Point of Law: Court while deciding objections under Section 34 of A & C Act will not review exercise conduct by learned Arbitrator on merits, once it is not found to be without jurisdiction.

JUDGMENT :

Satyen Vaidya, J.

Award dated 9.7.2013, passed by learned Arbitrator in the matter of arbitration arising out of Contract Agreement No. SKHEP-51/2007 Dt. 28.3.2008 between the parties in respect of Sawra Kuddu HEP (111MW) located in District Shimla, H.P., is the subject matter of present proceedings. Petitioner has taken exception to aforesaid award by filing objections under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, ‘the A&C Act).

2. The work involved was construction of Main Access Tunnel (MAT) Size 7.50M (Finished) D-shaped 172 Meter Long for underground power house at Snail, Tehsil Jubbal, District Shimla.

3. The claimant (respondent herein) was the successful bidder. The estimated cost of the work was 4,19,38,829/-. Letter of Intent (LOI) was issued in favour of claimant on 29.9.2007. Formal agreement was drawn between the parties on 28.3.2008. The Parwati Valley Power Corporation Ltd. was the owner/employer of the work. However, the Parwati Valley Power Corporation Ltd. was succeeded by Himachal Pradesh Power Corporation Ltd. (petitioner herein) during the course of time.

4. Certain dates relevant to the adjudication of instant petition are as under:-

(i) Period stipulated for completion of work was four months to be reckoned w.e.f. 31.10.2007.

(ii) The petitioner postponed the date to 30.11.2007 for the purpose of commencement of work.

(iii) Site was handed over to the respondent on 31.3.2008.

(iv) The Work had actually commenced on 18.4.2008 after another agency employed by petitioner for carrying out the work at portal had completed its job on 17.4.2008.

(v) Construction power was made available to the respondent on 5.6.2008.

(vi) Work was completed on 6.1.2009.

The request of respondent for extension of time was approved by petitioner in April, 2010.

5. Learned Arbitrator entered into reference on five claims, as under:-

“1. Claim No.1: Release of Rs. 5 lacs wrongly withheld with interest= Rs. 7,12,500/-

2. Claim No.2: De-watering Abnormal increase in quantum provided in BOQ= Rs. 6,80,373/-

3. Claim No.3: Demand Charges- Excess recovered-Refund of Rs. 1,49,906/-.

4. Claim No.4: Compensation towards Price Variation Adjustment= Rs. 67,72,534/-.

5. Claim No.5: compensation towards idle and/or under utilization of resources =Rs. 1,37,57,998/-.”

6. All the above claims were raised by the respondent. Petitioner simply contested the claims of respondent. No counter claim was submitted on behalf of the petitioner.

7. Learned Arbitrator has allowed Claims No. (1), (3) and (5) of the respondent, whereas Claim No. (2) and (4) have been rejected. Against Claim No.1, the learned Arbitrator has held as under :

“Arbitral Tribunal therefore decides and awards Claim No.1 of SOC in favour of Claimants for refund of Rs. 5 lac subject to adjustment of any amount if already paid over and above the deducted amount of liquidated damages which is the matter of reconciliation of record, otherwise full with held amount of Rs. 5 lac be refunded. A simple interest @ 12% per annum from the date of amount of Rs. 5.00 lac was withheld, as per record of measurement book, till actual date of payment within 90 days, and after 90 days of receipt of Award to the actual date of payment on awarded amount @ 15% per annum, is also awarded in favour of the claimant.”

8. Claim No.3 has been allowed in the manner and to the extent as under:-

“Arbitral Tribunal therefore concludes that there is no substance to support defence and there is enough evidence in support of Claim No.3 of the claimant and accordingly Arbitral Tribunal decides and awards in favour of claimant for refund of amount of Rs. 1,49,906/- charged in excess of demand charges of 125 KVA required for the work of MAT by the Claimant.

A simple interest @ 12% per annum on the awarded amount of Rs. 1,49,906/- from the date such amount was deducted, as per record of M.B. till actual date of payment within 90 days, and after 90 days of receipt of award to the actual date of payment @ 15%