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1998 Supreme(AP) 467

ANDHRA PRADESH HIGH COURT
Umesh Chandra Banerjee, J.
V. RAMANA REDDY – APPLICANT
v.
UNION OF INDIA REP. BY G.M., S.C. RAILWAY AND ANOTHER – RESPONDENTS
Arb. Appln. No. 25 of 1997
Decided on: July 24, 1998.

Advocates Appeared:
Sh. Mehar Chand Noori, Advocate, for the Applicant.
Sh. R.S. Murthy, Addl. Standing Counsel, for the Respondents.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 11(5) - General Conditions of Contract - Clauses 18, 22(5), 39, 45(a), 55, 55-A (5), 61(2) and 62(1)(xiii)(B) (e)(b) - Awarded work was completed and certain part payments were also made - Reimbursement of payment made to financier and compensation for loss of profit together with loss sustained by reason of the conduct of the respondents - Acceptance of the final bill without any reservation, question of there being any further claim does not and cannot arise - Unable to record my concurrence to the same by reason of the fact that there was in fact a protest lodged by the petitioner much prior to the finalisation of the bill - Held, Decision of the respondents shall be final and binding on the contractor and the same shall stand specifically excluded from the purview of the arbitration clause - Learned Advocate appearing for the respondents, however, candidly submitted that none of the claims as lodged by the applicant herein can be termed to be within the category of "excepted matters" - Factual score depicts that the applicant herein has already lodged a large claim and to deny him a right for adjudication thereof, in my view, in the contextual fact, does not and cannot arise since the same would otherwise be opposed to all norms of the concept of justice - Statement of facts be filed before the Arbitrator within a period of four weeks from the date hereof, counter statement within a further period of four weeks as prayed for by the learned Advocate appearing for the respondents, rejoinder, if any, be filed two weeks thereafter and the first sitting of the arbitration shall take place three months hence - All documentary evidence to be relied on by the parties is to be filed along with the respective pleadings with copies to the other party - Petition allowed.

ORDER

Umesh Chandra Banerjee, CJ. - In this application under Section 11(5) of the Arbitration and Conciliation Act, 1996, the petitioner prayed for appointment of an arbitrator under Clauses 63 and 64 of the General Conditions of Contract.

2. The contextual facts depict that in terms of an invitation to tender, the petitioner submitted his tender and his tender was accepted by the respondents and in pursuance whereof the Agreement No. 247/A/CAO/C/ SC/95 dated 11-10-1995 was entered into by and between the applicant and the respondents herein. As appears, on the factual score, the awarded work was completed and certain part payments were also made, but on completion of the work, by reason of specific conduct of the respondents herein, the applicant raised various disputes as regards reimbursement of payment made to financier and compensation for loss of profit together with loss sustained by reason of the conduct of the respondents. The applicant herein did, in fact, submit a claim in January, 1997 and requested for arbitration. Similar request was reiterated on 17-3-1997. The respondents, however, issued a letter rejecting the claim of the applicant in December, 1997. The final bill was, however, subsequently issued in January, 1998 and an amount of slightly over Rs. 9 lakhs was paid to the applicant. The applicant, however, has made a claim of Rs. 1,08,55,567/- which has been denied and disputed by the respondents in no uncertain terms.

3. The learned Standing Counsel for the respondents, contended that by reason of acceptance of the final bill without any reservation, question of there being any further claim does not and cannot arise. I am, however, unable to record my concurrence to the same by reason of the fact that there was in fact a protest lodged by the petitioner much prior to the finalisation of the bill. The petitioner recorded his objection as the dispute has already been raised prior to the payment of the final bill, question of there being an unconditional acceptance of the same does not and cannot arise as there was existing on that date, a claim lodged by the petitioner.

4. In any event, the records of the South Central Railway produced before the Court depict an office note to the following effect :

"The Contractor has furnished a "Qualified" no claim certificate along with the bill stating that the claims put forth in his letter dated 28-1-1997 still subsists. The claims put forth by the contractor were repudiated by the department vide this office letter dated 24-7-1997. Further, the contractor had filed an arbitration application in the High Court of A.P. and for which counter is being filed by the department."

5. The learned Standing Counsel appearing for the respondents further contended that the claims lodged by the applicant by reason of the specific terms of the agreement cannot be termed to be arbitrable in nature and as such question of there being any reference to the arbitration does not and cannot arise. It is on this score that Clauses 63 and 64 of the General Conditions of Contract ought to be noted :

"63. All disputes and differences of any kind whatsoever arising out of or in connection with the contract whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the Contractor to the Railway and the Railway shall within a reasonable time after receipt of the contractor's presentation make and notify decisions on all matters referred to by the contractor in writing, provided that matters for which provisions has been made in Clauses 18, 22(5), 39, 45(a), 55, 55-A(5), 61(2) and 62(1)(xiii)(B) (e)(b) of the General Conditions of Contract or in any Clause of the Special Conditions of the Contract shall be deemed as 'Excepted Matters' and decisions thereon shall be final and binding on the contractor; provided further that excepted matters shall stand specifically excluded from the purview of the arbitration












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