I.C. Gupta vs Union Of India And Ors.
1982 Latest Caselaw 268 Del

JUDGMENT

Charanjit Talwar, J.

(1) In this petition under section 20 of the Arbitration Act, Shri I.G. Gupta, Sole Proprietor of M/s. A.R. Builders, Ashok Vihar, Phase It, Delhi, has sought that the original arbitration agreement entered into between the parties be filed in the Court and the disputes arising out of contract bearing No. 2/EE/PWD XV/80-81, for "construction of Government Higher Secondary School at Gulabi Bagh, Phase Ii, Delhi" be referred to arbitration.

(2) The Union of India, respondent herein, has not disputed the execution of the contract. It also does not dispute that the agreement contained an arbitration clause. However, its case is that the contract was rescinded on 10th September, 1981, as the contractor (petitioner herein) did not execute the work in accordance with the terms of the contract.

(3) According to the petitioner, the disputes arising out of the contract which are required to be adjudicated upon by the Arbitration clause are eight in number. Those have been detailed in paragraph 10 of the petition.

(4) Mr. Y.K. Sabharwal. learned counsel for the respondent, does not object to seven out of the eight disputes being referred to arbitration. He, however, submits that dispute No. 6 raised by the petitioner in paragraph 10 of the petition regarding levy of compensation of Rs. 45,495.00 on the contractor by the Superintending Engineer under clause 2 of the agreement is outside the ambit of the arbitration clause and hence not referable. The argument is that under the said clause of the agreement the Superintending Engineer is the final authority to determine the amount of compensation for the delay caused by the contractor in the execution of the work. The said Superintending Engineer has determined the amount at Rs. 45,495.00 . This decision, it is urged, is final in terms of clause 2 and notwithstanding the dispute raised as to the validity of the rescission of the contract, the respon- dent-Union of India is entitled to recover the said amount.

(5) In my view, the submission has no force. The dispute as to the compensation claimed by the Union of India on account of the alleged delay is one which is covered by the arbitration clause, namely clause No. 25 of the agreement. This clause is re-produced in paragraph 6 of the petition. It is quite wide in amplitude. The levy of compensation by the Union of India on account of delay also falls within the sweep of the arbitration clause in question. Till such time the validity or otherwise of the rescission of the contract is decided it is exiomatic that the amount of compensation for the alleged delay cannot be determined, by the Superintending Engineer who no doubt is the final authority to determine the amount. Therefore, dispute No. 6 which has been referred by the petitioner as claim No. 6 is also referable.

(6) In view of the above discussion I direct the respondent to file the original arbitration agreement in Court within four weeks from today and to appoint an Arbitrator as per the terms of the arbitration agreement within two months from today.

(7) Petition stands disposed of. No order as to costs.