2026:BHC-OS:3579 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Commercial Arbitration Petition No. 444 of 2024 WITH Interim Application (L) No.2001 OF 2022 The Commissioner, Solapur Municipal Corporation and Ors. …..PETITIONERS : VERSUS :

M/s. S.M.C.-G.E.C.P. Ltd (J.V.) ….RESPONDENT WITH Commercial Arbitration Petition No. 252 of 2024 M/s. S.M.C.-G.E.C.P. Ltd (J.V.) …..PETITIONER : VERSUS :

The Commissioner, Solapur Municipal Corporation and Ors ….RESPONDENTS Mr. M.P. Rao, Senior Advocate with Mr. Vishwanath Patil, Ms. Nidhi Chauhan & Mr. Akshay Naidu, for Petitioner in CARBP/444/2024 &

for Respondent in CARBP/252/2024 Mr. Shardul Singh with Ms. Prerna Gandhi, Mr. Anisa Shahapurkar & Mr Ninad Thikekar, for Respondent in CARBP/444/2024 & for Petitioner in CARBP/252/2024.

Judg. Reserved On: 21 January 2026.

Judg. Pronounced On: 06 February 2026.

Judgment:-

1) These are cross Petitions filed by the parties challenging the Award of the learned sole Arbitrator dated 18 June 2020. By the impugned Award, the learned sole Arbitrator has awarded a sum of Rs.32,15,94,780/- alongwith interest in favour of the Contractor by setting aside penalties as well as order of termination of contract dated 9 December 2013 and order of blacklisting dated 11 April 2014.

2) The Solapur Municipal Corporation has filed Commercial Arbitration Petition No.444 of 2024 challenging the entire Award. The Contractor, on the other hand, has filed Commercial Arbitration Petition No.252 of 2024 challenging the Award to the limited extent of rejection of certified amounts beyond Rs.19,25,91,000/- towards Claim-I, directing reductions from Claim No.1 on the basis of old and non-operative tax regime, non-grant of damages on account of loss of profit on actual cost but on estimated cost of tender and non-grant of post-award interest.

3) It must be observed at the very outset that the Contractor has decided not to press challenge to the impugned arbitral Award in Commercial Arbitration Petition No. 252 of 2024. Thus, this Court is tasked upon to decide only the challenge raised by Solapur Municipal Corporation to the impugned Arbitral Award.

4) Solapur Municipal Corporation decided to set up a Sewerage Treatment Plant (STP) for improving sewerage scheme in zones-III, V, VI,VII and VIII. The Municipal Corporation decided to set up the STP of 75 Million Liters per Day (MLD) in main Solapur city in respect of zones-III, V and VI, STP of 12.5 MLD at zone-VII and another STP of 15 MLD in zone-VIII. For the purpose of carrying the sewerage to STP, Municipal Corporation also envisaged laying of concrete sewerage pipes within the city as well as in the outskirts. For execution of the work, the Municipal Corporation floated tender on a percentage rate basis vide Tender Notice dated 7 September 2011. The estimated cost of the tender was Rs.139,12,52,239/-. The Respondent- S.M.C.-G.E.C.P. Ltd. is a joint venture of M/s. S.M.C. Infrastructure Pvt. Ltd. and Gharpure Engineering Construction Pvt. Ltd.(the JV). The joint venture was formed as a special purpose vehicle for bidding and for execution of work. The joint venture participated in the bidding process and the Municipal Corporation awarded contract in its favour vide Agreement dated 2 January 2012. The period of completion of the contract work was 24 months commencing from the date of work order (27 February 2012) and the work was supposed to be completed by 26 February 2014. However, the Bhoomi Pujan in respect of the project was held on 3 June 2012 and it appears that the Municipal Corporation agreed to exclude period of 97 days by extending the time on account of non-commencement of work due to delay in conducting Bhoomi Pujan. After the JV commenced the work, the Municipal Corporation decided to penalise the contractor due to delay in progress of work and accordingly first penalty order was issued on 20 September 2012 imposing penalty of Rs.2,500./- per day. Thereafter on 13 December 2012 second pe