The main legal point established in the judgment is that the court's power under Section 34 of the Arbitration and Conciliation Act, 1996 is limited to setting aside an award and does not extend to modifying or altering it.

JUDGMENT :

J. SREENIVAS RAO, J.

1. Heard Sri V. Vivek Jain, learned counsel for the appellant and Sri K. Raghava Charyulu, learned counsel for the first respondent.

2. The appellant herein, M/s. Indu Projects Limited, represented by its authorised signatory (Law), Sri Ramana Murthy filed this appeal under section 13 of Commercial Courts Act, read with Section 37 of Arbitration and Conciliation Act, 1996 aggrieved by the order dated 17-08-2021 passed in C.O.P. No. 215 of 2017 on the file of the Court of Special Court for Trial and Disposal of Commercial Disputes, Hyderabad, allowing the petition filed by NMDC (A Government of India Enterprise), Hyderabad/first respondent and setting aside the award passed by the learned Arbitrator/second respondent except the finding on claim No. 1 is set aside and directed the parties to commence the arbitration proceedings again from the stage of appointment of the Arbitrator in respect of claim No. 5 of the appellant and the counter-claim of the first respondent. While allowing the petition with costs, the learned trial Judge held that if the first respondent herein is successful in proving its counter-claim, it can plead set-off in respect of claim No. 1 of the appellant to the extent allowed by the learned Arbitrator.

3. For the sake of convenience, the parties hereinafter will be referred to as “petitioner” and “respondents” as they were arrayed before the Special Court for Trial and Disposal of Commercial Disputes at Hyderabad.

4. The relevant facts, which have bearing on the issues raised by the parties and which emerge from the pleadings and documents filed by the parties are as follows:

That petitioner-NMDC called tenders for construction of studio type apartments comprising of 220 flats and shopping complex in Chowkawada Village in Chattisgarh State and the first respondent/contractor was awarded the contract on 22-06-2021 and the value of the contract is Rs. 28,36,96,197/- and the stipulated time for completion of work was 12 months and the first respondent has to complete the construction by 21-06-2012. The first respondent has not completed the work within the stipulated time and sought extension on four occasions and the petitioner considered and granted extension. In spite of the same, the first respondent has not completed the work and the petitioner issued several letters to complete the work but the first respondent did not attend the work within the stipulated time. Ultimately the petitioner issued letter of termination on 14-07-2015. Thereafter, the first respondent has invoked arbitration clause and made nine claims before the learned Arbitral Tribunal for an amount of Rs. 32,83,33,562/-. The learned Arbitrator has disallowed seven claims and partly allowed claim No. 1 and claim No. 5 was allowed in total. The petitioner-NMDC made a counter-claim and the learned Arbitral Tribunal did not take any decision on it on the ground that the cause of action did not arise for the counter-claim. Questioning the award passed by the second respondent/Arbitrator, dated 20-05-2017, the petitioner-NMDC filed C.O.P. No. 215 of 2017 before the Special Court.

5. The learned counsel for the appellant/first respondent vehemently contended that the learned Arbitrator after considering the contentions raised by both parties and after considering the entire oral and documentary evidence; namely, Ex.C-1 to Ex.C-27 and Ex.R-1 to Ex.R-67 was pleased to pass the award, allowed the claim No. 5 and directed the first respondent to refund the security amount of Rs. 2,83,69,700/- and also partly allowed the claim No. 1 and directed the appellant/first respondent to pay an amount of Rs. 1,58,000/- together with interest @ 18% p.a. within a period of four weeks by assigning cogent findings and there is no illegality committed by the learned Arbitrator while passing the award. The learned trial Judge without considering the scope of section 34 of the Arbitration and Conciliation Act, 1996 passed the impugned orde