The main legal point established in the judgment is that the application of the Hudson formula for loss of profit and overheads must be supported by evidence of actual damages suffered by the claimant, and it must align with the specific provisions of the contract agreement.

JUDGMENT :

Jyotsna Rewal Dua, J.

Feeling aggrieved against the award passed by the learned Arbitrator, instant petition under Section 34 of the Arbitration & Conciliation, Act 1996, has been preferred by the petitioner/claimant.

The main point to be adjudicated in this case is:- whether loss of profits and over heads on account of prolongation of the contract, can be awarded merely on the basis of Hudson formula without the claimant leading any evidence, be it oral or documentary in respect of loss, damages suffered by him.

2. The factual position of this case, can be summarized as under:-

2(i) The respondent awarded construction work of =Bachelor Accommodation at Sunder Nagar, District Mandi (Civil Work, Internal WS, SI and Electrical Installation)' to the petitioner/claimant vide letter of award dated 25.07.2011 (Annexure C-1). The contracted value of the work was Rs.1,96, 03,299/-. The work was to be completed within 18 months from 21st day after issuance of letter of award dated 25.07.2011. Annexure C-2, contained the terms and conditions governing the contract duly executed by the parties.

2(ii) Various representations of claimant, addressed to the respondent, in respect of the contract work have been enclosed at Annexure C-3 (colly). The details of the same can be summed up hereunder:-

I) Letter dated 31.08.2011 to the effect that work at site has been stopped by BBMB, on the ground that land belongs to BBMB. Request was made for revised handing over of the site to the claimant/contractor.

II) Letter dated 07.11.2011 is a reminder of previous letter dated 31.08.2011, with respect to handing over the possession of the site to the claimant.

III) Letter dated 09.2.2012, written in continuation to the previous letters that site had still not been handed over to the contractor, resultantly, huge loss on account of setting of cement, payments of chowkidars for watch and ward of material stacked at site stores and indirect losses due to prolongation is being caused to the claimant/contractor. Request was made for handing over the possession of the site for starting and completing the work in time.

IV) Letter dated 09.04.2012, to the effect that the possession of the site had still not been handed over to the contractor. Therefore, extension in time by nine months was requested by the claimant. This was followed by representation dated 07.01.2013 on the same lines.

V) Letter Dated 15.09.2014, intimating that the extension of time for completion of the project granted by the respondent up to 15.08.2014, had lapsed, however, the site had still not been handed over to the claimant. Therefore, the second extension to time from 15.08.2014 to 14.02.2016, i.e. for a period of 18 months, was sought for.

VI) Letter dated 04.10.2014, to the effect that despite repeated requests, second time extension had not been granted and accordingly, prayer was made for extending the time period for completing the work.

VII) Letter dated 23.06.2016, requesting the respondent either to appoint the Arbitrator under Clause-33 of the Contract or to provide the site for construction of the building.

2(iii) On 16.12.2016, notice (Annexure C-4), under Clause 36 of the agreement, was issued by the respondent to the claimant, intimating that despite best efforts of the respondent, the land ownership issues for undertaking the construction of the project work, could not be resolved, therefore, it was decided by the respondent to abandon the work.

2(iv) The Arbitrator was appointed by the order of this Court on 08.03.2017. Claimant preferred his claim before learned Arbitrator under following heads:-