R. K. ABICHANDANI, J.

( 1 ) THE Gujarat Housing Board has preferred this appeal against the judgement and order dated 27th October 1988 passed by the learned Judge, City Civil Court No. 2, Ahmedabad in Civil Suit No. 3799 of 1981 directing the appellant to pay Rs. 6,50,691=00 with proportionate costs and interest at the rate of 12% per annum on the amount of Rs. 6,08,879=00 from the date of the suit till realisation.

( 2 ) THE respondent - plaintiff, a registered partnership firm dealing in building construction activities, had submitted a tender for construction of a building for the Employees State Insurance Corporation, at Ahmedabad. After negotiations, the appellant original defendant had accepted the tender on 17th August 1973 and issued a work order to the respondent on 28th November 1973, fixing the date of commencement of work on 1st December 1973. According to the respondent, there was delay in issuing the work order due to the fact that the plans for construction had not been approved by the Ahmedabad Municipal Corporation and the commencement certificate was not granted till that date. Further more, the work was delayed due to the Boards inability to supply drawings of R. C. C. pillars in time. It was averred in the plaint that there was nearly eight months delay in supplying the drawings. While the work was being carried out, according to the respondent, it had submitted an application to the Executive Engineer, as also to the Housing Commissioner contending that there was a most unusual increase in the rates of materials and labour, and as a result of the delay on the part of the officials of the Board, the respondent had to suffer a loss of nearly Rs. 6,00,000=00. It was also alleged that there was a delay in supply of cement and steel, which had also affected the pace of the progress of the work entrusted to the respondent. The respondent had completed the contract and as contemplated by clause 30 of the agreement, had submitted a claim for enhanced rates to the Housing Commissioner. According to the respondent, this application was treated as a reference to the arbitration by the Housing Commissioner and a number of hearings were held commencing from 11th July 1978 till 17th January 1979, but no award was declared. The respondent gave notices on 11th January 1980 and 12th February 1980 through its advocate requesting the Housing Commissioner to declare the award, but it was not declared. It was further averred that the respondent came to know that the Board had taken up a stand in some proceedings in the City Civil Court that clause 30 of the agreement was not an arbitration clause. The respondent therefore concluded that the agreement between it and the defendant - Board did not have any arbitration clause and filed the suit. It was averred in para 13 (E) and 14 of the plaint that there was increase in the rates of the R. C. C. work which was included in the tender to the extent of Rs. 3,10,000=00, in respect of brick work to Rs. 57,800=00, for steel work to the extent of Rs. 85,300=00, for M. S. steel and reinforcement to the extent of Rs. 26,250=00 and for flush doors to the extent of Rs. 35,851=00. There was a further increase of Rs. 17,559=00 for the water supply and sanitary fittings and an increase of Rs. 76,129=00 for internal electrification. There was, thus, an additional cost of Rs. 6,08,879=00 incurred by the respondent over the tendered amount for the contract. According to the respondent, this increase was caused because it was prevented from carrying out the work in time by reason of the delays and defaults attributable to the Board and its officials. In para 16 of the plaint, it was contended that if the Board took up a stand that, under the terms of the agreement between the parties, the respondent was not entitled to claim any increase in rates, then in that event, the respondent was contending that the agreement between the parties was required to be signed by the Chairman of the Board, and th

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