M/s.UNION OF INDIA, Represented by Chief Engineer, vs M/s. ANIL Annasaheb Patil,

Original Petition No.312 of 2020
and Application No.1243 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ORDERS RESERVED ON : 28.10.2026
ORDERS PRONOUNCED ON : 11.11.2026
CORAM
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
Original Petition No.312 of 2020
and Application No.1243 of 2020
Union of India
Represented by
Chief Engineer, Chennai Zone
Military Engineer Services
Island Grounds, Chennai – 600 009. ... Petitioner
Vs.
M/s. Anil Annasaheb Patil
Plot No.88/Angol Mal
Bhagyanagar, Belgaum-590 006. ... Respondent

PRAYER: Original Petition filed under Section 34 of the Arbitration and Conciliation
Act, 1996, praying to set aside the award of the Arbitrator dated 23.10.2018 arising out
of CA.No.CECZ/BEL/02 of 2010-11 dated 09.04.2010 entered into between the
petitioner and the respondent and to direct the respondent to pay costs.
For the petitioner : Mr.AR.L.Sundaresan
Additional Solicitor General of India
for Mr.K.Subbu Ranga Bharathi
Central Government Counsel
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Original Petition No.312 of 2020
and Application No.1243 of 2020
For the respondent : Mr.Uday Holla, Senior Counsel
for Ms.Sneha Tiwari
for M/s.Surana & Surana
O R D E R
This Original Application is filed to set aside the award dated
23.10.2018 of the learned Arbitrator arising out of
C.A.No.CECZ/BEL/02 of 2010-11, dated 09.04.2010, entered into
between the petitioner (Union of India, represented by the Chief
Engineer, Chennai Zone, Military Engineer Services, Island Grounds,
Chennai) and the respondent (Anil Anna Saheb Patil), and for costs
and for further or other reliefs.
2. The brief factual background in which the Original Petition
arises is that, under a contract, upon the respondent/claimant being
the successful bidder, a contract was executed on 09.04.2010
between the parties for the provision of a security wall at HQ JL Wing,
at Turkamatti, Belgaum, bearing contract agreement No. CECZ/BEL/02
of 2010-2011, for a total value of Rs.6,47,64,232/-. The contract is a
lump sum contract quoted by the respondent, which is inclusive of
part I (buildings and structures), part II (internal water supply), part III
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Original Petition No.312 of 2020
and Application No.1243 of 2020
(internal electrification), part IV (site clearance), part V (sewage
disposal) and part VI (compound wall and gates).
3. Pursuant thereto, a work order was issued by the petitioner on
19.04.2010. The site was handed over on 26.04.2010, and the work
was required to commence on 26.04.2010 and be completed by
25.04.2011. At the respondent's request, communicated on
20.05.2011, the completion time was extended to 22.09.2011.
Thereafter, it was further extended up to 31.03.2012, 31.12.2012,
30.04.2013, and 03.01.2014. On 18.01.2014, a deviation order to the
original work was also served on the respondent. Approximately 85%
of the work had been completed, and the respondent had received the
amounts due in respect thereof. However, the respondent demanded
enhanced rates for the remaining work. Since the petitioner did not
accede to the said demand, the respondent invoked arbitration.
4. The respondent claimed amounts for non-payment of dispersal
of the excavated earth (2787 cum) and for surface dressing (18580
sqm) for a distance exceeding 50 meters and not exceeding 100
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Original Petition No.312 of 2020
and Application No.1243 of 2020
meters. The respondent also claimed non-payment for excavation of
hard rock (523.75 cum at the rate of Rs.1359.10 per cum) and
removal of the same.
5. The respondent further claimed non-payment of additional
expenditure incurred in the foundation, i.e., provision of a 150 mm
offset around column/plinth beams for fixing the steel frame work. The
respondent also claimed the balance payment towards the concertina
coil of 1470 kg, which was lying at the site on completion of the work.
The respondent claimed non-payment of the enhanced rate for the
works executed after the original completion period of the contract.
6. It is the contention of the petitioner that the variation in the
amounts claimed by the respondent is untenable. Firstly, the cost of
removal of excavated earth is already included in the quoted rate. The
contract also provided for excavation of hard/dense soil, with a
provision that any deviation will be paid, etc. Therefore, no further
amount is payable in that regard. As per engineering practice, a 150
mm offset in lieu of a 75 mm offset for column 14/plinth beam is not
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Original Petition No.312 of 2020
and Application No.1243 of 2020
provided. The respondent did not dispute the concept of a concertina
coil, and it was submitted that the rate can be considered at
Rs.86.68/- based on the purchase voucher and transportation.
7. The enhanced rates claimed by the respondent are not
tenable, as they can be claimed only if a new law comes into force or
a new statutory rule or order is issued, on account of which the price
exceeds 10%. The respondent served no notice under condition No.63,
and submitted no supporting details. It is further contended by the
petitioner that there is a special condition No.39.1, under which, if it is
not possible to make the entire site available on the award of the
work, the contractor has to arrange his working programme
accordingly, and no claim for not giving the entire site on award of the
work, or for giving the site gradually, will be tenable. In view thereof,
the claim in that regard is also not tenable. In the teeth of the said
pleadings, the Learned Arbitrator framed six issues.
8. The Learned Arbitrator framed Issue No.1 to interpret Special
Condition No.31.1, particularly as to whether the site for execution of
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Original Petition No.312 of 2020
and Application No.1243 of 2020
the work could be provided in phases, and answered the issue in the
negative, in favour of the respondent. The Learned Arbitrator framed
the issue as to whether the claimant proved that he was induced by
the petitioner herein to enter into the contract by fraudulent
misrepresentation regarding the availability of the site for execution of
the work, and answered the same in the affirmative, in favour of the
respondent/claimant.
9. The Learned Arbitrator framed Issue No.3 as to whether the
claimant proved that the respondent handed over only part of the site
and the compound wall during the original contract period, and found
the answer in the affirmative, in favour of the claimant. The Learned
Arbitrator framed Issue No.4 as to whether the claimant proved that
the part of the site provided by the respondent during the original
contract period was not free from encumbrances, and therefore he
had to execute the work in piecemeal on the said site, and found the
answer in the affirmative, in favour of the claimant.
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Original Petition No.312 of 2020
and Application No.1243 of 2020
10. The learned Arbitrator framed issue No.5 as to whether the
claimant proved that there was abnormal delay on the part of the
respondent in ordering add-back deviation orders pertaining to the
provisional schedules, thereby causing the petitioner (Union of India)
to breach schedule 'A' note 5 in Serial page.7 of CA and condition No.5
of GCC, and found the answer in the affirmative in favour of the
claimant. The learned Arbitrator framed issue No.6 as to whether the
respondent proved that, due to the non-mobilisation of adequate
resources by the claimant, the claimant could not complete the work
within the stipulated time, and found the answer in the negative in
favour of the petitioner (Union of India).
11. After making such findings, the learned Arbitrator rejected
the claims relating to belated payment interest, GST, and certain
other claims. The Arbitrator found that the respondent/claimant would
be entitled, in the first part, to the amount of schedule, Part VI, as per
the contract rate for the works executed during the original contract
period, being Rs.1,87,42,700/-. It was further found, in the second
part, that the respondent/claimant would be entitled to the amount of
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Original Petition No.312 of 2020
and Application No.1243 of 2020
schedule ‘A', Part VI, at the enhanced rate for the work executed after
the original contract period, and awarded a sum of
Rs.4,89,56,531.25/-. In all, it was found that the respondent/claimant
was entitled to a total sum of Rs.6,76,99,231.25/-.
12. After finding that, towards the running bills, a payment of
Rs.5.13 crores had already been made, it was determined that the
total further amount receivable by the claimant was
Rs.2,04,90,760.26/-.
13. Aggrieved by the award of the aforesaid amount, the
rejection of its claims, the consequential award of costs and the
rejection of its counterclaim, the present application has been filed.
14. Mr AR.L.Sundaresan, the learned Additional Solicitor General
of India, by taking this Court in detail through the various exhibits and
clauses of the contract, would first submit that the primary claim with
reference to the enhanced rates in this case is made on the ground of
delay. He would submit that it is the respondent/claimant himself who
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Original Petition No.312 of 2020
and Application No.1243 of 2020
had requested an extension of time, which was acceded to. As far as
the reason for delay is concerned, it may be true that the entire site
was not handed over on the day of granting the work order; however,
special condition No.31.1 in the contract is confined to ground
conditions. It categorically states that if the entire work site is not
made available, the contractor has to carry out the work only with
reference to the portions allotted to him and to conclude the work as
and when the site is made available. When the parties have expressly
agreed to such a clause, the Arbitrator cannot go on equitable
considerations and ought to have adjudicated the issue strictly based
on the contract between the parties.
15. Further, with reference to issue No.2, the Arbitrator himself
has found that different departments are dealing with ground
clearance and the grant of work order and, therefore, the finding that
there was a fraudulent misrepresentation while floating the tender is
incorrect and is against the evidence on record.
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Original Petition No.312 of 2020
and Application No.1243 of 2020
16. The learned Additional Solicitor General of India would submit
that the major portion of the claim pertains to the demand for
enhanced rates. The claimant had not raised any such demand during
the execution of the work, despite repeated extensions of time having
been granted. Having completed the work at the rates stipulated in
the original work order, the claimant, only after completion of the
work, sought to raise a claim for enhanced rates, which was clearly an
afterthought. The enhanced rates are not supported by sufficient
evidence, and the findings on all five heads are incorrect and not
supported by the evidence. Thus, the learned Additional Solicitor
General of India would submit that on a cumulative reading of the
award as a whole, it can be seen that the learned Arbitrator did not
consider the foundational principles of Indian law, by which the parties
are bound by the mutual terms of the contract, and passed the award
on equitable considerations. The award on the claim, as well as the
rejection of the counterclaim, is patently illegal and warrants
interference by this Court.
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Original Petition No.312 of 2020
and Application No.1243 of 2020
17. Per contra, the learned counsel appearing on behalf of the
respondent/claimant would submit that a thorough reading of the
award and the evidence adduced on both sides would categorically
prove that, knowing fully well that the site was not available, the
tender was floated. The bidders were not put to notice that there may
be a delay in handing over the site. The quotation was submitted on
the assumption that the work would be executed within the
contractual period. The delay on the part of the petitioner in granting
the site, part by part, is enormous, and during the interregnum, the
prices of the various components increased significantly. Special
Clause No.31.1, by its very terms, is intended to apply only to
exceptional circumstances. While floating the tender, the petitioner
was aware of the encumbrances and other issues affecting the site. In
any event, in light of the oral and documentary evidence on record,
the learned Arbitrator has rendered his findings, and the arguments
cannot be made as if this Court were an appellate authority.
18. I have considered the rival submissions made on either side
and perused the material records of the case.
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Original Petition No.312 of 2020
and Application No.1243 of 2020
19. As rightly contended by the learned counsel for the
respondent, every argument relating to each of the six issues revolves
(a) the reading and construction of the contract; (b) considering the
same in the context of the evidence relating to execution of the terms
on ground and the subsequent conduct of both sides; (c) the
communications and exchanges that came into being during the
course of the same and to render findings. When the learned
Arbitrator has duly appreciated the evidence on record and arrived at
plausible conclusions, the Court cannot interfere in the exercise of
powers under Section 34 of the Arbitration and Conciliation Act, 1996.
The power of judicial review on the limited grounds available cannot
be elevated to that of an appellate Court re-appreciating the entire
evidence. On a reading of the entire award, the findings of the learned
Arbitrator are just and reasonable and do not, in any manner, violate
the fundamental policy of Indian law or suffer from patent illegality. As
regards Special Condition 31.1, the learned Arbitrator framed Issue
No. 1, construed it by taking into account the entire contract as a
whole and the attendant circumstances, and rendered his finding. The
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Original Petition No.312 of 2020
and Application No.1243 of 2020
same cannot be termed as patently illegal or violative of the
fundamental tenets of Indian law.
20. In view thereof, finding no merits, the Original Application
stands dismissed. The costs of this Original Petition are made easy.
Consequently, the connected application is closed.
11.11.2026
Jer
Neutral citation : Yes/No
D.BHARATHA CHAKRAVARTHY, J.,
Jer
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Original Petition No.312 of 2020
and Application No.1243 of 2020
Pre-Delivery Order made in
Original Petition No.312 of 2020
and Application No.1243 of 2020
11.11.2026
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