The court held that a contract's termination after expiration is unlawful, necessitating the return of forfeited amounts when unjustified actions take place.

ORDER :

N.ANAND VENKATESH, J.

This Arbitration Original Petition has been filed challenging the award dated 27.3.2022 passed by the Arbitral Tribunal under Section 34 (1) of the Arbitration and Conciliation Act, 1996 , [hereinafter referred to as 'the Act'] .

2.The petitioner and the respondent entered into an agreement dated 27.3.2017 for work relating to provision of new foot over bridge at Chennai, Egmore. This was for platforms 2 to 11. The Letter of Acceptance was issued on 7.11.2016 and the duration of work was fixed as 12 months. However, extensions were granted till June 2020. Ultimately, a notice of termination dated 30.09.2020 was issued by the respondent under the General Conditions of Contract (GCC) 62(1) and 16(4)(f). Pursuant to the same, the Earnest Money Deposit (EMD), Performance Guarantee (PG) and Security Deposit (SD) were forfeited and certain claims made by the petitioner was rejected. The dispute was referred to the Arbitral Tribunal and the claimant made the following claims:

(a) To declare that the termination order dated 30-09-2020 is unlawful and also the termination has been done without currency.

(b) Direct the Respondent to release the Performance Guarantee amount of a sum Rs. 16,62,557/- .

(c) Direct the Respondent to Refund the EMD of Rs. 2,82,400/-.

(d) Direct the Respondent to Refund the Security Deposit of Rs. 13,45,026/-.

(e) Direct the Respondent to pay the Price Variation Clause Amount of a sum of Rs. 17,63,411/-.

(f) Direct the Respondent to pay the GST Amount of a sum of Rs. 14,26,327/-.

(g) The Claimant is entitled to cost of Stock at site of a sum o Rs.4,50,000/-.

(h) The Claimant is entitled to loss of amount incurred in Idling of men and Machinery of sum of Rs. 1,40,000/-.

(i) The Claimant is entitled to overhead charges and establishment charges incurred of a sum of Rs.6,76,000/-.

(j) The Claimant is entitled to cost of 2.5 MT Finished steel structure of a sum of Rs.2,96,000/-.

(k) The Claimant is entitled to loss of profit at 10% on the balance work of Rs. 2,89,54,459/- amounting to Rs.28,95,446/-.

(l) The Claimant is entitled to Rs. 15,06,047/- payable towards the Interest and charges paid by the Claimant to banks and others.

(m) The respondent is liable to pay compensation 20,00,000/-for the agony endured and which continues till date due to the wrongful termination of the contract.

(n) The claimant is entitled to interest on the claims.

(o)The respondent is liable to bear the cost of arbitration.

3.The respondent filed statement of defence and justified the termination of contract and forfeiture of EMD, PG and SD. The respondent sought for counter claims to the total tune of Rs.2.44 Crores. The respondent also sought for the rejection of the claim made by the petitioner.

4.The Arbitral Tribunal instead of framing issues thought it fit to deal with each claim made by the petitioner and the counter claim made by the respondent. On considering the facts and circumstances of the case and the documents relied upon by both sides, Claim Nos.5 and 6 alone were awarded. Insofar as the counter claims are concerned, the majority members held that the respondent is entitled for Counter Claim Nos.1 and 2 and rejected Counter Claim Nos. 3 to 5. The summary of the award is tabulated hereunder:

48.1 Claims of Claimant :

*Increased by the claimant through his submission at CD-4.

49.COUNTER CLAIMS OF RESPONDENT:

5.Aggrieved by the above award passed by the Tr