Full Judgment Text
Neutral Citation Number: 2023:DHC:2578
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 06.04.2023
Date of decision: 18.04.2023
+ O.M.P. (COMM) 511/2022 & I.A. 21971/2022
UNION OF INDIA ..... Petitioner
Through: Mr.Vineet Dhanda, CGSC with
Mr.Hussain Taqvi,
Ms. Gurleen Kaur, Mr. Archit
Agarwal, Advs. along with
Mr. A.K. Goel, Chief Engineer
(HLL Life care Ltd.)
versus
GLOVE CIVIL PROJECTS PVT LTD ..... Respondent
Through: Mr. Rahul Malhotra and
Ms. Anchal Tiwari, Advs.
JUDGMENT
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. This petition has been filed under Section 34 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’),
challenging the Arbitral Award dated 28.02.2022, along with the
amended Award dated 13.04.2022, passed by the learned Sole
Arbitrator.
BRIEF BACKGROUND:
2. The disputes between the parties arose out of the ‘Contract
Agreement no. PMSSY-II/ALIGARH/2011-12/PACKAGE-I for
the Construction of New Emergency and Trauma Centre, OPD
and OBG Blocks at Jawahar Lal Nehru Medical College, Aligarh
Muslim University, Aligarh (U.P.)’. The subject Contract was
awarded by the petitioner to the respondent vide Notice of Award
dated 17.10.2011, with a contract value of Rs.67,97,60,335/-.
The stipulated time for completion of the contract was set at 21
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months with effect from 01.11.2011, with a completion date of
31.07.2013. Admittedly, the work was completed with a delay of
32 months on 31.03.2016. The final bill was remitted by the
petitioner to the respondent on 09.10.2017.
3. On 08.09.2018, the respondent invoked the arbitration agreement
between the parties whereupon, a petition was filed under
Section 11 of the Act and the learned Sole Arbitrator was
appointed by this Court on 30.05.2019.
4. The learned Sole Arbitrator by way of the Impugned Award,
awarded the following reliefs to the respondent:-
“383. Accordingly, for the reasons set
out hereinabove, the Tribunal, under the
provisions of the Arbitration Act, allows
the claims in favour of the Claimant and
against the Respondent as per the
following terms and quantifying the
same:
Claim No. / Claim
Description
Claim Amount
Allowed
Claim No. 1-for
Payment under Clause
10C of the GCC
Rs.94,39,878/-
Claim No. 2-
Compensation for
escalation in the cost
of Steel and Cement in
the extended period
Rs.21,45,779/-
Claim No.3-
Compensation for
escalation on
materials (other than
Cement and Steel) in
the extended period
Rs.1,92,33,376/-
Claim No. 4 (i)- Cost
towards renewal of
Bank Guarantees in
the extended period
Rs.27,20,017/-
Claim No. 4 (ii)-
Refund of extra
interest recovered by
the Respondent on
mobilization advance
Rs.38,87,054/-
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Claim No. 4 (iii)-
Interest amount
withheld against
Milestone(s)
Rs.3,54,698/-
Claim No.5 (a)-
Compensation for on-
site Manpower
Retention in the
extended period
Rs.1,36,81,159/-
Claim No. 5 (b)-
Compensation for on-
site Tools and Plant
Retention in the
extended period
Nil
Claim No. 5 (c)-
Compensation for on-
site Electricity
charges in the
extended period
Rs.13,19,850/-
Claim No. 6-
Damages for Head
Office Overheads and
expenses in the
extended period
Rs.4,35,04,661/-
Claim No.7-
Insurance Charges for
the extended period
Rs.20,70,433/-
Claim No. 8-Claim for
rate less paid than the
agreement rate for fire
alarm
Nil
Claim No. 9- A total
Simple Interest of
[@7.5% on
Rs.7,85,29,480/- for
69 months].
Rs.4,36,45,877/-
Claim No. 10-
towards cost of
Arbitration and other
expenses.
Rs.22,00,000/-
Total Rs.14,42,02,782/-
384. Resultantly, in view of the
foregoing analysis and findings, the
Tribunal hereby passes an award, under
the provisions of the Arbitration Act, for
a total sum of Rs.14,42,02,782/- in
favour of the Claimant and against the
Respondent. The said amount is hereby
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recoverable in law by the Claimant from
the Respondent by virtue of this Award. ”
5. By way of a correction order dated 13.04.2022, the following
amendment was made in the impugned award:-
“5. Accordingly, the claim description, as allowed,
in the table to paragraph no. 383 at Column 9
is corrected thus:
“Claim No. 9 - A total simple interest of 7.5%
on Rs.9,83,56,905/- for 71 months” ”
SUBMISSIONS OF THE LEARNED COUNSEL FOR THE
PETITIONER:
6. The learned counsel for the petitioner submits that the impugned
Award is liable to be set aside inasmuch as Clause 5 of the
General Conditions of Contract (in short, ‘GCC’) provids that the
said project is time bound and no time overrun would be
acceptable, however, the learned sole Arbitrator has held that
time is not of the essence to the Contract. He submits that
therefore, the learned Arbitrator has clearly passed the Award
contrary to the terms of the Agreement between the parties.
7. He further submits that the learned Arbitrator has also ignored
the effect of the No Claim Certificate, not only given in the final
bill raised by the respondent on 15.12.2016, but even thereafter.
He submits that the learned Arbitrator, without any evidence, has
found that the said No Claim Certificates were forced out of the
respondent, which is totally incorrect inasmuch as the petitioner
had also waived its right to levy liquidated damages on the
respondent due to delay in the execution of the work. He submits
that the learned Arbitrator has also failed to appreciate that in
terms of the extension of time granted to the respondent for
completion of work, even the petitioner had to forego its claims
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for liquidated damages. He submits that therefore, both the
parties having foregone their respective claims, the question of
any coercion being exercised on the respondent for issuance of
the No Claim Certificate does not arise.
8. The learned counsel for the petitioner submits that the learned
Arbitrator has also failed to appreciate that the final bill payable
to the respondent was only for a sum of approximately Rs.58
Lakh, out of total contract value of around Rs.68 Crore.
Therefore, this meagre claim of the respondent could not have
acted as a matter of coercion on the respondent for giving an
unconditional undertaking of no further claims arising under the
contract.
9. He further draws my reference to Clause 9 of the GCC to submit
that the said Clause clearly provides that no further claim after
the final bill shall be made by the contractor.
10. He further submits that the learned Arbitrator having found that
only 70% of the delay was attributable to the petitioner, erred in
rejecting the counter claim of the petitioner, wherein damages
were being claimed for the remaining 30% of the delay that was
attributable to the respondent. He submits that in this manner,
there were contradictions in the findings in the Impugned Award.
11. He submits that the final arguments in the arbitration proceedings
were concluded on 07.02.2021, whereas the Award was passed
only on 28.02.2022, that is with a delay of more than one year.
Interest for the said period has also been awarded to the
respondent, thereby further burdening the petitioner.
12. He further submits that the respondent had raised its claims only
in the notice invoking arbitration dated 08.09.2018, which is with
a delay of almost one year from the date of payment of the final
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bill. He submits that this aspect has also been ignored by the
learned Arbitrator in awarding interest to the respondent.
13. The learned counsel for the petitioner further submits that the
learned Arbitrator has, in fact, gone beyond the pleadings of the
respondent and made up a case for the respondent, which has not
been pleaded in the Statement of Claim.
SUBMISSIONS OF THE LEARNED COUNSEL FOR THE
RESPONDENT:
14. On the other hand, the learned counsel for the respondent submits
that the learned Arbitrator has found that there was no provision
in the Contract which required the submission of a No Claim
Certificate from the respondent before processing of its bills.
The Arbitrator found that such demand of a No Claim Certificate
from the respondent itself shows that the respondent was coerced
into submitting the same and therefore, the No Claim Certificate
shall hold no value.
15. He submits that the learned Arbitrator on facts has also found
that in spite of the final bill, the petitioner itself was entertaining
further claims of the respondent under Clause 10C and 10CA of
the GCC, which itself belied the contention of the petitioner that
no further claims after the final bill could be entertained.
16. He submits that the petitioner itself had granted extension of time
for completion of the work to the respondent. In terms of Section
55 of the Indian Contract Act, 1872, and the judgment of the
Supreme Court in Hind Construction Contractors v. State of
Maharashtra , AIR 1979 SC 720, the learned Arbitrator has
rightly held that time was not of essence to the Contract.
17. He submits that the learned Arbitrator has also found that while
70% of the delay is due to the petitioner, the remaining 30% is
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not attributable to any of the parties. The learned Arbitrator has
therefore, awarded only 70% of the damages for the delay in
favour of the respondent, while rejecting the counter claim of the
petitioner. He submits that the petitioner has not shown any
ground to challenge the above findings.
18. On the issue of interest, he submits that the delay in passing of
the Award occurred due to the Covid-19 pandemic. This has been
taken note of by the learned Arbitrator in the impugned Award.
The respondent cannot be made to suffer for such delay. The
amounts found due and payable by the petitioner to the
respondent necessarily has to have a consequence of interest. He
submits that therefore, no fault could be found on the award of
interest for the period between the date of completion of hearing
the arguments and the date of the Award.
19. On the issue of raising the claims belatedly, the learned counsel
for the respondent submits that even after the final bill had been
paid, the petitioner was still considering the claim of the
respondent for escalation under Clause 10C and 10CA of the
GCC. The claim having been raised within the period of
limitation, no fault can be found with the respondent. He submits
that, in fact, the petitioner had not raised any plea on the
maintainability of the claims of the respondent.
ANALYSIS AND FINDINGS:
20. I have considered the submissions made by the learned counsels
for the parties.
21. As far as the plea of time being of essence to the Contract,
Clause 5 of the Contract provides for the time for completion of
the work as also extension of period in case of delay in
completion of the Contract. Clause 5 is reproduced hereinbelow:
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“ CLAUSE 5 Time and Extension for Delay
The time allowed for execution of the Works as
specified in the Schedule „F‟ or the extended
time in accordance with these conditions shall
be the essence of the Contract. The execution
of the works shall commence from such time
period as mentioned in schedule „F‟ or from
the date of handing over of the site whichever
is later. If the Contractor commits default in
commencing the execution of the work as
aforesaid, Department, shall without prejudice
to any other right or remedy available in law,
be at liberty to forfeit the earnest money &
performance guarantee absolutely.
5.1 As soon as possible after the
Contract is concluded, the Contractor
shall submit a Time and Progress Chart
for each mile stone and get it approved
by the Engineer-in-charge. The Chart
shall be prepared in direct relation to
the time stated in the Contract
documents for completion of items of the
works. It shall indicate the forecast of
the dates of commencement and
completion of various trades of sections
of the work and may be amended as
necessary by agreement between the
Engineer-in-Charge and the Contractor
within the limitations of time imposed in
the Contract documents and further to
ensure good progress during the
execution of the work, the contractor
shall in all cases in which the time
allowed for any work, exceeds one
month (save for special jobs separate
programme has been agreed upon)
complete the work stones given in
Schedule „F‟.
5.2 If the work(s) be delayed by:
(i) Force majeure, or
(ii) Abnormally bad weather, or
(iii) Serious loss or damage by fire,or
(iv) Civil commotion, local
commotion of workmen, strike or
lockout affecting any of the
traders employed on the work, or
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(v) Delay on the part of other
contractors or tradesmen
engaged by Department in
executing work not forming part
of the Contractor or
(vi) Non-availability of stores, which
are the responsibility of
Department to supply, or
(vii) Non-availability or break down
of tools and Plant to be supplied
or supplied by Department or
(viii) any other cause which, in the
absolute discretion of the
Engineer-in-charge then upon
the happening of any such event
causing delay, the Contractor
shall immediately give notice
thereof in writing to the
Engineer-in-Charge but shall
nevertheless use constantly his
best endeavours to prevent or
make good the delay and shall
do all that may be reasonably
required to the satisfaction of the
Engineer-in-Charge to proceed
with the works.
5.3 Request for rescheduling of
Milestones and extension of time, to be
eligible for consideration, shall be made
by the Contractor in writing within
fourteen days of the happening of the
event causing delay on the prescribed
form. The contractor may also, if
practicable, indicate in such a request
the period for which extension is
desired.
5.4 In any such case the authority as
indicated in Schedule F may give a fair
and reasonable extension of time and
reschedule the milestones for
completion of work. Such extension
shall be communicated to the
Contractor by the Engineer-in-Charge
in writing within 3 months of the date of
receipt of such request. Non application
by the contractor for extension of time
shall not be a bar for giving a fair and
reasonable extension by the authority as
indicated in Schedule F and this shall be
binding on the contractor.”
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22. A reading of the above would show that the said Clause also
provides for grant of extension of time for completion of the
Contract. In Hind Construction Contractors (supra), it has been
held that the question whether or not time was of essence of the
contract would essentially be a question of the intention of the
parties to be gathered from the terms of the contract. Even where
the parties have expressly provided that time is of the essence of
the contract, such a stipulation will have to be read along with
other provisions of the contract, and such other provisions may,
on construction of the contract, exclude the inference that the
completion of the work by a particular date was intended to be
fundamental. If the contract were to include clauses providing for
extension of time in certain contingencies or for payment of fine
or penalty for every day or week the work undertaken remains
unfinished on the expiry of the time provided in the contract,
such clauses would be construed as rendering ineffective, the
express provision relating to the time being of the essence of
contract.
23. In the present case, the learned Arbitrator, after considering other
Clauses of the Contract, has observed as under:-
“142. In the instant case, the quintessential
aspect, which is demonstrative of the intention
of the parties, that is, of the Claimant and the
Respondent, and which also negates the
contention of the Respondent that time was of
the essence of the contract is that the
Respondent granted successive EOTs,
including recommendations of the Chief
Engineer (Ex. R-96) granting EOT with
retrospective effect.... In the instant case, grant
of successive EOTs by the employer, that too
with retrospective effect, lead to the singular
conclusion that, in fact, time was not the
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essence of the Contract. The Respondent
retrospectively extending the time period for
completion clearly establish that time was not
of the essence of the Contract.
144. From the authorities discussed
hereinabove, it becomes amply clear that
notwithstanding an express stipulation in a
contract stating time to be of essence, if the
same contract also contains provision(s) for
extension of time in certain circumstances
and/or provision(s) for levy of liquidated
damages at specified rates during the period
the work remains unfinished after the expiry of
the stipulated date, then the said provisions
have the effect to render the express
stipulation envisaging time as the essence of
the contract a non-acceptable proposition in
law. Additionally, for discerning whether time
is of the essence of a contract, the paramount
consideration remains the intention of the
parties which needs to be gathered not only
from the provisions of the contract but also
from the attending facts and circumstances.
Therefore, determination of this issue becomes
a mixed question of fact and law.
145. In the instant case, not only the contract
between the Claimant and the Respondent
contains provisions for extension of time and
for levy of liquidated damages in the form of
Clause 5.4 and Clause 2 respectively, but, at
the same time, the fact also remains that the
Respondent-employer granted the Claimant
successive EOTs in a routine and mechanical
manner as and when such EOTs were
requested by the Claimant, and on an occasion
with retrospective effect. The stipulations in
Clause 5.4 and Clause 2 of the Contract
coupled with the fact that EOTs were granted
by the Respondent lead to the inescapable
conclusion that it was not the intention of the
parties to designate time of the essence of the
contract.
146. At present, the Tribunal thinks it
appropriate to deal with the decisions cited by
the learned counsel for the Respondent to
bolster the stand that the instant case falls
under Part III of Section 55 of the Contract
Act and the Claimant‟s claims cannot be
entertained, for no notice for compensation
was given by the Claimant when the time was
extended by the Respondent. It goes without
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saying that the said argument is structured on
the foundation that time was of the essence of
the contract, a stance already negated by the
Tribunal.”
24. It is settled law that the interpretation of the Contract is within
the exclusive domain of the learned Arbitrator. This Court in
exercise of its powers under Section 34 of the Act would not
interfere with such interpretation of the Contract made by the
learned Arbitral Tribunal. The Supreme Court in UHL Power
Co. Ltd. v. State of H.P. , (2022) 4 SCC 116, has reemphasised
this principle as under:-
“19. In Parsa Kente Collieries
Ltd. v. Rajasthan Rajya Vidyut Utpadan
Nigam Ltd. [Parsa Kente Collieries
Ltd. v. Rajasthan Rajya Vidyut Utpadan
Nigam Ltd., (2019) 7 SCC 236 : (2019) 3 SCC
(Civ) 552], adverting to the previous decisions
of this Court in McDermott International
Inc. v. Burn Standard Co. Ltd. [McDermott
International Inc. v. Burn Standard Co. Ltd.,
(2006) 11 SCC 181] and Rashtriya Ispat
Nigam Ltd. v. Dewan Chand Ram
Saran[Rashtriya Ispat Nigam Ltd. v. Dewan
Chand Ram Saran, (2012) 5 SCC 306] ,
wherein it has been observed that an Arbitral
Tribunal must decide in accordance with the
terms of the contract, but if a term of the
contract has been construed in a reasonable
manner, then the award ought not to be set
aside on this ground, it has been held thus :
(Parsa Kente Collieries case [Parsa Kente
Collieries Ltd. v. Rajasthan Rajya Vidyut
Utpadan Nigam Ltd., (2019) 7 SCC 236 :
(2019) 3 SCC (Civ) 552] , SCC pp. 244-45,
para 9)
“9.1. … It is further observed and held that
construction of the terms of a contract is
primarily for an arbitrator to decide unless the
arbitrator construes the contract in such a way
that it could be said to be something that no
fair-minded or reasonable person could do. It
is further observed by this Court in the
aforesaid decision in para 33 that when a
court is applying the “public policy” test to an
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arbitration award, it does not act as a court of
appeal and consequently errors of fact cannot
be corrected. A possible view by the arbitrator
on facts has necessarily to pass muster as the
arbitrator is the ultimate master of the
quantity and quality of evidence to be relied
upon when he delivers his arbitral award. It is
further observed that thus an award based on
little evidence or on evidence which does not
measure up in quality to a trained legal mind
would not be held to be invalid on this score.
9.2. Similar is the view taken by this Court
in NHAI v. ITD Cementation India
Ltd. [NHAI v. ITD Cementation India Ltd.,
(2015) 14 SCC 21 : (2016) 2 SCC (Civ) 716] ,
SCC para 25 and SAIL v. Gupta Brother Steel
Tubes Ltd. [SAIL v. Gupta Brother Steel Tubes
Ltd., (2009) 10 SCC 63 : (2009) 4 SCC (Civ)
16] , SCC para 29.”
(emphasis supplied)
20. In Dyna Technologies [Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1] , the view taken above
has been reiterated in the following words :
(SCC p. 12, para 25)
“25. Moreover, umpteen number of
judgments of this Court have categorically
held that the courts should not interfere with
an award merely because an alternative view
on facts and interpretation of contract exists.
The courts need to be cautious and should
defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the
award is implied unless such award portrays
perversity unpardonable under Section 34 of
the Arbitration Act.”
21. An identical line of reasoning has been
adopted in South East Asia Marine Engg. &
Constructions Ltd. (Seamec Ltd.) v. Oil India
Ltd. [South East Asia Marine Engg. &
Constructions Ltd. (Seamec Ltd.) v. Oil India
Ltd., (2020) 5 SCC 164 : (2020) 3 SCC (Civ)
1] and it has been held as follows : (SCC p.
172, paras 12-13)
“12. It is a settled position that a court can
set aside the award only on the grounds as
provided in the Arbitration Act as interpreted
by the courts. Recently, this Court in Dyna
Technologies (P) Ltd. v. Crompton Greaves
Ltd. [Dyna Technologies (P) Ltd. v. Crompton
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Greaves Ltd., (2019) 20 SCC 1] laid down the
scope of such interference. This Court
observed as follows : (SCC p. 12, para 24)
„24. There is no dispute that Section 34 of
the Arbitration Act limits a challenge to an
award only on the grounds provided therein or
as interpreted by various Courts. We need to
be cognizant of the fact that arbitral awards
should not be interfered with in a casual and
cavalier manner, unless the Court comes to a
conclusion that the perversity of the award
goes to the root of the matter without there
being a possibility of alternative interpretation
which may sustain the arbitral award. Section
34 is different in its approach and cannot be
equated with a normal appellate jurisdiction.
The mandate under Section 34 is to respect the
finality of the arbitral award and the party
autonomy to get their dispute adjudicated by
an alternative forum as provided under the
law. If the Courts were to interfere with the
arbitral award in the usual course on factual
aspects, then the commercial wisdom behind
opting for alternate dispute resolution would
stand frustrated.‟
13. It is also settled law that where two
views are possible, the Court cannot interfere
in the plausible view taken by the arbitrator
supported by reasoning. This Court in Dyna
Technologies [Dyna Technologies (P)
Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC
1] observed as under : (SCC p. 12, para 25)
„25. Moreover, umpteen number of
judgments of this Court have categorically
held that the Court should not interfere with
an award merely because an alternative view
on facts and interpretation of contract exists.
The Courts need to be cautious and should
defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the
award is implied unless such award portrays
perversity unpardonable under Section 34 of
the Arbitration Act.‟ ”
(emphasis supplied)”
25. In the present case, the above stringent standard laid down by the
Supreme Court has not been fulfilled by the petitioner. The
findings of the learned Arbitrator reproduced hereinabove show
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the due application of mind and consideration of the relevant
circumstances by the learned Arbitrator and therefore, warrants
no interference from this Court.
26. The submission of the learned counsel for the petitioner that the
learned Arbitrator having found that only 70% of the delay was
attributable to the petitioner, could not have completely rejected
the counter claim of the petitioner arising out of the delay in
execution of the work, is also ill-founded. The learned Arbitrator,
in his impugned Award has found that while 70% of the delay is
attributable to the petitioner, the remaining 30% of the delay is
not attributable to the respondent. No infirmity has been shown
by the petitioner in the said finding of the learned Arbitrator.
27. I may herein quote the relevant findings of the learned Arbitrator
on this issue:
“257. In view of the discussion carried out
hereinabove, the delay is held attributable in
the following manner:
Nature of Hinderance No. of days
Delay is held
attributable
to:
for which
delay was
caused
Delay in handing over
the site (OBG Block,
OPD Block and
Trauma Centre)
118 Respondent
Delay of approval of
Radio Therapy Block
28 Respondent
Non-availability of
project funds
3 Respondent
Construction of
corridor between
existing OBG Block
and new OBG Block
187 Respondent
Delay in start of road
work
52 Respondent
Delay in finalization
of Medical Gas Pipe
Line Work
299 Respondent
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Commissioning of
Services; Providing
pipeline for irrigation
for horticulture
works; and
modifications in OPD
and OBG blocks
258. Therefore, in terms of the remarks of the
Chief Engineer attached to the EOT
Application-Part 2, out of the total delay of
986 days, a delay of only 687 days (986-299
days) is adjudicated as attributable to the
Respondent. The percentage of delay
attributable to the Respondent is as follows:
Total
Delay
Delay held to be
attributable to the
% of Delay
attributable to
the Respondent
986 687 687/986 X 100 =
70% (approximately)
Respondent.
259. Consequently, the Tribunal hereby holds
that 70% of delay in the completion of the
Project is attributable to the Respondent. As
far as the rest of 30% of the delay is
concerned, it is made clear that the said 30%
delay is not held to be attributable to the
Claimant. It is only that for the said 30%
delay, the Claimant has not been able to
successfully prove that the same was caused
due to reasons attributable to the
Respondent.”
28. On the plea of the petitioner that having executed No Claim
Certificates, including in the final bill, the respondent was barred
from claiming any further amounts from the petitioner, also
deserves to be rejected. In this regard, I may quote from the
opinion of the learned Sole Arbitrator, who has held as under:-
“119. In the case at hand, though the Claimant
had submitted the no claim certificate, that is,
Ex. R-113, and other undertakings, including
EOT Application Part-1 (Ex. R-96), yet there
exists ample circumstantial evidence which
lead to the conclusion that the Claimant had
no option but to give the said no claim
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certificate and other undertakings to the
Respondent, for the Respondent was in a
dominant position and enjoyed such
dominance over the Claimant due to the fact
that the bills of the Claimant were not being
passed by the Respondent. There is neither any
settlement agreement executed between the
Claimant and the Respondent, which was the
case in Kelkar and Kelkar (supra), nor has the
Claimant ever withdrawn any pending claim
or proceeding against the Respondent, which
was the case in Double Dot Finance (supra).
The decisions in both the said cases were
premised on the principle that an offeree
cannot be permitted to change his mind after
the unequivocal acceptance of the offer, which
has its basis in Section 5 and Section 8 of the
Contract Act, which deal with “Revocation of
proposals and. acceptances” and “Acceptance
by performing conditions or receiving
consideration” respectively.
120. It is worthy to note that when the
contract works get prolonged beyond the
stipulated date of completion, inter alia, due to
late approvals and grant of extension of time
by the employer, without levy of liquidated
damages, such as in the present case, the
demand of the employer has been that till such
time a no claim certificate/undertaking is
tendered by the contractor, final bill shall not
be paid, which is itself a circumstances to
show that the contractor succumbed to the
pressure of the employer. That is also the
position when the Claimant tendered the other
undertakings at the time when the Respondent
granted EOT.
121. In addition, the fact remains that the
Claimant initially submitted the final bill on
15.12.2016 but the Respondent did not release
the payment for a long duration. As is evident,
the Claimant had received the payments much
after the submission of the undertaking along
with the EOT application dated 06.12.2016
(Ex. R-96). In fact, the Claimant did not even
know the quantum of the amount which shall
be remitted to it at the time of execution of the
said documents. These facts make the
domineering stance of the Respondent qua the
Claimant clear. It was as if the Respondent
made the presentation of the undertaking
along with the EOT application and the no
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claim certificate with the final bill a pre-
condition for scrutiny of the bills of the
Claimant. Thus, the said undertakings and the
no claim certificate can under no
circumstances be construed as discharge of
the contract by accord and satisfaction.
122. As stated earlier, another aspect that
needs to be adverted to is the fact that the
letter dated 30.08.2017 issued by the Claimant
confirming the payment, which as per the
Respondent tantamounts to acceptance of „full
and final‟ payment towards all claims, was not
a „final bill‟ in the proper sense of the term, as
it did not culminate or conclude the on-going
transaction(s) between the Claimant and the
Respondent. Such is the finding of the Tribunal
owing to the nature and legal consequence of
the letters dated 17.11.2017 (Ex. R-115),
04.01.2018 (Ex. C-66) and 17.03.2018 (Ex. C-
67) issued by the Respondent whereby the
Respondent had asked the Claimant to submit
the claims under Clause 10C and Clause
10CA of GCC. The Respondent‟s act of
issuance of letters after the submission of the
letter dated 30.08.2017 by the Claimant
confirming the payment to the Respondent has
immense significance.
123. In the letter dated 17.11.2017 (Ex. R-
115), the Chief Engineer wrote on behalf of
the Respondent asking the Claimant to submit
its claim under Clause 10 C and 10 CA of the
Contract. The relevant part of the letter
17.11.2017 (Ex.R-115) reads as under:
“This is in reference to our letter No.
HLL/IDN/4C/GCPPL/2017-18/336
dated 12.07.2017, subsequent
correspondence and various discussions
with M/s. Globe Civil Projects Pvt. Ltd.
regarding submission of their
documents for processing the payment
for escalation, if any, under clause 10C
& 10CA of contract. However, your
request for payment of escalation
under clause 10C & 10CA, in totality,
is still awaited.
In view of the above, it is once again
impressed upon M/s. Globe Civil
Projects Pvt. Ltd, to submit your
request for payment of escalation
under clause 10C & 10 CA, in totality,
along with required supporting
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documents like Labour records,
Labour payment proofs, related
insurance policies, invoices for steel &
cement etc. to examine the matter as per
the terms & conditions of contract”
[Emphasis supplied]
124. In response to the aforementioned letter,
the Claimant duly submitted its claim along
with the letter dated 30.12.2017. The
Respondent, however, vide its letter dated
04.01.2018 (Ex. C-66), stated that the claim so
raised was without the requisite documents
and asked the Claimant to re-submit the claim.
Similar has been the purport of the
communication dated 17.03.2018 (Ex. C-67)
whereby the Respondent again requested the
Claimant to submit the claims under Clause
10C and Clause 10CA of GCC.
125. These correspondences between the
parties are indicative of two significant
aspects, one, that even beyond 30.08.2017,
there was no „full and final‟ settlement
between the parties contrary to what the
learned counsel for the Respondent has urged
and second, that since all the dues and
payments of the Claimant were not finally
settled till 30.08.2017. Because of the
dominant position of the Respondent qua the
Claimant, the Claimant was compelled to issue
the full and final certificate in question, and it
was only for getting its legitimate payment
under the bill pending with the Respondent,
which did not even contain the escalation
amount under Clauses 10C and 10CA of the
Contract.
126. In view of the above analysis, the
Tribunal is of the view that neither the no
claim certificate submitted by the Claimant to
the Respondent vide letter dated 30.08.2017
nor the undertakings submitted by the
Claimant along with the EOT application(s) to
the Respondent amounts to acceptance of „full
and final‟ payment and, therefore, the claims
of the Claimant are not barred from
consideration.”
29. The above are findings of fact based on the appreciation of the
conduct of the parties as was evident from the documents before
the learned Arbitrator. In Delhi Airport Metro Express Pvt. Ltd.
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v. Delhi Metro Rail Corporation Ltd. , (2022) 1 SCC 131, the
Supreme Court has again cautioned that in exercise of its powers
under Section 34 of the Act, the Court does not act as a Court of
appeal. It is not permissible for the Court to reappreciate
evidence to conclude that the award suffers from patent illegality
appearing on the face of the award. In the present case, the
Award passed by the learned Arbitrator is well reasoned and no
ground to interefer with the same is made out by the petitioner.
30. The reliance of the learned counsel for the petitioner on Clause 9
of the GCC is also ill founded. Only a vague reliance on Clause 9
of the GCC was placed by the petitioner in the Statement of
Defence as also in the present petition, and that too only in
relation to the Claims 1 and 2. These claims were under Clause
10C and 10CA of the GCC and admittedly raised by the
respondent prior to the submission of the final bill. The
petitioner itself was seeking documents in support of these claims
from the respondent even after the submission of the final bill.
Even otherwise, in view of the above findings of the learned Sole
Arbitrator on the issue of No Claim Certificate, I find that the
said Clause would have no application to the facts of the present
case. The claims arising out of delay attributable to the petitioner
could not have been raised by the respondent at the time of
raising the Final Bill. I find no infirmity in the Arbitral Award on
this account.
31. The submission of the learned counsel for the petitioner that the
learned Arbitrator having reserved the Award for almost one year
could not have awarded interest in favour of the respondent for
the said period also has no merit. Admittedly, the learned
Arbitrator has found amounts to be payable by the petitioner to
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the respondent. The delay in pronouncement of the Award
occurred due to the outbreak of the Covid-19 pandemic, for
which neither party can be made to suffer. However, as the
amounts found due and payable by the petitioner to the
respondent remained in the hands of the petitioner, the petitioner
cannot escape the liability to pay interest on such amounts in any
case.
32. Delay in raising of its claim by the respondent also cannot lead to
denial of interest to the respondent for payment otherwise found
due and payable to it from the petitioner. The claim was raised
within the period of limitation and it was not as if the petitioner
immediately paid the same. Even otherwise, the award of interest
is at the discretion of the Arbitrator. Unless found to be
completely perverse, the Court cannot interfere with such award
merely because it may have taken a different view on the same.
33. I, therefore, find no merit in the present petition and the same is
dismissed.
34. There shall be no order as to costs.
NAVIN CHAWLA, J.
APRIL 18, 2023/RN/DJ
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