TaxTMI 
TaxTMI 
2015 (1) TMI 16
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....el crossing and in the said contract there was a clause with regard to arbitration. The issue with which we are concerned in the instant case, in a nutshell, is as under:- "When in a contract of arbitration, certain disputes are expressly "excepted", whether the Arbitrator can arbitrate on such excepted issues and what are the consequences if the Arbitrator decides such issues?" 3. For the purpose of considering the issue, in our opinion, certain clauses incorporated in the contract are relevant and those clauses are reproduced hereinbelow :- "Clause 39. Any item of work carried out by the Contractor on the instructions of the Engineer which is not included in the accepted schedule of rates shall be executed at the rates set forth ....
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....appeal to the Chief Engineer within 30 days of getting the decision of the Engineer supported by the analysis of the rates claimed. The Chief Engineer's decision after hearing both the parties in the matter would be final and binding on the contractor and the Railway." "Clause-63. 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 presentation make and notify decisions on all matters referred to by the contractor in writing pr....
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....er within 30 days of getting the decision of the Engineer and the Chief Engineer's decision about the amount payable was to be final. 7. It is not in dispute that some work, which was not covered under the contract had been entrusted to the contractor and for determining the amount payable for the said work, certain meetings had been held by the contractor and the concerned Engineer but they could not agree to any rate. Ultimately, some amount was paid in respect of the additional work done, which was not acceptable to the contractor but the contractor accepted the same under protest. 8. In addition to the aforestated dispute with regard to determination of the rate at which the contractor was to be paid for the extra work done by it,....
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....ad mainly submitted that as per Clause 39 of the contract, the Engineer of the respondent authorities was duty bound to decide the rate at which payment was to be made for the extra work done by the contractor, through negotiations between the parties. A final decision on the said subject was taken by the respondent authorities without the contractor's approval and therefore, there was a dispute between the parties. He further submitted that no decision was taken by the Engineer and therefore, there was no question of filing any appeal before the Chief Engineer and as the Chief Engineer did not take any decision, the aforestated clauses, viz. Clauses 39 and 64 would not apply because clause 64 would "except" a decision of the Chief Engi....
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.... of the Engineer before the Chief Engineer within 30 days from the date of communication of the decision to the contractor. 17. In the instant case, there was no finality so far as the amount payable to the contractor in relation to the extra work done by it is concerned, because the said dispute was never decided by the Chief Engineer. In the aforestated circumstances, when the disputes had been referred to the Arbitrator, the disputes which had been among "excepted matters" had also been referred to the learned Arbitrator. 18. Upon perusal of the case papers we find that before the learned Arbitrator, the contractor did object to the arbitrability of the disputes covered under Clause 39, but the Arbitrator had decided the said issue....