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Showing contexts for: price variation in The Government Of Madras, Represented ... vs The Superintending Engineer P.W.D. And ... on 3 October, 1967Matching Fragments
3. The documents which will be sufficient for determination of the main issue of fact are the contract itself, certain particulars to be gathered in the claim statement certain passages in the correspondence between the parties, and G.O. Ms. No 3436 (Health), dated 26th November, 1967. We may add that many of the facts of the records are not in dispute. Thus, for instance, it is not in dispute that the contract itself provided for a price variation clause. This states that prices were based on current controlled rates for steel and cement and if there was any rise in the price of materials, the Government were bound to pay for the increase subject to the production of certificates from the respective controllers. There is another clause by which the company was entitled to apply for extension of time for completion of the contract, on certain particularised grounds. This clause clearly states that the Superintending Engineer (Public Health) with whom the contract was executed formally, was entitled, if he was satisfied about the cause for the delay, to grant this extension, of time.
4. What actually happened between the parties was that the contract was not completed within the time originally specified, and the company prayed for extension of time, invoking several of the contingencies which are referred to in the contract as amounting to justification for the grant of extension of such time. The Superintending Engineer (Public Health), who, under the contract, was entitled to extend the time for completion of the contract, addressed a letter to the company, dated 26th September, 1957, which is of some importance. In the first paragraph he states that he has addressed the higher authorities, namely, the authorities of the Government for according sanction for extension of time upto 31st March, 1958, for the two contracts in question. In other words, he unambiguously declares that he himself was not competent to grant this extension of time, but that it had to be formally sanctioned by the Government. In the succeeding paragraph, he informs the company that, assuming that the extension is granted, the company will not be entitled to the benefit of the price variation clause during the extended period. That is his view or decision, whichever it might be termed and the language is quite categorical that this officer was of the view that the extension should be granted,, only subject to the condition that the company could not invoke the price variation clause, if there was an increase in price.
5. However that might be, the Government finally sanctioned the extension of time by G.O. Ms. No. 3436, dated 26th November, 1957. This is a very brief order in. clear terms, amounting to an extension of time for completion of the contract, without any conditions whatever attached to the grant. There is no reference at all to the price variation clause, and it is not stated that the company cannot invoke the benefit of this clause, in case it should establish an increase in prices, during this, period, of the controlled commodities.
11. We consider that these passages are very pertinent to the present context. Whatever might have been the prior correspondence and whatever might have been the views of the Superintending Engineer (Public Health) about the degree to which the company could or could not invoke the benefit of the price variation clause, the fact remains that there are only two effective documents in the entire record. The first is the contract, which includes the power of the Government to extend the time and the second is the Government Order actually extending the time. The, learned Government Pleader does not argue, that, under the contract, the Government were bound to suspend the price variation clause during the extended time, or they had no power to furnish the benefit of the clause, even for the extended period of the contract. Obviously, they had the power and discretion to do so. In interpreting the Government Order, the prior correspondence should not have been referred to at all, and the views of the Superintending Engineer are totally irrelevant. As we have pointed out, the true contracting parties are the Government and the company, and the only proper interpretation of the Government Order is that, fully cognisant of the prior facts and correspondence, the Government chose to extend the time in an unqualified manner, thereby implying that the benefit of the price variation clause was available to the company, during the extended period also. In other words, the arbitrator has interpreted the vital document, in the light of some opinion of the officer earlier expressed, which is wholly irrelevant and inadmissible, as far as that task of interpretation is concerned.