Back
2022 Supreme(Del) 2042
IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
MBL Infrastructures Ltd. - Appellant
Versus
Rites Limited - Respondent
O.M.P. (COMM) 98 of 2022
Decided On : 27-10-2022
The impugned order rejecting the petitioner's application for amendment of the statement of claims is not an interim award and is not amenable to challenge under section 34 of the Arbitration & Conciliation Act, 1996.
Headnote:
Arbitration & Conciliation Act, 1996 - Section 34 - The court considered the provisions of section 34 of the Act, which allows for the setting aside of an arbitral award. The court concluded that the impugned order was not an award and therefore not amenable to challenge under section 34.
Fact of the Case:
The petitioner filed a petition under section 34 of the Arbitration & Conciliation Act, 1996 to challenge an order made by the Arbitrator rejecting the petitioner's application for amendment of the statement of claims. The disputes between the parties arose from a contract for construction of Police Lines and Residential Quarters. The petitioner sought various amendments to the claims made in the statement of claims, which became necessary due to deductions made by the respondent from the running account bills. The petitioner contended that the impugned order amounted to an 'interim award' and was amenable to challenge under section 34 of the Act. The respondent argued that the impugned order was not an interim award and therefore the challenge was not maintainable.
Finding of the Court:
The court considered the arguments of both parties and referred to relevant case law. The court noted that the impugned order did not comprise a final determination of the petitioner's claims, including the enhanced quantum of claims arising from the final bill. The court concluded that the impugned order was not an interim award and therefore not amenable to challenge under section 34 of the Act. The court dismissed the petition, taking note of the Arbitrator's observations that he would consider the quantum of claims sought to be raised by the petitioner.
Ratio Decidendi: The impugned order rejecting the petitioner's application for amendment of the statement of claims is not an interim award and is not amenable to challenge under section 34 of the Arbitration & Conciliation Act, 1996.
Result: The petition is dismissed.
JUDGMENT
Anup Jairam Bhambhani J.
By way of the present petition under section 34 of the Arbitration & Conciliation Act, 1996 ('A&C Act' for short), the petitioner/claimant M/s MBL Infrastructures Ltd. impugns order dated 08.01.2022 made by the learned Sole Arbitrator in proceedings relating to disputes with respondent No. 1 M/s Rites Limited. It may be recorded at the outset that while the petitioner contends that order dated 08.01.2022 amounts to an `interim award' amenable to challenge under section 34 of the A&C Act, the respondent challenges the maintainability of the petition inter-alia on the ground that the impugned order is not an interim award.
2. By way of order dated 08.01.2022, the learned Arbitrator has rejected an application dated 29.01.2021 filed by the petitioner under section 23(3) of the A&C Act seeking amendment of the statement of claims.
3. Briefly, the genesis of the disputes between the parties is a contract for construction of Police Lines and Residential Quarters at Kondli Check Post in Delhi, awarded to the petitioner pursuant to a tender floated by respondent No. 1 as an agent of respondent No. 2/Ministry of Home Affairs (Delhi Police). By way of the amendment application dated 29.01.2021, the petitioner had sought the following amendments, which the petitioner contends, became necessary once respondent No. 1 finalized the running accounts bills raised by the petitioner upon the said respondent.
4. A summary of the amendments sought, as narrated in the pleadings, are quoted below, re-arranged in serial order:
AMENDMENTS TO CLAIMS
i. As per Statement of Claims dated 15.05.2018, the claim no. 1 stands as under:
| Claim No. 1 Refund of amount withheld for slow progress/milestone & withheld LD @ 10% of WD as per SBU Head (Upto 20th RA Bill) | Rs. 3,71,23,235/- |
After the finalization of 23rd Running Account Bill, the Respondent No. 1 made further deductions on this account and has deducted cumulative amount of Rs.4,06,03,294/- and further interest @16% per annum amounting to Rs. 34,80,059/-. Therefore, the Petitioner sought amendment of Claim No. 1 to Rs. 4,06,03,294/- along with interest @10% per annum compounded monthly from the date of completion of work till the date of actual payment.
ii. As per Statement of Claims dated 15.05.2018, the claim no. 2, 4 and 5 the Petitioner had claimed as under:
| Claim No. 2 Release of Net Payable (after deductions made by Rites) amount of 20th R/A Bill. | Rs. 7,98,546/- |
| Claim No. 4 Work done measured but part rates pending | Rs. 1,30,17,774/- |
| Claim No. 5 Work done but not measured (BOQ items/unmeasured & unpaid extra & deviated items) | To be quantified |
During the currency of Arbitration proceedings, the Petitioner raised raised 21st, 22nd and 23rd Running Account/Final Bill. During the currency of the arbitration proceedings some payments were released to the Petitioner which are detailed as under:
a . Rs. 53,82,856/- on 06.05.2019 towards RA Bill No. 21
b. Rs. 20,98,139/- on 19.06.2019 towards RA Bill No. 21
c. Rs. 72,00,000/- on 16.08.2019 towards RA Bill No. 22
d. Rs. 38,35,953/- on 07.12.2019 towards RA Bill No. 22
Therefore, the Petitioner sought merging and amendment of Claim No. 2,4 and 5. The Petitioner became entitled to Rs. 4,34,12,519/- against 23rd Running Account Bill, Rs. 7,84,988/- against 22nd Running Account Bill, Rs.1,32,27,336/- against balance escalation, Rs. 20,30,133.96 against extra items not taken into account by the Respondent No. 1 alongwith interest @ 10% per annum compounded monthly from the date of completion of work till the date of actual payment. The amendment under Claim No. 2, 4 and 5 were therefore necessitated on account of the finalization of the Final Bill handed over to the Petitioner on 29.12.2020.
iii. As per Statement of Claims dated 15.05.2018 the claim no. 3 stands as under:
| Claim No. 3 Release of amount deducted from various bills for Security Deposit | Rs.2,00,56,457/- |
After the finalization of 23rd Running Account Bill the retention money/security depo
