JUDGMENT
Sanjay Kishan Kaul, J.
1. Satluj Jal Vidyut Nigam Limited (‘SJVN’ for short) assigned the work to M/s. R.J. Shah & Co Ltd. (‘contractor’ for short)for construction of 8.5m X 8.5m finished D shaped 798 metres long Main Access Tunnel for power house cavern of Nathpa Jhakri Hydel Project at Jhakri District, Shimla. The work was completed by the contractor. However, disputes arose between the parties OMP No.225 of 2006 & OMP No.319 of 2006 Page No.1 of 8 resulting in the appointment of an Arbitral Tribunal of three technical persons, who have made and published an award dated 9.7.2005. The award is assailed by both the parties.
2. In order to appreciate the controversy, it would be appropriate to set out some of the facts relating to the dispute. The work on the access tunnel was being carried out departmentally when the work was assigned to the contractor. The case of the contractor is that though originally the tunnel was a straight one from point EL 1042.8 mtrs., the actual work done was from point EL 1028.00 mtrs. as a sloping tunnel. The entire alignment of the tunnel is stated to have been changed by introducing a curvature. Since as per the contractor from the beginning SJVN had altered the scope of the contract, there were some extra amounts due on account of the fact that due to reduction in quantum of work, the rate originally contracted became non-workable, work on the reduced section was carried out at service bay level which were extra items not envisaged in the contract and escalation on account of de-freezing of indices became due. The claim laid was Rs.1,60,39,656.00 apart from interest.
3. On the other hand, SJVN contested the position before the Arbitral Tribunal stating that everything was clear to the contractor from the very beginning and that the drawings annexed to the tender documents contained all the details. It was pleaded that it was not possible to indicate gradient of the tunnel as the drawing showed longitudinal section of the tunnel. All the claims were disputed. SJVN further claimed that they had released 85 per cent interim payment amounting to Rs.2,41,66,128.00 as goodwill gesture towards commitment for one time settlement as additional amount but since the undertaking given by the contractor was withdrawn this amount was liable to be paid back to SJVN along with interest. OMP No.225 of 2006 & OMP No.319 of 2006 Page No.2 of 8
4. The Arbitral Tribunal in terms of the award dated 9.7.2005 found partly in favor of the contract by specifying the rates at Rs.501.00 per cu.mtr. for quantities of 51,866.00 cu.mtr for the main access tunnel less (-) payment made. For the work of service bay portion SJVN was held liable to pay @ Rs.625.00 per cu.mtr. for the quantity of 19.69.551cu.mtr. for the work executed in pilot drift which could be considered as part of main access tunnel. SJVN was also held liable to pay to the contractor as per contract provision 2/3rd rate awarded by the Tribunal for the over breaks beyond pay line along with escalation on payments. The claim on account of freezing of indices was rejected. Interest was awarded @ 10 per cent per annum from 1.4.1997 to 30.9.2000 and pendente lite interest @ 9 per cent per annum had been awarded and future interest @ 6 per cent per annum. The counter claim had been rejected.
5. The aforesaid award of the Tribunal is based on the consideration of the pleadings and evidence before the Tribunal. It has been found that no longitudinal section was furnished with the tender documents and the general description given in the tender document would lead to an experienced contractor to draw the inference that he had executed the tunnel with the portal at 1028.00 mtrs. leading to the power house and transformer hall at ground level. It was held that SJVN did not plan adequately so as to ensure that the work could be started immediately after the invitation and finalisation of tender, the previous work being carried out in-house.
6. The Tribunal has also found that the correspondence exchanged between the parties is of general nature blaming each other for the delays involved but the fact remained that if the tunnel had to be driven with the downward grade, the contractor had to arrange for substantial de-watering measure and if road conditions are not proper, progress would suffer. A finding was arrived at that OMP No.225 of 2006 & OMP No.319 of 2006 Page No.3 of 8 the changes introduced by SJVN led to alterations, which were beyond the scope of contract and that the contractor was justified in claiming rates as per provision of Clause 12. This conclusion is stated to be fortified by the fact that after completion of work SJVN themselves constituted a Technical Committee of their own officers which have accepted the variation and alteration of the said work and arrived at a rate of Rs.441.00 per cu.mtr. This report took almost three (3) years for finalisation after the constitution of the Committee and was made available to the contractor only after the arbitration clause had been invoked. The contract pointed out some errors in the report. Consequently SJVN itself appointed a high level committee to examine the point raised by the contractor, the proceedings of which went on for more than four (4) years after completion of the work by the contractor.
7. It was found that the contract provisions stipulated that the escalation was payable based on indices prevailing at the time of opening of tender or for the quarter in which the tender had been submitted and thus the best index of date of start of work was erroneous.
8. The Tribunal after holding that the contractor was entitled to revision of rates came to a conclusion about the rate on the basis of appreciation of evidence. It was further found that the work of pilot drift in the service bay portion could not be treated as part of access tunnel and thus the work fell under the category of extra item and thus provisions of Clause 11.10.4(iii) could not be made applicable. The reduction in size was held to be more than 50 per cent and the smaller the tunnel, the more the input in drilling, blasting and other operations.
9. The only challenge made by the contractor is about the period and rate of interest. Learned Counsel for the contractor sought to contend that the rate of interest should have been higher as the contractor was availing certain loan OMP No.225 of 2006 & OMP No.319 of 2006 Page No.4 of 8 facilities and once escalation was held admissible, the same should have been granted from the inception itself.
10. In my considered view, the aforesaid aspects hardly call for interference in exercise of jurisdiction under Section 34(2) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the said Act). It is not as if the arbitrators were unaware of the fact but taking a conspectus of the whole dispute have taken a deliberate decision to award interest from a particular date at a particular rate.
11. The additional grievance sought to be made by learned Counsel for the contractor was that an application filed by the contractor for quantification of the amount was rejected. This application was necessitated on account of the fact that in the award only the rate has been mentioned. Once again, I find no basis for any grievance since the rate is mentioned qua quantum and only the two have to be multiplied to come to the quantum of amount liable to be paid. Thus, there is no merit in OMP No.319/2006.
12. SJVN has filed objections vide OMP No.225/2006. It is the contention of the learned Counsel for SJVN that the award is contrary to the specific terms of the contract and the arbitrator being a creature of the contract, does not have jurisdiction to go beyond the same. In this behalf, reference has been made to the judgment in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. and Hindustan Zinc. Limited v. Friends Coal Cabonisation .
13. Insofar as the aforesaid principle is concerned there is no dispute. The question, however, remains whether the award is actually contrary to any specific term of the contract. While analysing the said contention it cannot be lost sight of that it is the arbitrators who have to interpret the terms of the OMP No.225 of 2006 & OMP No.319 of 2006 Page No.5 of 8 contract. Thus if a particular view has been taken, which may not be the only view but a plausible view, it is not for this Court to interfere with the award. However, if the arbitrator proceeds to award something, which is not provided for in the contract then the Court is not devoid of jurisdiction to interfere with the same.
14. I am unable to accept the contention of the learned Counsel for SJVN that the Arbitral Tribunal ignored the terms of the contract. The relevant clauses have been referred to in this behalf. In fact, the real grievance of SJVN is that Clause 12 of the contract relied upon by the Arbitral Tribunal did not apply to the present case. It is in view of Clause 12 that the amount has been awarded.
15. A perusal of Clause 12 shows that the same deals with alterations of specifications in designs and quantities. The Engineer-in-Charge has been given the power to make any such alteration, omissions, additions or substitution in the original specifications, drawings, etc. and the contractor is duty bound to carry out the work in accordance with the instructions. If there is any additional work and the rates are provided in the contract then the same rates would apply but in the absence of the provisions for the rate the same would be derived from the rate for similar type of work as specified in the contract of work.
16. Clause 12(A) makes stipulation as to rates for items exceeding deviation limits. In terms of Clause (iv) of Clause 12(A) it is provided that the total value of additional items taken together, rates for which are derived in accordance with the provisions of Clause 12 shall be limited to 10 per cent of the value of contract as a whole at the time of signing of the agreement. OMP No.225 of 2006 & OMP No.319 of 2006 Page No.6 of 8
17. A perusal of the synopsis of SJVN and the submissions made in that behalf would show that what is sought to be really assailed is the finding arrived at by the Arbitral Tribunal on the appraisal of evidence about the nature and quantum of work and is not really one based on any interpretation of the Clauses of the contract.
18. The finding arrived at by the Arbitral Tribunal that the delays in modification was caused on account of lack of proper ground work done by SJVN.
19. The power of the Engineer-in-Charge to make alterations of work as provided for in Clause 12 of the general conditions of contract is not disputed by SJVN and since this altered work fell within the parameters of Clause 12, there was need for revision. The plea advanced by learned Counsel for the petitioner is that in terms of Clause 12(A)(i) & (ii) substituted items up to 30 per cent did not require any revision. The finding of the Tribunal is that the subject matter could not be treated as substituted items but fell within the purview of additional items. It cannot be lost sight that this is a unanimous finding of three member technical Tribunal who are familiar with the nature of work and it can hardly be expected that this Court would take a different view as to whether the work was of substituted items or additional items.
20. Similarly the plea of SJVN about the application of Clause 30 has been negated specifically by the Tribunal on the ground that it pertains to nonpayment of compensation on part or whole of the work being completed. No such compensation has been asked for by the contractor but a revision has been sought for the additional items as per Clause 12(A)(iv) due to major alternations in the nature of work. The position is once again the same in OMP No.225 of 2006 & OMP No.319 of 2006 Page No.7 of 8 respect of the plea of learned Counsel for SJVN about the application of condition 11.10.4(iii) of Section (xi) of Technical Specifications dealing with the underground excavation as it was found that the changes made were not contemplated under the said technical specifications.
21. No doubt Clause 4.2 & 4.22 of the Technical Specifications of the contract provided for the contractor to familiarise and acquaint himself fully with the detail of the site location, material, etc. but the same must be based on the tender document. Once the major changes are made in respect of the scope of work in respect of original tender documents, payment has been provided for in terms of the contract for additional work.
22. At the cost of repetition it must be noted that all these aspects are really technical in nature and that is the precise reason that a specialised Tribunal of three technical persons was constituted, which has given the award over which this Court would not sit as a Court of appeal.
23. There is, thus, no merit in this petition as well.
24. Thus, both the petitions are dismissed leaving the parties to bear their own costs.