The High companyrt dismissed the appeal filed by the employer by judgment dated 5.2.2007.
On the face of it this is erroneous.
But the CTR was followed by work order dated 23.8.1988 which was followed by amendment dated 8.11.1988 which specifically stated that the mobilization advance shall be paid in three instalments of which the second and third instalments shall be paid on production of a certificate of the Chartered Accountant about utilization of the previously paid amounts and on verification by the department towards progress of the factory.
By order dated 17.2.2003, the District Judge, Ajmer allowed the application of the companytractor and made the award a rule of the companyrt subject to a modification in regard to the award made on claim No.37A. In place of the award made by the Arbitrator direction to employer to pay Rs.12072/ per day from the date of award , the District Judge directed that the employer shall return the original title deeds to the companytractor and pay the amounts awarded to the companytractor after deducting the amount awarded by way of companynter claim that is Rs.59,42,275/ towards refund of mobilization advance due with 18 interest within 30 days from the date of decree, failing which, the employer shall pay Rs.12072 per day from the date of decree.
33 Less measurement of pipe 1,15,738 1,15,738 15.
After the work order, the parties have executed a bilateral agreement dated 11.1.1989 which specifically states at para 2 and para 6 that the work order dated 23.8.1988 and subsequent amendment to the work order dated 8.11.1988 shall be deemed to be a part of the companytract and will bind both the parties.
This was followed by an agreement executed by both parties on 11.1.1989 and clause 7 thereof extracted below dealt with mobilization advance Mobilisation advance 10 of the companytract value shall be given as mobilization advance 18 simple interest subject to production of Bank Guarantee from any of the Nationalised Bank equal to the amount of such advance.
30 Refunds for paint of specials 9,759 9,759 12.
3 Rs.79,87,846/ towards refund of mobilization advance with interest , the arbitrator awarded a sum of Rs.59,42,275 with interest at 18 per annum from 18.9.1990 up to the date or decree or payment whichever was earlier.
24 Refund of deduction for want of 4,31,926 4,31,926 BG renewal 9.
By letter dated 15.12.1990, the companytractor companyfirmed that the original title deeds will remain in deposit with the employer till the entire amount of advance was repaid in full with interest.
2 relating to extra companyt to Rs.6,66,62,000/ and companysequently the total of the companynter claims stood increased to Rs.11,55,98,388/ .
35 with Difference in final bill 1,47,00,000 23,74,458 25 Less payment re sand bedding 7,31,676 34 Payment for excavation 2,50,740 16.
27 28 Gap pipes fitted 2,60,200 67,098 10.
Clause 5 1 b of the work order, as amended, specifically provided that the companytractor had to provide a Bank guarantee for the mobilization advance.
Sub clause d of clause 7 provided that if the companytractor failed to establish the factory within three months of payment the mobilization advance, the said advance would be recovered by enforcing the bank guarantee given in lieu of the mobilization advance.
In regard to companynter claim No.
Appeal No.872/2003 against the said judgment and decree companytending that the award ought to have been set aside.
1, from 16,12.1991 to 21.9.1994 at 18 per annum and c future interest on all sums awarded from 22.9.1994 till date of decree or payment whichever is earlier at the rate of 18 per annum.
under a water supply scheme in Ajmer District.
day from from date of 13.1.92 award, if the factory was number released from mortgage security within 30 days.
29 Payment for 8 kg pipes but paid 1,17,150 1,12,294 for 6 kg pipes 11.
There was an amendment to the work order on 8.11.1988.
The District Court, Ajmer by order dated 27.4.1991 held that it had jurisdiction to appoint an arbitrator but deferred the actual appointment to a future date.
In the subsequent work order issued on 23.8.1988, clause 5.1 relates to mobilization advance.
It is thus evident that the companytractor had also proceeded on the basis that the companydition in clause 5 1 b of the work order amendment letter dated 8.11.1988 governed the payment of mobilization advance.
The companytractor made an application to the District Court, Ajmer, under section 20 read with section 8 of the Arbitration Act, 1940 Act for short for filing the arbitration agreement into companyrt and seeking appointment of an arbitrator.
The said companytention was rejected by both companyrts on the ground that when the authority companypetent to appoint the arbitrator appointed the arbitrator, in pursuance of the agreement reached before this Court to have the pending disputes of both parties settled by arbitration, the employer companyld number be permitted to raise a technical plea that the arbitrator had numberjurisdiction to proceed with the arbitration, in the absence of a further specific reference by the employer.
Para 5.1 b as replaced is extracted below The mobilization advance is being given for establishment of factory at site.
But strangely the companytractor did number give such a bank guarantee.
The assets built by the companytractor out of mobilization advance so made will be mortgaged to the department.
The companytract clause 23 of General Conditions of Contract provided for settlement of disputes by arbitration.
Therefore obviously the clauses relating to mobilization advance in the amendment to work order dated 8.11.1988 and the agreement dated 11.1.1989 had to be read in addition to the earlier provision relating to mobilization advance companytained in the CTR.
The employer filed its reply to the claim statement, and also made five companynter claims aggregating for Rs.863,46,505/ before the arbitrator.
Appeal No.
31 Deduction from running bill for 22,385 22,385 pipes 13.
910/2003 aggrieved by the modification by the Learned District Judge directing companypensation of Rs.12,072/ per day only from the date of decree instead of the date of award .
37A Idle charges for machinery, staff 12,072 per 12,072 per day etc.
There was a specific companytract for companytinuation of the mortgage until the said amount was paid.
11 20 Slow progress due to reduction of 21,32,496 21,07,195 width of trench 8.
claimed awarded Rs.
The respondent contractor sent a reply dated 3.11.1990 stating its efforts to companyplete the work were rendered futile on account of the delays and breaches on the part of the employer and it was necessary to enter into a fresh agreement as the tender was number accepted in the manner in which it ought to have been accepted.
Another dispute was raised in respect of the rate payable for work done subsequent to the due date of companypletion 22.8.1990 .
Thus it is evident that the mobilization advance had to be released only against a bank guarantee to be furnished by the companytractor.
Such assets can be used by the department for the purpose of companypleting the remaining work.
By letter dated 18.6.1990 respondent invoked the provision for arbitration and sought appointment of an arbitrator to decide its claims aggregating to Rs.2,01,66,547, arising on account of certain alleged omissions and companymissions of the employer.
2 16 Refund of excess sales tax 2,94,142 2,94,142 deducted 3.
The companytractor created an equitable mortgage over its plant by depositing its title deeds thereto as security for the mobilization advance.
As numbericed above at best the arbitrator companyld have directed return of the documents of title to the companytractor and companyld number have directed payment of damages at the rate of Rs.
It gave four bank guarantees for Rs.40 lacs on 21.5.1989, Rs.25 lacs on 1.2.1989, Rs.15 lacs on 17.2.1989 and Rs.25 lacs on 23.3.1989.
3 15 5 amount withheld for testing 14,70,956 14,70,956 of pipeline 4.
The Arbitrator awarded the following interest a pre reference interest on all sums awarded except claim number 1 , from 3.9.1990 date of companytractors application under section 8 and 20 of the Act to 15.12.1991 at 18 per annum b pendente lite interest on all sums awarded including claim No.
If according to the companytractor, the mobilization advance had to be released in a single instalment and if the companytractor wanted the entire mobilization money to be released in one lump sum instead of in three instalments, it ought to have given a single bank guarantee for the entire sum.
The second of the appeals arising out of SLP C No.22565/2007 is against the judgment dated 30.5.2007 allowing the companytractors appeal.
32 Refund for deduction for 46,569 46,569 insufficient refilling 14.
While para a of clause 5.1 was a reproduction of clause 3 of the Common Terms of Reference, the following was added as para b in clause 5.1 of the work order The mobilization advance is being given for establishment of factory at site.
The value of the work as per the work order was Rs.9,91,94,602.50.
The employer on 30.3.1991 made a final demand calling upon the companytractor to state whether it was ready to re start and companyplete the remaining work and if so to submit a revised time schedule for such companypletion.
In the meanwhile the companytractor filed a suit against the appellant in the District Court, Ajmer and obtained a temporary injunction restraining the employer from imposing liquidated damages.
The companytractor revised its claim to Rs.5,51,90,306/ in the numberice of appointment of arbitrator.
The employer challenged the award by filing objections under section 30 read with section 33 of the Act.
Thereafter the offer of the respondent was accepted and a work order dated 23.8.1988 was issued to him stipulating the period for companypleting the companytract as two years from that date.
As the companytractor did number resume the work, the employer initiated steps to get the balance work executed through an alternative agency.
One of the companytentions urged by the appellants before the companyrt below was that the Arbitrator did number have jurisdiction to enter upon the reference and make an award, as the appointing authority under the arbitration clause had merely appointed the arbitrator, but had number referred any dispute to him for arbitration.
The companytractor made an application for making the award, a rule of the companyrt.
9 19 Refusal of employer for re 10,11,354 6,95,910 designing pressure pipes from higher into lower.
In the meanwhile, the employer having companycluded the arrangements to get the work companypleted through an alternative agency, on the companytractors failure to resume the work, awarded the work to M s. Indian Hume Pipes Co. Ltd. on 10.8.1992.
The companytractor did number resume the work.
On the basis of the companytract value in regard to the balance work, the employer revised its companynter claim No.
The companytractor in turn approached this Court.
The agreement dated 11.1.1989 itself companytains a detailed clause clause 7 relating to mobilization advance in addition to what was earlier agreed in regard to mobilization advance.
6 17 Price escalation 58,83,854 43,47,520 6.
Recovery of mobilization advance shall be effected from 1st Running Bill on pro rata basis in a way that companyplete mobilization advance is recovered by the time 75 work is companyplete.
Sub clause b of clause 7 of the agreement dated 11.1.1989 provided that assets built by the companytractor by utilizing the mobilization advance should be mortgaged to the employer.
12 13 Interest pre reference, pendente 18 per 18 per annum lite and future annum The arbitrator rejected companynter claims 1, 2, 4 and 5 of the employer.
The arbitrator has held that the said clause was unilaterally introduced and therefore is number binding by the companytractor.
The employer and the companytractor entered into an agreement dated 11.1.1989 enumerating and stipulating the documents which will form part of the companytract and the modifications agreed in regard to certain terms.
The High Court allowed the appeal filed by the companytractor by judgment dated 30.5.2007 and restored the direction of the arbitrator that the payment of companypensation at Rs.12,072/ per day should be from the date of the award itself 21.9.1994 .
The employer challenged the order of the District Judge and the High Court allowed the appeal on 9.8.1991 and set aside the order of the District Judge.
1 Loss of profitability due to late 83,49,913 33,06,500 release of mobilization advance 2.
Tenders were received from various tenderers including respondent hereinafter referred to as the companytractor .
5 18 Excess recovery of security 13,28,457 13,28,457 deposit 5.
The companytractor also filed an appeal Civil Misc.
He awarded the following amounts to the companytractor in regard to the remaining claims Claim No.
The first of the appeals arising out of SLP C No.10818/2007 is against the dismissal of its appeal on 5.2.2007.
Description of claim Amount Amount No.
Thus the High Court upheld the award.
Interest shall also be recovered alongwith recovery of capital mobilization advance.
On 22.8.1990 the companytractor stopped the work.
Ten percent of the value of work Rs.99.19 lakhs which was agreed to be released as mobilization advance, was released to the companytractor between 25.1.1989 and 5.5.1989.
Realising the unsoundness of the said companytention, the appellants did number press it before us.
25, 34 and companynter claims 1, 2, 4 and 5.
The companytractors stand was that in the absence of an extension of time for companypletion by mutual companysent before the stipulated date for companypletion, it was number liable to companytinue the work on the tendered rates.
By that date it had manufactured 15.26 km.
The above clause was superseded by clause 3 of the Common Terms of Reference which is extracted below Mobilisation advance for PSC Pipes only 10 of the companytract value shall be given against Bank Guarantee as mobilization advance at a simple interest rate of 18.
The mobilization advance shall be paid in three instalments of which the second and third instalment shall be paid on production of the certificate of the Chartered Accountant about utilization of the previously paid amount and on verification by the department of the progress towards setting up of the factory.
On being appointed, the arbitrator entered upon the reference and the companytractor filed a claim statement before the arbitrator on 13.1.1992 making 43 claims aggregating to Rs.6,21,29,626/ .
By letter of amendment dated 8.11.1988 issued by the employer, several clauses of the work order including clause 5.1 b were amended replaced.
On 12.11.1991, this Court recorded the companysent of parties for appointment of Mr. B L Mathur as sole arbitrator and directed the employer Chief Engineer, Public Health Engineering Department, State of Rajasthan to appoint him as the arbitrator.
12 and 13 The companytractor claimed pre reference interest at 18 per annum on all its claims from the date of claim to date of arbitrator entering upon the reference 18.6.1990 to 15.12.1991 , as also pendente lite interest from 16.12.1991 to 21.9.1994 and future interest from the date of award till date of payment or decree whichever was earlier.
Heard learned companynsel.
The High Court also granted interest at 18 per annum from the date of the award.
The employer filed an appeal Civil Misc.
Feeling aggrieved the employer has filed these two appeals by special leave.
On 13.9.1990 the employer numberified the companytractor that if he did number resume the work, the balance of the work would be got executed through an alternative agency in terms of the companytract, by treating the companytract as having been abandoned on 22.8.1990, and recover the excess companyt from the companytractor.
of pipes and had laid 11.6 km.
In case the factory is number established in 3 months period the mobilization advance shall be recovered by way of the Bank Guarantee given in lieu of the mobilization advance.
V.RAVEENDRAN, J. Leave granted.
As different tenderers had stipulated different terms and companyditions, the tenderers were invited for discussions, and companymon terms of reference for short CTR were formulated on 22.2.1988 and the original tender companyditions stood modified to the extent of the alterations in the CTR.
The appellants also referred to as employer invited tenders for the manufacture, laying, testing and companymissioning of water pipeline of a length of 37.41 km.
out of them and tested only 1.4 km.
On the other hand the amounts that allegedly became due to the companytractor under the award were mostly towards damages and escalation in prices validity of which were under challenge and there was numberprovision in the companytract for payment of interest thereon.
In case work is left in complete, liquidated damages will be imposed as per terms of the document and the assets built by the companytractor for manufacturing pipe will become the property of the department.
Sub clause c of clause 7 provided that if the companytractor fails to companyplete the work, the assets built by the companytractor would become the property of the employer and the department companyld use it as government property for companypletion of the remaining work.
After companysidering the claims and companynter claims, the learned arbitrator made an award dated 21.9.1994.
of pipeline as against the total companytracted quantity of 37.41 km.
He rejected claim number.
4, 7,8,10, 14 21,22,23,26,36,36A, 37,38,39,40,41, 41A,42, 42A and 43 of the companytractor.
