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Himachal Pradesh High Court · body

2012 DIGILAW 527 (HP)

National Hydro Power Corp. Ltd. through its General Manager v. Sham Mahajan

2012-09-11

RAJIV SHARMA

body2012
JUDGMENT Rajiv Sharma, Judge: This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act” for the sake of brevity) is directed against the award, dated 22.06.2010. 2. Material facts necessary for adjudication of this petition are that a notice inviting tenders was issued on 04.12.2000 for the work “Investigation, Design & Construction of Suitable (RCC/Steel) Bridge 7.5 M Wide, 22 M Span Double Lane 70 R Loading Across Urshu Nallah On Garsa-Sheelagarh Road Including Hill Slope Protection, If Any, Aesthetics And Landscaping etc.”. The respondent also participated in the same and was awarded the work vide letter, dated 23.06.2001, for a sum of Rs. 41,50,000/-. The work was to be completed within a period of five months to be reckoned from 7th day of the issue of award letter, dated 23.06.2001. The entire work was to be completed on or before 29.11.2001. However, the work was completed in July, 2003. 3. The respondent-claimant (hereinafter referred to as “the claimant” for the sake of convenience) has raised issues/disputes, which were denied/rejected by the petitioners. Thereafter, the claimant resorted to Arbitration and raised eight claims. Learned Arbitrator accepted four claims and rejected the remaining four while making the award on 22.06.2010. 4. Mr. Vijay Arora, learned counsel for the petitioners has vehemently argued that the learned Arbitrator has passed a non-speaking award, dated 22.06.2010. He also contended that the evidence produced before the learned Arbitrator has been overlooked by him by allowing four claims of the respondent-claimant. He then argued that the learned Arbitrator has misconstrued various Clauses contained in the agreement. He also contended that the learned Arbitrator has gone beyond the terms and conditions of reference. He also contended that the learned Arbitrator has not framed any issues and the interest @ 9% awarded by him is excessive. 5. Mr. J.S. Bhogal, learned Senior Counsel for the respondent-claimant has supported the award, dated 22.06.2010. 6. I have heard the learned counsel for the parties, gone through the pleadings and the award carefully. 7. Claim No. 1 pertains to payment of extra work. According to the claimant, during the execution of work after the founding level has been achieved, the claimant was required to raise the founding level of the bridge by 40 cm. and was required to fill up the excavated portion with concrete. 7. Claim No. 1 pertains to payment of extra work. According to the claimant, during the execution of work after the founding level has been achieved, the claimant was required to raise the founding level of the bridge by 40 cm. and was required to fill up the excavated portion with concrete. He complied with the orders and necessary entries were also made in respect of concrete. However, the petitioners did not make any payment in terms of agreed rates contained in Annexure-II to Schedule-A of the contract. 8. The claim was resisted by the petitioners. According to them, the contract in question was a lump sum contract, therefore, for execution of entire work nothing extra was payable to the claimant beyond the lump sum amount. The petitioners have relied upon Clause-2.2.1 of the agreement. It was not in dispute before the learned Arbitrator that the founding level was raised by 38 cm and the claimant laid extra PCC for which payment has been made by the petitioners to the claimant @ Rs. 3,800/- per cubic meter as per rate quoted in Annexure-II to Schedule-A. It was not disputed before the learned Arbitrator that foundation level of the bridge was revised and protection work was undertaken by the claimant. It was also admitted by the parties that recovery on account of reduction in foundation level was made as per Annexure-I to Schedule-A from the claimant account. Since the recovery on account of reduction in foundation level has been made in accordance with Annexure-I, the claimant was entitled for payment of extra work done such as concrete, excavation and form work in accordance with the rates provided in Annexure-II to Schedule-A. Learned Arbitrator has, thus, rightly concluded that the claimant was entitled to payment of 90 cum excavation and 14.33 sqm form work at the rate prescribed in Schedule-A. The petitioners have not disputed the quantity mentioned by the claimant, except that nothing was payable being the lump sum contract. 9. The claimant has sought payment of bearings of Rs.5,50,000/-. According to the claimant, the petitioners have not made payment for eight numbers of extra bearings costing to Rs. 5,33,000/- & also recovered an amount of Rs. 17,000/- towards testing charges from the bills of the claimant arbitrarily. 9. The claimant has sought payment of bearings of Rs.5,50,000/-. According to the claimant, the petitioners have not made payment for eight numbers of extra bearings costing to Rs. 5,33,000/- & also recovered an amount of Rs. 17,000/- towards testing charges from the bills of the claimant arbitrarily. According to the claimant, the bearings were got manufactured by him from the approved manufacturer only after the drawings for the bearings which were submitted by the claimant on 12.10.2001, had been approved by the petitioners. The claimant has also informed the petitioners about the manufacturing of bearings as per the approved drawings vide letter, dated 11.02.2002. This factual aspect has not been controverted by the petitioners. The claimant has also furnished a test certificate of the manufacturer of bearing, i.e., J.K. Steel & Polymers, Yamunanagar, who is on the approved list of the manufacturers. According to the petitioners, the bearings were not in conformity with the specifications laid down in the contract, IS codes in practice and were not manufactured as per the Circular/Guidelines issued by the Ministry of Surface Transportation. The same were required to be tested in an independent testing laboratory. As per Clause 23.2 of the agreement, all materials required to be used in the work to be provided by the Contractor, should be in conformity with the specifications laid down in the contract & the contractor has to furnish proof & samples time to time at his cost as may be specified by the Engineer-in-Charge for his approval before used in the work. In the instant case, the claimant has submitted drawings of bearings which were approved by the Engineer-in-charge, as per Annexure R-XVII. According to the document “Summary of Information”, the drawings of bearings were approved in time. The J. K. Steel & Polymers (India), Yamunanagar finds mention at Sr. No. 5 of the Circular. Moreover, the witness produced by the petitioners has admitted in cross-examination that M/s. J.K. Steel & Polymers, Yamunanagar, are on the list of manufacturers of bearings issued by the Ministry of Surface Transportation. The witness has also accepted that claimant has submitted a test report of bearings manufactured by J.K. Steel & Polymers together with letter, dated 11.02.2002. Thus, it is duly proved that the bearings were got prepared from the approved manufacturer after the drawings were approved by the petitioners. The witness has also accepted that claimant has submitted a test report of bearings manufactured by J.K. Steel & Polymers together with letter, dated 11.02.2002. Thus, it is duly proved that the bearings were got prepared from the approved manufacturer after the drawings were approved by the petitioners. Thus, the learned Arbitrator has rightly allowed the claim partly by awarding a sum of Rs.4,15,000/- to the claimant as cost of six bearings. 10. According to the claimant, a sum of Rs. 9,83,000/- has been wrongly withheld by the petitioners alongwith security deposit amounting to Rs. 3,00,000/-. The security deposit of the claimant was required to be refunded to the claimant as per Clause-4 of the agreement by the petitioners, if there was no outstanding demand against him. The petitioners have deducted an amount of Rs. 2,49,137/- on account of compensation for delay in completion of work. The work was to be completed within a period of five months. There was delay of 19 months. The petitioners have granted provisional time extension in favour of the claimant up to July, 2003. Once the extension has been granted by the Engineer-in-Charge, the levy of any compensation was not justifiable. 11. The petitioners have not placed any tangible evidence on record to establish that an amount of Rs. 81,758 was recoverable from the claimant. 12. Now, as far as the increase of deck level is concerned, the petitioners have accepted the tender of the claimant and provided further opportunity to quote the rate for the work and also subsequently to submit the G.A.D. The claimant submitted the G.A.D., which was accepted by the petitioners. As per Annexure-I of Schedule-A, rate for increase in depth of bottom level foundation abutment mentioned was Rs.2,00,000/- per meter. The claimant submitted GAD and the work were awarded by the respondents based on said GAD. The deck level has been increased 2.8 meters by the petitioners which is to be paid at the rate mentioned in Annexure-I to Schedule-A. As per the said schedule, the rate was Rs. 2 lacs/m. Thus, in these circumstances, the learned Arbitrator has rightly held the claimant to be entitled to a sum of Rs.5,60,000/- on account of increase of deck level as extra work to be paid by the petitioners. . 13. The 9% rate of interest awarded to the claimant is strictly in accordance with law. Mr. 2 lacs/m. Thus, in these circumstances, the learned Arbitrator has rightly held the claimant to be entitled to a sum of Rs.5,60,000/- on account of increase of deck level as extra work to be paid by the petitioners. . 13. The 9% rate of interest awarded to the claimant is strictly in accordance with law. Mr. Vijay Arora, learned counsel for the petitioners has not substantiated that the rate of interest @ 9% awarded by the learned Arbitrator is not in accordance with law. Learned Arbitrator has relied upon the judgment rendered by their Lordships of the Hon’ble Supreme Court in Krishna Bhagya Jala Nigam Ltd. Vs. G. Haris Chandra Reddy and Anr., 2007 (2) SCC 720 while awarding the interest @ 9% to the claimant from the date of start of Arbitration proceedings, i.e., 27.07.2004 till the date of payment. The award made by the learned Arbitrator is speaking and he has not travelled beyond the terms of reference and the specific provisions of the agreement. 14. Now, as far a non-framing of issues, as argued by Mr. Vijay Arora, learned counsel for the petitioner is concerned, the same would not affect the award of the learned Arbitrator. The parties knew their case and have led their evidence on each claim separately. 15. Accordingly, in view of the observations and discussions made hereinabove, there is no merit in this petition and the same is dismissed, so also the pending application(s), if any. No costs.