Point of Law : None of the objections as raised, fell within the purview of Section 34 of the Act and therefore, the award impugned did not deserve any interference.

JUDGMENT :

REKHA BORANA, J.

1. The present appeal has been preferred against the order dated 25.01.2019 passed by the Commercial Court, Jodhpur (hereinafter referred to as ‘the learned Court below’) in Civil Misc. ‘A’ Case No. 46/2018 (NCV no. 32/2018) whereby the objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) preferred by the appellant-State against the award dated 04.12.2014 passed by learned Arbitrator have been rejected. Vide the award, the learned Arbitrator had proceeded on to pass an award for an amount of Rs. 25,42,748/- qua price escalation in favour of the applicant-firm with interest @ 10% per annum and has proceeded on to reject the counter-claim as preferred by the non-applicants State Department.

2. The facts of the case are as under:

An agreement was entered into between firm M/s Rameshwar Lal Manaram and the State for “Construction work of pumping station 3rd at Sahwa K.M. 63.200.” Vide the work order dated 27.10.1997, work valuing to Rs. 1,41,52,086/- was awarded to the applicant-firm and the stipulated period for completion of the work was 18 months. During the progress of work, an additional work valuing to Rs. 69,17,847/- was also allotted to the firm. The complete work could not be completed within the stipulated period of 18 months and was infact completed on 05.04.2003. The firm then applied for extension of time and vide order dated 06.11.2003, time extension up to the date of completion i.e. 05.04.2003 was granted by the Department with a penalty of 0.10% of the tender amount. In the circumstances, the firm raised a claim for an amount of Rs. 25,42,748/- along with interest qua price escalation. When the request/claim of the firm was not acceded to, it prayed for the dispute to be referred to arbitration and on its application under Section 11 of the Act of 1996, vide order dated 08.11.2013, sole arbitrator was appointed for adjudication of the dispute.

3. Before the learned Arbitrator following two claims were raised by the applicant-firm:

(i) Rs. 25,42,748/- qua price escalation.

(ii) Rs. 22,37,618/- qua interest on the principal amount from 21.09.2005 to 20.01.2014 + pendente lite and future interest.

4. In response to the claim of the firm, a counter-claim for an amount of Rs. 16,24,860/- was raised by the State Department qua the damages/loss caused to the State due to delay in execution of the work which was later amended to Rs. 1,59,45,028/-.

5. On basis of the pleadings as made by both the parties, the following nine issues were framed by the learned Arbitrator:

“1. Whether the applicant firm is a registered partnership firm or not?........Applicant

2. Whether the applicant firm did not give the pro-rate progress as provided under clause-2 of the agreement? If not then what is effect of it on the claim?........Non-applicants

3. Whether the applicant failed to complete the work within stipulated period or extended period as required under clause 45 and 45-A of the agreement?........Non-applicants

4. Whether the respondents had allowed the price escalation benefit to the applicant for the period from 09.11.1997 to 08.11.2000. If yes then what is effect thereof?........Applicant

5. Whether the applicant had given the consent for the statement of time extension sent by the Engineer In charge to the state government for extension of time?........Non-applicants

6. Whether, the nominal penalty disentitled to the applicant for benefit of price escalation under clause-45 and 45-A of the agreement?........Non-applicants

7. Whether the applicant is liable to pay the damages to the respondents as claimed by the respondents in its counter claim?........Non-applicants

8. Whether the applicant is entitled to get the interest on the due amount? If yes, then for what period and on what rate?........Applicant

9. Relief?”

6. Learned Arbitrator proceeded on to decide