Facts
The petitioner was awarded a contract by the respondent on 23.06.2017 for building repairs and painting at a total value of ₹48,00,000
Source reference: p.1-2The work was to be completed by 31.12.2017, but despite extensions until 01.03.2018, the deadline was not met due to slow progress and under-deployment of labor
Source reference: para 2.1The petitioner raised five Running Account (RA) bills totaling ₹59,37,023, against which the respondent paid ₹49,19,907 based on joint measurements
Source reference: para 2.1The respondent terminated the contract on 10.04.2019
Source reference: para 2.2Subsequently, the petitioner submitted a final (sixth) bill for ₹2,58,78,656, sparking a dispute
Source reference: para 2.2The Arbitral Tribunal dismissed the petitioner's claims on 30.05.2024, leading to the current challenge under Section 34 of the Arbitration and Conciliation Act, 1996
Source reference: para 1, 2.2Issues
1. Whether the Arbitrator erred in rejecting the petitioner's claim of ₹2,58,78,656 for additional work on the grounds that it was unsubstantiated and improbable
Source reference: p.4 / para. 7-92. Whether the finding that the breach of contract was attributable to the petitioner was perverse or patently illegal
Source reference: p.6 / para. 12-15Law Applied
Section 34 of the Arbitration and Conciliation Act, 1996, which limits judicial interference in arbitral awards unless the award is vitiated by patent illegality or perversity
Source reference: p.1, 6Associate Builders v. Delhi Development Authority (2015) 3 SCC 49, which establishes that an award cannot be set aside for mere factual errors unless it is so irrational that no reasonable person could have arrived at such a conclusion
Source reference: p.3, 7Contractual principles regarding "Joint Measurement" clauses (Clause 21) and the evidentiary requirement for proving additional work beyond the original scope of the Letter of Award
Source reference: p.4-5Reasoning
The Court observed that the petitioner sought over ₹2.5 crores on a ₹48 lakh contract without providing any documentary evidence of work variations or approval for additional items
Source reference: para 7-10The Court noted that Clause 21 required payments to be based on "joint measurements," yet the petitioner admitted no joint measurement register was maintained for the claimed additional work
Source reference: para 11The Arbitrator’s finding that the claim "inspired no confidence" was upheld as the petitioner failed to produce tax invoices or procurement bills for the alleged extra materials
Source reference: para 9-10Regarding the breach, the Court found the Arbitrator's conclusion plausible because the petitioner failed to prove the deployment of adequate labor as per Clause 17 and admitted to starting work five months after the allotment date
Source reference: para 13-15The Court emphasized that it cannot reassess evidence or interfere with factual findings unless they are perverse, which was not the case here
Source reference: para 12Holding
The Court answered both issues in the negative, holding that the Arbitrator’s findings were based on a reasonable appraisal of the lack of evidence provided by the petitioner
The Court held that the award did not suffer from perversity or patent illegality under Section 34 of the Act
Source reference: para 15, 18The petition was dismissed, and the arbitral award dated 30.05.2024 was upheld
Source reference: para 18Original Court PDF
Nandini EnterprisingvsRajasthan Co Operative Group Housing Society Ltd And Anr
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