GURUSHARAN SHARMA, J. - (1.) THIS appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act), challenging impugned judgment dated 8.6.2002 passed by First Subordinate Judge, Bokaro at Chas, in Title (Arbitration) Suit No. 7 of 1998, whereby petition under Section 34 of the Act to set aside award dated 10.4.1998 has been rejected.
(2.) PURSUANT to open tender -notice dated 18.9.1993 for handling and removal of sludge from Sludge Compartment No. 2 of Bokaro Steel Plant, M/s. Rungta Project Limited, Ranch!, submitted its tender quotation on 16.10.1993, which was accepted by letter of intent dated 18.12.1993, Exhibit 3 for a total price of Rs. 4,81,60,000/ -and thereafter work order. Exhibit 5 was issued on 16.2.1994, which was accepted by the tenderer by their letter dated 10.5.1994. In clause No. 16 of the work order it was mentioned that contract price will remain firm during contract period except labour and diesel price escalation. Thereafter on 7.4.1994 agreement, Exhibit 6 was executed by both parties. The work was completed on 23.6.1996. After seven months of completion of work, M/s. Bokaro Steel Plant intimated the contractor that inclusion of escalation clause in the work order was a mistake and as such the same was withdrawn on 20.1.1997. Exhibit 14 as per clause 13 of the Special Conditions of Contract, Exhibit 6.
(3.) ON receipt of letter dated 20.1.1997 the contractor in terms of Clause 18.2 of the General Condition of Contract, Exhibit 7 appointed an arbitrator on 22.4.1997, M/s. Bokaro Steel Plant also appointed arbitrator on 19.5.1997. Both arbitrators appointed a presiding arbitrator. Board of arbitrator, started functioning from 19.6.1997. They found that action in deleting vital portion of clause 16 of Exhibit 5 was unilateral, without giving any opportunity to the Contractor of being heard and as such was not justified and contractors claim was justified. On the basis of work order containing aforesaid escalation clause of sum of Rs. 23,19,542/ - for escalation in price of diesel and Rs. 18,92,769/ - for increase in the rate of wages as per Government Notification, Exhibit 11 was found payable to the Contractor besides interest and costs of arbitration. By award dated 10.4.1998 M/s. Bokaro Steel Plant was directed to pay a sum of Rs. 63,51,087/ - to M/s. Rungta Project Limited. The Steel Authority of India/Bokaro Steel Plant filed application under Section 34 of the Act to set aside the award. Main objection to the award was that clause No. 9 of special condition of contract provides that no claim on account of idle labour and material incurred by contractor for any reason whatsoever, can be entertained. It was mentioned therein that all documents, namely. Agreement, Form of tender. Invitation of tender. Instruction of tenderers. General Condition of Contract, Special condition of contract, Letter of intent shall form part of contract. Work order does not form part of contract in the said clause. The words "except labour and diesel price escalation" was inadvertently added in clause 16 of the work order, which was never the intention of parties. Taking into consideration clause 9 of Special Condition of Contract the contractor had quoted its rates. When the said mistake came to notice. Company issued letter dated 20.1.1997 deleting said exception clause from the work order. The Contractor acted in accordance with the said escalation clause so far as price of diesel is concerned from the very beginning till conclusion of work and it was only when contractor claimed escalation of wages, after completion of work. Company came out with a baseless plea that in the work order aforesaid mistake had occurred. In the agreement entered into between the parties work order was clearly made part of contract. According to Clause 1.1.14 of the General Condition of contract letter of intent or work order means an intimation by a letter to tenderer that tender has been accepted in accordance with the provisions contained in the letter. Dispute arose when the Company denied benefit of escalation clause to the contractor. It is not disputed that work order was part of contract and the Board of Arbitrators on consideration of entire evidence brought on record found that work was started by Contractor on 16.2.1994 and was completed on 23.6.1996, i.e., within the stipulated period of three years. Last bill, Exhibit 18/8 was made after more than four years of completion of work. The amount payable to the Contractor was withheld without any justification from 23.7.1996 to 17.10.1997. The action of Company in deleting clause 15 was unjustified. The Board of Arbitrators granted interest @ 18% per annum on the withheld amount of Rs. 29,48,886.25 paise from 23.7.1996 to 17.1,0.1997 as well as on Rs. 23,19,042/ - diesel escalation price and Rs. 18,92,769/ - escalation of wages from 23.7.1996 to 31.3.1998.;