Arbitral awards set aside partly for patent illegality where head office overhead claims lack evidentiary support like unverified CA certificates without witness testimony, despite upholding other prolongation costs as possible view on facts.

JUDGMENT :

G.S. Sandhawalia, C.J.

Challenge in the present Civil Arbitration Appeal is laid to the judgment dated 05.12.2022, passed by the learned Single Judge in Civil Arbitration Case No. 1 of 2020, titled Himachal Pradesh Road and other Infrastructure Development Corp. Ltd vs M/s C & C Construction Ltd. whereby the Award dated 17.08.2019, passed by the three Member Arbitral Tribunal in favour of the respondent herein has been upheld.

2. The appellant herein is a Infrastructure Corporation having its registered office at Nirman Bhawan Shimla and respondent on the other hand, is a construction company registered under The Companies Act, 1956 and having its registered office at Plot No. 79, Sector 32 Gurgaon, in the State of Haryana.

3. Apparently, appellant had awarded the Contract on 29.02.2008 to the respondent, whereby the respondent agreed to execute the works relating to widening and strengthening of Una-Barsar-Jahu-Kalkhar-Nerchowk Road, Section Una to Barsar from Km 45+000 to Km 90+800. The parties in terms of the aforesaid agreement inter se entered into a Contract on 6th of May, 2008 which was numbered as Contract No. PW -SRP/ RIDC/ Procurement-ICB-3/2008 for the execution of the aforesaid work. There was delay in execution of the work since the work was to be completed in 33 months from 07.05.2008 by March, 2011 however, the appellant decided to grant extension of time till the completion of the work which was on 31.10.2014. After making the entire payments with regard to the execution of the work to the respondent, the respondent invoked the arbitration agreement with respect to its claim for damages for prolongation of the Contract. The respondent nominated Shri Ashok Khurana, Director General (Retd.), CPWD, as its Arbitrator nominee. On receipt of such notice of invocation of the arbitration, the appellant also nominated Shri R.K. Sharma, Engineer-in-Chief (Retd.) IPH, Himachal Pradesh as its Arbitrator nominee and they both nominated Hon'ble Mr. Justice Devinder Gupta, former Chief Justice as the Presiding Arbitrator and the constitution of the Tribunal was completed on 24.02.2018.

4. The claimant/respondent herein put forth its all claims before the Tribunal and appellant herein replied to the said claim by taking objections with regard to maintainability of the claim petition, including the claim petition being hopelessly time barred as also the authority of the person who had filed the claim. Thereafter, the issues were framed by learned Tribunal and the parties led their respective evidence. The learned Arbitrator, after considering the pleadings of the parties and documents placed on record, has passed the award in favour of the claimant in the following terms.

"(i) An amount of Rs.11.70 Crore under claim No. 1.

(ii) An amount of Rs. 13.60 Crore under claim No.2

iii) Under Claim No.3, the Claimant is held entitled to Rs.6.07 Crore towards simple interest 12% per annum from 07.04.2016, the date when cause of action arose to the Claimant till 07.04.2018 the date of filing of statement of claim on the awarded amount of Rs.25.30 Crore.

(iv) Claimant is also held entitled to Rs.4.12 Crore towards pendente lite intere