The court held that the tribunal's award of refund and risk and cost compensation was justified, but the risk and cost amount should be modified to reflect the corrected value of work done.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. Both the above applications under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the 1996 Act"), having arisen out of the self-same award, as subsequently corrected under Section 33 of the 1996 Act, are taken up together for analogous hearing.

2. The genesis of the case is a work order awarded to the contractor, M/s. Konarak Enterprise (hereinafter referred to as the "claimant") by the Haldia Development Authority (hereinafter referred to as the "respondent"), on the basis of a tender in which the claimant came out successful, for construction of a road from Gholpukur to Tekhali Bridge via Amdabad High School, Haldia and maintenance of the said road.

3. Disputes having arisen between the parties arising out of the said contract, the claimant referred the matter to arbitration, seeking refund of security deposit and earnest money which was deposited at the inception by it, whereas the respondent filed a counter claim before the Arbitral Tribunal for recovering the risk and cost expenses, which was the balance amount paid to the subsequent contractor for completion of the work left unfinished by the claimant.

4. The Tribunal directed the earnest money and security deposit to the tune of Rs.9,06,091.44p to be refunded to the claimant. The risk and cost claim of the respondent was partially allowed, to the tune of Rs.18,00,163/-.

5. Learned counsel appearing for the respondent argues that the refund of security deposit and earnest money as directed by the Tribunal was not permissible, since the work was not completed by the claimant. The completion certificates issued to the claimant at various stages of the work, it is argued, were restricted to the partial work completed upto each such stage and did not pertain to the completion of the entire work.

6. It is further argued that in view of the three additional years of maintenance of the construction of road having not been completed, the claim of refund was premature.

7. Thirdly, it is contended that the claim of refund of security deposit was barred by limitation, since the work was completed on September 24, 2010 and the claim was made sometime in the year 2016.

8. Learned counsel also contends that the risk and cost expenses awarded by the Tribunal ought to have been enhanced. The value of the total work was calculated to be Rs.1,96,49,202/-. The work actually done by the claimant and paid for was subsequently corrected under Section 33, on the application of the claimant, and increased from the original awarded amount of Rs.1,41,39,493/- to Rs.1,74,05,144/-. As a logical corollary thereto, the work left unfinished should have been decreased to Rs.22,44,058/-, in view of the same being the difference between the total contract value and the work actually done. However, such prayer of the respondent was refused by the Arbitral Tribunal on the ground that no independent application under Section 33 of the 1996 Act had been filed by the respondent, overlooking that no further application by the respondent was necessary in that regard, since the enhancement of the value of work done would automatically entail a decrease of the work left unfinished. Instead of decreasing the said amount, which would require mere mathematical calculation, to Rs.22,44,058/-, which is the difference between the total contract value and the enhanced value of work done, the Tribunal retained the value of the unfinished work at Rs.55,09,759/-, thereby committing a patent error of law apparent on the face of the corrected award.

9. In support of his contentions, learned counsel cites Indian Oil Corporation Limited v. Shree Ganesh Petroleum Rajgurunagar, reported at (2022) 4 SCC 463, for the proposition that if the Arbitral Tribunal passes an award contrary to the specific terms of the contract between the parties, the same is tainted by patent illegality and can be set aside under Section 34 of the 1996 Act.

10. Learned counsel for the respondent next