NAVAYUGA ENGINEERING COMPANY LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) The Hon'ble Supreme Court in Project Director, National Highways Authority of India v. M. Hakeem, (2021 SCC Online 473) held that Sec. 34 of the Arbitration and Conciliation Act, 1996 (the Act) does not contemplate modification of an award by a court in a proceeding under the said Sec. . Now the question is what constitutes modification of an award? If the Arbitrator has awarded separate amounts on various independent claims, would setting aside some of the claims, which are separable and independent of the remaining claims, constitute a modification of the award? This is one major issue apart from the justifiability of interference made by the court below and the arbitrability of certain disputes decided by the Arbitrator, that calls for an adjudication in this case.

(2.) First, a brief reference to the facts of the caseThe appellant and the respondent herein entered into a contract for the provision of Parade Ground, PT Complex, Athletic Track, Swimming Pool, Covered PT and Drill Shed etc. at Ezhimala. The work was completed on 31/10/2007. Disputes arose between the parties and hence the matter was referred for arbitration. Sri.N.D.Bhagatkar, Chief Engineer (QS&C), C/o. Commander Works Engineer, Pune was appointed as the sole Arbitrator. 31 claims were raised before the Arbitrator by the claimant for a total amount of Rs.16,04,07,582.00 with interest. Claims 1 to 5, 7, 8, 10, 11, 14, 15,16 to 20, 27, 30 and 31 were allowed and the remaining claims were rejected. The Arbitrator by award dtd. 21/5/2012 granted an amount of Rs.3,93,24,065.00 with interest at the rate of 9% per annum w.e.f. 13/09/2009 to the date of award to be paid within 90 days from the date of award, failing which interest was to be paid @ 11% from the date of award till payment. The claim of the respondent for Rs.11.00 lakhs (Rs.5.00 lakhs for cost of arbitration and Rs.8,38,032.00 for repair of roof) was rejected by the Arbitrator.

(3.) The respondent/Union of India (UoI) preferred O.P. Arb. Appeal No.664/2012 before the District Court, Ernakulam challenging the award. The Court confirmed the award under claim no.2, 3,10,11,14,15,20 and 27 and set aside the award under claim no.1,4,5,7,8,16, and 19. The award under claim no.31 was modified. The award of Rs.3,93,24,065.00 was thus reduced to Rs.22,36,380.00 plus cost of Rs.28,402.00. Aggrieved, the appellant/claimant is before us.