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1986 DIGILAW 8 (DEL)

JAGDISH MANCHANDA v. UNION OF INDIA

1986-01-08

D.P.WADHWA

body1986
D. P. Wadhwa ( 1 ) THIS is a petition under Section 20 of the Arbitration Act. ( 2 ) THERE was a contract for execution of the work styled "prov. Stone Sett flooring in the stock yard of SAIL siding at Guldhar". The tender of the petitioner was accepted and a contract was duly entered into. It appears that at some subsequent stage the contract was cancelled and work awarded to some other contractor. It is the case of the respondents that the petitioner did not carry out any work under the contract and it had, therefore, to be terminated. The respondents not only forfeited the security deposit of Rs. 1250. 00 of the petitioner but also levied damages amounting to Rs. 11,874. 00 on the petitioner. The disputes having thus arisen the petitioner invoked the arbitration clause. Thereafter, the present petition came to be filed. On the pleadings of the parties the following issues were framed :- 1. Whether subject disputes are converted under the arbitration agreement between the parties ? 2. Relief. ( 3 ) THERE respondents did not dispute the existence of the arbitration agreement. This arbitration agreement is contained in Clause 64 of the Central Conditions of Contract governing the contract between the parties The disputes are mentioned in para 8 of the petition and for the sake of convenience these may be reproduced as under :- 1. Losses incurred by way of idling of the Supervisory staff, labour, chowkidar etc. after the award of the work till termination of the contract, illegally and arbitrarily by the Respondents. Rs. 30,000. 00 2. Loss of the material stocked and lying at the site of the work. Rs. 30,000. 00 3. Refund of the part security deposit. Rs. 1,250. 00 4. Expenses in making the preliminary arrangements, but became useless as the Petitioner has not been allowed to work in view of the position stated in the petition. Rs. 15,000. 00 5. Business loss and loss of profit. Rs. 15,000. 00 6. The Arbitrator to declare that the demand of the Respondents for Rs. 11,874. 00 by way of liquidated damages is illegal and arbitrary. Rs. 11,874. 00 7. Interest pendent-lite add future till the payment of the dues, at the rate of 24% per annum. 8. Costs of the arbitration. Business loss and loss of profit. Rs. 15,000. 00 6. The Arbitrator to declare that the demand of the Respondents for Rs. 11,874. 00 by way of liquidated damages is illegal and arbitrary. Rs. 11,874. 00 7. Interest pendent-lite add future till the payment of the dues, at the rate of 24% per annum. 8. Costs of the arbitration. " ( 4 ) IT has not been shown as to how the aforementioned disputes are not covered under the arbitration agreement between the parties. The main plea of the respondents is that the claim of the petitioner s bogus in as much as the petitioner has made claims worth over Rs. 1 lakh, though after the contract was terminated an amount of Rs. 61,000. 00 was awarded to the second contractor to execute the job. But that is not for me to decide. If reference is made to the written statement filed by the respondents it is not the case of the respondents that any of the claims could not be the subject matter of the arbitration agreement between the parties. I would, therefore, hold issue No. 1 in favour of the petitioner. Accordingly, the petition is allowed and the disputes are referred to arbitration in terms of arbitration agreement between the parties. The General Manager, Northern Railways, respondent No. 2 will appoint the arbitrator within two months from today. There will be no order as to costs.