The main legal point established in the judgment is that the dispute regarding the breach of the contract and the entitlement to retain any sum towards liquidated damages falls within the jurisdiction of the Arbitral Tribunal.

This appeal challenges an order of dismissal made by the learned Single Judge of this Court in O.P.No.589 of 2004 seeking to set aside an arbitral award dated 30.11.2003, on the reasons set out therein.

2. The appellant/petitioner filed the original petition under Sec.34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the award dated 30.11.2003, directing them to pay a sum of Rs.90,23,650/-withheld by them towards liquidated damages with interest of Rs.43,76,608/-.

3. The case of the appellant is as follows:

The petitioner, a Public Sector Undertaking, invited tender on 20.5.1993. The first respondent was awarded a contract for supply of 110 ATA boiler package including fuel oil handling system, RCC chimney with state monitoring system, continuous polishing unit and all relevant spares at a cost of Rs.18,05,53,000/-. Thereafter, two more awards of work were granted to the first respondent under order dated 112. 1994 as stated in the petition. The completion period for the boiler package was 18 months. The first respondent completed commissioning of boiler on 25. 1997 with a delay of 14 months. The contract includes the general and special conditions. As per the contract and the letter of award of work dated 112. 1994, the work jobs have to be completed within 18 months from 29. 1994 i.e., on or before 25. 1996. But, the work was completed only on 25. 1997. Despite the same, the appellant allowed the first respondent to continue to complete the work and also made timely payment for the amount of work done in a phased manner. The appellant reminded the first respondent to complete the job to the satisfaction of the appellant i.e., to make the boiler more reliable and fully operational. As the first respondent failed in its duty to make the boiler operational within the stipulated time or the extended period of time, the appellant exercised the right to levy liquidated damages on the first respondent.

4. The first respondent invoked the arbitration clause and raised a dispute in respect of the levy of liquidated damages and other related issues, and the same was referred to the respondents 2 to 4. The appellant filed a detailed counter. Apart from that, the appellant also made a counter claim to the extent of Rs.14.36 lakhs together with interest.

5. A common arbitral award came to be made by the Arbitral Tribunal directing the refund of Rs.90,23,650/- which was withheld by the petitioner/appellant along with interest of Rs.43,76,608/- and also ordering the claim made by the petitioner/appellant for a sum of Rs.14,36,000/- without any interest.

6. Challenging the award directing the appellant to make refund of the said sum, the appellant brought forth a petition stating that the delay in the completion of the project was purely due to various reasons attributable to the first respondent; that the clause 9.01 in the letter of award substituted sub-clause 51 of the General conditions of contract; that the letter of acceptance dated 112. 1994 clearly states that the award of work is subject to the terms and conditions and superseded any contradictory provision that may exist in any other contract documents; that there are no contradictory provisions between sub-clause 51 and sub-para 9.01; that it is pertinent to note that there was total consensus ad idem between the parties under the letter dated 112. 1994; that the first respondent could have opted to refuse to accept the terms contained in the letter of acceptance if the same were allegedly contrary to the general conditions of the contract; that the issue regarding the liquidated damages was an excepted matter, and hence the Arbitral Tribunal had no jurisdiction to decide the same; that in the instant case, the terms of the contract clearly stipulate that the appellant can levy liquidated damages if there was delay in completion of the project by the first respondent; that the contract did not stipulate that the appellant should put the firs