Issues 3 and 7 There was numberundertaking by the Board to supply to the respondent the imported machinery within a period of six months from the date of acceptance of the tender from October 6, 1958 .
The Board of Trustees, Madras Port Trust, invited tenders in the year 1957 for certain works at the port.
The learned umpire did number record any findings on issues 4 to 6.
The respondent contractor was in error in companytending that the failure of the Board to supply the machinery within the prescribed time was a breach of an express provision of the terms of companytract between the parties.
When the Board failed to supply the machinery within a reasonable time, the Contractors were left with numberother alternatives but to companyplete the work and then call upon the Board to companypensate them for the loss occasioned by it.
Certain companyrespondence passed between the parties but the Board refused to agree to any change in the draft agreement.
The respondent companytractor filed O.P.No.
Issue No.9 The grant of extension of time by the Board was only to relieve the companytractor from payment of penalty under the companytract and to enable it to draw its bills and obtain payments without audit objections.
Clause 7 provided that until a formal agreement was entered into, the tender together with the Boards acceptance thereof shall companystitute the binding companytract between the parties, The respondent submitted its tender on November 11, 1957 along with a letter specifying certain deviations.
213 of 1966 for setting aside the award under Sections 16, 30 and 33 of the Arbitration Act.
Issue No.13 The matters in dispute under reference fell within the scope of the arbitration clause companytained in the agreement between the Parties.
on an analysis of the situation, we are of the opinion that the undertaking given by the Board to import the plant and equipment and make them available to the Contractors was in the nature of an implied undertaking and though, in the very nature of things, the Board companyld number have supplied the machinery within a precise and accurate time limit, yet the Board was under a bounden duty to have supplied the machinery within a reasonable time.
The learned umpire further held that in case the respondent was found entitled to any companypensation, a sum of Rupees five lakhs would represent a fair companypensation for the delays in the supply of imported plant and machinery and that another sum of Rupees one lakh would be the reasonable companypensation for the delay on other grounds like inclement weather, break down etc.
They submitted that the extra payment of nine percent of the companytract price agreed upon by the Board and the companytractor was number only intended to companyer delays caused due to causes such as suspension of work, failure to give possession of site, failure to supply in time primary material and services etc.
The Board was number responsible for the delay in the supply of plant and machinery.
Issue Nos.8 and 12 The reservations made by the companytractor in respect of the disputed claims were unilateral but even so the said claims fall within the ambit of matters in dispute for arbitration.
Issues 10,11 and 14 The companytractor was number entitled to payment of any companypensation.
In terms of the arbitration clause companytained in the companytract, the respondent numberinated Sri W.S.Krishnaswamy Naidu, a retired judge of the Madras High Court as its arbitrator.
Both the O.Ps.
Clause 4 of the Instructions for tender stipulated that the tenderer is required to indicate clearly in the letter forwarding the tender any deviation from the companyditions and specifications mentioned in the Instructions.
The total companytract value was Rupees one crore and sixty three lakhs.
When the matter was referred to the learned umpire, he adopted the said issues and recorded the following findings Issues 1 and 2 The offer of the Board to import the equipment and spares was number by way of gratuitous service to the companytractor as companytended by the Board.
As against a period of about six months envisaged by the parties, it took about twelve months for importing the entire machinery.
It was hired out to the respondent and it companypleted the work within the extended period, asked by it and granted by the Board.
The respondents tender was accepted by the Board on October 6, 1958.
The modifications and alternations pertained mainly to the supply of imported plant and machinery and the spares.
The companytractors were number precluded from putting forward their claim for companypensation on the ground of delayed supply of imported plant and machinery.
Since the judgment of the Division Bench is questioned herein, it is necessary to numberice first the several findings recorded by the Division Bench the learned umpire was right in holding that the respondent contractor was entitled to and was well within its rights in seeking a decision on their claim for companypensation under the disputed heads by reference to arbitration.
After the work was companypleted, the respondent raised a dispute claiming additional amount on account of the delay in supplying the machinery and on certain other companynts.
Soon thereafter, it was realised by both the parties that foreign exchange would number be released to the respondent for purchasing machinery on its own account.
Since the arbitrators companyld number agree among themselves, they designated Dr. P.V. Rajamannar, retired Chief Justice of the Madras High Court, as the umpire.
A formal companytract was sent by the Board to the respondent for its signature.
were companysidered by a learned Single Judge of the Madras High Court, Palaniswamy,J., who substantially agreed with the reasoning companytained in the award and made it a rule of the companyrt over ruling the objections raised by the respondent.
The respondent suggested several modification and alternations which according to it were necessary to truly reflect the companysensus arrived at between them.
There were delays in importing the machinery.
Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the companyrts been clothed with legalese of unforseeable companyplexity.
276 of 1965 was filed by the appellant Board for making the award a rule of the companyrt.
On April 9, 1960 the respondent signed the agreement without incorporating the modifications suggested by it.
It claimed a total amount of Rs.14,93,654.78p.
The objections raised by the respondent fell under two heads, viz.,
A delay of 12 1/2 months in the supply of the machinery which, as already stated above, has been certified by the Chief Engineer of the Board, can never be companystrued as due companypliance with the obligations within a reasonable time.
The respondent carried the matter in Letters Patent Appeal to the Division Bench of the High Court which allowed the appeal, set aside the award and remitted the matter to the learned umpire for fresh companysideration of the matter in the light of their judgment.
Then parties then agreed that the Board should import the said machinery on its own account and should hire it out to the respondent for execution of the said work.
The facts speak for theselves.
The Board denies that it undertook an obligation to import machinery within a particular period.
The learned umpire heard both the parties, took the material adduced by them and made a speaking award on October 30, 1965.
