IMPORTANT POINT
The court affirmed that an arbitral award can be set aside if it contravenes the terms of the contract or exceeds the jurisdiction of the arbitrator, emphasizing the importance of notified claims.

JUDGMENT :

ROBIN PHUKAN, J.

1. Heard Mr. G.N. Sahewalla, learned Senior Counsel, assisted by Ms. K. Bhattacharya, learned counsel for the appellant. Also heard Mr. N. Deka, learned counsel for the respondent No. 1 and 2.

2. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is directed against the judgement and order dated 16.08.2010 passed by the learned District Judge, Kamrup (M) at Guwahati in Misc. (Arbitration) Case No. 9 of 2005.

3. It is to be noted here that vide impugned judgment and order the learned District Judge, Kamrup (M) has set-aside the arbitral award dated 05.04.2005, passed by the sole Arbitrator, Mrs. Justice M. Sharma (Retd.) in Case No. Arb. (MS) No. 02/2002.

4. In order to avoid confusion, the rank of the parties, assigned to them in this appeal, will be referred herein, for the sake of convenience.

The Background Facts:

5. The background facts leading to filing of the present appeal are adumbrated herein-below:

“The appellant herein, M/s Ranjul Baruah, Engineers and Contractors, of “Raha Villa” Rehabari, Guwahati was offered civil works (jobs) for setting up DCU (De-Cokering Unit) and CDU (Crude Distillation Unit) revamp project at Guwahati Refinery valued Rs. 1,74,01,950/- within time limits on condition that the materials jor steel, cement etc will be supplied by the respondent to the appellant and the value of the materials will be deducted from the Bills.

Accordingly the appellant had accepted the offer and work order No. GR/TS/ES/09/WO-11/99, dated 16.2.99 was issued to him for carring out execution of the work, which had to be completed within the stipulated period. But, owing to some difficulties, the appellant had failed to complete the task within stipulated period. Extension of time of completion was granted on several occasions by the respondent authority, on condition of without any financial implication on either side. Ultimately, the appellant had given the work on Sub-Contract to one N.C. Kalita for completion. Thereafter, the Sub- Contractor, Mr. N.C. Kalita had completed the work on 30.9.2000. Thereafter, final bill was prepared in the month of May, 2001 and cheque was issued in the name of the appellant and his authorized Sub-Contractor N.C. Kalita had put his signatures on the measurement books, bills and accepted the A/c payee cheque on behalf of the appellant without raising any objection.

Thereafter, dispute had arisen between the appellant and the respondent for which Hon’ble Mrs. Justice Meera Sarma (Retd.) was appointed as sole Arbitrator by the Hon'ble Chief Justice of Gauhati High Court to settle the alleged disputes and claims between the parties. The learned Arbitrator had framed the following issues for deciding the arbitral dispute in between the parties:

(A) Whether payments due against the enhanced labour rates amounting to Rs. 27,72,649/-?

(B) Whether the claimant is entitled to claim compensation/payment due against escalation amount to Rs. 28,92,193/-?

(C) Whether claimant is entitled to incidental claims for damages and loss for breach of contract conditions for Lump Sum?

(D) Whether the claimant is entitled to the cost incurred in the arbitration proceeding?

(E) Whether the claimant is entitled to interest at the rate of 21% from the date it fallen due?

Thereafter, hearing both the parties, and considering the documentary evidence produced by the parties, the learned Arbitrator had decided Issues No. A, B and E, in favour of the appellant, however, reduced the rate of interest @ 21% per annum to @ 6% payable to the claimant on the total amount of payment from the date of filing the arbitration petition U/s 11 of the Act before the Chief Justice of Gauhati High Court till payment is made by the respondent.

The amount claimed under different heads and the awarded amount is shown in the Table below: