1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH : NAGPUR
First Appeal No. 328 of 2008
Appellant : M/s R. N. Tandon and Sons,
1, South Civil Lines, Jabalpur
versus
Respondent :
Union of India, through its Deputy Chief Engineer, Central Railway, Nagpur Mr R. R. Srivastava, Advocate for appellant Mr N. P. Lambat, Advocate for respondent Coram : A. P. Bhangale, J Dated : 17th December 2013 Oral Judgment
1. This is appeal under Section 37 of the Arbitration and Conciliation Act, 1996. The appellant is aggrieved by judgment and order dated 18th December 2007 passed by learned District Judge, Nagpur when he had set aside the Award of Arbitral Tribunal in respect of price ::: Downloaded on - 23/12/2013 20:35:44 ::: 2 escalation awarded to the contractor in the sum of Rs. 7,36,469/- with interest @ 8% per annum.
2. It is grievance of the appellant that respondent Union of India had awarded the work of construction of bridges between CH. 3550 meters to 8000 mtrs in Section III of Metpanjara-Kohli Section of Central Railway which included Earth Work also for tender value in the sum of Rs.
57,21,132/- The work was to be completed within nine months from the date of acceptance letter excluding monsoon period of four months from 15th June to 15th October and, therefore, total period for completion of contract was 13 months. On issuance of acceptance letter dated 23.1.1991, appellant undertook the aforesaid work. The contract agreement was signed on 25.9.1991 by the appellant and it was sent for signature of respondent at Mumbai, which was received back sometime in November 1991 - January 1991.
3. It is grievance of the appellant that some official of the respondent scored off the price variation clause from the contract unilaterally without knowledge and consent of the appellant and thus, the mischief was committed by an endorsement made without consent of the appellant. Despite correspondence by appellant with respondent the mischief was subsisting. According to appellant, there was no justification ::: Downloaded on - 23/12/2013 20:35:44 ::: 3 for respondent to deny benefit of price variation clause to the appellant when the appellant was similarly placed at par with other contractors.
My attention is invited to the price variation clause in the contract which appears struck off by pen with endorsement "escalation clause not applicable". Who struck off the price variation clause and who made the endorsement as above and whether appellant had consented or not remains a mystery since oral evidence of signatory on the contract was not obtained by Arbitral Tribunal.
4. Learned counsel for the appellant submitted that learned District Judge failed to consider this aspect before setting aside the award passed by the Arbiral Tribunal. Learned District Judge also erred to answer in the negative a question as to whether escalation is available in the agreement and whether interference is possible in the Award under Section 34 of the Act. Considering that three similar agreements were entered into by respondent with other similarly circumstanced three contractors in respect of adjoining Sections during the same contract period as that of the appellant, the Arbitral Tribunal could have exposed malafide action if any of the respondent by insisting upon evidence of the contracting persons when price variation clause appeared scored off in the contract. The dispute is, as to who scored off and who made the endorsement and whether Appellant had consented to it. Oral evidence insisted upon could ::: Downloaded on - 23/12/2013 20:35:44 ::: 4 have settled this vital controversy between the parties. That being so, impugned order passed by learned District Judge must be set aside in exercise of appellate jurisdiction.
5. In the result, impugned order is set aside. The proceeding is remanded to learned Arbitral Tribunal to record evidence as may be available regarding price variation clause which is a matter of dispute between the parties. The Tribunal would decide the question as to who made endorsement and who struck off price variation clause and what is its effect and whether the price variation clause was scored off uniterally. The Tribunal shall decide the question as early as possible preferably within six months from the receipt of writ from this Court. If the members of Arbitral Tribunal who decided the controversy are not available presently, new Arbitral Tribunal shall be constituted by the General Manager, Central Railways, Mumbai as per the procedure agreed between the parties. R & P be sent back immediately. The Arbitral Tribunal be constituted expeditiously and appellant would appear before it soon after the issuance of notice by the Tribunal.
A. P. BHANGALE, J joshi ::: Downloaded on - 23/12/2013 20:35:44 :::