( 1 ) THE original claimant the Petitioner, has invoked section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act)and thereby, challenged the award partially, mainly on the ground of interest and claiming interest @ 18% p. a. from the date of payment i. e. from 18-4-2006 till 12-1-2009, and also service tax and levies liabilities.

( 2 ) I have already taken a view in Arbitration Petition No. 31 of 2009, M/s anupam Engineers vs. Indian Oil Corporation, dated 10-12-2009 by referring to the following Supreme Court Judgments of section 34 of the Arbitration Act, that the award can be modified or the award can be challenged partly. 1. Tata Hydro-Electric Power Supply Co. Ltd. vs. Union of India, 2003 (4) S. C. C. 172 2. Hindustan Zinc Ltd. vs. Friends Coal carbonisation, 2006 (5) Mh. L. J. (SC) 1 = (2006) 4 S. C. C. 445. 3. Mcdermott International Inc. vs. Burn Standard Co. Ltd. and Ors. (2006)11 S. C. C. 181 4. Krishna Bhagya Jala Nigam Ltd. vs. Harischandra reddy and Anr. (2007) AIR SCW 527. 5. Numaligarh Refinery Ltd. vs. Daquelim Industrial Co. Ltd. , (2007) 8 S. C. C. 466 6. Delhi Development authority vs. R. S. Sharma and Co. New Delhi, (2008) 13 S. C. C. 80 7. Royal Education Society vs. Lis (India) Construction Company Pvt. Ltd. , (2009) 2 SCC 261.

( 3 ) I have already modified the awards in the following cases, based upon the Supreme Court's Judgments. Some are as under: (a) Union of India vs. Arctic India, 2007 (6) Bom. C. R. 384, (b) Sai enterprises vs. Mahanagar Telephone Nigam Ltd. and anr. 2007 (6)Bom. C. R. 390, (c) Arbitration Petition No. 494 of 2004 in The Board of trustees of the Port of Mumbai vs. M/s. Mohinder Singh and Company.

( 4 ) THE preliminary object is rejected. Therefore, heard the parties finally.

( 5 ) THE learned counsel appearing for the Petitioner has strongly relied on air 2001 SC 626, Executive Engineer, D. M. I. Divn. , Orissa vs. N. C. Budharaj, and thereby contended that in absence of any contra agreement the Arbitrator is empowered to grant interest under section 31 (7) of the Arbitration Act, as well as, as per the provisions of Interest Act 1978.

( 6 ) THE learned Arbitrator after considering the material, as well as, the concerned terms and conditions between the parties has granted award in favour of the Petitioner but not granted interest as claimed @ 18% p. a. , basically from 21-6-2005. The Petitioner was awarded contract by the Respondent for replacement of existing 2 Nos. 166 KVA DG Sets at Airport Mumbai. The agreement was executed accordingly. As there was dispute, the Arbitration clause was invoked on 26-7-2007. The statement of claim was submitted before the arbitrator on 31-1-2008. The parties have filed their written submissions on 20-9-2008. The sole Arbitrator therefore, passed the impugned award and partly awarded the claim on 27-11-2008.

( 7 ) CLAUSE 10 (F) (1), as relevant is as under –

"tendered rates are inclusive of all taxes and levies payable under the respective State. However, pursuant to the Constitution (Forty Sixth amendment) Act, 1982 if any further tax or levy is imposed by State, after the date of receipt of tenders, and the contractors thereupon necessarily and properly pays such taxes/levies the contractor shall be reimbursed the amount so paid, provided such payment, if any, is not, in the opinion of Executive Director Engineering/general Manager engineering (whose decision shall be final and binding) attributable to delay in execution of work within the control of the contractor. "

( 8 ) THE Respondent, considering above and in view of the award paid the amount of Rs. 4,33,470/- vide letter dated 13th January, 2009, though resisted by reply dated 18th August, 2009 as under-

"i further say that the Petitioners are not entitled to interest of rs. 97,022/- on the VAT at the rate of 4% awarded in favour of the petitioners as per Clause 25 of Agreement. "

( 9 ) THE Petitioner has accepted the said amount but still filed this Petition

Click Here to Read the rest of this document