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[Cites 4, Cited by 0]

Bombay High Court

Nuclear Power Corporation Of India Ltd. vs Khamkar Construction Pvt. Ltd. on 6 October, 2025

  2025:BHC-OS:17621


                                                                               J-9-CARBP-1108-2018.doc



                                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                        ORDINARY ORIGINAL CIVIL JURISDICTION
                                                 IN ITS COMMERCIAL DIVISION

                             COMMERCIAL ARBITRATION PETITION NO. 1108 OF 2018

                           Nuclear Power Corporation of India Ltd.                               ...Petitioner
                                  Versus
                           Khamkar Construction Pvt. Ltd.                                        ...Respondent


                           Mr. M.P. Rao, Senior Advocate, a/w Kajal Gupta, Shweta Singh,
                           i/b M.V. Kini & Co., Advocate for the Petitioner.
                           Mr. Suneet Moholkar, a/w Mr. Sanjeel Kadam, Mr. Soham Salvi,
                           Ms Netra Jagtap i/b Kadam and Company for the Respondent.


                                                 CORAM       : SOMASEKHAR SUNDARESAN, J.
                                                 RESERVED ON:            MARCH 20, 2025
                                                 PRONOUNCED ON: OCTOBER 6, 2025

                      JUDGEMENT :

Context and Factual Background:

1. This is a Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act") challenging a unanimous arbitral award dated June 21, 2018 made by a Learned Arbitral Tribunal ruling against the Petitioner, Nuclear Power Corporation of India Ltd. (" NPC") ASHWINI JANARDAN and in favour of the Respondent, Khamkar Construction Pvt. Ltd.

VALLAKATI Digitally signed by ASHWINI JANARDAN VALLAKATI Date: 2025.10.06 12:30:55 +0530 Page 1 of 18 October 6, 2025 ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc ("Khamkar"). The three-member arbitral tribunal has held that NPC is obliged to pay Khamkar a sum of Rs. ~12.50 crores with simple interest at the rate of 10.5% from the date of the award until realisation.

2. NPC commissioned the construction of an Intergrated Thermal-Hydraulic Test Facility Building meant for carrying out various tests and experiments to validate thermal hydraulic design and to ensure enhanced safety of nuclear reactors in India. The value of work awarded was Rs. ~16.15 crores and it was envisaged that the work would be completed in nine months. A work order dated November 20, 2009 ("Work Order") came to be issued and a formal contract was signed on January 6, 2010 ("Agreement"). The work was completed on May 7, 2013 while NPC contended that it ought to have been completed by August 23, 2010.

3. There was a time over-run and NPC granted multiple extensions. NPC claims that the grant of extension of time did not mean that time was not of the essence of the contract, and that it had always reserved the right to liquidated damages. NPC issued a completion certificate on September 6, 2013, contending that the liquidated damages were still being assessed. NPC claims to have overpaid amounts under the Running Account Bills (" RA Bills") and also claimed Page 2 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc liquidated damages from Khamkar. Eventually, the disputes led to arbitration proceedings and the Impugned Award was passed.

4. In all, there were 36 claims raised by Khamkar before the Learned Arbitral Tribunal, of which 12 claims have been rejected. NPC too raised eight counter-claims, which were rejected. Suffice it to say that Khamkar has not challenged the Impugned Award, and NPC has not expressed grievance about a number of the claims allowed. The Petition entails a challenge to 23 claims being allowed while 12 claims were allowed but for which NPC has not expressed grievance. Even among the claims that are allowed and are challenged, for purposes of these proceedings, the core focus is on the time over-run and whether Khamkar had made out a case for being compensated for additional work done.

5. The table in hte Annexure to this judgement would summarise the heads of claims that NPC is aggrieved by, the amounts claimed, the nature of the claims and the amounts awarded against the claim.

Analysis and Findings:

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6. I have heard at great length the submissions made by Mr. M.P.S. Rao, Learned Senior Advocate on behalf of NPC and by Mr. Kadam, Learned Advocate on behalf of Khamkar. Each of them has filed copious written submissions summarising their contentions with reference to the record. Mr. Rao has vehemently argued against each and every claim that has been allowed on the basis of copious written notes, which have been countered by Mr. Kadam, also with copious written notes on each of the awarded claims under challenge.

7. From a review of the voluminous record with the assistance of the oral and written submissions of the parties, it can be seen that there are a few key issues involved, which would be determinative of the disputes between the parties and therefore fall for consideration in these proceedings, subject, of course, to the specific contours of jurisdiction under Section 34 of the Act.

8. The core issue framed by the Learned Arbitral Tribunal was this: who was responsible for the delay in completion of the work and to what extent. Therefore, adjudication of the delay and the reasons therefor would inform the assessment of the multiple claims and also the challenge to the claims allowed. Learned Advocates for both sides would also focus on these issues and then make submissions on the Page 4 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc respective claims. Therefore, a decision on the adjudication of these core issues would be necessary so that the analysis of the submissions relating to all the other claims would abide by the assessment of these core issues.

Delay in Completion:

9. The issue of delay foreshadows the analysis of all claims in an over-arching manner. The Learned Arbitral Tribunal has noticed that the stipulated date of completion was August 23, 2010 and the work was completed on May 7, 2013. The value of the contract was Rs. ~16.15 crores. The value of the work done, according to NPC was Rs. ~19.10 crores while the value of the work done, according to Khamkar was Rs. ~26.21 crores. Khamkar led evidence with one witness while NPC led evidence with two witnesses.

10. Khamkar sought extension of time to complete work on 26 occasions. In a nutshell, the core contention of Khamkar was that drawings for the construction were not given in a sequential manner, and often the revised drawings received at the eleventh hour necessitated reworking the plan. Revised instructions said to have been received right until December 2012. The Bar Chart for the work plan involved receipt of drawings in a sequential manner but this was not Page 5 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc adhered to. Disputes also arose in relation to the Abnormally High Rate ("AHR") items, which are said to have far exceeded the Schedule of Quantities and Rates ("SOQR"). There were delays in releasing payments and that had a spiralling effect. Khamkar also attributed delay to other issues such as being deployed on areas outside the ITF building, and non-availability of sand, receipt of instructions from two different groups within NPC (civil and structural), the non-availability of engineer-in-charge at the site, and delay in payment of RA Bills. Delay in release of funds is also an abiding theme - Khamkar would contend that even the mobilisation advance was received after eight months when the stipulated completion deadline was nine months.

11. NPC would blame Khamkar for all the delay - indicating that the work was below expectations, and planning and deployment of resources was poor. NPC would contend that the release of drawings was meant to be in a phased manner and that NPC had stuck to the phase-wise provision of drawings.

12. The Learned Arbitral Tribunal has provided cogent and reasoned findings on all the facets of the delay. Citing from the material on record, the Learned Arbitral Tribunal found that there had been early warning signals from Khamkar about delays throughout the Project Page 6 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc implementation. A reading of the material cited and analysed by the Learned Arbitral Tribunal does not present any scope for holding that the Learned Arbitral Tribunal was perverse in its reading of such material. It is seen that Khamkar provided a bar chart of activity as required under the Agreement on December 24, 2009, a month after issuance of the Work Order. However, NPC provided no comment or inputs on it and Khamkar had proceeded on the premise of deemed approval. This eventually led to the project being implemented without a planned structure. That apart, design of the fabrication shop and bar bending schedule ("BBS") were indeed modified by NPC and the Learned Arbitral Tribunal found that a change in the terms would indeed have implications.

13. Moreover, the Learned Arbitral Tribunal has found, based on clear material on record, that the mobilisation advance was not at all paid as an advance but was released a year after the Work Order. As for AHR items, it was found that Khamkar indeed was required to deploy such material only after approval by NPC, but had this stipulation been strictly adhered to, the Project would not have been completed even by May 7, 2013, since the Learned Arbitral Tribunal found significant delays in the approvals being accorded by NPC. Additional work too was required as late as March 15, 2013 and this necessitated execution of Page 7 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc such work thereafter. Designs were also provided with acute delay by NPC, it was found, and in particular, the design for structural steel work was indeed not provided in a sequential manner.

14. As stated earlier, almost everything turned on the facet of delay and who was responsible for the delay. For this, the Learned Arbitral Tribunal has examined the evidence and returned detailed findings. Therefore, the findings on liquidated damages not being payable is also a legitimate finding that warrants no interference and is dispositive of the issue in both, the claim and the counter-claim.

15. Having examined the reasoning provided by the Learned Arbitral Tribunal and the material and evidence cited by the Learned Arbitral Tribunal in support of this findings, it is clear that the Learned Arbitral Tribunal, which is the master of the evidence and the sole arbiter of the quality and quantity of evidence has returned cogent, reasonable and plausible findings on the facet of delay, which does not warrant interference, bearing in mind the contours of the jurisdiction of the Section 34 Court. The clear and cogent finding that the delay was not attributable to Khamkar and was clearly attributable to NPC cannot be faulted. This forms the foundation of much of the assessment of claims in the Impugned Award.

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October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc FIM and Shot Blasting:

16. The 'free issue materials' ("FIM") involved in the contract - materials that a client would provide to a contractor, and therefore free of implications for project cost - also forms subject matter of controversy.

17. The Learned Arbitral Tribunal, again with cogent reasoning linked to specific material on record, quoting chapter and verse, found that it had not been disclosed that the FIM being provided by NPC had been stored without protection in the open yard. This required considerable work to remove the rust on the materials by use of 'shot blasting' and NPC's own consultant had indicated 70% strength due to this facet. A study to indicate the additional time and expense in making use of the FIM was provided to NPC. The SOQR does not factor in this hurdle to the use of FIM, the Learned Arbitral Tribunal found, and has worked out the impact in reliance upon the material contained in the record, to allow the claim for Rs. ~31.94 lakh. It was found that NPC was put to notice repeatedly about the issues arising out of the FIM and the shot blasting that was necessary, and the findings of the Learned Arbitral Tribunal on this count too cannot be faulted at all. Page 9 of 18

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18. A somewhat similar issue arose with the structural steel supplied by Khamkar itself not being FIM supplied by NPC. A dispute arose about whether Khamkar ought to have effected shot blasting on such steel or whether a wire brushing would have been adequate before deployment. NPC had not insisted on shot blasting but in the design approved, it was explicitly stated that the steel ought to be cleaned by using shot blasting before being painted on with zinc silicate primer. The painter manufacturer's specifications too provided the same instructions. Since the industry standard and practice was to be discerned from such explicit technical stipulations, the Learned Arbitral Tribunal found that Khamkar's work on shot blasting could not be wished away. It was not as if such work was not done, but the dispute was about whether such work was necessary and having been carried out, whether it should be paid for by NPC. The Learned Arbitral Tribunal found in favour of Khamkar and its findings cannot be considered perverse in view of the paint manufacturer's specifications and the design itself requiring such work to be carried out. The Learned Arbitral Tribunal has also calibrated its assessment of claim in this regard and only allowed the elemental cost and disallowed attribution of overheads to such expense to assess the claim at Rs. ~45.42 lakh. There is no scope for interference with either the finding or the assessment. Page 10 of 18

October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc HSFG Bolts:

19. The next issue that Mr. Rao pressed on hard on behalf of NPC was the grade of the bolts used in the project. The bid had been prepared on the premise of the building being a conventional structure and needing bolts of a certain grade (4.6 grade). It was found that the approved drawings stipulated usage of High Strength Friction Grip ("HSFG") bolts (6.8/8.8/10.9 grade). With a detailed analysis of the evidence, both documentary and the oral evidence led, the Learned Arbitral Tribunal found that the tender terms did not unambiguously stipulate the grade to be deployed.

20. The Learned Arbitral Tribunal indeed has not accepted Khamkar's contention of presuming the use of 4.6 grade bolts, but equally does not accept NPC's contention that it was unambiguous about the usage of HSFG bolts. Therefore, the Learned Arbitral Tribunal has conducted its assessment of the bolts actually used and has arrived at the variation in the sum of Rs. ~14.12 lakh. On this count too, the analysis being well reasoned and plausible, no basis is made out for interference.

Other Claims:

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21. As stated earlier, the findings on the aforesaid facets inform the analysis in the rest of the Impugned Award. The sheer volume and number of claims dealt with are all linked to the very same issues. For example, a large component of the claims allowed is the manpower cost overrun, but that is directly linked to the issue of delay. Once it is held that the delay was attributable to NPC and not to Khamkar, the claim being allowed is an inexorable consequence. Once it is found that these findings have been reasonable, plausible and unworthy of interference, the other claims allowed by the Learned Arbitral Tribunal, flowing as they do from the analysis on these facets, in my opinion, no case has been made out for interference.

22. These claims are also de minimis in scale -ranging from a few tens of thousands to a few lakhs of rupees. It is not that the scale of the claim turns the needle on whether the challenge to them need to be dealt with, but these claims are all dependent on the very same issues as above, and therefore would stand or fall on the same basis. It is only noteworthy that the consequence of the aforesaid findings are de minimis in scale.

Counter-Claim and Interest:

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23. The counter-claims too are linked to the findings on the very same issue of delay. As a logical corollary to the findings on the core foundations of the claim, the Learned Arbitral Tribunal has rightly and reasonably dismissed the counter-claims too. This facet too does not call for interference within the contours of the jurisdiction under Section 34.

24. On the facet of interest payable, each party has claimed interest at varying rates, demanding up to 18% per annum. The Learned Arbitral Tribunal has awarded 12.25% per annum in terms of the General Conditions of Contract for delayed payments and post-award interest at a reasonable rate of 10.5% per annum. Other Grounds:

25. In the Petition, multiple grounds have been taken in the Petition - 38 in number - and this judgement has focused on what has been pressed and focused on the hearing. However, a few other facets also need mention and consideration. The Learned Arbitral Tribunal had rejected a request made in April 2015 for conducting an inspection of the building constructed and completed two years earlier. Likewise, a request by NPC to amend the counter-claim, which is an afterthought was not permitted. This is one of the grounds raised on behalf of NPC Page 13 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc stating that the Learned Arbitral Tribunal could have permitted such an inspection and measurement for considering the actual materials used.

26. On reflection, I am of the view that this cannot be faulted. How to conduct the arbitration is squarely in the domain of the arbitral tribunal. The foundational issue in the matter was delay in according approvals and in interpreting the record to examine if there was any ambiguity in the scope of materials to be used, such as the bolts and whether shot-blasting of the structural steel was necessary and whether the rusting on the FIM necessitated cleaning them up by shot-blasting and consequential impact. Much of the adjudication of questions of fact in the matter turned on these issues. If the Learned Arbitral Tribunal believed it was unnecessary to conduct a site inspection to consider these issues, or that it need not allow an amendment to the counter- claim when the proceedings were underway, it is not for this Court to second-guess how to conduct the proceedings.

27. One must keep in mind the following passage from Associate Builders1:

It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible 1 Associate Builders Vs. Delhi Development Authority - (2015) 3 SCC 49 Page 14 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score.
[Emphasis Supplied]

28. In any case, the Impugned Award is not even one that is based on little or no evidence. On the contrary, it comprehensively quotes chapter and verse from various facets of the evidence to return its findings on every single facet of every claim presented to it. Indeed, the Learned Arbitral Tribunal, as the ultimate master of the quantity and quality of evidence was fully entitled to take a view that a visit and inspection two years after issuance of a completion certificate is unnecessary.

Scope of Review:

29. It is now trite law that the Section 34 Court cannot re- consider evidence and re-assess the material on record and sit in judgement over the Learned Arbitral Tribunal. In my opinion, having analysed the Impugned Award and examined the material that the Learned Arbitral Tribunal has meticulously and thoroughly analysed in copious detail in the Impugned Award, there is nothing to show that the Page 15 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc findings of the Learned Arbitral Tribunal are implausible, perverse, contrary to the contract, violative of natural justice or in conflict with the fundamental policy of India. The Impugned Award is consistent with the bargain between the parties and returns plausible findings on areas of ambiguity posed in the contract - for example, shot-blasting of structural steel acquired and supplied by Khamkar.

30. The scope of review by the Section 34 Court is well covered in multiple judgements of the Supreme Court including Dyna Technologies2, Associate Builders, Ssyangyong, Konkan Railway3 and OPG Power4. An arbitral award is not to be reviewed with an appellate lens but from the standpoint of whether it falls foul of any of the limited grounds of challenge under Section 34 of the Act. It is well settled that the arbitral tribunal is the master of the evidence and the best judge of the quality and quantity of evidence. The voluminous evidence submitted by the parties to the Learned Arbitral Tribunal has been well analysed and on a review of the same, there is nothing perverse. Besides, NPC's request for intervention would essentially require this Court to re-appreciate the evidence and substitute the view it canvasses 2 Dyna Technologies Private Limited v. Crompton Greaves Limited - (2019) 20 SCC 1 3 Konkan Railways v. Chenab Bridge Project Undertaking - 2023 INSC 742 4 OPG Power vs. Enoxio - (2025) 2 SCC 417 Page 16 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc for the view of the Learned Arbitral Tribunal. I do not think it necessary to burden this judgement with quotations from the well-known principles articulated in the aforesaid judgements.

31. No case for interference being made out, the Petition is hereby dismissed. Since costs should follow the event, considering that an eminently reasonable award has been held up in challenge, I direct that NPC pay costs in the sum of Rs. 5 lakh to Khamkar within a period of four weeks from the upload of this judgement on the website of this Court. Amounts deposited, if any, in this Court shall stand released to Khamkar within a period of four weeks from the upload of this judgement on the Court's website.

32. All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this Court's website.

Sr. No. Claim Claim Amount Subject Matter Dispute/ Claim Raised For Amount Awarded No. A) 1. Rs.43,36,699/- Additional claim made for Shot blasting and painting Rs.31,94,419/-

of steel.

B) 2. Rs.63,94,023/- Claim for Shot Blasting. Rs.45,42,178/- C) 3. Rs.14,12,179/- Cost for provision of High Strength Friction Grip Bolts. Rs.14,12,179/- D) 13. Rs.3,56,847/- Hire charges for machinery returning free issue Rs.2,83,693/-

materials of structural steel from site to NPC's yard. E) 14. Rs.21,91,865/- Reimbursement of labour charges for tightening the Rs.16,43,900/-

HSFG Bolts.

F) 5A. Rs.1,40,68,052/- NPC attributes the claim to delay in making payments Rs.1,40,68,052/-

of claim nos.5 & 6.

Claim no.5 - price escalation clause no.11.3.4 for all Page 17 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 ::: J-9-CARBP-1108-2018.doc Sr. No. Claim Claim Amount Subject Matter Dispute/ Claim Raised For Amount Awarded No. items under SOQR amounting to Rs.53,17,906/- Claim no.6 - price escalation under clause no.11.3.4 for Structural Steel items amounting to Rs.1,10,16,591/- G) 7. Rs.4,62,806/- Interest on delayed payments as per cl.no.12.2.3 of Rs.4,62,806/-

GCC.

H) 8. Rs.21,87,124/- Interest on delayed payments kept on hold until Rs.15,03,000/-

Competent Authority's approval on the rates. I) 10. Rs.61,813/- Cost of the Rework as per Column A6. Rs.61,813/- J) 11. Rs.59,277/- Claim arose due to changes and modifications in Rs.15,727/-

revised drawings.

K) 12. Rs.32,563/- Claim for dismantling Chhajjas as per oral Rs.14,056/-

instructions.

L) 15. Rs.1,17,716/- Royalty Charges payable for River Sand. Rs.1,17,716/- M) 16. Rs.9,08,875/- Extra cost in erection work due to mismatch in Rs. 3,99,125/-

structural steel drawings.

N) 17. Rs.6,19,064/- Service Tax payable on free issue materials as per Rs.6,19,064/-

cl.6.10.1 of GCC.

O) 19. Rs.11,05,332/- Claim as against the RA Bill 33. Rs.11,05,332/- P) 20. Rs.20,000/- Amount withheld against Wage Settlement of workers Rs.20,000/-

employed by Khamkar.

Q) 21. Rs.16,66,359/- Claim with regards to the Final Bill No.34. Rs.9,27,515/- R) 27. Rs.11,64,000/- In respect of construction of shed during monsoons Rs.11,64,000/-

(Monsoon Shed) to conduct work at the site.

S) 28. Rs,4,09,84,993/- Compensation for manpower-Amounts claimed Rs.2,82,70,670/-

towards overheads, establishment and supervisory charges.

T) 29. Rs.5,90,60,000/- Overstay of machinery- Due to delay on the account of Rs.1,66,000/-

NPC, claim was made towards overstay at the site, in respect of deployment of machinery, tools and plants beyond the contract period.

U) 30. Rs.5,21,424/- Expenses incurred in respect of extension of bank Rs.5,21,424/-

guarantee.

V) 31. Rs.25,381/- Cost of tree cutting required in completion of the Rs.25,381/-

building works, which is allegedly out of the scope of work as per the contract.

W) 34. Interest @18% Interest claimed for delayed payments Interest @12.25% on delayed payments as per GCC Post-Award Interest @ 10.5% [SOMASEKHAR SUNDARESAN, J.] Page 18 of 18 October 6, 2025 Ashwini Vallakati ::: Uploaded on - 06/10/2025 ::: Downloaded on - 06/10/2025 21:26:35 :::