Calcutta High Court
Damodar Valley Corporation vs M/S. Stp Ltd on 22 July, 2019
Author: Arindam Sinha
Bench: Arindam Sinha
ORDER SHEET
AP No.1111 of 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
DAMODAR VALLEY CORPORATION
Versus
M/S. STP LTD.
BEFORE:
The Hon'ble JUSTICE ARINDAM SINHA
Date: 22nd July, 2019.
Appearance:
Mr. Pradip Tarafder Adv.
Mr. Subir Pal, Adv.
. . .for petitioner.
Mr. Utpal Bose Sr. Adv.
Ms.Hashnuhana Chakraborti, Adv.
Mr. Subhransu Ganguly, Adv.
Mr.Pallab Kr.Mitra, Adv.
. . .for respondent.
The Court: Mr.Tarafder, learned advocate appears on behalf of petitioner and continues his argument. He refers to discussion on claim no.3, in the award. There is reference to clause 5.05. He draws attention to clause (d)(ii), which says no additional escalation will be paid for the period extended for reasons attributable to the contractor. He submits, document C9 is last extension granted being order dated 19th September, 2007 and quoted in paragraph 6.2 in the award. Respondent had reiterated that post 31st December, 1996 time was extended without imposition of liquidated damages and on specific direction of no further escalation as stood frozen up to 31st December, 1996. He submits, this is clear evidence of time over-run from 31st December, 1996 being at instance of contractor thereby disentitling it to award of escalation. 2
He draws attention to claim no.10 for compensation on reducing scope of work. He submits, applicable contract clause is clause 5.01 and not clause 10(a) relied upon by Arbitrator. There is no evidence that the part of the contract reduced, was handed over for execution by some other contractor. He relies on following in clause 5.01:-
"During course of execution of the contract there may be inclusion, exclusion, addition, or abstraction of works and/or items of works required to be done, and the contractor will have to execute, at the Sole option of DVC. The rates for such works shall be guided by the terms of the contract."
Mr. Tarafder refers to minutes of 53 sitting held on 10th June, 2014 wherein there is record of concluding part of cross-examination of respondent's witness. He relies on question nos. 579 to 581 and answers thereto. They are reproduced below:-
"Q.579. Kindly look to your answer to Q.572. Are you ready with the answer today ?
Ans. I am referring to clause 5.01 of Additional General Conditions of the Contract - relevant portion of which runs as follows:-
"During course of execution of the contract there may be inclusion, exclusion, addition, or abstraction of works and/or items of works required to be done and the contractor will have to execute at the Sole option of DVC. The rates for such work shall be guided by the terms of the contract".3
Q. 580 The relevant portion which you have read is an obligation on the part of the contractor to execute any work which may be directed by DVC and does not speak about contractor for not doing any work. What do you say ?
Ans. In terms of clause no.5.01 DVC could have reduced or increased the value of work required to be done by the contractor. Q.581 This clause does not authorize DVC to omit some works from the scope of the claimant contractor and to get it done by other agency. What do you say ?
Ans. In this case no work of the contractor was omitted from the STP and no other agency was engaged to execute the work which was within the scope of STP."
Mr. Tarafder then submits, there could not have been award for hire charges on machinery to do concrete works, which amounted to 20% of work under the contract. Hire charges awarded is for 62 months. He submits, 20% of the work could not have been got executed by machinery for 62 months beyond stipulated time. This award is unreasonable. Also unreasonable is award on costs of keeping renewed bank guarantee for overrun period of 140 months. Clause 5.03 of the contract would not allow for the same.
He relies on judgment of Supreme Court in State of Utter Pradesh Vs. Ram Nath International Construction Private Limited reported in (1996) 1 SCC 18, para 7, in which Supreme Court while dealing with challenge to the award under section 30 of Arbitration Act, 1940, said arbitrator is a creature of the agreement itself, therefore duty-bound to enforce the terms and cannot 4 adjudicate a matter beyond the agreement itself. He also refers ONGC Limited Vs. Garware Shipping Corporation Limited reported in (2007) 13 SCC 434, paragraph 30, which is reproduced below.
"There is no proposition that the courts could be slow to interfere with the arbitrator's award, even if the conclusions are perverse, and even when the very basis of the arbitrator's award is wrong. In any case this is a case where interference is warranted and we set aside the norms prescribed by the arbitrator as upheld by the learned Single Judge and the Division Bench."
Lastly, he relies on ONGC Vs. Western Geco International Ltd. reported in AIR 2015 Supreme Court 363, paragraphs 26, 28 to 30 for interpretation of judicial approach in relation to fundamental policy of Indian law.
Mr. Tarafder submits, the Arbitrator also misdirected himself by disallowing the counter-claims. The Arbitrator is also wrong in awarding excess interest. He concludes his submission.
List on 30th July, 2019 for respondent being heard.
(ARINDAM SINHA, J.) sb.