Sarvesh Chopra Vs. the General Manager, Northern Railways and anr. - Court Judgment

Excerpt:
in the instant case, there was no opposition to refer the arbitration that was made in respect of the certain claims - it was held that the expected matters should not be referred for the arbitration; although, the other matters could be referred to the arbitrator for the arbitration - - 3 to 6 are not liable to be referred to arbitration is well founded.y.k. sabharwal, j.(1) -the petitioner was granted by respondent no. i work of construction of bored piles 500 mm dia by cast in situ method for widening and raising of pul mithai (s) by agreement dated 27th april. 1985. the petitioner claims that the contract contains an arbitration clause 64(3)(a) whereunder matters in dispute or difference between the parties are to be referred to arbitration. the disputes of which reference is sought are set out in letter dated 31st march, 1986 (annexure 'a' to the petition). (2) the respondent is contesting the claim of the petitioner particularly in regard to claims no. 3 to 6. the case of the respondent is that the said claims are not liable to be referred to arbitration in view of clause 63 of the general conditions of contract read with the special conditions of contract. the respondents have not pleaded that claims no. i and 2 are 'excepted matters' under clause 63 and there is no opposition to reference to arbitration being made in respect of these claims no. i and 2. with regard to claims no. 3 to 6, reliance is placed on clause 63 which reads as under: '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 representation make and notify decisions on all matters referred to by the contractor in writing, provided that matters for which provision has been made in clauses 18, 22(5), 39, 45(a), 55, 55-a(5), 61(2) and 62(1) (xiii)(b)(a)(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 clause and not be referred to arbitration'. (3) on pleadings of the parties, following issues were framed : 1. whether the disputes referable to the arbitrator have arisen out of the contract in question 7 2. relief. (4) parties were directed to lead their evidence in form of affidavits and documents. the petitioner has filed his own affidavit by way of evidence. the respondent has filed affidavit of mr. d.d. singh, its senior engineer working in the northern railway. i have heard learned counsel for the parties and now proceed to determine the aforesaid issues. issue no. i: 5. claims no. 3 to 6 as set out in letter dated 31st march, 1986 (annexure 'a') reads as under : '3. there occurred tremendous increase in cost of building piaterials. 42 nos. of piles were bored after the expiry of stipulate 404 completion period and particularly when the prices were too high. additional cost incurred @ rs. 250.00 for these 42 nos. of piles may please be paid. this has also been verified by your staff at site. rs.250x42=rs.lo,500.00 . piling rig with diesel driven wench, mixture, machine, driving pipe, wheel barrows, hoppers and other tools and plants remained idle at site for 2 months, i.e. for 75 days. the entire machinery was procured from the market on hire charges. rent was paid @ rs. 1070.00 per day for this machinery. hire charges amounting to rs. 80, 250.00 (1070x75) may please be re-imbursed. (5) the site was not made available for one month. changes took place and decisions were delayed. the work which was required to be completed within 3 months but dragged on for additional period of 6 months. establishments and arrangements were kept intact for additional period of 6 months at a cost of rs. 10,000.00 per month. these losses may please be paid. (rs. 10.000 x 6=rs. 60,000). (6) the work of rs. 5,95,000.00 was required to be completed within 3i months meaning thereby, monthly progress would not be less than rs. l,75,000.00 . as against the entire work could be completed within a period of 9i months i.e., rs. 75,000.00 per month. the losses sustained for less output may be compensated and this comes to rs. 40 000.00 '. clause 63 has already been reproduced above. the said clause shows that the matters for which provision has been made in clauses 18, 22(5), 39, 45(a), 55, 55-a(5). 61(2) and 62(1) (xiii) (b) (a) (b) of the general conditions of contract or in any clause of the special conditions of contract shall be deemed as 'excepted matters' and decision thereon shall be final and binding on the contractor provided further that 'excepted matters' shall stand specifically excluded from the purview of the arbitration clause and not be referred to arbitration. along with the affidavit of mr. d.d. singh, a photo-state copy of special conditions of contract has been filed. the relevant, conditions are 9.2, 11.3 and 21.5. the said conditions read as under: '9.2. no material price variation or wages escalation on any account whatsoever and compensation for 'force major' etc. shall be payable under this contract. 11.3. no claim whatsoever will be entertained by the railway on a/c of any delay or hold up of the works arising out of delay in supply of drawings, changes, modifications, alterations, additions, commissions in the site layout plans or detailed drawings or designs and or late supply of such materials as are required to be arranged by the railway or due to any other factor on railway accounts. 21.5 no claim for idle labour and/or idle machinery etc. on any account will be entertained. similarly no claim shall be entertained for business loss or any such loss'. (7) from a bare reading of claims as given in annexure 'a' and elaborated in the affidavit of the petitioner by way of evidence, it is abundantly clear that claims no 3 to 6 are covered by one or the other of the aforesaid special conditions of contract. the matters covered by the special conditions of contract have been excepted from arbitration under the aforesaid clause 63. in this view of the matter, in my opinion, the objection of the learned counsel for the respondent that claims no. 3 to 6 are not liable to be referred to arbitration is well founded. learned counsel for the petitioner however, places reliance upon the case of .6. .d. chawlav. union of india, 1984 raj. l.r. 421 for the proposition that such matters can be referred to arbitration. in that case b.n. kirpal, j. was considering. whether the claim of the contractor who having accepted the extension of time without reserving any right to claim, was debarred from making such a claim and whether reference of such a claim to arbitration could be made or not. in the said case justice kirpal was considering clause 63 prior to its amendment in the year 1979. the work under the contract of the case before justice kirpal was to be completed by 28th february, 1978. although the exact clause is not reproduced in the report which was cited before me but para 7 of the report sets out the gist of the said clause. it appears that the words 'or in any clause of the special conditions of the contract shall be deemed to be 'excepted matters' and the decisions thereon shall be final and binding on the contractor' were added by amendment of the 1979 and were not part of clause 63 before its amendment on 3rd september, 1979. in view of the amendment of clause 63 in the year 1979, the judgment in the case of b.d chawla (supra) will not be applicable. admittedly the contract in this case was awarded in the year 1985 and the conditions as existing in the year 1979 will be applicable. (8) for the reasons stated above, in my opinion, that claims no. 3 to 6 are 'excepted matters' under clause 63 and cannot be referred to arbitration . as stated above, there is no objection of reference to arbitration being made of claims no. i and 2. accordingly, issue no. i will stand decided in favor of petitioner in respect of claims no. i and 2, and against the petitioner in respect of claims no. 3 to 6. issue no. 2 (relief) : (9) for the reasons stated above, i direct the respondent to file arbitration agreement in court within eight weeks and appoint an arbitrator in accordance with the arbitration clause and disputes no. 1 & 2 be referred to arbitration. suit no. 2206-a/86 is disposed of in the above terms leaving the parties to bear their own costs.