The court upheld that inaccurate findings in an arbitration award necessitate judicial interference, allowing for the severance of valid and invalid portions of the award.

ORDER :

N.ANAND VENKATESH, J.

Both the claimant and the respondent before the Arbitral Tribunal have filed the above petitions under Section 34 of the Arbitration and Conciliation Act , 1996 (for short, the Act) challenging the award passed by the Arbitral Tribunal dated 06.2.2020.

2. Heard both.

3. For the sake of convenience, the parties will be assigned the same rank as was assigned before the Arbitral Tribunal.

4. The facts leading to filing of these petitions are as follows:

(i) The claimant is a public charitable trust to promote and run educational institutions in all faculties. They approached the respondent with a request to undertake construction works of a college and the scope of work was for construction of a building and interior contract. The respondent also introduced two other potential contractors to complete the work.

(ii) A work order was issued to the respondent by the claimant on 18.3.2010. Further, an agreement was entered into between the parties on 22.3.2010.The respondent was awarded the contracts for execution of the works such as Block A, Block B – second floor, Workshop – ground, first and second Floors and Hostel – second and third floors. The project was to be executed between March 2010 and December 2011 and the claimant had to supply all materials like steel, cement, etc. The respondent was paid a sum of Rs.842.42 lakhs, which was inclusive of the materials supplied amounting to 107.78% of the total contract value.

(iii) When the final bill namely bill No.8 was raised and submitted by the respondent, the same was approved by the Architect. However, vide letter dated 25.12.2012, the claimant disputed the said approval given by the Architect and pointed out the mistakes. Further, the Architect, vide letter dated 01.2.2013, rectified the mistakes and revised the certified bill.

(iv) The dispute arose between the parties, which resulted in making 8 claims by the claimant. The respondent raised the bills for a sum of Rs.969.31 lakhs. The Architect certified the bills for Rs.833.40 lakhs. The claimant paid a sum of Rs.842.42 lakhs. Hence, the claimant took a stand that excess payment was made to the respondent and that the respondent was liable to refund Rs.60.85 lakhs, which was paid in excess by the claimant.

(v) Before the Arbitral Tribunal, the claimant prayed for an award against the respondent for a sum of Rs.60.85 lakhs towards the amount paid in excess along with interest at the rate of 8% per annum. In turn, the respondent filed a statement of defence and made counter claims. According to the respondent, the contract was limited to civil works to be carried out in terms of the drawings of the Architect.

(vi) In the statement of defence, the respondent also took a stand that there was no understanding of steel calculation of 5 Kgs per sq.ft., between the parties, that, apart from that, the respondent undertook additional works on the request made by the claimant vide letters dated 08.8.2011 and 19.12.2011 and that the construction of second floor of Blocks A and B was agreed at the revised rate of Rs.750/- per sq.ft., while the construction of the hostel and the workshop was agreed at the price quoted by the claimant.

(vii) The respondent also took a stand that the constructed buildings were handed over (a) during July 2010 – Block A - ground and first floors; (b) during May 2011 – Blocks A & B – II Floor; and (c) during July 2011 – workshop - ground and first floors. Totally, 13 bills were raised by the respondent for the main building and the workshop, 3 bills for the hostel block and 2 bills for the work shop second floor. Further, 11 bills were certifie