- (1.) The applicant M/s. Pioneer Construction has filed this application for appointment of an arbitrator in regard to a dispute which he has raised claiming additional amount on account of price escalation of the materials which he had used in construction of the quarters to be used as residence by the Judicial Officers.
(2.) To appreciate the controversy it may be noticed that a contract was awarded to the applicant in the year 1995 for construction of residential accommodation for judicial officers by the Public Works Department of the Government of Rajasthan which was to be completed by 23-4-1996. But the petitioner executed the contract finally in the year 1998 for which the entire payment also was made to the applicant in the year 1998 itself. The applicant however had a late realisation in the year 2001 when it struck him that he could claim additional payment in regard to the contract which he had executed in the year 1998 towards price escalation taking the advantage of an order for increase in petroleum products and therefore, he filed an application after five years of acceptance of final payment in the year 2003 for appointment of an arbitrator in regard to additional claim of payment towards price escalation of petroleum products which he had used in construction of the residential premises.
(3.) While filing an application for appointment of an arbitrator the applicant and his counsel have totally ignored the agreement which had been executed between the applicant and the respondent-State in regard to execution of the contract as admittedly the clause regarding price escalation had been specifically deleted in the agreement to which the applicant had agreed by signing the agreement. It is therefore, relevant to quote Clause 45 of the agreement which lays down as follows : "Clause 45. If, during the progress of the contract of value exceeding Rs. 10.00 lac (accepted tendered amount minus cost of material supplied by the department), and where stipulated completion period is more than 12 months (both the conditions should be fulfilled) the price, of any materials/bitumen/diesel and petrol incorporated in the works (not being materials supplied by the Department) and/or wages of labour increase or decreases, as compared to the price and/or wages prevailing at the date of opening of tender or date of negotiations for the work, the amount payable to contractors for the work shall be adjusted for increase or decrease in the rates of materials (excepting those materials supplied by the Department/labour/bitumen diesel and petrol. If negotiated rates have been accepted, prices as on the date of negotiation shall be considered for price adjustment. Similarly, if rates received on the date of opening of tenders have been accepted, them prices on the date of opening of tender shall be considered for price adjustment.";