V.V.S. Rao, J.

Introduction

These two miscellaneous appeals are against common order, dated 24.01.2000 in O.P.No.1031 of 1998 (hereafter called, the first O.P.,) and O.P.No.1052 of 1998 (hereafter called, the second O.P.,) filed by M/s. Dhirubhai Thurner & Company, Engineers and Contractors (hereafter called, DOC). C.M.A.No.585 of 2001 against first O.P., was heard and reserved by us on 18.11.2009. C.M.A.No.1601 of 2000 against second O.P., was heard and reserved by us on 30.11.2009. It is, therefore, appropriate to dispose of both the appeals by common Judgment.

Facts in brief

2. Nizam Sugar Factory Limited (NSF) called for tenders for construction of machine foundations at Madhunagar, Zaheerabad in Medak District. DDC submitted their tender, which was accepted vide letter, dated 05.04.1991 of NSF. The parties entered into agreement on 26.04.1991 after negotiations in the presence of NSF's consultant M/s. C.R.Narayanan Private Limited, Bangalore. The contractor gave lumpsum rebate of Rs.3,00,0001- (Rupees three lakhs only) reducing the contract value from Rs.45,94,0201- to Rs.42,94,0201-. Time was agreed to be the essence of contract, and work was to be completed by 14.10.1991 i.e., within a period of six months from the date of agreement. Nevertheless, clause 48 of General Conditions of Contract (GCC): provided for extension of time for completion of work by NSF on condition that no compensation would be payable. Clause Ti of GCC forming part of contract provide~ for resolution of dispute by arbitration.

3. DOC completed the work by 30.11.1992. Disputes arose with regard to payment of final bills and related matters. DOC invoked clause 77 of GCC and by letter dated 20.06.1995 appointed Sri Akela Sitaramam, Retired Superintending Engineer as arbitrator requesting to enter reference as soon as arbitrator is nominated by NSF. A copy thereof was sent to NSF. In response thereto, NSF informed that their arbitrator would be appointed within twenty days. They did not do so in twenty days. Long thereafter, vide their letter, dated 21.02.1997, NSF appointed Sri K. Yagnanarayana, Retired Chief Engineer as their arbitrator and both the arbitrators chose Sri K.C.S. Rao, Retired Additional Director General of Works as Umpire.

4. DOC raised eight claims. The arbitral tribunal partly allowed claim Nos.1, 2, 3, 4 and 8 (payment of interest) while rejecting claim Nos.5, 6 and 7, which have had been accepted by DOC. They filed first O.P., on the file of the Court of the Additional Chief Judge for SPE & ACB Cases-cum-V Additional Chief Judge, City Civil Court, Hyderabad, under Section 17 of the Arbitration Act, 1940 (hereafter called, 1940 Act). NSF filed second O.P., seeking to set aside the award. By impugned order, dated 24.01.2000, the Court below dismissed case of DOC and allowed NSF's case. While doing so, learned Additional Chief Judgs considered the question whether1940 Act applies or the Arbitration and Conciliation Act, 1996 (hereafter called, 1996 Act) applies for resolution of dispute. On this, it was held that 1996 Act applies and the award passed by arbitral tribunal under 1940 Act is null and void. The Court below then considered claim Nos.1, 2, 3, 4 and 8, which were allowed by arbitral tribunal, and held that the contractor is not entitled for any extra amounts towards escalation charges or towards compensation. Arbitral award was accordingly set aside.

5. The particulars of claims, award of the arbitral tribunal and the findings of the Court below are as below.

Claim No. Amount claimed Amount awarded Amount awarded

by arbitrator by civil Court

Rs. Rs. Rs.

Claim No.1 11, 10,782 2,14,700 Rejected

Claim No.2 10,01,000 6,06,000 Rejected

Claim No.3 5,03,000 3,76,000/- Rejected

Claim No.4 5,89,500 1,86,000 Rejected

Claim No.5 1,75,000 Rejected -

Claim No.6 1,03,563 Rejected -

Claim No.7 Not specified Parties to bear -

their own costs

Claim No.8 Interest claimed a)Awarded