Chief Electrical Traction Engineer Western Railways vs New Adarsh Electrical Works

Anoop V. Mohta, J.—The Petitioner (Union of India) Western Railway, Mumbai has challenged award dated 1 March 2011 in favour of the Respondent (Contractor) passed by the Arbitral Tribunal in the matter of the work of replacement of corroded OHE structures.

The claimant submitted 17 claims. The learned Arbitral Tribunal, however, granted the following claims:

All the six counter claims are rejected. There is no counter challenge by the Petitioners in reference to rejection of their counter claims. Therefore, the claims of risk and cost recovery; liquidated damages, costs of labour, compensation of loss and inconvenience, interest rate of 18% for above and cost of arbitration were rejected, therefore the claim of Respondents of the illegal and undue recoveries of claim of Respondent/claimant against R and C and penalty have also attained finality, against the Petitioner. The basis of counter claims as remained unproved and after giving due consideration and deliberation, the Tribunal has not awarded any amount towards the counter claims and as the same remained unchallenged, in my view, clinches the issue in favour of the reasons maintaining the award so passed by the Tribunal. There is no perversity and or even any illegality.

Another aspect is that the Tribunal after considering the evidence placed on record by both the parties, came to a conclusion that there were defaults on both sides in the contract management by giving further finding that "It is established that the Respondent had not fulfilled his obligation adequately towards the claimant as enumerated in the plea of claimant brought out above". The learned Tribunal accepted the claim towards illegal and undue recoveries against the penalty and so also against R and C. The learned Tribunal has recorded, "The undisputable fact, however, is that it took Respondents six and half months to finalise the tenders, for work to be executed in eleven months, which is a significant length of time for that activity which had adverse effect on the claimant, notwithstanding the fact that the claimant for his own reasons accepted the letter of acceptance.". There is also finding that no formal contract agreement signed between two parties to the earlier contract in question. Therefore, the finding was given that the claimant cannot be bound by the contract. The letter of termination of contract was also not by the Competent Authority. The earnest amount was also forfeited. The Tribunal, therefore, rightly came to a conclusion that the termination of the first contract was not in order and consequently any action taken by the Petitioner/Respondent arising out of such wrongful termination (alleged first contract) i.e. the decision to execute the work at the risk and costs of claimant is also, therefore, held to be unsustainable and thereby directed to return the amount recovered by the Petitioners from the claimants during the course of second contract.

So far as the amount due and payable for the work completed and supply of material by the claimant, as there is no serious dispute in this regard, I also see no reason to interfere with the same as the amount so arrived is based upon the material and the evidence placed on record by the parties. Therefore, the award passed by the Tribunal needs no interference as all these claims are self-explanatory and also for the reason that the learned Tribunal, after adjusting the amount already received, has awarded the claim in question. The Tribunal has rightly rejected the withholding of the said amount by the Petitioner/Respondent based upon the earlier un- executed contract in question. The learned Tribunal, therefore, ultimately awarded only Rs.6,33,697/-, though claim was for Rs.26,61,714/-, which needs no interference.

So far as the award of interest on the amount so due and payable and as arrived at by the learned Tribunal, no challenge is made even by the Respondent and no further argument is made on that in view of the GCC Conditions about the claim interest as the same is not admissible. The Respondent did not challenge the award against rejection of their other claims and so also the Petitioner against the rejection of their counter claims.

It is relevant to note the Supreme Court judgment in Oil and Natural Gas Corporation Ltd. Vs. Western Geco international Ltd., and specially paragraph 32 which reads as under:-

32 We may at this stage deal with the contention urged on behalf of the respondent that the jurisdiction of the Court to set aside an arbitral award being limited to grounds set out in Section 34 of the Arbitration and Conciliation Act, 1996, this Court ought not to interfere with the same. It was contended that none of the grounds on which a court is authorised to interfere with an arbitral award are present in the case at hand. Alternatively, it was contended that even if a contrary view is possible on the facts proved before the Arbitral Tribunal, the Court cannot, in the absence of any compelling reason, interfere with the view taken by the arbitrators as if it was sitting in appeal over the award made by the Tribunal. 7. Therefore, taking overall view of the matter, no case is made out to interfere with the award. There is no perversity or illegality in the award. The Award is well within the frame work of law and the record and the public policy as explained and elaborated in ONGC (supra). The Petition is accordingly dismissed. There shall be no order as to costs.