The court emphasized the finality of arbitral awards and the limited scope of interference under Section 34 of the Arbitration and Conciliation Act.

Manmohan Singh, J.

1. The petitioner has preferred the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the arbitral award dated 21st March, 2012.

2. Brief facts are that:-

(i) The petitioner (NHAI) entered into a contract agreement with the respondent, Progressive Constructions Ltd., for the work of four laning of Km. 410.000 to Km. 419.000, and Km. 470.000 to Km. 476.150 of Purnea-Gayakota Section of the National Highway (Package EW-4), in the State of Bihar on 12th August, 1999.

(ii) During the course of execution of the work, due to certain site conditions and the decision to construct an additional 4 Km. of service road, the quantities of some items of the BOQ increased substantially compared to the original provision in the BOQ. The Engineer, by four separate letters dated 26th March, 2003 issued Variation Orders (‘VOs’) for changes in the quantities of items 3.01, 3.02, 3.03 and 4.04 of the BOQ. The rate for quantities of these items which amounted to 1% of the contract price was kept the same as was quoted by the contractor while tendering. It was also stated by the Engineer that the Variation Order for balance quantity beyond 1% of the Contract Price which has to be approved by the petitioner, will be issued separately after getting concurrence of the competent authority.

(iii) The respondent asked for a revision in the rates of the BOQ items in question owing to the large scale variations that were instructed as also keeping in mind the massive increase in cost by the time the variations were issued as compared to the prevailing cost at the time of tendering. However, the petitioner rejected the demand of the respondent and stated that it was not agreeable to the revision of rates for the BOQ items.

(iv) A dispute having accordingly arisen between the parties, the respondent invoked the dispute resolution procedure as contained in the contract agreement and the disputes were referred for the purpose of final adjudication of the claims of the respondent to a three member arbitral tribunal, comprised of three retired engineers, which was jointly constituted by the parties as provided for under the contract agreement.

(v) After completion of pleadings of the parties and considering submissions of the parties, the arbitral award dated 21st March, 2012. The Arbitral Tribunal allowed the claims of the respondent.

3. The respondent submits that the petition filed by the petitioner under section 34 of an Act is completely devoid of merits and deserves to be dismissed as the Court has limited jurisdiction. In the objections to the award, the petitioner has not placed any material facts nor made out any grounds whatsoever that are relevant under the above Section for setting aside the award, as in the present case, the arbitral award is a comprehensive and well-reasoned award which is in consonance with the contract between the parties.

4. Parties were heard on 27th March, 2014. Time was granted for filing the written submissions. The petitioner has not filed the same. The matter, therefore, is kept for orders on 19th May, 2014.

5. Coming to the case of merit, the second submission of the petitioner is that the claim of the respondent is not meritorious and not supported by the conditions of the contract. In the way, the submission is that there is no provision in the contract for the revision of the rate. The Arbitral Tribunal, however, came to the conclusion contrary to the submissions of the petitioner, as there are specific clauses in the contract between the parties where respondent is entitled to seek a revision in the rates. The relevant clauses 38.1 and 40.2 of the contract are as under:-

“38. Changes in Quantities

38.1 If the final quantities of the work done differs from the quantity in the Bill of Quantities for the particular item by more than 25% provided the change exceeds 1% of the initial contract price, the Engineer sha