GODREJ PROPERTIES AND INVESTMENTS LIMITED Vs. TRIPURA CONSTRUCTION

JUDGEMENT

(1.) HEARD forthwith.

(2.) BY the present petition under section 34 of the Arbitration and Conciliation Act, 1996. The petitioners have impugned the Award dated 16th July, 2002 of the Arbitral Tribunal. The petitioners herein had awarded in favour of the respondents a civil contract for construction of two buildings. Disputes and differences arose between the parties. There being an Arbitral clause the matter was referred to arbitration. Parties have filed their claims and counter claims, which have been disposed by the common Award. The Arbitral Tribunal has awarded in favour of the respondents a sum of Rs. 22,33,619/- after reducing the counter claim awarded in favour of the petitioners. The Arbitral Tribunal has also awarded in favour of the respondents pendente lite interest in the sum of Rs. 11,76,447/- which has been calculated at the rate of 18% per annum from 12th August, 1999 till 6th July, 2002, the date of the Award. Future interest is awarded from the date of the Award at the rate of 18% per annum if the Award amount is not settled within 30 days. The Arbitral Tribunal in respect of Claim No. 1 and considering counter claims No. 1 have awarded in favour of the respondents a sum of Rs. 3,48,936/ -. These are the amounts outstanding towards the final bills taking into consideration the claim of the petitioners for deductions and counter claims as can be seen in the Award itself. In so far as claim No. 2 is concerned it was for refund of security deposit and retention money. Against this claim an amount of Rs. 6,27,546/- has been awarded. Similarly under claim No. 4 which is the claim for amount withheld from R. A. bills the Tribunal has been pleased to Award a sum of Rs. 33, 436/ -. Claim No. 6 is for extra work done by the respondents. In respect of this amount what has been awarded is a sum of Rs. 5,93,398/ -. Claim No. 7 is for payment in respect of the actual area of the work. Against this an amount of Rs. 4,86,703/- has been awarded. Claim Nos. 10 and 11 were for interest where the Tribunal was pleased to Award 18% interest. The rest of the claims of the respondents have been rejected. In so far as claim No. 1 is concerned, that was dealt with along with counter-claim No. 1 as can be seen in the discussion while answering Claim No. 1 and counter claim No. 1. Counter claim No. 2 was for liquidated damages. This has been rejected by the Arbitral Tribunal by holding that the delay in executing the work cannot be attributed solely to any one party. Similarly, counter claim No. 3 for supervision charges was also rejected. Counter claim No. 4 for electricity charges has been allowed in the sum of Rs. 65,365/ -. Counter claim No. 5 was for work not carried out as per specifications. This has been allowed in a sum of Rs. 2,18,663/ -. That has been adjusted against claim No. 1 of the respondents. Counter Claim Nos. 6 and 7 have been rejected. Counter Claim Nos. 8 and 9 for interest were allowed for the period from 12th August, 1999 till the date of the Award at the rate of 18% Counter Claim No. 10 which was for costs has been rejected.

(3.) AT the hearing of the petition of behalf of the petitioners it is contended that the Award is liable to be set aside as (1) the party was under an incapacity and as such the Award has to be set aside; (2) the Arbitral Tribunal did not consider that the contract was a lump-sum contract. Once that being the case, additional amounts could not have been awarded and as such the Award was liable to be set aside considering section 34 (2) (iv) of the Arbitration and Conciliation Act, 1996 namely that amounts had been awarded contrary to the terms of the contract and as such filed beyond the scope of the submission; (3) that the Arbitral Tribunal did not treat the parties with equality and considering that also the Award is liable to be set aside; (4) lastly that the Award is an unreasoned Award considering section 31 (3) of the Act of 1996 and lastly (5) the interest awarded is unreasonable as against the public policy of India considering the interest rates now prevailing.