MOHAN LAL HARBANSLAL BHAYANA AND COMPANY Vs. UOI

JUDGEMENT

(1.) The appellant herein was awarded a contract by the respondent Union of India. Some dispute arose in the execution of the said contract as according to the appellant, certain claims and amounts allegedly due to the appellants were not honoured by the respondent. As per the appellant, the contract awarded was for construction of Doordarshan Bhawan, Phase II at Mandi House, New Delhi including super structure, internal and external water supply and plumbing work which was to be completed within 18 months, i.e. by 6.10.1996. However, due to the omission and failure on the part of the respondents, the work could not be completed within the stipulated period and since it was prolonged, the appellant became entitled to claim extra escalation of 40% over and above the quoted rates. The appellant thus made a claim of Rs.27,00,213/- on this basis. Since there was an arbitration clause in the contract entered into between the parties, Sh. O.P. Goel was appointed as the sole arbitrator who rendered his award allowing a claim of Rs.4,15,026/- to the appellant as extra payment on account of increase in price of work done after the stipulated date.

(2.) The respondent Union of India was not satisfied with this award which led to filing of petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act?). According to the respondents, Clause 10(CC) of the General Conditions of Contract (GCC) provided for escalation and no extra claim over and above the said Clause 10(CC) could be entertained. It was thus submitted by the respondent that by entertaining and awarding the claim, the learned arbitrator went beyond the aforesaid contractual stipulation which he was not empowered to do.

(3.) Petition under Section 34 of the Act has been allowed by the learned Single Judge accepting the aforesaid plea of the respondent herein thereby setting aside the impugned award of the arbitrator. The present intra-court appeal is preferred disputing the validity of the aforesaid decision rendered by the learned Single Judge. Before we take note of and examine the grievances of the appellant, it would be worthwhile to find out the reasons which prevailed with the learned Single Judge in arriving at the aforesaid conclusion. A perusal of the impugned order indicates that Clause 10(CC) of GCC provides for claim of escalation and, therefore, any escalation claimed by the contractor has to be given within the parameters and four corners of the said provision. The arbitrator was not permitted to go beyond the said terms. The learned Single Judge referred to the judgment of the Division Bench of this Court wherein it was held that the arbitrator had misconducted himself by not adhering to the provisions of Clause 10(CC) of GCC. This judgment of the Division Bench is taken note of in the following manner: