongst others detailed provision for payment of wage escalation and a formula of wage escalation has been set out in the said work order. From time to time the respondent submitted bills in terms of the contract and diverse payments were made by the West Bengal State Electricity Board to the respondent against such bills. The West Bengal State Electricity Board, however, disputed its liability for payment on account of wage escalation and excise duty thereon and thus disputes and differences arose between the parties regarding wage escalation and excise duty and these were the subject matter of the arbitration proceedings before the said Joint Arbitrators.;