MTNL Vs. RALHAN CONSTRUCTION COMPANY

JUDGEMENT

(1.) VIDE this petition, the petitioner has challenged the award dated 21.05.2014 passed by the sole Arbitrator. The facts of the case are that the petitioner -MTNL had floated a tender inviting bids for construction of telephone exchange building at M -Block, Sarita Vihar, New Delhi for an estimated cost of Rs. 3,56,82,251.00/ -. On 22.06.2007, the respondent tendered their bids and the tender was awarded to respondent for a negotiated amount of Rs. 5,31,88,852.12 on 26.06.2007. In its letter dated 18.07.2007, the respondent had informed the petitioner that the service tax at that time was 2% which was payable to the Government. This fact was again reiterated by the respondent in its letter dated 10.10.2007. The validity of the tender was extended on 20.10.2007. On 27.11.2007, the respondent submitted Performance Guarantee and entered into a formal agreement and from 07.12.2007 the execution of the work was allowed which was to be completed within 12 months. The agreement to this effect was signed on 07.12.2007 and the date of completion was 06.12.2008. The respondent raised certain disputes which were ultimately referred to the learned Arbitrator. The learned Arbitrator gave its award. It is submitted that the findings of the learned Arbitrator on the claim Nos. 1,3,4,8 and 10 are wrong because the learned Arbitrator has not correctly interpreted the various clauses of the agreement. The petitioner has challenged the findings of the learned Arbitrator on the said following claims: -

(2.) THE sole ground for challenge to the findings of the learned Arbitration is that the learned Arbitrator has not correctly interpreted the clauses of the agreement and has used the wrong clauses while giving its finding that the respondent was entitled for reimbursement of the service tax which was paid by him at the rate of 4%; that he was also entitled for the escalation/increase in the minimum wages of the labour and that the learned Arbitrator has reached to a wrong conclusion while holding that the agreement rate should be paid for the deviated quantity.

(3.) IT is a well -settled principle of law that an award can be challenged only on the grounds enumerated in Section 34 of the Arbitration and Conciliation Act. It is also a settled principle of law that while considering the challenge of an award under Section 34, the Court does not sit in appeal and determine whether the learned Arbitrator has reached to a correct finding or not.