An arbitrator cannot award claims that contradict explicit contractual terms, but may uphold claims supported by assurances from the contracting authority.

JUDGMENT :

PANKAJ BHANDARI, J.

1. Appellant-State has preferred the instant appeal aggrieved by the judgment dated 16.11.2019 passed by the Commercial Court, Kota, whereby the application filed by the appellant-State under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act of 1996’) was rejected and the award dated 09.11.2015 was confirmed.

2. Succinctly stated the facts of the case are that the Superintending Engineer, Irrigation Circle, Jhalawar invited tenders on 19.11.1996 for the work of construction of Earthen Dam from R.D. (-) 60m to R.D. 1290m of Chauli Irrigation Project, Pirwa, District Jhalawar. The respondent-claimant submitted the tender, which was found lowest and accepted by the competent authority of the Government and the same was communicated to the claimant. An Agreement was executed between the parties on 28.03.1997. The claimant submitted their claims before the learned Arbitrator amounting to Rs.14,24,721/- towards enhanced rate for extra work beyond 50% in the work of head outlet sluice; Rs.52,24,900/- towards extra lead of sand and filter material; Rs.181.18 lacs on account of infrastructure overhead expenses and loss of profit being retained longer on the contract; Rs.41,65,750/- on account of idling of men and machineries and; Rs.45,38,686/- towards the increase in the rate of minimum wages.

3. The defence of the appellant-State was that the contractor before submitting the tender must have verified all the facts about the site i.e. source of material, labour, borrow area, quarry sites and other necessary information useful for the execution of the work. The contractor is not entitled for payment of extra lead as per Clause-63 of the Agreement. The appellant-State also stated in their reply that delay in executing the work within the stipulated period is due to failure of the contractor to accelerate the work. Several letters were written to the contractor in this regard, but no attention was paid by the contractor. In regard to the excess quantity of the work, it is pleaded in the reply by the appellant that there was no mutual agreement regarding executing the additional quantity of work and thus, the contractor is not entitled for any payment in this regard.

4. Learned Arbitrator had framed as many as seven issues and along with these issues, decided five claims raised by the claimant. Claim No. 1 pertained to a claim of Rs.14,24,721/-towards enhanced rate for extra work beyond 50% in the work of head outlet sluice, was decided in favour of the claimant; Claim No. 2 is pertaining to Rs.52,24,900/- towards extra lead of sand and filter material, was also decided in favour of the claimant; Claim No. 3 of Rs.181.18 lacs on account of infrastructure overhead expenses and loss of profit, was rejected; Claim No. 4 of Rs.41,65,750/- on account of idling of men and machineries, was partly allowed and Rs.4,09,200/- was awarded to the claimant and; Claim No. 5 of Rs.45,38,686/- towards increase in the rate of minimum wages, was also rejected. Aggrieved by the award dated 09.11.2015, appellant-State filed an application under Section 34 of the Act of 1996 before the Commercial Court, Kota, which was rejected vide order dated 16.11.2019. Thus, aggrieved by the award dated 09.11.2015 as well as the Judgment and Order dated 16.11.2019, the appellant-State has preferred the present appeal before this Court.

5. It is contended by Mr. B.S. Chhaba, Additional Advocate General, appearing for the appellant-State that the learned Arbitrator has misconducted the proceedings by not considering the specific clause in the Agreement that no extra payment will be made on account of extra/excess lead involved in carting the material from longer lead. It is also contended that the learned Arbitrator has failed to consider Clause No. 2 & 63 of the Agreement which provides that it was the duty of the contractor to acquaint himself and it was specifically provided that it shall be deemed that