Bangalore District Court
M/S Raymond Construction Co. (I) Pvt vs M/S Mahaveer Electro Mech Pvt. Ltd on 8 July, 2022
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Com.A.S.No.41/2019
In the Court of LXXXIV Addl. City Civil and Sessions
Judge (CCH-85 Commercial Court) Bengaluru
Dated this the 8th day of July 2022
Present: Smt.H.R.Radha B.A.L., LL.M.
LXXXIV Addl. City Civil and Sessions Judge,
(CCH-85 - Commercial Court)
Bengaluru
Com.A.S.No.41/2019
Plaintiff M/s Raymond Construction Co. (I) Pvt.
Ltd., having its registered office at
No.F-183, Prashant Vihar, Delhi-110
034, represented by its Managing
Director, Mr.D.B.Goel
(Rep. by Sri.Abhinav R., Advocate)
Vs
Defendants 1. M/s Mahaveer Electro Mech Pvt. Ltd.,
(A Company incorporated under the
Companies Act, 1956), having its
Registered office at No.606, 4th 'B'
Cross, 8th Main, R.P.C.Layout,
Vijayanagar, 2 Stage, Bengaluru-560
nd
040, represented by its Director
Mr.Sharath Kumar K.H.
(Rep. by Sri.Dinesh Gaonkar, Advocate)
2. Sri. Kukkaje Ramakrishna Bhat,
District and Sessions Judge (Retd.) and
Learned Arbitrator, No.2, 1st Cross, 1st
Main Road, Judicial Officers Layout,
Sanjay Nagar, Bengaluru - 560 094
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Com.A.S.No.41/2019
Date of Institution 08-03-2019
Nature of the petition U/s 34 of the Arbitration and
Conciliation Act, 1996
Date on which
judgment pronounced 08-07-2022
Total Duration Years Months Days
03 04 00
LXXXIV Addl. City Civil and Sessions Judge
(CCH-85 Commercial Court) Bengaluru
JUDGMENT
This petition U/s 34 of the Arbitration and Conciliation Act, 1996 ('the Act' for short) is filed by the respondent in A.C.No.16/2011 seeking to set aside the arbitral award dated 10.12.2018 passed by the sole arbitrator (the 'Arbitral Tribunal' for short).
2. This case was transferred from CCH-83 (Commercial Court) to this court by notification dated 07-08-2021. 3
Com.A.S.No.41/2019
3. The parties are referred as per their original rank before the Arbitral Tribunal for clarity.
4. Brief facts leading to filing of this petition are that the claimant entered a sub-contract dated 24.09.2008 with the respondent for execution of civil works of 66KV Substation at Rattangarh, Yamunanagar for a contract sum of Rs.1,33,55,000/- pursuant to M/s Haryana Vidyut Prasaran Nigarm Limited ('HVPNL' for short) entrusting the contract work of supply, erection, civil works, testing and commissioning of the sub station on turn key basis. The respondent however, did not complete complete its work within the stipulated time of six months i.e. by 23.03.2009. After disputes arose in relation to execution of the sub- contract and payments under the running bills, the claimant terminated the sub-contract by issuing notice dated 13.12.2010.
5. After the Arbitral Tribunal was constituted in CMP 56/2011 by order dated 05.09.2011 the claimant submitted the claim for monies with interest at 18% p.a. alleging that excess payment was made to the respondent under the running bills and excess VAT and service tax was 4 Com.A.S.No.41/2019 appropriated by the respondent; additional expenses were incurred to complete the work by engaging M/s Sheetal Engineering Works, as it was abandoned by the respondent and also to rectify the defects in the work already executed. On account of the respondent's delay, HVPNL imposed damages of Rs.52,34,160/- on them. HVPNL also deducted from the amounts due a sum of Rs.2,59,580/- towards Labour Cess as the respondent failed to pay the same. The claimant sought to recover these amounts from the respondent with interest at 18% p.a. as the transaction was commercial in nature.
6. The respondent filed statement of defence with counter claim contending that the delay was attributable to claimant, as drawings was issued on 23.05.2009 and the boundary wall issue was resolved on 19.06.2009 and technically qualified person was not available at the site for prompt action and to issue clarification. The claimant delayed forwarding their running bills to HVPNL resulting in delayed payments affecting the progress of the work. After expiration of the time stipulated under the contract, they were required to execute work at a reasonable pace and 5 Com.A.S.No.41/2019 there was no question of the claimant terminating the same or imposing any liquidated damages. The claimant did not complete its scope of work independently as per the contract with HVPNL and defects were noticed in the said work. Owing to this, some payments were not released by HVPNL to the claimant and they are not responsible for it in any manner. Payments were made to them under the running bills only after checking the quantities and verifying the same, and no excess payment was made, as claimed. The work turned out by them is reflected in the report of the local Commissioner appointed by the District court at Yamunanagar in their petition U/s 9 of the Act and it is in accordance with their running bills. Minor defects cannot be avoided in a construction project, but they have duly removed all genuine defects; the claimant is bound to pay for the work done as per Sec.70 of the Indian Contract Act. Without finalizing or quantifying the actual work done by them byway of a a joint inspection, the claimant cannot hold them responsible for the payments made to a third party. It was for the contractor to pay the labour cess and they were only the sub-contractor. The claimant ought to pay cost of the proceedings and RA Bill No.8, overhead charges, loss of 6 Com.A.S.No.41/2019 profit; to refund the retention money with interest at 18% p.a.
7. The claimant filed statement of objections to the counter claim contending that the measurement of work executed by the respondent was not approved by them or HVPNL and the bills were contrary to payment terms. Only after completion of the civil work, other works of the sub station could be taken up; and the initial drawings of the site was made available by HVPNL. All further activities at different stages had to be done by the respondent and they were only to coordinate. The respondent failed to appoint the qualified engineer/technician at the site and the delay was attributable to the respondent alone. Though the quantity of work executed as per the contract was Rs.1,29,79,008/- they have already paid Rs.1,61,92,498/- to the respondent. The work awarded to the M.D. of the respondent in his personal capacity should be excluded from the scope of the dispute. In spite of issuing memos, reminders and notice, the respondent abandoned the work in July 2010 with all equipment. After termination of the respondent's contract, the work was entrusted to 7 Com.A.S.No.41/2019 M/s Sheetal Engineering Works at additional cost of Rs.28,89,290.42. Due to defective/incomplete work of the respondent, the running bills were not cleared by HVPNL and it was a back to back contract. The counter claim for Rs.27,73,035/- on account of the work done cannot be granted. The respondent used undue influence to secure amendment of rate on 18.04.2010 but did not execute any work thereafter to claim payment. The inspection report dated 22.02.2011 is unilateral and not binding on them; and the Court at Yamunanagar had no jurisdiction to appoint local commissioner in ARB No.1/2011 and the petition came to be dismissed for want of jurisdiction on 03.11.2011. The final accepted quantities recorded in the measurement book maintained by HVPNL falsifies the respondent's claim and they are not liable to pay the amounts claimed in counter claims.
8. Based on the pleadings, Arbitral Tribunal framed the following ISSUES
1. Whether the Claimant proves delay in execution of work under the contract? If so who is responsible for the delay?
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Com.A.S.No.41/2019
2. Whether the Claimant proves that the time is the essence of the contract?
3. Whether the Claimant proves that the contract was validly terminated by it?
4. Whether the Claimant proves that it is entitled to the refund of the excess payments of Rs.32,13,491/- made to the respondent under the works contract?
5. Whether the Claimant proves that it is entitled to the refund of the excess Value Added Tax and Service Tax of RS.4,04,016/-
claimed and appropriated by the Respondent?
6. Whether the Claimant proves that it is entitled to the expenses Rs.26,69,467/- incurred towards the completion of the incomplete, defective, poor quality and non- compliance of the pending work of the Respondent by engaging the services of the third parties after the work of the Respondent?
7. Whether the Claimant proves that it is entitled to liquidated damages in a sum of Rs.52,34,160/- which amount was imposed on it by HVPNL due to delay of execution of work by the Respondent?
8. Whether the Claimant proves that it is entitled to Labour Cess of Rs.2,59,580/- which amount is deducted by M/s HVPNL from payments of the claimant due to non- compliance of work order by the Respondent?
9. Whether the Claimant proves that it is entitled to the award of costs of this arbitration proceeding?
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Com.A.S.No.41/2019
10. Whether the Respondent proves that there was an amendment of the rates of the work order dated 24.09.2008 under the document dated 18.04.2010 and that such amendment is binding the claimant?
11. Whether the Respondent proves it is entitled to a sum of Rs.27,73,035/- on account of work done by them?
12. Whether the Respondent proves it is entitled to a sum of Rs.17,06,831/- on account of infructuous Expenses met by them?
13. Whether the Respondent proves it is entitled to a sum of Rs.51,20,499.25/- on account of Loss of profitability?
14. Whether Respondent proves it is entitled to a sum of Rs.16,60,998/- on account of the Claimant illegally withholding the retention money which is due to the Respondent?
15. Whether the Respondent proves it it entitled to a sum of Rs.17,65,309/- on account of delayed release of payment by the Claimant?
16. Whether the Claimant and Respondent are entitled interest on their respective claims?
17. Whether the Claimant and/or Respondent are eligible for award of costs of this arbitration proceeding?
18. What Award or order?
9. One of the Directors of the claimant and the Managing Director of the respondent are examined as Pw1 and Rw1 10 Com.A.S.No.41/2019 respectively. Ex.P1 to P68 are marked for the claimant and Ex.R1 to R116, for the respondent.
10. After hearing arguments and considering the evidence on record, the Arbitral Tribunal allowed the claim in part with cost and rejected the counter claim in toto by the impugned award; and the respondent was directed to refund Rs.32,13,491/- being excess payment, Rs.4,04,016/- towards VAT and service tax, Rs.26,69,467/- towards expenses incurred for completing the pending work through third party, Rs.1,33,500/- towards liquidated damages, Rs.2,59,580/- towards Labour Cess, interest at 12% p.a. and cost of Rs.5,17,500/-.
11. Aggrieved by the impugned award the respondent/plaintiff has filed this petition on the ground that it is contrary to law, facts of the case and practices prevalent in construction contracts: The principle that the scope of the work should be precise and material/information to execute the same should be made available, has been lost sight of while evaluating the evidence. The documentary evidence in the form of correspondence between the HVPNL and the claimant 11 Com.A.S.No.41/2019 obtained through RTI, is ignored. The findings on issue No.2 that time was not the essence of the contract runs contrary to the findings on issue No.3 upholding the termination of contract on the ground of delay; and the finding on issue No.3 is contrary to Sec.55 of Indian Contract Act. Without evidence, the Arbitral Tribunal has held that the running bills are manipulated ignoring that the same was duly certified by the claimant's General Manager. The findings on issue No.5 are based on the observations in issue No.4 and both are incorrect.
11(a). That the Arbitral Tribunal has failed to appreciate that no valid final bill was prepared by the claimant for the works executed by them, as such there was no ground for accepting the claim with regard to expenses allegedly incurred to complete the work or to award liquidated damages. More so, when the Arbitral Tribunal concluded that it was not possible to calculate the delay attributable to them. The liability to pay labour cess was on the claimant being the contractor as per the provisions of the Building and Other Construction Workers Act (BOCW Act for short). The evidence that the claimant's General Manager had 12 Com.A.S.No.41/2019 approved amendment of rates is lightly dealt with by the Arbitral Tribunal and issue of payment of bills for the work done is mixed up with delay in execution, resulting in erroneous finding. They are entitled to receive payments for the work done and increased rates in respect of the overheads but, the Arbitral Tribunal has wrongly concluded that no such escalation was possible. The conclusion that they are guilty of breach of contract is a result of ignorance of the evidence on record and interest awarded is excessive. The rejection of their counter claims for overheads, idling charges is without reason and there is total non consideration of the documents produced by them more particularly Ex.P88 to R116 and awarding additional expenditure is a result of not considering Ex.R85 and therefore the impugned award should be set aside.
12. The claimant/defendant has filed the statement of objections contending that the petition is not maintainable as no specific grounds of violation of public policy or patent illegality, is made out. They had entered into a back to back sub-contract, as such respondent had to perform all the required acts on their behalf as a contractor of HVPNL; all 13 Com.A.S.No.41/2019 necessary documents/drawings were given to the respondent to understand the scope of work and its due performance. The Managing Director of the respondent happens to be an Ex. Employee of HVPNL and experienced in the execution of work. The respondent visited the spot before submitting the bid. In spite of several reminders and notices the respondent delayed the execution of work and finally abandoned it. The sub-contract therefore was terminated. The delayed submission of the drawings and clarification of boundary wall is raised only to get payments released without carrying out the work. 12(a). That the period stipulated for the contract expired on 23.03.2009 and the Arbitral Tribunal has discussed the evidence with regard to who caused the delay and the same cannot be interfered with. The defects and observations pointed out by HVPNL were to be complied by the respondent; and the findings on issues 1 to 3 cannot be interfered with. Though required to pay the respondent only on receiving payments from the HVPNL, they continued making payment towards the RA bills in order to get the work done. This resulted in excess payment and certain 14 Com.A.S.No.41/2019 payments were made even for the work which was defective, incomplete and not executed. After completion of the work, the respondent tried to make a false claim for the work not executed by them by submitting 8 th RA bill. The court at Yamunagar did not have jurisdiction to entertain the arbitration application and therefore the Arbitral Tribunal has not placed any reliance on the local Commissioner's report Ex.R85. The grounds urged in para 22 to 29 of the petition do not fall within the scope of Sec.34 of the Act.
13. Heard arguments of the learned counsel for the plaintiff/ respondent.
14. The defendant/claimant has failed to address arguments or to file written arguments.
15. Perused the records in A.C.No.16/2011.
16. As held by the Division Bench of our Hon'ble High Court in the case of Union of India Vs M/s Warsaw Engineers & Anr. [COMAP No.25/2021 dated 17.04.2021], while dealing with a petition U/s 34 of the Act, the court is required to advert to the grounds, consider the same and examine whether they are available U/Ss.34 15 Com.A.S.No.41/2019 (2) and 34(2A) of the Act; if available, to examine further as to whether those grounds are established.
17. Therefore, the point that arise for my consideration are:
1. Whether the respondent/plaintiff establishes that the Arbitral Tribunal has ignored the vital evidence, relevant provisions of BOCW Act and the Contract Act?
2. Whether the respondent/plaintiff establishes that the grounds urged by them fall within the scope of Sec.34(2A) of the Act calling for setting aside the arbitral award as prayed?
3. What order?
18. My findings on the above points are :
Point No.1: In the affirmative Point No.2: In the affirmative Point No.3: As per the final order for the following REASONS
19. Before taking up the point for consideration it is essential to understand the scope of Sec.34 of the Act. An 16 Com.A.S.No.41/2019 application for setting aside the arbitral award can be entertained only if the grounds U/s 34 of the Act are made out. Arbitral Tribunal being a creature of contract between the parties, cannot act beyond the four corners of the agreement. Every contravention of law cannot be branded as a patent illegality. The court cannot reappreciate the facts and evidence or sit in appeal to conclude that the award suffers from patent illegality. A possible view taken by the arbitrator on facts as to pass muster cannot be interfered with, as he is the ultimate master of quantity and quality of evidence to be relied upon. However, if the Arbitral Tribunal has given findings based on no evidence or ignoring vital evidence on record or by taking irrelevant matter into consideration, then the same would amount to patent illegality.
20. Point No.1: The learned counsel for the plaintiff/respondent argues that there was ample evidence on record to demonstrate that the delay was mainly attributable to the claimant/ defendant; the drawings were not furnished in time and the issue of boundary line was resolved only after the time fixed for performance of the 17 Com.A.S.No.41/2019 sub-contract, stood determined. The payments towards RA bills 1 to 7 were made by the claimant only after duly checking and verifying the work done by the respondent and after the bills were certified in accordance with the sub- contract terms. The respondent executed the works and submitted RA bill No.8 and insisted for payment. This is the time at which the claimant terminated the sub-contract on 13.12.2010 and raised false claims. Due to lapses on the part of the claimant, the respondent was made to continue to keep their infrastructure intact at the site for more than 21 months. The General Manager of the claimant had approved amendment of rates. The respondent therefore claimed overhead charges and loss of profit, as per the amended rate. Without there being positive evidence to prove the claimant incurring additional expenses and alleged manipulation on the part of respondent in getting the amended rates approved, the Arbitral Tribunal ought not to have granted the claims or rejected the counter claim.
21. Drawing the attention to certain observations made by the Arbitral Tribunal with regard to submission of the RA bills, it is argued that, fault is found with the respondent for 18 Com.A.S.No.41/2019 submitting these bills in time and not doing so. As per HVPNL's letter at Ex.P25(a) only item No.16 was the civil work pending and all other works were in the scope of the claimant's work under the main contract. Ex.R85 and R87, court commissioner's report submitted to the District Court at Yamunanagar though proves the respondent's claim with regard to the works carried out by them, the Arbitral Tribunal has not accepted the same without justification. The works allegedly done by M/s Sheetal Engineers in Ex.P42 over lapse the work done by the respondent as per the 7th running bill at Ex.R38 but there is no reference to this document at all in the impugned award. The Arbitral Tribunal has also ignored Ex.P47 and P48 which are in favour of the respondent. When the quantity was approved in 2013 and in the absence of acceptable evidence led by the claimant the Arbitral Tribunal could not have concluded that there was excess claim. Specially, when Ex.P57, the claim of the claimant approved at a later date tallies with Ex.P48.
22. It is also argued that the Arbitral Tribunal has not assigned any reasons as to why the respondent is not 19 Com.A.S.No.41/2019 entitled for counter claim, but simply says that there was breach on their part. The respondent did not commit breach and the delay was attributable to the claimant, but the Arbitral Tribunal has not considered the material evidence in this behalf and therefore, the grounds urged fall within the scope of Sec.34(2A) of the Act.
23. The verification of the pleadings in a commercial dispute shall be by way of an affidavit under sub rule (1) of Order VI Rule 15A of CPC as amended by Sec.16 of the Commercial Courts Act. Where the pleading is not verified in this manner, the party cannot be permitted to rely on the same as evidence or any of the matters set out therein. This provision was inserted by Act No.28 of 2018 w.r.e.f. 03.05.2018. The claimant/defendant filed the statement of objections on 26.10.2021. Even after granting sufficient opportunities, the claimant/ defendant failed to comply with Order VI Rule 15A CPC and to file the statement of truth. Therefore, I am of the opinion that the claimant/defendant's statement of objection cannot be looked into and it is struck out as provided under sub rule (5) of Order VI Rule 15A of CPC.
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24. Sec.34 of the Act makes it clear that the party approaching the court seeking to set aside the arbitral award should be able to establish the grounds thereunder, on the basis of the arbitral records.
25. There is absolutely no dispute that HVPNL, a government of Haryana undertaking awarded the contract in favour of the claimant for construction of 66 KV sub station at different places, namely, Ugala, Ambala, Gurgaon and Rattangarh in Yamunanagar on turn key basis for Rs.26,51,26,778/-. HVPNL also entered into contract with the claimant for erection, testing and commission of 66KV sub station at Rattangarh, including the civil works for Rs.3,71,20,374/-. The claimant entered into a sub-contract with the respondent under agreement dated 24.09.2008 for execution of the civil works of Rattangarh sub station. The time stipulated for completion of the contract was six months and the respondent therefore was required to complete the civil works and handover the site to the claimant by 23.03.2009. However, there was delay and the sub-contract came to be terminated by the claimant nearly 27 months later, on 13.12.2010 by issuing a notice. By then, 21 Com.A.S.No.41/2019 Running bills 1 to 7 were paid and the respondent submitted 8th Running bill on 10.01.2011 as per Ex.R69.
26. The date fixed for the sub-contract was 23.05.2009. Ex.R14, Ex.R2 and Ex.R15 dated 19.05.2009, 20.05.2009 and 22.05.2009 respectively would show that the claimant was yet to get the drawings approved as on 19.05.2005, the respondent wrote requesting for the same and it was provided only on 22.05.2009. The issue of identifying the boundary wall was resolved only on 19.06.2009. Thus, the respondent was unable to complete their part of work under the sub-contract within the prescribed time on account of the delay on the part of the claimant. Ex.R87 shows that HVPNL approved the drawings submitted by the claimant and this falsifies the claim that the respondent was required to prepare the same. A plain reading of the impugned award would reveal that Ex.R2, R14 and R15 are not at all referred to by the Arbitral Tribunal while considering issue No.1.
27. Ex.P24(a) is the letter written by Superintendent Engineer of HVPNL stating that from the beginning, the turn key contractor i.e. the claimant was not serious and not consistent in timely execution of the project and as a result 22 Com.A.S.No.41/2019 the progress had suffered badly. Even sub-contractors were regularly complaining about non clearance of their dues as main cause for their inaction in doing the work on time. Ex.P24(b) is letter dated 05.05.2010 by the Executive Engineer of HVPNL to the claimant stating that the work of Rattangarh sub station was not progressing at the desired rate and the sub-contractor had expressed inability to continue with the work due to non payment of long pending dues.
28. Ex.R30 would show that in the minutes of the meeting held between the claimant and the respondent on 18.04.2010 it was acknowledged that the delay was due to financial problems and the claimant should not impose any penalty on the respondent for the delay in execution. Ex.R31 the letter dated 10.05.2010 issued by the claimant to the respondent amply demonstrates that the work order was amended for execution of civil works of 66KV sub station at Rattangarh and the value of the amendment shall be Rs.1,79,22,141.50 as against the original value of Rs.1,33,55,000/- with all other terms and conditions remaining unchanged. Ex.R33, R34, R35, R36, R36(a) would 23 Com.A.S.No.41/2019 show that the cheque issued by the claimant in relation to Rattangarh civil works was dishonored on 02.06.2010; and the amount was paid through RTGS on 23.06.2010 with a request to return the cheques.
29. There is a galore of evidence on record adduced by the respondent to show that tardy progress of work was attributable to the non payment of the bills on time and due to claimant not having sufficient funds. The Arbitral Tribunal has failed to take note of the documentary evidence adduced by the respondent to substantiate that delay was not at all attributable to them.
30. The Running bills 1 to 7 of the respondent was duly verified and certified before making payment as submitted by the learned counsel for the respondent. Ex.R38(a) is one such entry which shows that Running bill No.7 submitted by the respondent was certified with regard to the quantity on the basis of joint measurement done by the claimant on 03.09.2010. Thus, the claimant appears to have written Ex.R53 asking for supporting documents, without any justification.
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31. Ex.R68 is the notice of termination of contract dated 15.12.2010 accompanied by HVPNL letter addressed to the claimant, that it should have obtained labour license from the concerned labour commissioner as mandated under law. This letter has been completely ignored by the Arbitral Tribunal in coming to the conclusion that the respondent is liable to pay the labour cess.
32. Ex.R69 dated 10.02.2011 of the respondent shows that the 8th RA bill for Rs.27,32,385/- was submitted with a request to make payment by 20 th of January, with supporting documents and it was followed up with reminder at Ex.R70 and R71. The court commissioner's report at Ex.R85 and R87 are simply brushed aside by the Arbitral Tribunal on the ground that the court appointing the local commissioner had no jurisdiction to entertain the petition U/s 9 of the Act and that the claimant was not a party to such local inspection. In doing so, it has failed to notice that the said reports were not challenged by the claimant before any forum or that they were not set aside.
33. Sec.18 of the Act mandates that the Arbitral Tribunal should treat the parties with equality. Ignoring the said 25 Com.A.S.No.41/2019 principle and also that the respondent was not a party to Ex.P42 the Arbitral Tribunal interestingly records a finding in favour of the claimant and has awarded Rs.26,69,467/- towards additional expense incurred for completion of the project through M/s Sheetal Engineering Works. There is absolutely no evidence to establish if the third party contractor executed the additional work as claimed. Nor was there any evidence adduced to establish that the amendment of rates was obtained using undue influence by the respondent, as alleged. Ex.P42 overlaps with Ex.P38, the 7th Running bill of the respondent which was duly certified by the claimant. The Arbitral Tribunal has ignored these material documents and without there being any discussion with regard to the payment made to M/s Sheetal Engineers, the claim has been allowed.
34. Ex.R37 is the respondent's letter dated 18.08.2010 addressed to the claimant referring to the email dated 11.08.2010 which is at Ex.R30 and refers to dishonor of cheques issued by the claimant. These two documents are not denied by the claimant. Under such circumstances, the Arbitral Tribunal could not have concluded that Ex.R30 is 26 Com.A.S.No.41/2019 concluded.
35. The Arbitral Tribunal has proceeded to award liquidated damages on the ground that the termination is valid and attributable to delay on the part of the respondent. The above discussion demonstrates that the said finding is unsustainable, as the Arbitral Tribunal has ignored the material evidence on record which establish that the delay in completion of the work assigned to the respondent was majorly attributable to the claimant.
36. As seen from para 34 of the impugned award Ex.P57 is said to be not containing statement of quantity, variation and deviation. Ex.P48 would show that long after termination of the sub-contract, HVPNL approved the variations on 21.03.2013. Without even waiting for HVPNL's approval, the claimant could not have claimed that the respondent did not carry out the work, specially in the absence of acceptable evidence to show that the work was got executed through M/s Sheetal Engineers.
37. As rightly argued by the learned counsel for the respondent though Ex.P48 favours them and tallies with 27 Com.A.S.No.41/2019 Ex.P57, the Arbitral Tribunal has conveniently ignored the same forgetting that the said document would give impartial view of the matter. The Arbitral Tribunal has also ignored the principle enshrined in Sec.70 of the Indian Contract Act which creates obligation to pay compensation by person enjoying the benefit of non gratuitous Act. The Arbitral Tribunal has denied the counter claim on the ground that the delay is attributable to the respondent. But as discussed earlier, failure to consider material evidence as resulted in this erroneous finding and the respondent, on the basis of arbitration records has successfully demonstrated that there was no breach on their part. Therefore, the point for consideration is answered in the affirmative.
38. Point No.2: Sec.34(2A) of the Act provides for setting aside the arbitral award if it is in conflict with the public policy of India which includes fundamental policy of Indian law and basic notions of morality or justice. This is not a case of erroneous application of law. Forgoing discussion would amply demonstrate that the Arbitral Tribunal's findings are vitiated by patent illegality and the findings are 28 Com.A.S.No.41/2019 a result of ignoring the vital and material piece of documentary evidence adduced by the respondent. Therefore, the impugned award is liable to be set aside on the ground U/s 34(2A) of the Act. Accordingly, the point for consideration is answered in the affirmative.
39. Point No.3: In the result, I pass the following ORDER The petition U/Sec.34 of the Arbitration and Conciliation Act is allowed.
Arbitral award dated 10.12.2018 passed in A.C.No.16/2011 by the sole arbitrator is hereby set aside.
Issue copy of the judgment to the parties through e-mail as provided U/o XX Rule 1 of CPC, if mail ID is furnished and send back the arbitration records to the Arbitration Centre, Bengaluru.
(Dictated to the stenographer, transcribed and typed by her directly on the computer, corrected and then pronounced by me in the open court on this the 8th day of July 2022) (H.R.Radha) LXXXIV Addl. City Civil and Sessions Judge, (CCH-85 Commercial Court) Bengaluru