IMPORTANT POINT
In a matter of contract where parties have to stick to govern by provisions of contract entered into between them, equity has no role to play.

JUDGMENT

A.K. Sikri, J.

The National Hydro-Electric Power Corporation Ltd. (hereinafter referred to as 'NHPC") had floated tender for award of work of construction of left side Afflux Bund from RD-00 M to RD-1700 M of Tanakpur Hydro-Electric Project, Tanakpur, Distt. Nainital, U.P. sometime in the 1980s, when Nainital was part of State of Uttar Pradesh (now Uttarakhand). In that tender, Hindustan Steel Works Construction Ltd. (HSCL) emerged as the successful tenderor to whom the contract was awarded by NHPC by entering into contract dated January 28, 1986. The contract permitted sub-contracting thereof by HSCL with the consent of NHPC. Thus, HSCL sub-contracted the said works to respondent herein, i.e. Progressive Construction Ltd. (PCL) vide contract dated July 16, 1991. PCL had further sub-contracted the said work or part thereof to the appellant herein, i.e. M/s. Sharma & Associates Contractors (P) Ltd. (SAPL). This appeal relates to disputes between SAPL (the appellant) and PCL (the respondent). Though, work was sub-contracted to the appellant, it is an admitted case between the parties that the sub-contracting of the work was not permissible by the respondent to the appellant. Be that as it may, a contract dated February 09, 1990 was signed between the appellant and the respondent (even prior to the award of work by HSCL to the respondent), though it was sealed on April 15, 1992, i.e., after the respondent was awarded the sub-contract from HSCL on July 16, 1991. From the facts recorded upto now, it is clear that there is a main contract between the employer NHPC and HSCL which is dated January 28, 1996 and HSCL sub-contracted the work to PCL and contract between them is dated July 16, 1991, third contract which is between PCL (the respondent) and SAPL (the appellant) is dated February 09, 1990, sealed on April 15, 1992.

2. Disputes arose between the appellant and the respondent in respect of execution of the work. According to the appellant, certain payments were not made to it by the respondent though it had executed work. Those, disputes were referred to for adjudication to the arbitration as per arbitration clause in the contract between appellant and respondent by the High Court in petition filed by the appellant under Section 20 of the Arbitration Act, 1940. After adjudication of these disputes, the arbitrator rendered his award dated February 18, 1999. Since this was an award under Arbitration Act, 1940, the same was filed in the Court for making it rule of the court and was registered as Suit No. 492/99. Respondent filed objections thereto which were dismissed by the learned Single Judge vide its judgment dated November 18, 2004. In respect of six claims raised by the appellant, award was passed by the arbitrator allowing Claim Nos. 1 to 3 which was upheld by the learned Single Judge. We are not concerned with all those claims except Claim No. 1 inasmuch as in appeal preferred by the respondent against the aforesaid judgment of the learned Single Judge, Division Bench has allowed the appeal in respect of six claims and set aside the award holding that no money is payable under this claim by the respondent to the appellant. As far as Claim No. 1 is concerned, it was on account of revised rates received by the respondent from HSCL towards deviation in quantities. The appellant contended that since it was a back to back contract, the manner in which the rates are revised upward and received by PCL from HSCL, benefit thereof has to be given to the appellant also. The matter with regard to the revision of rates, which formed part of Claim No. 1, pertains to item nos. 1 and 6 which were to be executed by the appellant. Respondent had taken up this matter with HSCL, purportedly at the instance of the appellant, and HSCL had revised the rates in the following manner: