2021 Supreme(Mad) 1547

IN THE HIGH COURT OF MADRAS
R. SUBBIAH, C. SARAVANAN, JJ.
The Superintending Engineer National Highways, Salem Circle – Appellant
Versus
Gowpatt Associates – Respondent
O.S.A. Nos. 197, 198 of 2019, C.M.P. Nos. 17948 and 17964 of 2019
Decided On : 24-03-2021

Headnote:

Arbitration and conciliation Act 1996- Section 34(2)(b)(i),34,37-Application for setting aside arbitral award-Subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force-Appeal orders- Appellant herein has floated tenders relating to two projects- The first stretch of 5.2 K.ms ,The second stretch of 14.8 K.ms. As per the contract, the total extent to be covered by the respondent is 20 kilometers - In the bids the respondent was declared as the successful bidder and letter of acceptance was issued to the respondent. Thereafter, the terms of the contract were reduced into writing by means of two agreements .The value of the contract was estimated at Rs. 33,29,67,770 and Rs. 21,06,37,366/- respectively. The respondent furnished the requisite performance guarantee of (i) Rs. 1,66,50,000/- and (ii) Rs. 1,06,00,000/- and additional security for unbalanced bid of Rs. 1,06,00,000/- respectively as required under Clause 5 (a) and (b) of the agreements. The intended date of completion of the work was fixed as 12 months from the commencement of work as per clause 7 of the general clauses of the contract. The defect liability period was to extend for a period of 365 days from the date of completion of the work, vide clause 6 of the agreement. Pursuant to the execution of the agreements, the appellant issued notice to proceed with the work-Appeal against the common order -Held, Though very many contentions have been raised on the factual disputes involved in this case, Court is not inclined to render any finding with respect to such factual disputes in this appeal under Section 37 of the Act, inasmuch as the scope of Section 37 of the Arbitration and Conciliation Act to entertain an appeal lies in a narrow compass- learned Additional Solicitor General appearing for the appellant/National Highways made an attempt before us to re-appreciate the factual disputes involved in this case, which is legally impermissible under Section 37 of the Act- Court has also gone through the grounds of the Original Petition as also the order passed by the learned Single Judge in this regard. When objection was not made before the learned Arbitrator as regards the applicability of Clause 47.2 of the Conditions of Contract or before the learned Single Judge, it cannot be raised in these appeals under Section 37 of the Arbitration and Conciliation Act- It is seen that the Appellants had raised the question of maintainability before the Arbitrator on the ground that it is only the Memorandum of Understanding which is binding the parties and not the Lease Agreement. It is only in that context, the Appellants had raised the question of maintainability. Therefore, it was also contended incidentally by them before the Arbitrator that the First Respondent cannot make any claim for money but only for the shares as per the Memorandum of Understanding- With respect to the merits of the submissions - Court find that, as early as, the respondent-claimant, by way of a representation, enclosed a detailed working, running into more than 300 pages setting out the rate prevailed during execution along with the proof of bills, vouchers etc., This was never disputed even in the rejection letter. In the rejection letter, it is merely stated by the Divisional Engineer of the National Highways that completion period fixed as per the agreement is only 12 months and "price adjustment clause" in Clause 47 of the Conditions of Contract, is not applicable for this work. In view of this factual dispute- Court does not found any error in the decision of the learned Arbitrator in making calculation towards price escalation as per MORT & H. The learned Single Judge also considered the same and rejected it. Above all, we find that the appellant has not raised this issue either before the learned arbitrator or the learned Single Judge. For the first time, the calculation made by adopting the MORT & H method for computing the price escalation is raised before this Court. In such view of the matter, there is no arbitral issue that arises for consideration before the learned Arbitrator with regard to the mode of calculation, unless this was raised. We do not find any reason, illegality or irregularity in the decision rendered by the learned Single Judge, warranting our interference. All the other claims are not raised much- Court therefore confirm the common order, Resultantly, Court dismiss these Original Side Appeals. However, there shall be no order as to costs. Consequently, C.M.Ps. are closed- Appeal Dismissed.