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2018 Supreme(Del) 1855
IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
Delhi Tourism & Transportation - Petitioner
Versus
Gammon India Limited - Respondent
O.M.P. 510 of 2015
Decided On : 16-07-2018
Advocate Appeared:
For the Petitioner: Mr. G. Saikumar, Ms. Sowmya Saikumar, Mr. Abhimanyu Garg, Ms. Preety Makkar
For the Respondent: Mr. Rajiv Bansal, Ms. Awantika Manohar, Ms. Fiza Saluja
The court emphasized that its jurisdiction was limited to see if the learned tribunal had transgressed beyond the contract or had not acted in accordance with the law, and there was no scope for re-evaluation on merits or reinterpreting the terms of the contract.
Headnote:
Arbitration - Construction Contract - Arbitration and Conciliation Act, 1996 - Section 34 - The court dismissed the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral award. The court held that the petitioner's challenge regarding the limitation to move the fresh claim was not raised before the learned arbitrator and was therefore barred under Section 4 of the Act. The court also noted that the petitioner had only challenged the limitation to file fresh claims per clause No.25 and had waived off its right to challenge. The court further highlighted that the learned arbitrator had examined all the documents, appreciated the evidence, and made a reasoned award, and there was no infirmity in the award. The court emphasized that its jurisdiction was limited to see if the learned tribunal had transgressed beyond the contract or had not acted in accordance with the law, and there was no scope for re-evaluation on merits or reinterpreting the terms of the contract.
Yogesh Khanna, J.
1. The petitioner has filed objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘the Act’) against the arbitral award dated 09.06.2015 passed against the petitioner and in favour of the respondent.
2. The facts in brief are as under:-
(a) on 03.10.2002 the petitioner awarded the contract for construction of flyover from Lajpat Nagar to Srinivaspuri, Ring Road, New Delhi to the respondent against a total consideration of 42.57 Crores on CPWD 12 (modified) for the completion period of 18 months i.e. on or before 17.04.2004;
(b) on 18.10.2002 the respondent commenced the work. The petitioner granted the extension of time for completion of work vide letter DTTDC/Engg/LN54(36)/1984 dated 04.07.2005.
(c) on 12.04.2005 the respondent completed the construction work with delay of almost an year;
(d) on 20.09.2005 the respondent raised the final bill upon the petitioner to the tune of 47,84,83,173/- against which on 28.07.2006 the petitioner made the payment of 42,54,08,660/- to the respondent, which was duly accepted by the respondent;
(e) on 16.09.2008 after expiry of two years of accepting the payment against the final bill the respondent invoked the arbitration vide letter No.WSS/G/614; and
(f) on 12.11.2008 the Chief Engineer of the petitioner appointed Shri K.N. Aggarwal, as sole arbitrator, who commenced the arbitral proceedings on 19.12.2008 and passed an impugned arbitral award dated 09.06.2015 against the petitioner, hence the present petition.
3. Admittedly, the completion date of the contract was 12.04.2004 but extension was sought on 04.07.2005 and was acceded to. The time was extended till 12.04.2005 without prejudice to the rights of the Government to recover liquidated damages in accordance with the provisions of clause No.2 of the Agreement No.02/DTTDC/Engn/LN 2002-03. On 17.05.2005 a letter was written by the petitioner to the respondent to get the completion certificate and requested the respondent to submit its final bill along with final measurements, deviation statements etc to its office immediately in order to process the same. The provisional completion certificate was annexed with the said letter.
4. Though, as per the term of the contract, the final bill was to be submitted within three months but the respondent delayed in filing the final bill but yet the petitioner entertained it and processed the same.
5. The respondent submitted its final bill along with 41 claims. The claims were entertained by the Executive Engineer and some of them were accepted while remaining were rejected vide communications dated 28.11.2004, 18.01.2005, 01.12.2005, 01.03.2006, 05.04.2006, 04.09.2006 etc. Thereafter, vide letter dated 14.11.2006 the petitioner paid security deposit and released the Bank Guarantees for mobilisation advance, as requested by the respondent, vide its letter dated 14.11.2006. However, after two years i.e. on 16.09.2008, the respondent raised demand to the tune of Rs.16,17,91,203/- against which payment of Rs.2,31,53,000/- was made in the final bill and an amount of Rs.13,86,38,203/- was said to be outstanding. Such demand was rejected, hence respondent preferred raising dispute.
6. The petitioner then appointed Shri K.N. Aggarwal, Retired DG (W), CPWD as a sole arbitrator to decide and make his award regarding the claims/disputes raised by the respondent but, however, subject to their admissibility under clause 25 of the aforesaid agreement.
7. It is the case of the petitioner since the procedure for making a dispute arbitrable was never followed by the respondent, the learned arbitrator erred in allowing its claims. He refers to clause 9 and clause 25 of the agreement.
8. Clause No.9 of the contract notes:-
“CLAUSE 9 Payment of final bill
The final bill shall be submitted by the Contractor in the same manner as specified in interim bills within three months of physical completion of the work or within one month of the date of the final certific
