The court upheld the Arbitrator's award, emphasizing that unilateral alterations to agreed contract rates without mutual consent are impermissible under the Arbitration and Conciliation Act, 1996.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)--The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, `the Act'] has been filed by the Petitioner [hereinafter, `DDA'] seeking setting aside of the impugned Arbitral Award dated 22nd April, 2020 [hereinafter, `Award'] passed the Sole Arbitrator, in so far as it awards the amount qua Claim No. 3 and interest thereon under Claim No. 5 in favour of the Respondent herein - M/s. Satya Prakash & Bros. Pvt. Ltd. (being the Claimant therein) [hereinafter, `SPBPL'].

BRIEF FACTS

2. The facts giving rise to the present petition are summarized as follows:

The Contract:

2.1. SPBPL being the L-1 bidder, was awarded contract for work of "Construction of UER-II Master Plan Road in Rohini (SH-C/o 100m R/W Road (UER II) Western Yamuna Canal to Kanjhawala road near village Karala Mazari for part of alignment passing through Rohini", by DDA, under Agreement No. 03/EE/MPR1/DDA/2012-13 for a value of Rs.56,16,62,727/-. The stipulated commencement date was 14th January, 2013 and completion date was 13th April, 2014.

2.2. A separate Supplementary Agreement - No. 3A/EE/MPR-1/DDA/2012-13 was also executed between the parties.

The Dispute:

2.3. Agreement Item no. 4 of Bill of Quantities [hereinafter, `BOQ'] pertained to construction for embankment by getting earth from "all leads and lifts, transporting to site". The tender estimate rate for the same was fixed by DDA as Rs.171.10/- [calculated taking the transportation lead of 20 kms]; SPBPL quoted the rate of Rs.234/-; the same was accepted by DDA; it was applicable to any/all distances.

2.4. During the execution of the work SPBPL expressed inability to source the material (earth) and requested DDA for helping/arranging procurement of earth for execution of work, as `earth' was not available in nearby areas, on account of ban imposed by the Supreme Court on excavation of earth from cultivated land in NCR Delhi. Acting upon the request of the SPBPL and in the interest of work, DDA requested DSIIDC to allow earth to be procured from its site which was at a distance of 8 kms. SPBPL was put to notice that it would be treated as a substituted item relying on Clause 12 the Agreement<sup>1</sup> SPBPL, on the other hand, refuted DDA's substitution of the agreed `rates' and contended and it had never agreed or consented to the same. Disputes finally arose when, SPBPL received the final bill from DDA and after scrutiny thereof, it was observed that payments against some claims, were not included.

The Arbitration:

2.5. In the afore-noted background, when SPBPL invoked arbitration vide letter dated 16th March, 2019, DDA appointed Mr. Sarvagya Kumar Srivastava as the Sole Arbitrator. The arbitration proceedings have now culminated into the Award dated 22nd April, 2020. DDA assails the same qua following claims:

Claim No. 3 - Rate of payment relating to embankment work under the Agreement.

i. The Claim No. 3, pertains to agreement Item No. 4 dealing with construction of embankment with approved material (earth) obtained from borrow pits with all lifts and leads. The exact description contained therein reads as under:

"Construction of embankment with approved material (earth) obtained from borrow pits with all lifts and leads, transporting to site, spreading, grading to required slope and compacted to meet the requirement of Table 300-2 of MoRT&H specifications for Road & Bridge works - 2001"

ii. The Arbitrator found the decision of `substitution' by DDA to be arbitrary, not in sync with the spirit