M/S DELHI TOURISM AND TRANSPORTATION DEVELOPMENT CORPORATION v. M/S GAMMON INDIA LIMITED

1. This appeal has been filed under Section 10 of the Delhi High Court Act, 1966 read with Section 37 of the Arbitration & Conciliations Act, 1996 (for short 'Act of 1996') against the judgment dated July 16, 2018 whereby the learned Single Judge has rejected the petition filed by the appellant under Section 34 of the Act challenging the Arbitral award dated June 09, 2015.

2. The facts are, the parties herein entered into a contract for construction of a flyover from Lajpat Nagar to Srinivaspuri for a consideration of Rs.42.57 crores. The work was to be completed within a period of 18 months, It is not disputed that the work could notbe completed within the time liikit aild' extension was granted by the appellant to the respondent vide communication dated July 04,

2005. On April 12, 2005, the-constmctipn of the flyover was completed by the respondent after a delay of almost one year. Vide the award dated June 09, 2015, the learned Arbitrator, so appointed, granted an amount ofRs.3,77,40,595/- to the respondent on account of various claims along with interest. A perusal of the impugned order would showthat the appellant herein had primarily made two FAO (OS) 158/2018 Page 2 of13 submissions before the learned Single Judge (i) the procedure for invoking arbitration was never followed by the respondent; and (ii) once the final bill has.been settled on July 28, 2006, then after two years, the respondent was precluded from raising fresh claims.

3. With regard to both the issues, the appellant herein relied upon Clause 25 ofthe Contract, which we reproduce as under 'CLAUSE 25 Settlement ofDisputes & Arbitration Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, desi^, drawings and instructions herein-before mentioned^ anda as- to the quality of workmanship or riiicUeri^s Msedion the work or as to any other -• 'matter or thing whatsoever in any way arising out of relating to the contract, designs, drawings, specifications, estimates, instructions, orders or theise'^cpnd or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereofshall be dealt with as mentioned hereinafter i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or FAO (OS) 158/2018 Page 3 of13 disputes any drawings, record or decision given in writing by the Engineer-in-charge on any matter in connection with or arising out of the contract or carrying out of the work, to he unacceptable, he shall promptly witPdn 15 days requests the Superintendent Engineer in writingfor written instruction or decision. Thereupon, the Superintending Engineer in writing shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision I df, the Superintending Engineer, the contractor' nihy. Within 15 days of the receipt of the Superintenidiiig} Engineer's decision, appeal to the Chi^^-Engin^r:i^\^ho shall afford an opportunity to the contractor to be heard, if the latter so desires, arid to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days ofreceipt ofContractor's appeal. Ifthe contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from the receipt of the decision, give notice to the Chief Engineer for appointment of arbitrator failing which the said decision shall befinal, binding and conclusive and not referable to adjudication by the arbitrator. FAO (OS) 158/2018 Page 4 of13 ii) Except where the decision has come final, binding and conclusive in terms ofSub Para (i) above disputes or difference shall be referredfor adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, DTTDC, in charge ofthe work or ifthere be no ChiefEngineer, the administrative head ofthe said DTTDC. If the arbitrator so appointed is unable or Unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be •entitled to proceed with the reference from the stage' at; which it was left by his predecessor. It is a term of this contj'dct' that the party invoking arbitration shall give a list. of disputes with amounts claimed in respect ofeddh s^^ along with the notice for appoinhn^t\^'^ and giving reference to the rejection by the ChiefEngineer of the appeal. -,,. / It is also a term of this contract that no person other than a person appointed by such Chief Engineer, DTTDC or the administrative head of the DTTDC, as aforesaid should act as arbitrator and iffor any reason that is not possible, the matter shall not be referred to arbitration at all. It is also a term of this contract that if the contractor does not make any demand for FAO (OS) 158/2018 Page 5 of13 V) appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the intimation from the Engineer-in-charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the DTTDC/Govt. shall be discharged and released ofall liabilities under the contract in respect ofthese claims."

4. Insofar as the submission No.l above is concerned, it was the case of the appellant before the learned Single Judge that as per Clause 25 ofthe Contract for admissibility of claims, the same have to be referred to Engineer, In-CHarge then to Superintending Engineer and finally to Chief Engineer. As the same was not followed, the claims were not niaintaihable. The learned Single Judge in paras 29 to 31, has hUd(as!und€r:H C' • ^ • ^

FAO (OS) !58/2018 Page 6 of13 the learned arbitrator, therefore it is now barred under Section 4 to raise the saidpleafor thefirst time before this Court only in oral submissions. Reliance is placed on paragraph 39 of the judgment in Bharat Sanchar Nigam Limited vi' Motorola India Private Limited (2009) 2 see 337.

30. Since the petitioner has neither pleaded nor argued before the learned sole arbitrator about noncompliance of the procedure to be followed for arbitrability ofclaims under Clause 25 ofthe Contract, nor pleaded the same before this Court in any of the submissions (Section 34.Petition, Rejoinder and Written Submissions), the:same cannot be now considered by this Court,'per Bharat Singh and Others vs. State of Haryana and Others (1988) 4 SCC 534; referparagraph 13; and' Mt^h^m and Another vs. State of U.P. & (2010) 10 SCC 677; referparagraph 24.

31. The reliance placed by:^ on the cases ofHarsha Constructions v. Union ofIndia and Others, (2014) 9 SCC 246 and Indian Oil Corporation Limited

V. ERA Construction (India) Ltd., OMP No. 104/2006 in this Court is completely misplaced. The decision in Harsha Construction (supra) case clearly provides there is a separate clause being Clause 39 which is an excepted matter and hence could not have been FAO (OS) 158/2018 Page 7of13 adjudicated upon by the Arbitrator as provided under Clause 63. However, in the instant case the issue of excepted matter does not arise. Even assuming without admitting for the sake of argument, that there is a procedure prescribed to befollowedfor arbitrability of claims, it by no stretch ofimagination can mean that it be considered as an excepted matter. Hence, reliance on Harsha Construction (supra) is completely misplaced." •

5. Suffice to state, from the finding of the learned Single Judge, it is clear that the! plea urged was never taken by the appellant before the learned Arbitrator. The learned Single Judge had relied upon Section 4 of the;;Apt of 1996 to hold that the appellant is now barred to raise sucH a^^^^^^^ for the first time only during the oral submissions^ jEIe-^lifeH the judgments in the case of Bharat Singh & Ors v. State ofHaryana and Ors (1988) 4 see 534 and Ritesh Tiwari. and Another vs. State of U.P. & Others, (2010) 10 SCC 677. The aforesaid being a finding of fact by the learned Single Judge and the fact, reference to Arbitration was made by the appellant itself, we see no illegality in the conclusion anived at by the learned.Single Judge. FAO (OS) 158/2018 Page 8 of13

6. On the aspect of hmitation, it was contended by Mr. Sen, learned Senior Counsel for the appellant by relying upon Section 43 of the Act of 1996 that in terms of Clause 25 of the Contract, if the other party does not make any demand for appointment of Arbitrator in respect of any of the claims in writing within 120 days of receiving the intimation from the Engineer, In-Charge that the final bill is ready for payment, the claim of the contractor shall be deemed to have been waived and absolutely barred unless, the respondent got the time extended by approaching this- Court under Section 43 of the Act. Having not done that, the bar under Clause 25 would hit the claims as raised; by the respondent before the learned Arbitrator., He would rely, upon thejudgment of the Madras High Court in the case ofDr. EyMur0(^^ v. Venkataraman & Co. 2009 (3) RAJ 537 (Mad) in support ofhis contention.

7. On a specific query to Mr.: Sert.^-hetHer the plea, as has been advanced before us now, had been taken before the learned Single Judge; the answer of Mr. Sen was that the issue of limitation was taken before the learned Single Judge, which was rejected by him. We find that the appellant had not taken any plea in the manner now advanced by Mr. Sen, before the learned Single Judge,. Suffice it to FAO (OS) 158/2018 Page 9 of13 %. state, the issue of Hmitation is a mixed question of fact and law, should have been taken by the appellant, at the time of reference / before the Arbitrator. This would have possibly made the respondent seek the remedy as available under Section 43 ofthe Act of 1996 at the relevant time, when three years of limitation for a money claim was available to the respondent. Having not made the plea before the learned Arbitrator, the plea advanced by Mr. Sen, does not impress us. We reject the same. One ofthe submissions of Mr. Sen was also with regard.to Claim 41 inasmuch as the learned Arbitrator could not have awarded damages against the appellant when admittedly the appellant was not responsible for the delay in completing the contract within,-a.period of 18 months as stipulated in the contract..We note^;^om:the;irn;pugried ju that such an issue was not argued before the learned Single Judge. Be that as it may, the reasoning given by the learned Arbitrator is the following:- It is also worth noting that the Clause 2provides "If the contractor fails to maintain the required progress in terms ofclause 5 or to complete the work and clear the site on or before the contract or extended date of completion, he shall, without prejudice to any other risht or remedy available under the law to the DTTDC on account of such FAO(QS).15S/2G18 Page 10 of13 breach, pay as asreed compensation the amount calculated at the rates, as stipulated below or such smaller amount as the Superintending Engineer (whose decision in writing shall be final and binding) may decide on the amount of tendered value of the work for every completed day / week (as applicable) that the progress remains below that specified in Clause 5 or that the work remains incomplete..." (Emphasis supplied). The very fact that no compensation was levied by Respondents is proof enough that the concernM 'authprity at the relevant point of time did not consMkr the Claimants being responsiblefbr the delays. '' )^/ • S

8. The aforesaid is a pTatisibld'H^iew by the learned Arbitrator, which is not a perverse view, as jsought to-be contended by Mr. Sen and this court cannot substitute-th&^view of learned Arbitratorby its own view. We do not fina any merit in the plea ofMr. Sen.

9. On the plea of interest, we find that such a plea does not find mention in the impugned order. Be that as it may, the learned Arbitrator has grantedthe interest:in favour ofthe respondent on the basis ofthe following conclusion:-