Italian Thai Develpoment Public Company Ltd. v. MCM Services Ltd.
2020-05-27
JYOTI SINGH
body2020
DigiLaw.ai
JUDGMENT Jyoti Singh, J. - Present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") challenging the Award dated 22.03.2017 passed by the Arbitral Tribunal in so far as it has partially allowed the claims of the Respondent. Respondent herein was the Claimant in the Arbitration Proceedings and the Petitioner herein was the Respondent. 2. Brief facts leading to filing of the present petition are that the Government of Himachal Pradesh decided to construct a Project, namely, Koldam Hydroelectric Power Project of 800 MW in Bilaspur District, situated about 25 km from District HQ on River Satluj and 4.5 Kms of Dehar Power Plant. Construction of the Project was to be done by National Thermal Power Corporation (hereinafter referred to as "NTPC"). 3. Petitioner participated in the Tender floated by NTPC and was appointed as a Contractor for the Project, for "main civil works Package I Dam, Spillway and Power Intake Package". Contractual relationships between the Petitioner and NTPC were governed by a Letter of Award dated 12.12.2003 and the FIDIC General Conditions of Contract (hereinafter referred to as "FIDIC Conditions") read with the NTPC Conditions of Particular Application (hereinafter referred to as the "COPA"). 4. The works included in the Contract between the Petitioner and the NTPC were as under: Section Particulars Section 2 Design and construction of u/s Diversion Dyke and d/s Cofferdam. Design, Installation and operation of water control works. Earth and rock fill dam. Dam Instrumentation. Section 3 Excavation in De-silting basin area and Approach channel up to EL618m Section 4 Power Intake structure. Intake and Spillway Control Building. Section 5 Spillway and chute. Complete excavation for spillway, chute and plunge pool. Dam Instrumentation Section 7 Excavation in Powerhouse area up to EL 531 m (average) including access road. Excavation, leveling and grading works of switch yard area. Section 8 Underground drainage and grouting works in the foundation including galleries. Section 9 Plugging of Diversion Tunnel. All other associated for all sections of works. 5. The total estimated awarded value of the Contract in favour of the Petitioner was Rs. 6,64,55,55,021/-. 6. Under Clause 4.1 of the FIDIC Conditions read with COPA, Petitioner was permitted to sub-contract the work, awarded to it by NTPC.
Section 9 Plugging of Diversion Tunnel. All other associated for all sections of works. 5. The total estimated awarded value of the Contract in favour of the Petitioner was Rs. 6,64,55,55,021/-. 6. Under Clause 4.1 of the FIDIC Conditions read with COPA, Petitioner was permitted to sub-contract the work, awarded to it by NTPC. Petitioner, thereafter, subcontracted the work in respect of Sections 5, 8 & 9 to the Respondent herein and issued a Letter of Award on 10.03.2004 (hereinafter referred to as "LOA"). Value of work, so awarded was Rs.2,32,55,61,050/- i.e. 12% less than the amount at which these Sections of work were awarded by NTPC to the Petitioner. Under the LOA the scope of work to be executed by the Respondent included: Spillway: The spillway for Koldam is a gated spillway located on the left bank of Dam. The main elements of this structure are: · concrete weir approximately 132m. wide, with a crest at elevation 625. · 6 gate bays, each equipped with a radial gate 17.10m wide by 17m high (by H M Contractor) · A concrete closure section situated on the left bank of the weir with a top surface at elevation 648 , that prevents any bypassing of the gated weir by the left bank. · A reinforced-concrete chute of total length of approximately 420m, with width varying from 132m at the top to 70 m at the bottom, equipped at the bottom with a flip bucket that forms a jet trajectory at 30 angle to the horizontal. This structure shall respect the following operating specification; (i) Discharge a flow of 11,400 cu.m./sec, which corresponds to the Standard Project Flood, with 5 gates opened and a maximum water level of EL. 641.1 (ii) Discharge a flow of 16,500 m3/s, which corresponds to the Probable Maximum Flood, with 6 gates opened and maximum water level of El. 646The spillway piers shall each have a room containing the radial gate control equipment Underground Grouting and Drainage Works The work is composed of: Underground construction works for grouting and drainage galleries. All the grouting and drainage works carried out from the galleries. Installation of monitoring equipment in the galleries. Diversion Tunnel Plugs The two diversion tunnels will be equipped with losing plugs to ensure a permanent water tightness after filling up the reservoir. The closing of tunnel 2 are made out of reinforced concrete as well.
All the grouting and drainage works carried out from the galleries. Installation of monitoring equipment in the galleries. Diversion Tunnel Plugs The two diversion tunnels will be equipped with losing plugs to ensure a permanent water tightness after filling up the reservoir. The closing of tunnel 2 are made out of reinforced concrete as well. The plugging shall be carried out along with the work of bottom outlet made of two pipes allowing to evacuate a flow of 580 Cu. M/S at full reservoir water level. This facility will allow to control the level of the reservoir during the first fill up, The steel lining at the invert for 1OOm length on the downstream of the floodgate shall be provided to limit erosions due to high velocity of the water full of abrasive materials 7. Certain Provisions of the LOA which are necessary for the present petition are as under: i. "Clause 3.2 of the Letter of Award required that the scope of work subcontracted to the Respondent/Claimant be completed in accordance with the specifications, terms and conditions contained in the FIDIC Conditions read with the NTPC COPA. Further, Clause 14 required the Respondent/Claimant to ensure that the work is completed in accordance with the Technical Specifications prescribed by NTPC. ii. Clause 4 provided that the subcontract was for a total consideration of Rs. 232,55,61,050. Clause 5 further provided that this consideration was subject to price adjustment in accordance with the formula specified in Clause 73 of the NTPC COPA. iii. Clause 8 stipulated that time is of the essence of the contract as far as the Respondent/Claimant''s obligations are concerned and required the Respondent/Claimant to complete its works m accordance with the timeline prescribed by the NTPC in its Letter of Award dt. 12.12.2003. Clause 9 further stipulated the amount of compensation to be paid by the Respondent/Claimant in the event of delay. iv. Clause 10 stipulated the amount of money to be retained with the Petitioner as the Respondent/Claimant''s security deposit towards its performance of its obligations under the Letter of Award. v. Clauses 11 and 21 of the Letter of Award read with Clause 3 of the Attachment to the Letter of Award explicated the obligation the Respondent/Claimant to mobilize sufficient resources and employ sufficient labour, as specified, for the completion of the work awarded to it in accordance with the timelines prescribed by NTPC. vi.
v. Clauses 11 and 21 of the Letter of Award read with Clause 3 of the Attachment to the Letter of Award explicated the obligation the Respondent/Claimant to mobilize sufficient resources and employ sufficient labour, as specified, for the completion of the work awarded to it in accordance with the timelines prescribed by NTPC. vi. Clause 23 of the Letter of Award provided that disputes arising out the contract would be resolved in accordance with the procedure specified in Clause 67 of the FIDIC Conditions read with the NTPC COPA, and Clause 24 conferred exclusive jurisdiction on courts in Delhi in relation to matters arising from the contract. vii. Clause 2 of the Attachment to the Letter of Award clarified that payments to the Respondent/Claimant on a back to back basis after receipt of certifications and payments from NTPC for the work completed by the Respondent/Claimant, and clause 6 of the Attachment to the Letter of Award made the conditions of work in the FIDIC Conditions and NTPC COPA applicable to the contract on a back to back basis, except insofar as any inconsistency exists between the two, in which case the Letter of Award would prevail. viii. Clause 7 of the Attachment to the Letter of Award empowered the Petitioner to terminate the contract or a part thereof in the event of the Respondent/Claimant''s nonperformance." 8. According to the Petitioner, Respondent failed to fulfill its obligations under the LOA from the very beginning, as it failed to mobilize machinery as required and its work output suffered from severe delays, besides failing to meet the quality requirement specified by the NTPC. As per the Petitioner, Respondent abandoned the work, after failing to adhere with the timelines for completion of work and on account of this disputes began to arise between the parties. 9. On 27.01.2009, Respondent invoked Clause 67 of the FIDIC Conditions, informing the Engineer of the disputes and seeking adjudication of the following claims : S.No. Claim Amount Claimed 1. Idling of MCM?s resources Rs. 12,65,77,806. 2. Release of unjustified recoveries and pending payments. Rs. 78,71,126. 3. Reimbursement of payment made to seconded staff Rs. 37,79,729. 4. Additional Work in certain inclined gallaries Rs. 65,05,419. 5. Additional amount paid to workmen Rs. 42,15,251. 6. Release of security deposit amount Rs. 4,91,92,145. 7. Balance payment of RA Bills and Escalation Bills Matter of calculation, therefore not ascertained 8.
Release of unjustified recoveries and pending payments. Rs. 78,71,126. 3. Reimbursement of payment made to seconded staff Rs. 37,79,729. 4. Additional Work in certain inclined gallaries Rs. 65,05,419. 5. Additional amount paid to workmen Rs. 42,15,251. 6. Release of security deposit amount Rs. 4,91,92,145. 7. Balance payment of RA Bills and Escalation Bills Matter of calculation, therefore not ascertained 8. Interest 1% per month, from the date on which payment was due till the date of actual payment. 10. On 17.04.2009, the Engineer communicated its decision to the parties finding all the claims preferred by the Respondent to be untenable, being against the explicit Provisions of the Contract and lacking sufficient details as well as evidence of the alleged loss. The Engineer, in fact, concluded that it was the Petitioner who had incurred losses and damages on account of breach and abandonment by the Respondent. 11. Subsequent, thereto, Respondent invoked Arbitration and filed its Statement of Claim on 27.10.2009 before the Tribunal, raising the following claims against the Petitioner: S.No. Claim Amount Claimed Amount Awarded 1. Idling Charges Rs.12,65,77,806 Rs.1,34,67,162 2. Refund of deductions and release of pending payments Rs.78,71,126 Rs.32,42,705 3. Reimbursement of service charges and service tax paid on salaries paid for seconded labour Rs.12,55,921 Rs.5,08,904 4. Additional Work in inclined galleries Rs.65,05,419 Rs.65,05,419 5. Reimbursement for additional payment made to workmen Rs.42,15,251 Nil 6. Release of security deposit Rs.4,97,10,698 Rs.4,48,95,263 7. Balance payment for work done along with escalation Rs.14,67,73,025 Rs.1,19,96,310 8. Payment of agency fee Rs.28,24,36,088 Nil 9. Interest 18% per annum from 16.02.2008 1% over RBI lending rate from 20.04.2009 12. On 10.12.2009, Petitioner filed its Statement of Defence rebutting the claims raised by the Respondent, being against the Contractual provisions and also highlighting that there was no evidence or proof of alleged loss suffered by the Respondent under any of the claims raised by it. Respondent filed its rejoinder, thereto, and added new claims as follows: S.No. Claim Amount Claimed 1. Agency fee ( post award) Rs. 12,96,00,000 2. Idling Charges of staff and machinery till December 2009 Rs 16,79,25,216 3. Costs for demobilization of machinery Rs. 50,00,000 13. On 22.04.2010, Petitioner also filed its counterclaims, seeking an Award of Rs. 18,49,00,730/- on account of additional costs incurred by the Petitioner in completing the balance work sub-contracted to the Respondent.
Agency fee ( post award) Rs. 12,96,00,000 2. Idling Charges of staff and machinery till December 2009 Rs 16,79,25,216 3. Costs for demobilization of machinery Rs. 50,00,000 13. On 22.04.2010, Petitioner also filed its counterclaims, seeking an Award of Rs. 18,49,00,730/- on account of additional costs incurred by the Petitioner in completing the balance work sub-contracted to the Respondent. These counterclaims were, however, suspended, as recorded by the Tribunal in its order dated 03.05.2014. Subsequently, Respondent sought to amend its claims and filed an amended Statement of Claim whereby it raised the following additional claims: S.No. Claim Amount Claimed Amount Awarded 10. Agency fee Rs. 12,96,00,000 Nil 11. Idling charges of staff and machinery on account of stoppage of services Rs. 27,87,94,049 Nil 12. Costs for demobilization of machinery Rs. 50,00,000 Nil 13. Costs for restoration of machinery Rs. 99,35,229 Nil 14. Petitioner filed its amended Statement of Defence and the Respondent filed amended rejoinder. Petitioner also filed a response to an application filed by the Respondent for interrogatories and clarified the process by which the Respondent''s bills were cleared, upon receipt of certification and payments from NTPC and also clarified that the difference, if any, in the amounts billed by the Respondent and paid to it, was on account of differences in certification and payments claimed by the Respondent on one hand and the NTPC on the other. Both parties led evidence and after hearing the parties, learned Tribunal passed the impugned Award, partially allowing the claims of the Respondent as under: Claim no. Description Awarded Amount in Rs 1 Idling charges 1,34,67,162.88 2(a) Rent for Shaper Machine 12,501.00 2(c) Refund as to construction of Approach Road to Gallery No.12 1,59,946.50 2(d) Refund as to construction of Road No.5A 14,50,000.00 2(e) Refund of medical & Dispensary Charges 6,82,825.88 2(f) Refund of QC Lab Charges 7,00,676.85 3 Reimbursement of Service Charges of Seconded Staff supplied 5,08,904.71 4 Revised Rates of Excavation in Inclined Galleries No.3,5,7,9,10 &H. Gallery No.6 65,05,419.20 6 Refund of Retention money 4,48,95,263.00 7 Balance Payment & escalation 1,19,96,310.23 TOTAL 8,03,79,010.25 9 Interest Costs 15. The principal contention of learned Senior Counsel, Mr.
The principal contention of learned Senior Counsel, Mr. Hooda, touching upon objections, with respect to most of the claims challenged herein is that the claims have been awarded by the Tribunal without considering and identifying the existence and breach of any contractual obligations by the Petitioner and dehors the fact that Respondent was unable to either plead or prove loss/damage as required under Section 73 of the Indian Contract Act, 1872. Arguments have also been made separately with respect to each of the claims awarded in favour of the Respondent. CASE OF THE PETITIONER Claim No. 1: Award of idling charges for non-utilization of equipments/resources deployed by the Respondent due to delays caused by extraneous factors. 16. Mr. Hooda argued that the Tribunal failed to appreciate that the claim was on account of factors such as strikes/protests by locals, delay in possession of Spillway/dumping area, etc. and none of these factors could be attributed to the Petitioner and nor do they constitute Force Majeure Events. The Tribunal did not consider or identify the breach of any contractual obligations by the Petitioner and the Award of Claim was against the Provisions of Section 73 of the Indian Contract Act as no loss/damage was established by the Respondent. The Tribunal erroneously awarded the Claim on consideration of Clauses 12.1, 42.2 and 44 of the FIDIC Conditions read with NTPC COPA, even though these were not pleaded by the Respondent and moreover, these clauses placed obligations on NTPC qua the Petitioner and not on the Petitioner qua the Respondent under the contract. Even otherwise, the remedy contemplated by these Clauses could at best lead to a claim for grant of extension of time and price adjustment, in case of delays caused by specifying conditions, but which were neither claimed by the Respondent nor awarded by the Tribunal. Tribunal failed to appreciate that the work had been further sub-contracted by the Respondent and it neither pleaded nor proved that it had paid any compensation to its sub-contractors on account of idling and thus no loss could be claimed by the Respondent. It was argued that even if the Petitioner was to be held responsible, compensation would be limited to escalation as per Clause 73 of the Contract, which was already granted to the Respondent.
It was argued that even if the Petitioner was to be held responsible, compensation would be limited to escalation as per Clause 73 of the Contract, which was already granted to the Respondent. The Tribunal rightly held that in the absence of any evidence with respect to the alleged loss suffered, Contractor is not entitled to idling charges, yet ignoring the said finding, Tribunal allowed the idling charges, on an imaginary CPWD Formula. 17. Learned senior counsel for the Petitioner argued that the Tribunal completely ignored the cross examination, in which the witness of the Respondent failed to give any evidence on any loss suffered due to idling. In fact, the Tribunal itself reproduced the relevant cross examination, more particularly, question Nos. 19 and 20, which are as under: "Q19. I put it to you that MCM executed the excavation works awarded to it through its various sub- contractors and therefore did not directly suffer any loss on idling of resources for which MCM has raised Claim No. 1. What do you have to say? Ans: It is incorrect, because we ourselves also worked besides the sub-contractors and have borne the expenses of equipment, machinery and manpower of sub-contractors as well as ourselves. Tribunal''s question: Is there anything to show whether the MCM has borne the expenses of sub-contractors? Ans: I am not aware of it. Q20. How much of the works that led to the claim No. 1 on idling of resources were carried out by sub-contractors of MCM? Ans: I cannot say until I check the records." Claim No. 4: Payment for additional work in certain inclined galleries due to delays caused by extraneous factors: Tribunal awarded Rs. 65,05,419.20. 18. Learned senior counsel contends that the findings of the Tribunal in para 250 of the Award are perverse and beyond the Provisions of the Contract. Tribunal overlooked that Respondent had abandoned the work and Petitioner had to deploy another sub-contractor, at higher rates, to complete the work. Cross examination of the Respondent''s witness confirms abandonment of work on the part of the Respondent, more particularly, reply to question Nos. 27 and 28. It is further argued that the claim was based on factors such as strikes/protests by locals etc. and none of these factors could be attributed to the Petitioner and would at the highest constitute Force Majeure Events.
27 and 28. It is further argued that the claim was based on factors such as strikes/protests by locals etc. and none of these factors could be attributed to the Petitioner and would at the highest constitute Force Majeure Events. The Award of Claim is also against the Provisions of Section 73 of the Indian Contract Act as the Tribunal has neither considered nor identified breach of any contractual obligations on the part of the Petitioner. Tribunal further erred in awarding the claim using the rates offered by the Petitioner to other sub-contractors who had completed the balance work after the Respondent had abandoned the same. This was against the scheme of payment under the Contract. Tribunal further ignored the fact that under the Contract, the Respondent, at the highest, could be entitled to an extension of time and price escalation under Clauses 12.2, 42.2, 44 and 73, which was not even the pleaded case of the Respondent. Tribunal failed to appreciate that reliance of the Respondent on Section 54 of the Indian Contract Act was misplaced in as much as it had pleaded a case of reciprocal obligations, without identifying any obligations imposed or breached by the Petitioner under the Contract. Claim No. 6: Release of security deposit in the sum of Rs. 4,48,95,263/- 19. Learned senior counsel for the Petitioner contends that the findings of the Tribunal under this Claim are perverse and against the contractual provisions. Tribunal has erroneously concluded that Petitioner was not entitled to forfeit the security deposit solely on the basis that the Petitioner withdrew its counterclaims against the Respondent and this is in contravention of the law on adjustments and equitable set off. The Claim was allowed in the teeth of Clause 10 of the Letter of Attachment, under which Respondent was not entitled to refund of the security deposit, until the Engineer issued a "Certificate of Satisfaction" certifying complete discharge of the work sub-contracted under the Letter of Award. Respondent had abandoned the work during the pendency of the Letter of Award, and was thus in breach of its obligations. Tribunal erroneously awarded a refund of security deposit to the extent of Rs. 4,48,95,263/- even though the record clearly indicated that the amount of security deposit lying with the Petitioner admittedly stood reduced to Rs.1,88,29,249/- on account of adjustments made towards the dues payable to Petitioner, to the extent of Rs. 3,08,81,448.
Tribunal erroneously awarded a refund of security deposit to the extent of Rs. 4,48,95,263/- even though the record clearly indicated that the amount of security deposit lying with the Petitioner admittedly stood reduced to Rs.1,88,29,249/- on account of adjustments made towards the dues payable to Petitioner, to the extent of Rs. 3,08,81,448. Tribunal also neglected to consider that Petitioner suffered additional costs to the extent of Rs. 18,49,00,730/- on account of the abandonment of work by the Respondent. Claim No. 7: Award of balance payments along with price escalation 20. Learned senior counsel for the Petitioner argues that the said Claim has been allowed by the Tribunal even though the same was beyond its jurisdiction having not been raised before the Engineer in accordance with clause 67 of FIDIC conditions read with COPA. The Award is a result of total non-application of mind. The Tribunal in its finding under para 262 of the Award has recorded that the Claim was for Rs. 1,82,79,471/-, based on the Statement of Claim. Under para 274, the Tribunal records the Petitioner''s version, based on the documents of the Respondent, being Annexures R-1 to R-6, that there was no outstanding payment and the retention has reduced, considering the adjustment of the unpaid advance. In para 275, the Tribunal, based on the rejoinder of the Respondent, records its revised Claim being Rs. 13,44,08,620/- and then in paras 276 and 278 based on pure guess work, comes to an assumption of total value of balance work being Rs. 5,68,91,573/-. Thereafter considering the full Award value of Claim No. 6, Tribunal finally arrived at a figure of Rs. 1,19,96,310/-. The Tribunal also ignores that the supporting documents under this Claim were fudged documents and there was duplication of claims. 21. Respondent thereafter submitted Annexure C-68 and a Tabular submission, reflecting the Claim amount to be Rs. 63,30,74,904/-. Respondent in the said Annexure showed net claim after only deducting the duplication made under Claim Nos.2 and 4 but did not show any deduction of Rs.25,545,555/- towards other claims settled by Petitioner as brought out in Annexure C-63. The Tribunal considered only two entries of the Respondent in Annexure R-3 i.e. RA-51 & 52 and ignored the total RA Bills 1 to 50. This part of the Award being totally illusive and based on guess work deserves to be set aside. Claim No. 9: Award of Interest. 22. Mr.
The Tribunal considered only two entries of the Respondent in Annexure R-3 i.e. RA-51 & 52 and ignored the total RA Bills 1 to 50. This part of the Award being totally illusive and based on guess work deserves to be set aside. Claim No. 9: Award of Interest. 22. Mr. Hooda learned senior counsel submits that the Tribunal has awarded simple interest to the Respondent at the rate of 1% over and above the RBI prime lending rate, on the date of the Award, on the awarded claims, excluding cost, from 20.04.2009 and this is completely contrary to the terms of the Contract between the parties, wherein payment of interest was explicitly prohibited, in case of any dues outstanding or in case of delayed payments. Attention of the Court is drawn to Clause 78 of the Contract which reads as under: CONDITIONS OF PARTICULAR APPLICATION 78 No claim for interest or damage will be entertained or be payable by the Employer in respect of any amount or balances which may be lying with the Employer owing to any dispute, difference or misunderstanding between the parties or in respect of any delay or omission on the part of the Engineer in making intermediate or final payments or in any other respect what-so-ever. 23. Learned senior counsel relied on the judgment of the Supreme Court in case of State of U.P v. Harish Chandra & Co., 1999 SCC 163 , where the Supreme Court dealt with an identical Clause and held as under: "9. ...The said clause reads as under: "1.9 No claim for delayed payment due to dispute etc.-No claim for interest or damages will be entertained by the Government with respect to any moneys or balances which may be lying with the Government owing to any dispute, difference; or misunderstanding between the Engineer-in-Charge in marking periodical or final payments or in any other respect whatsoever." 10. A mere look at the clause shows that the claim for interest by way of damages was not to be entertained against the Government with respect to only a specified type of amount, namely, any moneys or balances which may be lying with the Government owing to any dispute, difference between the Engineer-in-Charge and the contractor; or misunderstanding between the Engineer-in-Charge and the contractor in marking periodical or final payments or in any other respect whatsoever.
The words "or in any other respect whatsoever" also referred to the dispute pertaining to the moneys or balances which may be lying with the Government pursuant to the agreement meaning thereby security deposit or retention money or any other amount which might have been with the Government and refund of which might have been withheld by the Government. The claim for damages or claim for payment for the work done and which was not paid for would not obviously cover any money which may be said to be lying with the Government. Consequently, on the express language of this clause, there is no prohibition which could be culled out against the respondent-contractor that he could not raise the claim for interest by way of damages before the arbitrator on the relevant items placed for adjudication. In fact, similar contention has been repelled by the aforesaid decision of the three-Judge Bench of this Court in paras 24 and 25 of the Report. It has been clearly observed in para 25 of the Report that under clause 4 which was pressed into service, no interest was payable on the amount withheld. The claim which was made in that case by Durga Parshad before the arbitrator was for the non-payment of the full amount as per final bill submitted by him and the interest so awarded on the said amount was clearly not covered by clause 4 of the contract. Similar is the fact situation in the present case and the wording of the clause in question is also of an identical nature. Therefore, the contention of learned Senior Counsel for the appellant-State that clause 1.9 barred the consideration of such a claim for interest cannot be sustained. The High Court, therefore, rightly came to the conclusion that that clause was not a bar to such a claim. Further contention of learned Senior Counsel for the appellant that the claims regarding cutting of hard rock were wrongly granted, cannot be made the subjectmatter of an objection under Section 30 of the Arbitration Act which could have been agitated for getting any reduction of the amount as awarded by the arbitrator. It was a question purely on the merits of the award which could not be agitated in objections as they were not in the nature of an appeal against the award before the court below.
It was a question purely on the merits of the award which could not be agitated in objections as they were not in the nature of an appeal against the award before the court below. Civil Appeal No. 7643 of 1995 is disposed of accordingly." It is argued that Clause 78 of the Contract clearly bars payment of interest on any amount which remains lying with the employer on account of any dispute between the parties. Except damages, all sums of money payable under the Contract would be presumed to be lying with the employer and thus barred under Section 78. 24. Per contra learned Senior Counsel for the Respondent has at the outset argued that none of the objections raised against the Award fall within the scope of Section 34 of the Act and the Court cannot be called upon to interfere with the findings of fact recorded by the Tribunal or reappreciate the evidence as an Appellate Court. The view taken by the Tribunal is a plausible view based on documents and evidence and calls for no interference. Case of the Respondent 25. As regards Claim No. 1, it is argued that Respondent had claimed a sum of Rs. 12,65,77,806/- but the Tribunal after detailed analysis of material on record and taking cognizance of the admitted fact that idling had taken place, applied the CPWD Formula and awarded only Rs. 1,34,67,162.88/-. Petitioner''s several letters on record particularly from pages 835 onwards, clearly indicated that there was idling of the equipment of the Respondent. In these letters, the Petitioner had itself, while stating the reasons for idling, demanded consequential reliefs from the principle employer, NTPC. Reasons for idling are also admitted, as evident from the documents on record, being, delay in handing over the site, delay in removal of physical obstruction, delay in site for dumping and stock, pile, area, etc. Idling charges for non or under utilization of equipment is in the realm of compensation or damages and covered under Section 54 of the Contract Act, under which the claim was made and not under Clauses 12.2 and 42 of the Contract, which the Petitioner had with NTPC, as alleged. Though there were 91 idling days, the Tribunal only considered 51 and allowed the claim. In the absence of any contractual Formula, the Tribunal rightly relied on the CPWD norms which are standard norms in all Construction Contracts.
Though there were 91 idling days, the Tribunal only considered 51 and allowed the claim. In the absence of any contractual Formula, the Tribunal rightly relied on the CPWD norms which are standard norms in all Construction Contracts. Reliance is placed on the judgment in the case of NTPC v. Patel Engineering,2015 SCCOnLineDel 7512 and Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra Reddy & Anr., (2007) 2 SCC 720 . 26. Claim No. 4 pertains to revision of rates of excavation in inclined galleries and horizontal galleries. It was argued that the work was delayed due to site constraints where the work had to start from top end instead of bottom, as per planned methodology, which resulted in higher expenses. Delay in handing over the drawings and access roads by Respondents caused the delay. Respondent had completed more than 90% of the gallery work. Petitioner got the balance work executed through another agency at a higher rate and the Respondent only requested for the same rate to be paid to it. 27. Tribunal observed that Petitioner did not dispute the additional costs worked out by the Respondent nor denied payment of higher rates to the second agency. Clause 5 of the LOA provided that the price specified in para 4.0 was subject to price escalation under Clause 73 of COPA, which the Petitioner had with NTPC. The rates claimed by the Respondent were at par with M/s Himalaya Construction for similar excavation work and, therefore, the Tribunal rightly allowed the claim. 28. Learned Senior Counsel argued that under Claim No. 6, Respondent had claimed the amount withheld by the Petitioner, as Security Deposit. Clause 10 of the LOA provided for retention of 5% of RA Bills as security deposit which was to be returned back to the Respondent. The objection of the Petitioner was that Respondent had abandoned the work and, therefore, claimed Rs. 3.10 Crore as negative balance and deducted Rs. 4,48,95,263/- from the Respondent''s RA bills for the period 2004-2008. Subsequently, however, the Petitioner withdrew its counterclaim of Rs. 18,49,00,730/-, which it had earlier submitted on account of alleged breach by the Respondent due to abandoning the work. Since the Petitioner itself withdrew the counterclaim, the Tribunal rightly held that the retention amount was in fact for the work executed and was Respondent''s own money. It thus directed refund of the amount.
18,49,00,730/-, which it had earlier submitted on account of alleged breach by the Respondent due to abandoning the work. Since the Petitioner itself withdrew the counterclaim, the Tribunal rightly held that the retention amount was in fact for the work executed and was Respondent''s own money. It thus directed refund of the amount. It was also argued that under Clauses 6 & 7 of the "Appendix" to the LOA dated 10.03.2004, Petitioner was entitled to terminate part or whole of the Contract in case of nonperformance by the Respondent, but no such action was taken. 29. With respect to Claim No. 7, it is argued that Respondent had claimed Rs. 18,22,79,471/- but the Tribunal awarded only Rs. 1,19,96,310/- after detailed examination of the material on record. Petitioner has not disputed the computation nor sought any clarification assuming there was any factual mistake, under Section 33 of the Act. The amount claimed is against the work done along with escalation and is based on the evidence led before the Tribunal. It is not open to this Court under Section 34 of the Act to re-appreciate the evidence. Relying on the judgment in the case of MP Power Generation vs. Ansaldo Energia, (2018) 16 SCC 661 , it is reiterated that under Section 34 of the Act, Court does not sit as a Court of Appeal and a possible view by the Arbitrator has to necessarily pass muster as the Arbitrator is the sole judge of quantity and quality of evidence. 30. Defending the Award under Claim No. 9, which relates to grant of Interest, learned Senior Counsel for the Respondent argues that the Petitioner''s reliance on Clauses 77 and 78 of the Agreement entered into between NTPC and ITDC, to contend that these clauses prohibit the grant of interest, is misconceived. The same clauses have been considered in three Decisions of this Court, where the interest was allowed by interpreting the clauses to mean that they would apply only with respect to money lying with the employer and not with respect to adjudicated claims qua certain disputes. Reliance is placed on the judgment of the Single Judge of this Court in NTPC v. Patel Engineering,2015 SCCOnLineDel 7512 , which was upheld by the Division Bench in FAO (OS) 219/2015 titled NTPC v. Patel Engineering.
Reliance is placed on the judgment of the Single Judge of this Court in NTPC v. Patel Engineering,2015 SCCOnLineDel 7512 , which was upheld by the Division Bench in FAO (OS) 219/2015 titled NTPC v. Patel Engineering. It is submitted that judgment of the Division Bench was taken up in appeal before the Supreme Court and SLP(C) 25685/2015 filed by NTPC was dismissed vide order dated 05.10.2015. Reliance is also placed on the decisions in the case of NTPC Limited v. Hindustan Construction Company Ltd.,2017 SCCOnLineDel 6652 and Harish Chandra (supra). 31. I have heard the learned Senior Counsels for the parties and examined their rival contentions. 32. Claim No. 1 was with respect to idling charges of machinery and manpower on account of stoppage of work by the Petitioner on many occasions due to obstructions in the work. The Tribunal relied upon a plethora of letters placed on record by the Respondent including Annexures C-3, C-4, C-5, C-28, C-29, C-30 etc., whereby the respondent had brought to the notice of the Petitioner, from time to time, that there were obstructions on the site on account of non-availability of access road, hindrances towards excavation, blasting work, stoppage of work due to problems by the locals. Tribunal extracted the "summary of the reasons" for stoppage of work in great details, in para 201 of the Award. Reliance is placed by the Tribunal on the various clauses of the Contract entitling the Respondent to idling charges. Clause 12.1 relates to unforeseeable physical obstructions or conditions; Clause 42.2 relates to entitlement to extension on account of failure to give possession and Clause 44 provides the consequences for delay, impediment or prevention by the employer. Tribunal placed reliance on various letters written by the Petitioner, wherein they had objected to the delay at their end as well as those portions of the letter where some hindrances and obstructions were not denied. The Tribunal also extracted a letter dated 10.01.2008 written by the Petitioner to the Respondent wherein the Respondent was informed that Petitioner was discussing the matter with NTPC on the issue of extension of time, driven by the delays to critical path. Pursuant to the directions of the Tribunal, Petitioner filed various documents including Statement of Claims raised by it against NTPC.
Pursuant to the directions of the Tribunal, Petitioner filed various documents including Statement of Claims raised by it against NTPC. The Tribunal after perusal of the statement, observed that the Petitioner had raised a Claim against NTPC on account of events that had adversely effected the progress of the work, extension of time etc. on account of delay in handling the site possession, removal of obstructions, delay in handling / dumping as well as on other aspects, which were essentially the same reasons on which the Respondent had claimed idling charges from the Petitioner. The Tribunal then sifts the evidence on record which includes correspondence between the parties, the data showing the period of stoppage of work under different Heads such as rainfall, strike, non-availability of site for excavation, dumping etc. Having analysed the data minutely, the Tribunal rejects the Claim for idling charges on account of strike and the rainfall period. The Tribunal observes that neither of the parties presented the correct figures of idling or led satisfactory evidence on the assessment of rates to determine the idling charges. However, finding that none of the reasons cited by the Respondent regarding stoppage of work, as evident from several documents on record, were denied by the Petitioner and instead the Petitioner admitted in its letter dated 14.12.2005 that progress was adversely impacted due to various reasons, Tribunal allowed the Claim in favour of the Respondent. The Tribunal additionally notes that Petitioner had itself raised Claims against the NTPC on account of delays and obstructions in the progress of work by the NTPC. The Tribunal having found that there was no contractual formula to determine the idling charges, relied on the CPWD norms and calculated the charges by dividing the value of work done by total number of days worked and then multiplying the same with the number of idle days, after deducting 50% towards material consumed. Thus, out of the total 91 idling days claimed, the Tribunal awarded the Claim only with respect to 51 days.