Indian Kanoon - Search engine for Indian Law

6. Before the DRB it was contended by the NHAI that the material specifications for the GSB work were not in conformity with that specified for BOQ Item 3.02. Included in the documents submitted before the DRB by the NHAI was the report of a Committee which got the materials used in the GSB work tested through an independent laboratory. The Committee observed that "the material used for such works are generally comparable to closely graded GSB material (except for marginal variation with regard to percentage passing through IS Sieve size 0.42 mm and 0.07 mm) as specified in the MOST Specifications outlined in the Contract Agreement." In its recommendation dated 7th September, 2006 the DRB referred to the Committee's aforementioned report and concluded that "the GSB material used met the requirements of the Specifications." However, the procedure in carrying out the GSB work in accordance with BOQ Item 3.02 "was probably not wholly adhered to." The DRB analyzed the rates based on a comparative statement furnished by NHAI and recommended that a rate of Rs. 596 per cum be paid to the Respondent for the GSB work together with interest for any delay in terms of Clause 60. 8 (b) of COPA.

Claim No.3: Cost of Arbitration in the sum of Rs. 10,00,000.

9. By the impugned Award, the AT held that the Respondents were entitled to payment at Rs. 665 per cum for the GSB work and a further premium of 2.7% above the said rate along with interest at 12% per annum. Both parties were directed to bear their own costs of arbitration.

10. Ms. Gunjan Sinha Jain, learned counsel appearing for NHAI, submitted that despite noting in the Award that the Respondent had itself agreed for a rate of Rs. 665 per cubic metre, the AT awarded it a premium of 2.7% over the said rate, which was not even asked for by the Respondent. She submitted that there was no basis for the AT to fix a rate for GSB much higher than that recommended by the DRB, which was comprised of technical personnel, unless there were sound reasons for doing so. She further submitted that the decision of the AT was also inconsistent with the engineering practice. She submitted that there were no reasons afforded by the AT for proceeding on the basis that the maximum input for compaction in the cost of a GSB work was 16.794%. Ms Sinha further submitted that the claim was time barred as the since it had not been made within 28 days of the first recovery made from the IPC as required by Clause 53.1. Finally, she submitted that the Award of interest at 12% was uncalled for and excessive.

17. Apart from the fact that the above ground cannot be read as even remotely alluding to any of the grounds urged during arguments as noted above, Ground D contains statements that are factually erroneous. It ignores the fact that a Committee appointed by NHAI itself had given a report confirming that the material used for the GSB work was "generally comparable to closely graded GSB material (except for marginal variation with regard to percentage passing through IS Sieve size 0.42 mm and 0.07 mm) as specified in the MOST Specifications outlined in the Contract Agreement." The DRB relied on that report to conclude in its recommendation dated 7th September, 2006 that "the GSB material used met the requirements of the Specifications." The NHAI not having questioned the findings of the DRB cannot now be heard to plead to the contrary.

"5.9 AT observes that Respondents have already stated in the Variation Order that material used was GSB equivalent material. 'However, the concern of Respondents was only about Compaction and Quality Control measures.

We find that the maximum input for compaction, in the cost of GSB work, comes to 16.794%. The Respondents have assessed that the compaction of the non-BOQ item is lesser by 30% viz-a-viz a compaction of the GSB work as per MORT&H specifications. So, when we take 30% of 16.794% it comes to 5.038%. Further when we add 2% on account of inadequate Quality Control measures as assessed by the Respondents, the total comes to 7.038%.