An arbitral award may be set aside if the adjudicator fails to provide intelligible reasoning, resulting in findings that are contradictory and lacking foundation.

ORDER :

1. The petitioner has assailed the award passed by the Sole Arbitrator dated 30.11.2020 by filing the present petition under Section 34 of the Arbitration and Conciliation Act (for brevity hereinafter referred to as the “Act”).

2. The brief facts of the case are the respondent/claimant entered into a building contract agreement with the petitioner on 02.02.2011 for the construction of Plots, Smart Homes at Anagaputhur containing 92 Plots. As per the contract, the Contractor should construct in accordance with the detailed drawings given by the owner which was appended as Annexure I to the agreement and the specifications appended as Annexure II to the agreement.

3. During the execution of the Contract, the claimant raised 30 running bills, out of which 28 bills were cleared. However while raising bill Nos.29 and 30, disputes arose between the parties and according to the claimant, the amounts were not settled. Apart from the above, the contract envisaged completion within a period of one year. The provisional estimate, based on the working drawings was calculated at approximately Rs.12.58 Crores. Out of every running bill, 3% can be retained as retention amount and the same has to be paid within three months of the completion of the contract. Thus, 3% of the retention amount which was retained towards 28 bills which were cleared, was also not released.

4. The further case of the claimant is that on 19.03.2012 due to non payment of bills and pendency for over six months, a request was made to clear the pending bills. It was also informed by the contractor that due to non-availability of funds, the work on site is affected. The bill that was raised towards minor alterations / additions as required by the petitioner was raised on 28.05.2012 and this amount also remained unpaid.

5. Since the amounts were not settled, the dispute was referred to the sole arbitrator and the claimant raised the following claims :-

a. Rs.48,03,763/- (Forty Eight Lakhs Three Thousand and seven Sixty Three) towards outstanding payment of Running Bill Nos.29 and 30.

(b) Rs.33,36,432/- (Thirty Three Lakhs, Thirty Six Thousand and Four Hundred Thirty Two), being the retention amount of 3% on the running bills paid.

(c) Rs.70,66,022/- (Seventy Lakhs Sixty Six Thousand and Twenty Two) for the extra increase of the basement height by two feet

(d) Rs.9,80,000/- (Nine Lakhs Eighty Thousand) to the material at Site

(e) Rs.11,00,000/- (Eleven Lakhs) being outstanding payments towards the extra work carried out at the instance of the respondent.

(f) Rs.2,44,000/- (Two Lakhs and Forty Four Thousand) for the purchase of grills made, to be installed in the Windows. Amounting to Rs.1,75.30,217/- (One Crore Seventy Five Lakhs Thirty Thousand and two Hundred and Seventeen) together with interest @ 24% p.a. until date of payment. The payment of Rs.50,00,000/- (Fifty Lakhs) as damages on account of loss of Business account of the mental harassment and cost of proceedings.

6. The petitioner filed statement of defence and took a specific stand that the respondent has paid much higher than the actual work that was carried out at the site by the claimant. According to the petitioner, the total value of the contract was Rs.12,58,55,050/- and the total amount that was paid to the claimant was Rs.10,83,44,952/-. This amount was 86% of the contract price and whereas, the work carried out was only 60%. The petitioner took a further stand that the claimant had stopped the work as early as on 19.07.2012 and the cl