The interpretation of contract terms, particularly regarding price adjustments and inclusivity of tax components, cannot be altered post-agreement without breaching contract law principles.

JUDGMENT

Purushaindra Kumar Kaurav, J.

1. This appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as `A&C Act') read with Section 13 of the Commercial Courts Acts, 2015 (hereinafter referred to as `CCA') is directed against the order dated 10.12.2021, passed by the District Judge (Commercial Court)-01 Patiala House Courts, New Delhi, rejecting an application under Section 34 of the A&C Act and affirming the arbitration award dated 03.08.2010 passed by the Arbitral Tribunal (hereinafter referred as `AT').

2. The brief facts leading to filing of the present appeal are as under:

(i) The respondent-Rail Vikas Nigam Limited (RVNL) invited bids for the work of "MANUFACTURE AND SUPPLY OF PSC MONO-BLOCK SLEEPER PLANTS FOR VARIOUS RAIL ROADS PROJECTS IN DIFFERENT REGIONS OF INDIA".

(ii) The appellant No. 2/ M/s Vaman Prestressing Company Private Limited (VPCL) was one of the bidders whose bid was found to be viable and was offered for performance of the work in question. The appellant No. 2/VPCL on 31.08.2007 accepted the offer unconditionally and had a request for exemption from excise duty on raw material and assignment of contract to M/s Icon Sleeper Track Private Limited (ISTPL) as per Clause-36 of Section VI of General Conditions of Contract (GCC). It be noted that ISTPL is appellant No. 1 in the instant appeal.

(iii) On 14.09.2007, RVNL accepted the request of VPCL granting an exemption for excise duty and assignment of contract to ISTPL. The period for completion of the whole work was 18 months from the date of acceptance of the counter-offer by RVNL.

(iv) On 05.11.2007, an agreement was entered into between VPCL & RVNL. During the course of execution of the work, certain disputes arose between the contracting parties. In accordance with the provisions of Clause 10.1 of GCC of the contract agreement, efforts for amicable settlement of the disputes were made between the parties. However, the parties failed to arrive at an amicable settlement. Resultantly, in accordance with the provisions of Clause 10.2 of the GCC, the AT was constituted, consisting of a presiding arbitrator and two other members. The AT after conducting various hearings, passed the final award on 05.08.2019, rejecting the claim of the appellants.

(v) The appellants challenged the award passed by the AT in an application under Section 34 of the A&C Act before the learned Commercial Court. The learned Commercial Court passed the impugned order and did not find any substance in the said application and has rejected the same. Therefore, the appellants have approached this court in the present application under Section 37 of the A&C Act.

3. Learned senior counsel appearing on behalf of the appellants vehemently submitted that the impugned order and award passed by the AT is patently illegal and against the Public Policy of India and hence, deserves to be set aside by this court. According to him, the entire understanding of the AT and the Commercial Court is erroneous, inasmuch as, the appellants are only insisting on the due observance of the terms of the contract in their strict sense. While taking this court through condition 15.2 of the GCC, he has specifically pointed out that C₀ is defined as the base cost of the cement per MT including ED, ST/VAT and freight equal to Rs.4,080/- and C₁ is defined as the cost of the cement per MT including ED, ST/VAT and freight on the date of adjustment. He, therefore, submitted that C₀ is the base cost of cement, which includes excise duty