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Mbl Infrastructures Limited vs Rites Limited & Anr on 31 October, 2022

Author: Anup Jairam Bhambhani

Bench: Anup Jairam Bhambhani

                          $~21

                          *      IN THE HIGH COURT OF DELHI AT NEW DELHI

                          +      O.M.P. (COMM) 317/2022

                                 MBL INFRASTRUCTURES LIMITED                        ..... Petitioner
                                               Through: Mr. Amit Sibal, Senior Advocate with
                                                          Ms. Anusuya Salwan, Mr. B. Garg
                                                          and Mr. Rohit Wadhwa, Advocates.
                                               versus
                                 RITES LIMITED & ANR.                          ..... Respondents
                                               Through: G. S. Chaturvedi, Advocate for R1
                                                          via video conferencing.
                                                          Mr. Avishkar Singhvi, Mr. Vivek
                                                          Kumar & Mr. Naved Ahmed,
                                                          Advocates for R2.
                                 CORAM:
                                 HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
                                               ORDER

% 31.10.2022 I.A.11745/2022 Exemption granted, subject to just exceptions. Let requisite compliances be made within 01 week. Application stands disposed of.

O.M.P. (COMM) 317/2022 By way of the present petition under section 34 of the Arbitration & Conciliation Act, 1996 ('A&C Act') the petitioner (contractor) impugns award dated 21.02.2022 and subsequent order dated 21.03.2022 under section 33 of the A&C Act rendered by the learned Sole Arbitrator, challenging inter-alia the decision on claims Nos. 2, 3, 4, 6, 7, 9 and 10.

2. Mr. Amit Sibal, learned senior counsel appearing on behalf of the petitioner submits inter-alia that an application filed by the petitioner under section 33 of the A&C Act seeking a correction in award dated 21.02.2022, relating to the liability of the respondents to compensate for the Works Contract Tax ('WCT' for short)paid by the petitioner, has been declined by the learned Arbitrator without affording an oral hearing, despite the fact that there was no agreement between the parties that such hearing should not be given as contemplated under section 24 of the A&C Act.

3. That apart, Mr. Sibal points-out, that the issue raised in the application under section 33 has been decided contrary to the evidence relating to payment made by the petitioner towards WCT.

4. Mr. Sibal has also taken the court through the portion of the arbitral award relating to levy of compensation/liquidated damages for alleged delay in completion of the project, which delay has been blamed by respondent No. 1 upon the petitioner, to submit that admittedly such decision could only have been taken by the Executive Director, whereas the evidence on record shows that the Executive Director had not taken any such decision. In fact, it is pointed-out, that in order to cover-up the lacuna as to levy of liquidated damages, respondent No. 1 has sought to place on record certain fresh documents vide index dated 08.06.2020, after the cross-examination of respondent No. 1's witnesses was already completed on 13.12.2019; and the learned Arbitrator did not afford any opportunity to the petitioner to cross-examine respondent No.1's witness in relation to such fresh document. Furthermore, it is argued, that Signature Not Verified Digitally Signed By:NEERAJ Signing Date:03.11.2022 O.M.P. (COMM) 317/2022 Page 2 of 3 12:37:14 liquidated damages have been upheld in the teeth of clause 5.2 of the contractual terms, which provided for extension of time inter-alia in the circumstance that there was increase in the scope of work, which was indeed the case in relation to the project.

5. Upon a prima-facie conspectus of the averments contained in the petition and the submissions made, issue notice.

6. Learned counsel, as above, appearing for respondents Nos. 1 and 2, accept notice; and seek time to file reply.

7. In fact Mr. G.S. Chaturvedi, learned counsel appearing for respondent No. 1 and Mr. Avishkar Singhvi, learned counsel appearing for respondent No. 2, submit that they are also in the process of filing objections under section 34 of the A&C Act impugning the same arbitral award.

8. Let reply be filed within 06 weeks; rejoinder thereto, if any, be filed within 04 weeks thereafter; with copies to the opposing counsel.

9. Re-notify on 01st February 2023.

ANUP JAIRAM BHAMBHANI, J.

OCTOBER 31, 2022 ds Signature Not Verified Digitally Signed By:NEERAJ Signing Date:03.11.2022 O.M.P. (COMM) 317/2022 Page 3 of 3 12:37:14