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2014 Supreme(Raj) 1994

RAJASTHAN HIGH COURT
P.K.Lohra, J.
Rajasthan State Road Development & Construction Corporation Ltd. and Ors. - Appellant
Versus
Five Star Builders & Contractor - Respondent
S.B. Civil Misc. Appeal No. 1182 of 2013.
Decided On : 24-11-2014

Advocates:
For the Appellants:Vinay Jain, Advocate.
For the Respondent:Rajesh Joshi, Advocate.

Headnote:Arbitration and Conciliation Act, 1996 Sections 34 and 37 Appeal was made under Sec 37 – The Application filed was dismissed under Section 34 in accordance with the arbitral award in favour of the respondent – it was stated that the respondent was not to be held for unprofessional work that was executed – As the Scope of judicial review was limited the decision of the Arbitrator was held final- The Appeal was dismissed.

JUDGMENT

1. - Matter comes up on second stay petition but with the consent of both the parties, appeal itself is heard finally at this stage and disposed of by this judgment.

2. Appalled by the order dt. 4.3.2013, the appellants have laid this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, 'Act of 1996) By the order impugned, learned Additional District Judge No. 3, Udaipur has rejected the application of the appellants under Section 34 of the Act of 1996 by declining to interfere with the arbitral award dt. 21.4.2010.

3. Succinctly stated, the facts of the case are that State Government sanctioned the work for construction of flow portion of RD 235 to 3501 M of Chiklawas Irrigation Project by its order dt. 7.3.1994 for a sum of Rs. 3,32,15,276/- in favour of appellant-Corporation and in this respect Work Order was issued and requisite agreement was also executed. Pursuant to the Work Order, appellants issued a Notice Inviting Tender (for short, 'NIT') in which respondent also participated and after acceptance of its tender. Work Order No. 10/97 dt. 2.5.1994 was issued for a sum of Rs. 1,79,52,393.09. The aforesaid work was allotted to the respondent on the same terms and conditions, which were agreed between the appellants and the Irrigation Department. In the Work Order, the date of commencement of the work was mentioned as 15.5.1994 and deadline for its completion was shown as 14.11.1995. However, in fact, the work was completed on 18.6.1997. After completion of the work, a dispute cropped up between the parties and eventually by judicial intervention, at the behest of respondent, this Court, while exercising powers under Section 18 of the Act of 1996, appointed Arbitrator vide order dt. 5.5.2005 while deciding S.B. Civil Arbitration Application No. 42/2004. The respondent contractor submitted its claim before the sole Arbitrator worth Rs. 1,53,29,794.18, while dividing it in 13 parts. The details about 13 claims of the respondent are as under:--

Claim No-1

Refund of Security Deposit (SD) for Rs. 5,30,000.00 (Rupees five lacs thirty thousand).

Claim No. 2

Payment of Final Bill for Rs. 10,14,711.00 (Rupees ten lacs fourteen thousand seven hundred eleven).

Claim No. 3

Escalation charges for labour and material for Rs. 11,91,776.18 (Rupees eleven lacs ninety one thousand seven hundred seventy six & paise eighteen) as per Agreement Clause 45.

Claim No. 4

Overhead expenditure and reduced profitability for Rs. 14,07,000.00 (Rupees fourteen lacs seven thousand).

Claim No. 5

Idling of labour and machinery for Rs. 66,50,000.00 (Rupees sixty six lacs fifty thousand).

Claim No. 6

Reduced profitability - Claim for Rs. 16,10,991.00 (Rupees sixteen lacs ten thousand nine hundred ninety one).

Claim No. 7

Increase in minimum wages claim for Rs. 3,95,366.00 (Rupees three lacs ninety five thousand three hundred sixty six).

Claim No. 8

Payment for land acquisition for haul road Rs. 1,57,000.00 (Rupees one lac fifty seven thousand).

Claim No. 9

Payment for cleaning of blocks Rs. 38,000.00 (Rupees thirty eight thousand).

Claim No. 10

Construction of temporary access on block No. 14 Rs. 40,000.00 (Rupees forty thousand)

Claim No. 11

Wrong recovery of Rs. 35,000.00 (Rupees thirty five thousand) for electric connection.

Claim No. 12

Illegal and wrongful deduction of Rs. 7,60,000.00 (Rupees seven lacs sixty thousand) from running bills.

Claim No. 13

Damage for illegal & wrongful deductions, non payments etc. - Rs. 15,00,000.00 (Rupees fifteen lacs)

4. For substantiating the aforementioned claims, the respondent pleaded requisite facts in the claim petition and also produced documentary evidence.

5. Responding to the claim petition submitted by the respondent-contractor, appellants filed a reply. In the return, respondent has raised a preliminary objection that entire work relates to the Irrigation Department, and therefore, without impleadment of Irrigation Department, claim cannot be processed. In the reply, it was also pleaded that delay in












































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