IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL A. O. No. 27/2008 Uttar Pradesh Rajkiya Nirman Nigam Ltd. ..Appellant. Versus National Hydro Electric Power Corporation, Registered Office at Himkunt Tower, 8 Nehru Place, New Delhi .. Respondent. Sri Anil Kumar Joshi, Advocate for the appellant. Sri Alok Mehra, holding brief of Sri Manoj Tewari, Advocate for the respondent. Dated: 12-2-2009 UHon’ble B.C. Kandpal, ACJ This appeal under Section 39 of the Arbitration Act, 1939, arise out against the judgment and order dated 26-4-1997, passed by Addl. C.J.M./Civil Judge (Senior Division), Nainital, in O.S. No. 211 of 1991, U.P. Rajkiya Nirman Nigam Ltd. Vs. National Hydro Electric Power Corporation Ltd. 2- Brief facts of the case giving rise to this appeal, are that the appellant U.P. Rajkiya Nirman Nigam was given a contract dated 18-8-1996 by the respondent National Hydro Electric Power Corporation, for constructing residential buildings at Banbasa Tehsil Khatima. The contract value was Rs. 1,17,03,594-50P. According to the appellant/Nigam it had completed the work on 17-10-1987 as per the terms of the contract and sent the final bill to the defendant/Corporation. It is also further allegation of the appellant that Rs. 19.71 lacs are due against the respondent but the respondent/Corporation has wrongly withheld the said 2 amount with it and made illegal deductions on the pretext of low standard work; made illegal recovery of the value of supplied cement and steel; deductions made towards rent of accommodation and realizing interest on mobilization advance given to the appellant. It is also the allegation of the appellant that the respondent did not inform it at the time of final verification of the work done at site. Hence there arose a dispute between the parties. As per the term of clause- 55 of the contract there is provision to settle the dispute by the Arbitrator. Therefore, the appellant/Nigam filed suit U/S 28 of the Arbitration Act before the trial court to refer the dispute to the Arbitrator. 3- The respondent/Corporation contested the suit by filing written statement before the trial Judge and admitted the contract work between the parties but denied the details given by the Nigam about the work done by it. According to the respondent the appellant was already paid the value of the work done by it on the basis of the bills submitted to the respondent. The respondent denied the completion of work on 17-10-1987 and alleged that the work was completed on 31-11-1987 and 18-11-1987 and the appellant/Nigam did not submit the final bill. According to the contract the work of Field Hostel was to be completed on 14-10-1986 and that of Administrative Block on 14-12-1986 therefore the appellant/Nigam was liable for the delay in completing the work. It has further been alleged by the respondent that the appellant was informed of the final measurement and after final measurement a sum of Rs. 8,747-67P. was found due against the respondent. According to clause – 53 of the contract agreement the dispute between the parties was to be settled by the Engineer-in-charge and his decision was binding upon the parties. The 3 respondent/Corporation, therefore, raised the plea before the trial court that the suit is not maintainable and is liable to be dismissed. 4- The trial court on the pleadings of parties framed the following issues in the suit:- 1- Whether the matter is liable to be referred to the Arbitrator?. 2- Whether any contract of the matter in dispute was entered in to between the plaintiff and the defendant as alleged in the written statement? If so, its effect?. 3- Whether the suit is barred by limitation?. 4- Whether this court has no jurisdiction and hear and decide the suit?. 5- To what relief, the plaintiff is entitled to get?. 5- Both the parties exchanged affidavits before the trial Judge and after hearing learned counsel for the parties and perused the material available before it, the trial court dismissed the suit of the plaintiff. 6- Feeling aggrieved, the plaintiff/appellant has preferred this appeal before this court. 7- I have heard learned counsel for the parties and perused the record. 8- The learned counsel for the appellant has submitted that the dispute was liable to be referred to the Arbitrator as per the terms of clause-55 of the agreement clause and the court below has misread the provisions of clause-55 and has committed an obvious error in dismissing the suit. 4 9- On the other hand learned counsel for the respondent has made rival submission and contended that the disputes were covered under clause-53 of the agreement clause and the Engineer-in-charge was competent to decide the same. The trial court has arrived at a just and appropriate decision by rejecting the plea of the plaintiff to appoint an Arbitrator in the matter. 10- The sole controversy involved in this appeal is whether the disputes between the parties were liable to be referred to the Arbitrator or the same were covered under clause –53 of the agreement clause and were not liable to be referred to the Arbitrator as per the terms of clause-55 of the agreement clause. 11- Perusal of record shows that plaintiff’s case is that the work was completed on 31-10-87 whereas according to the defendant the work of Field Hostel and Administrative Block were to be completed on 14-10-86 and 14-12-86 respectively and there was delay in completion of the work. Further allegation of the respondent/Corporation was that the work carried out by the plaintiff/Nigam was not as per specification of the contract and despite intimation to rectify such items as per specification, the plaintiff/Nigam defaulted to rectify the same and the recoveries against such items were made as per the provisions of the contract. Further contention of the defendant is that advance payments were also made against the work and material and the works carried out by the plaintiff were jointly measured and recorded in the measurement book and the same were duly accepted by the plaintiff. At the close of the work final bill was prepared by the defendant and plaintiff was intimated about it. The said final bill was 5 signed by the plaintiff also in M.B. No. 56, at page 102. The contention of respondent is that clause 55.1 to 55.8 of the General Conditions of the Contract has no application to the case of plaintiff as is evident from the footnote appended below the said clause and the said footnote makes a provision that in case of contract with Public Sector Undertaking the clause 55.1 to 55.8 shall stand deleted and the dispute or difference in case of a contract with a Public Sector Undertaking shall be settled by Arbitrator in terms of Ministry of Finance (Bureau of Public Enterprises) O.M. No. BPE/GL-901/76 MAN/2/110/75-BPE/OM-1 dated 1.1.76, 29.10.76 and 4.10.77 or any other modifications/amendments thereof. The trial court has recorded a categorical finding that the disputes mentioned by the plaintiff in its plaint were covered under clauses 13, 18, 23, 34, 40 and 44 of the agreement clause and the same were to be decided by the Engineer-in-charge whose decision was binding upon both the parties and the matter was not to be referred to the Arbitrator. The further contention of the defendant/respondent is that all the disputes raised in the plaint have already been decided by the Engineer-in- charge and his decision is binding upon both the parties as per the terms of clause-53 of the contract agreement and there remains no dispute to be referred to the Arbitrator under clause 55. 12- The trial court on issue No.3 has also given a finding that the dispute between the parties arose in June-July 1988 and the suit filed by the plaintiff was barred by limitation as the same was filed after expiry of three years. 13- In the above facts and circumstances of the case I find myself in full agreement with the conclusion 6 arrived at by the trial Judge that the disputes mentioned in the plaint were covered under clause-53 of the agreement clause and the same were to be decided by the Engineer-in-charge himself, whose decision was binding upon both the parties, and the matter was not liable to be referred to the Arbitrator as per clause-55 and footnote appended below it. The point framed in this appeal is decided in favour of the defendant/respondent and against the plaintiff/appellant. 14- The appeal lacks merit and is liable to be dismissed. 15- Accordingly, the appeal is dismissed. The impugned judgment and order passed by the trial court is hereby confirmed. (B.C. Kandpal, ACJ) SP