REPORTABLE

2025 INSC 113 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2058 OF 2012 SOMDATT BUILDERS –NCC – NEC(JV) APPELLANT(S)

VERSUS NATIONAL HIGHWAYS AUTHORITY OF INDIA & ORS. RESPONDENT(S)

J U D G M E N T

UJJAL BHUYAN, J.

Heard learned counsel for the parties.

2. This civil appeal by special leave is directed against the judgment and order dated 17.11.2009 passed by the High Court of Delhi at New Delhi (‘High Court’) in FAO(OS) No. 427 of 2007 [National Highways Authority of India Vs. Som Datt Builders-NCC-

NEC(JV)].

2.1. By the aforesaid judgment, the High Court allowed the Signature Not Verified appeal of the respondent-National Highways Authority of India Digitally signed by KAVITA PAHUJA Date: 2025.01.27 Reason:

(‘respondent’ or ‘NHAI’ hereinafter) under Section 37 of the Arbitration and Conciliation Act, 1996 (briefly ‘the 1996 Act’ hereinafter). It may be mentioned that respondent had challenged, by way of the aforesaid appeal, the judgment and order of the learned Single Judge in OMP No. 316/2005 dated 29.08.2007 whereby the learned Single Judge dismissed the application filed by NHAI under Section 34 of the 1996 Act for setting aside the award dated 03.06.2005 passed by the Arbitral Tribunal.

3. The matter relates to execution of a contract awarded by NHAI to the appellant regarding the work of four laning and strengthening of the existing two lane section between Km. 470.000 and Km. 38.000 on NH-2 (construction package II-B) near Kanpur in the State of Uttar Pradesh under World Bank Loan Assistance.

4. At the outset, it would be apposite to advert to the relevant facts.

5. Following a process of open bid tender, the related contract was allotted by NHAI to the appellant vide the contract agreement dated 27.03.2002 who undertook to execute the work at the contract price of Rs. 4,961,183,599.00. Appellant is a joint venture of Somdatt Builders Pvt. Ltd., Nagarjuna Construction Company and Navayug Engineering Company Limited having its principal place of business at East of Kailash, New Delhi.

6. A joint venture between Consulting Engineering Services (I) Ltd. and BECA International Consultants Ltd. was appointed by NHAI as the Engineer of the project in terms of the contract agreement to supervise the construction work.

7. It was a unit rate contract comprising of a detailed Bill of Quantities (BOQ). The BOQ contained description of the items of the work to be executed by the appellant as contractor and the estimated quantity of each item. The rates of each BOQ item were to be filled in by the contractor (appellant).

8. The contract agreement provided for a mechanism of dispute resolution at the first instance through a Dispute Review Board (‘DRB’) prior to the parties availing of their remedy by way of arbitration. A three-member panel of DRB was constituted comprising of one member appointed by each of the two parties and the third member appointed by the aforesaid two members.

9. While executing the contract, a dispute arose between the parties in respect of item No. 7.07 of the BOQ which provided for reinforced earth structure including soil reinforcing geogrid with all fixtures and accessories complete as per approved design and drawing of specialised firm and matters connected therewith. The dispute was not really in respect of the nature of the work to be performed but was the consequence of the geogrid/geotextile material exceeding the BOQ quantities in the contract. In essence, the dispute relates to power of the Engineer to revise the rates given in the BOQ in the event of increase in actual quantities. This was contested by the appellant.

10. Appellant raised the aforesaid dispute before the DRB contending that the Engineer/Employer was intending wrongful application of Clause 52.2 of the Conditions of Particular Application (COPA) for downward revision of rates for BOQ item No. 7.07 (ii) of geogrid for quantity in excess of BOQ quantity. DRB heard both the sides and deliberated upon the