Under Section 34 of the Arbitration and Conciliation Act, 1996, a court cannot re-appreciate evidence to substitute its own findings. However, it may modify an arbitral award by severing invalid portions if the award is severable and contains patent illegality, such as including unrelated financial transactions in a contract settlement.

COMMON ORDER

The petitioner in Arbitration O.P.(Com.Div.) No.48 of 2021 was the claimant and the petitioner in Arbitration O.P.(Com.Div) No.59 of 2022 was the respondent before the Arbitral Tribunal. They will be identified in this common order in line with their respective ranking before the Arbitral Tribunal.

2. Heard both.

3. The claimant filed Arbitration O.P.(Com.Div.) No.48 of 2021 against the award passed by the Arbitral Tribunal dated 06.2.2020, the extent, to which, certain claims made by the claimant came to be rejected. The respondent filed Arbitration O.P.(Com.Div.) No.59 of 2022 with regard to that portion of the award, which directed the respondent to refund a sum of Rs.49,09,745/- to the claimant and as against the rejection of their counter claim.

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

(i) During the relevant point of time, the claimant was in the process of establishing an engineering and management college. For that purpose, they identified 26 acres of land in Pulivalam Village, Tiruchirapalli to establish the said college. One M/s.Ainthiram Developers Private Limited approached the claimant giving their expertise for undertaking the project. They also introduced two potential contractors to do the work. They are (a) one M/s.Sha Constructions; and (b) the respondent.

(ii) Upon the representations made, a work order was issued by the claimant to the respondent on 12.4.2010 for civil works at a cost computed at the rate of Rs.800/- per sq.ft. According to the claimant, this was agreed based on the usage calculation of 5 Kgs of steel per sq.ft., provided by the Architect. A contract was also entered into between the parties on 12.4.2010. As per the contract, it was specifically agreed that the amounts would be payable to the respondent only on certification of the bills by the Architect.

(iii) Apart from other terms of the contract, Clause 24.1(c) provided for dispute resolution through arbitration. In so far as the respondent was concerned, the contract was awarded specifically for execution of works in Block C. The project was executed between April 2010 and December 2011. Certain payments were made to the respondent and ultimately, when the final bill was raised, it was alleged that the Architect approved the same mechanically. When the claimant pointed out the mistakes in the certification, the Architect rectified the same and revised the certified bill.

(iv) Subsequently, various disputes arose between the parties, which led to the appointment of the Arbitral Tribunal.

(v) The claimant filed a statement of claim before the Arbitral Tribunal by raising the following disputes:

“(a) difference in steel consumption – not as per specification by Structural Engineer;

(b) defects in construction and rectification;

(c) inclusion of the parapet wall area in total sq.ft., constructed by the respondent;

(d) the respondent used aluminium doors instead of UPVC – difference in cost to be deducted from bill;

(e) reduction in price for corridor portion;

(f) difference in level and cost towards filling;

(g) cost towards weathering course; and

(h) difference in 2^nd floor base price reduced by Rs.44/- since 2F rate was fixed at Rs.750/-.”

(vi) In the light of the above, the claimant prayed before the Arbitral Tribunal to pass an award for a sum of Rs.81.85 lakhs along with interest at the rate of 18% from the date, on which, it became due and payable till the date of actual payment.

(vii) Before the Arbitral Tribunal, the respondent filed a statement of defence wherein they took a stand that the Architect, in violation of the contractual provisions, revised the certified final bill unilaterally without notice to the respondent and apart from that, the revised calculation was also factually incorrect and erroneous. The respondent also took a very specific stand that the Architect had no power to rectify the certification. The respondent sought for a counter claim to the tune of Rs.28,42,270/- for the works done along with