Full Text
HIGH COURT OF DELHI
Date of Decision: 07th December, 2018
NATIONAL HIGHWAYS AUTHORITY OF INDIA..... Appellant
Through: Mr. Adarsh B. Dial, Sr. Adv. with Mr. Shubham Shanker Saxena and
Mr. Ankur, Advs.
Through: Mr. Dayan Krishnan, Sr. Adv. with Mr. Rishi Agarwal, Ms. Shruti Arora and Mr. Sannjeev, Advs.
HON'BLE MR. JUSTICE V. KAMESWAR RAO V. KAMESWAR RAO, J. (ORAL)
JUDGMENT
1. This appeal has been filed by the appellant challenging the order dated April 20, 2018 passed by the learned Single Judge in OMP (COMM) No.156/2016, whereby the learned Single Judge, vide a common judgment, has also decided O.M.P. Nos. 1165/2014 and 1556/2014.
2. Mr. Adarsh B. Dial, learned Senior Counsel appearing for the appellant has made a submission that the appeal against the O.M.P.No.1556/2014, being FAO(OS) 192/2017 has been dismissed by 2018:DHC:7745-DB this Court. He also states that out of four claims in the present appeal, three claims being claim Nos.1, 2 and 3 are common to claim Nos.1, 3 and 4 in OMP (COMM) 1556/2014 (FAO (OS) 192/2017). According to him, the Division Bench of this Court having dismissed the FAO (OS) 192/2017, this appeal should also follow the same outcome.
3. We may state that while deciding the OM(COMM) 156/2016, the learned Single Judge has on claim No.1, which is with regard to fixing of claim number of new / appropriate rate for varied works of construction of the embankment at Ramsnehighat Bypass with borrow earth obtained from the contractor’s borrow areas, in place of flyash embankment as provide for in the contract, which is similar to claim No.1 in FAO (OS) 192/2017 which claim states as under: “Re. Claim No.1- “Non-Approval of appropriate rates for the varied works of construction of embankment o Faizabad bypass with earth obtained from Contractor’s own borrow pit”.
4. On this claim, the learned Single Judge has held as under: “11. In this context, the Court would like to refer to the following findings of the impugned majority Award: a. The substitution of earth embankment in place of flyash embankment was a change in the scope of work. This change was required to be regularised by a variation order. b. The Engineer was not correct in certifying the quantities of embankment at Ramsnehighat Bypass with earth obtained from the Contractor‟s borrow area at the rates agreed against Item No. 2.02 of the BOQ. c. The action of the Engineer in directing the use of borrow earth instead of flyash to complete the construction of the Ramsnehighat bypass embankment was driven by economic considerations in the interest of NHAI. It was a change in the scope of work and called for the fixation of a new rate.
12. After accounting for the payment made in Interim Payment Certificates (“IPCs”), a sum of Rs. 3,43,77,450 was found by the majority Award to be payable by NHAI to HCCL. In addition, HCCL was held entitled to interest at 12% per annum compounded monthly on all the amounts due from the date of cause of action till the date of payment in terms of Sub-Clause 60.[8] of the COPA read with Appendix to Bid.
13. It must be noted at the outset that the settled legal position is that the scope of interference by the Court with an arbitral Award under Section 34 of the Act is extremely limited. In NHAI v. ITD Cementation (2015) 14 SCC 21, the Supreme Court explained:
taken by the majority AT was an entirely plausible one and cannot be said to be perverse warranting interference under Section 34(2)(b)(ii) of the Act.”
5. The Division Bench in FAO (OS) 192/2017 has in Paras 9.1,
9.14 and 9.15 held as under: 9.[1] This claim related to construction of the embankment of the Faizabad by-pass. The BOQ contemplated construction of the said embankment using fly-ash. Contending that the quantity of fly-ash stipulated in the contract was insufficient to construct the embankment, the respondent addressed a communication, dated 11th February 2006, to the Engineer-in-charge of the contract, requesting for revision of the rates mentioned in Item No. 2.08 of the BOQ (supra). xxx xxx xxx xxx “9.14 Having perused the Award and the judgment of the learned Single Judge, we express our entire concurrence with the decision, of the learned Single Judge, not to interfere with the findings of the Arbitral Tribunal. On the face of it, it is clear that the contractual clauses contemplated construction of the Faizabad bypass embankment using fly-ash, and that the quantity of fly-ash stipulated in BOQ Item 2.08 was insufficient for construction of the embankment. The respondent appropriately requested for sanctioning of additional quantity of fly-ash to construct the embankment but, in order to minimise its own cost, the appellant directed the respondent to use earth from its own borrow area, instead of fly-ash, to construct the remainder of the embankment. There can be no manner of doubt that such alteration was not contemplated by the contract and had, in fact been directed in contravention of the existing Governmental instructions on the subject. While accepting the said request made by the appellant, the respondent made it unambiguously clear that it would be entitled to a new rate to carry out the said work, as it involved huge additional costs on its part, inter alia for procuring the said borrow earth and transporting to the site of the embankment. The attempt, of the appellant, to apply the rates contained in BOQ Item 2.02, to make payment against the work thus done, was obviously totally misguided, as BOQ Item 2.02 dealt with construction of roads of low height and not of the Faizabad embankment. There was, as the Tribunal correctly noted, a clear distinction between the two items of work. Equally ill conceived was the reliance, by the appellant, on Clause 52.[2] of the GCC, which covered only changes in quantities of the material used in carrying out a particular item of work and not where the scope of the work itself was fundamentally altered by substituting one material by another.
9.15 Our jurisdiction, under Section 37 of the 1996 Act, is even more circumscribed than the jurisdiction of the learned Single Judge under Section 34 thereof. In view of the principles governing such jurisdiction, as set out in our earlier judgment in M.T.N.L. v. Finolex Cables Ltd (supra), as also in NHAI v. ITD Cementation India Limited (supra), on which the learned Single Judge has rightly relied, we see no reason to adopt a view different from that adopted by the learned Single Judge.”
6. Similarly, with regard to claim No.2 which is in pari materia to claim No.3 in FAO (OS) 192/2017, the learned Single Judge has held as under:
9. The Division Bench in FAO (OS) 192/2017 has drawn the following conclusion: “12.[5] The learned Single Judge has opined, in the impugned judgment, that the view of the Arbitral Tribunal is an entirely plausible view and that, in fact, in the contract between the parties, the same view had been adopted by the Engineer, in respect of earlier bills. It is observed, in the impugned judgment, that the appellant was unable to show any basis on which the finding of the learned Arbitral Tribunal, on this issue, could be characterized as perverse or shocking to the judicial conscience. 12.[6] We entirely agree with the said finding, and find no reason to interfere with the decision of the Arbitral Tribunal on this claim of the respondent, in exercise of our limited jurisdiction under Section 37 of 1996 Act. The reference to the “0.85” factor, in the formula provided in the contract, does appear to be on account of the stipulation, therein, that 15% of the foreign currency component would be nonadjustable. No other reason, for incorporation of the said factor, in the formula, is forthcoming from the record, neither could any such reason be elucidated, at the Bar, by learned counsel for the appellant. We are unable, therefore to discern any infirmity in the reasoning of the Arbitral Tribunal in this regard, or in the impugned decision of the learned Single Judge to uphold the same.”
10. Having noted the similarity between the issues with regard to claim Nos.1, 2 and 3 herein, with claim Nos.1, 3 and 4 in FAO (OS) 192/2017 and the fact that Mr. Adarsh B. Dial has stated that this appeal should also follow the FAO (OS) 192/2017 to that extent, we dismiss the challenge of the appellant to the conclusion drawn by the learned Single Judge in the impugned order, with regard to claim Nos.1, 2 and 3.
11. Insofar as the claim No.4 is concerned, the same is with regard to fixation of appropriate rates for additional work of construction. The learned Single Judge against the claim No.4 has held as under:
24. Further, the majority has referred to the Engineer‟s letter dated 24th May, 2010 where he admitted that the viaduct work was a variation and change in the scope of work. The majority accepted the plea of HCCL that: “The viaduct structure compared to Bridge/Underpass structure involves intricate construction. In that it comprises RCC/PSC girders totaling 56 spans. Also the nature, construction and input requirements are different. In case the Claimant had known before hand he would have planned execution differently. In that case such huge number of PSC girders, he would have precast the same instead of cast-insitu. This would have been economical. Also the shuttering and temporary structures required including the method of launching would have been less time consuming and different.”
25. It is for this reason that the majority rejected NHAI‟s contentions. It was the responsibility of the HCCL to ensure sufficiency of physical conditions. However, this was limited to the extent of designs provided and the scope of work indicated in the tender. HCCL was neither the designer nor was it assigned the work of soil exploration. An entirely different situation arose during the course of construction. The inappropriateness of the soil for the construction of the retaining wall was unforeseen. This would fall for consideration under Sub-Clause 12.[2] of the GCC and was independent of Sub-Clause 51.[1] and other sub-clauses. The view taken by the majority AT again appears to be on the basis of the correct interpretation of the various clauses and it was a plausible view to take. It has not been shown to be perverse or shocking to judicial conscience. The majority's views are reasonable and based on contemporaneous evidence. Consequently, no ground has been made out under Section 34(2)(b)(ii) of the Act to persuade the Court to interfere with the impugned majority Award in relation to Claim No. 4.
12. From the perusal of the finding of the learned Single Judge on claim No.4, it is clear that the learned Single Judge has agreed with the majority decision of the Arbitral Tribunal, which according to him, is on the correct interpretation of various clauses, which is a plausible view to take and has consequently rejected the objections with regard to the said claim.
13. Having noted the conclusion as arrived at by the learned Single Judge, and the fact that this Court is considering objections under Section 34 of the Arbitration & Conciliation Act, 1996 and keeping in mind the legal position as explained by the Supreme Court in the case of Associated Builders vs. DDA (2015) 3 SCC 49, we are not inclined to interfere with the said conclusion against this claim.
14. In view of our above discussion, we do not see any merit in the appeal. The same is dismissed. No costs. CM No. 27595/2017 Dismissed as infructuous.
V. KAMESWAR RAO, J
CHIEF JUSTICE DECEMBER 07, 2018