IMPORTANT POINTS
The appellant was liable for delay of 4½ months in the work between 13.10.2006 and 28.02.2007. The finding of the Arbitrator regarding the delay in work and attributability thereof on the appellant, are being questions of fact, neither the District Court in an appeal filed under Section 34 of the Arbitration and Conciliation Act nor this Court entertaining a petition under Section 37 of the Act, will be justified in interfering with those findings.

JUDGMENT :

Nagaresh, J.

Aggrieved by the order and decree dated 18.12.2014 in O.P.(Arb) No.21/2009 of the District Court, Thalassery, the Union of India has preferred this appeal under the Arbitration and Conciliation Act, 1996.

2. The Executive Engineer, Kannur Central Division of CPWD invited tenders on 12.01.2005 for the work of construction of bulk services and development to RTC.III, CRPF, Peringom, Kerala. The work included construction of internal roads, peripheral roads, culverts, drains, parade ground and one RCC bridge. The estimated cost was Rs.5,30,58,016/-and the time allowed for execution of work was 18 months. The respondent-Claimant was awarded the work. In the agreement executed between the parties, it was agreed that if the prices of materials and/or wages of labour required for execution of the work increase, the Contractor shall be compensated for such increase. However, no escalation shall be paid for work executed in extended contract period. It was also stipulated that no such compensation shall be payable for a work for which the stipulated period is equal to or less than 18 months.

3. The work was awarded to the respondent as per letter dated 23.03.2005 with stipulated date of start of work as 14.04.2005 and stipulated date of completion of work as 13.10.2006. The work was actually completed only on 30.06.2007 with a delay of 260 days. The parties blamed each other for the laches and lapses committed by them due to which the delay was caused.

4. The respondent-Claimant invoked arbitration clause and the matter was placed before a Sole Arbitrator. The respondent-Claimant put forth four claims:-

The appellant-Union of India opposed the claims made by the respondent.

5. On appreciation of the evidence before him, the Arbitrator concluded that the appellant is responsible for delay of 4½ months in the work and the delay during period between 13.10.2006 to 28.02.2007 should be treated as one attributable to the department. At the same time, the Arbitrator found that delay beyond 28.02.2007 is attributable to the respondent-Claimant. On calculation of data, the Arbitrator awarded an amount of Rs.3,78,220/-against Claim No.1. To arrive at this figure, the Arbitrator did not rely on vouchers signed by the suppliers and workers which were produced by the respondent. Instead, the Arbitrator relied on average Wholesale Price Index (WPI) of the Government of India.

6. As regards Claim No.2, the Arbitrator concluded that 15% increase should have been built into the basic rate of bitumen and the rate of bitumen taken by the Contractor shall be Rs.15,776/-per Tonne. On that basis, the Arbitrator awarded Rs.17,00,000/-against Claim No.2. The Arbitrator further awarded 10% simple interest on Claim No.1 and Claim No.2 from 30.12.2007 i.e., six months from the actual date of completion of work. An amount of Rs.75,000/-was awarded as cost of arbitration to the respondent-Claimant. In conclusion, the Arbitrator held that the appellant shall pay to the respondent-Claimant a sum of Rs.21,53,220/-plus simple interest. The total amount so calculated was to carry future interest at 10% per annum from the date of Award till the date of payment.

7. Aggrieved by the said Award dated 29.10.2008, the appellant filed O.P.(Arb) No.21/2009 invoking Section 34 of the Arbitration and Conciliation Act, 1996, before the District Court, Thalassery. Before the District Court, the appellant contended that the Arbitrator exceeded his powers in awarding amount towards price escalation since the agreement undoubtedly prohibited payment of any such amount