The Court emphasized the importance of interpreting contracts based on their ordinary and popular sense, the limited scope of objections under Section 34 of the Arbitration and Conciliation Act, 1996, and the need for parties to raise their defenses before the Arbitral Tribunal.

JUDGMENT

Vipin Sanghi, J. - CM APPL. 13248/2021

Exemption allowed, subject to all just exceptions.

The application stands disposed of.

FAO(OS) 14/2021 & CM APPL. 13246/2021,CM APPL. 13247/2021( to seek condonation of delay of 360 days in filing the appeal)

1. We have heard learned senior counsel for the appellant, and perused the record. Learned counsel for the respondent is also present on advance notice.

2. Mr. Phoolka, at the outset, points out that the delay is not of 360 days as stated in the application considering the fact that the order was passed on 04.03.2020, whereafter the lockdown was imposed due to the pandemic, and the running of limitation was suspended by the orders of the Supreme Court.

3. Be that as it may, since we have heard Mr. Phoolka on the merits of the appeal, and we do not find merit in the present appeal, we are not inclined to deal with the issue as to what is the quantum of delay, and what is the justification therefor.

4. The present appeal is directed against the order dated 04.03.2020, passed by the learned single Judge allowing the respondents objection filed under Section 34 of the Arbitration and Conciliation Act, 1996 seeking setting aside of the award dated 29.06.2015, passed by the Sole Arbitrator, and seeking a declaration that the recovery made by the appellant herein is illegal and arbitrary.

5. The brief facts relevant for the determination of the present appeal have been noted in the impugned order, and we quote the same from the impugned order itself.

"2. Brief facts germane to the present petition are that the petitioner was appointed as a Conversion Agent for the first time in the year 2006 by the respondent which is a Government Company for conversion of TMT Bars. A contract was entered into for a period of three years i.e. from 2006 till 2009 (hereinafter referred to as "Contract-I") Under Contract-I, conversion charges payable to the petitioner were to be increased @ 2% every year. Consequently, the respondent revised the conversion charges for the year 2007-2008 vide letter dated 17.03.2007 as well as for the year 2008-2009 vide its letter dated 30.05.2008 and accordingly reimbursed the money at increased rate every year till the conclusion of Contract-I.

3. On 05.02.2009, petitioner entered into a fresh agreement with the respondent (hereinafter referred to as "Contract-II?). Contract-II had a different clause with regard to the rates of escalation and reads as under:

"ESCALATION OF RATES The conversion charges finalized in the tender shall be kept firm for 1 year w.e.f the date specified for commencement of work in the work order. At the end of one year, the conversion charges will be revised based on the following weightage and neutralization for each of the components:-

4. Pursuant to Clause 8, as mentioned above, respondent after completion of one year of the agreement vide letter dated 24.05.2010 approved the revised conversion charges w.e.f. 05.02.2010 and consequently, the petitioner raised the invoices and was paid at the revised rates. The charges were once again revised w.e.f. 05.02.2011 by the respondent vide its letter dated 08.11.2011 and the petitioner was paid at the revised rates till the conclusion of Contract-II.

5. It is the case of the petitioner that at the end of Contract-II, respondent issued "No Dues Certificate? and the Bank Guarantees submitted by the petitioner to the tune of Rs. 1.25 Crores and Rs. 75 Lacs were released, without any demur.

6. As the chronology goes, the petitioner then entered into a third Contract wi