NATIONAL HIGHWAYS AUTHORITY OF INDIA Vs. JSC CENTRODORSTROY

JUDGEMENT

(1.) The present petition under Section 34 has been filed challenging award dated 30th June, 2010 passed by a three-member Arbitral Tribunal. The National Highways Authority of India (hereinafter, "NHAI") had awarded works for "Four Laning and Strengthening of Existing Two Lane Section between Km.38 and Km. 115 on NH-2 in the State of UP, Construction Package II-C" vide contract dated 12th March, 2001 bearing No. TNHP/25 to M/s JSC Centrodorstroy (hereinafter, "Contractor"). The total value of the contract was over Rs.295.53 crores. One of the claims that was raised by the Contractor was in respect of payment for the work of 'loosening and re-compacting the ground supporting the embankment' (hereinafter "claimed work").

(2.) The claim of the Contractor was that the Contractor could not achieve the mandatory 95% of compaction level, without doing the additional work of loosening and re-compaction. According to the Contractor, the Engineer had recommended that loosening and re-compaction work be carried out, which was beyond the BOQ items, which provided for only 'scarification, watering and rolling'. The claim was referred to the Arbitral Tribunal which concluded that the Contractor was entitled to this claim and accordingly awarded a principal sum of Rs.43,52,235/- along with the price adjustment of Rs.6,57,381/-. Thus, the total principal amount awarded by the Arbitral Tribunal was a sum of Rs.50,09,616/-. The Ld. Tribunal, thereafter awarded interest in the following manner:

(3.) The main contention of Mrs. Padma Priya, Ld. counsel appearing for NHAI is that there is no evidence on record to show that the work of loosening and re-compaction was actually carried out by the Contractor. She submits that the evidence on record, including the letters, show that repeatedly correspondence has been exchanged between the Contractor and the Engineer where rates are being called for and breakup is being given. According to her, there is no document on record to show that the additional work was actually carried out. She specifically relies upon letter dated 28th December, 2002 written by the Contractor to the effect that the Contractor was well aware that the work carried out would not entail making of any extra payment. She further submits that on the basis of this letter, and the other letters which are on record, it is clear that the Contractor never carried out the work and no evidence was led before the Ld. Tribunal to establish that loosening and re-compaction was carried out. On the basis of letters dated 17th January, 2003 (CK-57), 21st January, 2004 (CK-58), 31st January, 2004 (CK-61), 19th February, 2004 (CK-64), it is submitted that only the rates are being discussed in these letters and vide letter dated 27th July, 2007 (CK-78), the Contractor was clearly informed that the NHAI did not approve making of any extra payment to the Contractor.