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XXV. As such now coming into the issue of evidence in support of this claim of overhead which has been allowed by the learned arbitrator.

Trade usage or industrial practice have all along been considered as a valid form of evidence.

In order to support Trade usage in form of evidence, documents of Government of India for the purpose of component of Overhead in an irrigation project was brought before the learned Arbitrator by the Claimant vide C-10 which were never objected by the State. The said documents were:

It is further submitted that in a similar matter taking note of this very trade practices in form of evidence for computing overhead expenses to the tune of 5% of the Contract, the learned Arbitrator in the case of "Associate Builders v. DDA"

had allowed the claim of overhead. The Division Bench of the Hon'ble Delhi High Court had taken a note of this very fact with regards to claim no. 15. While dealing with this claim, the Division Bench had negated the stand of the arbitrator taking 5% as a trade usage for grant of overhead expenses which finds mention at paragraph 12 of the said judgment. Finally, the Division Bench had set aside the award and modified the same negating trade usage and evidence of 5% under the head of overhead expenses. Matter was then challenged by the claimants i.e. Associate Builders in Civil Appeal No. 10531 of 2014 before the Hon'ble Supreme Court who negated the findings holding therein that while dealing with appeal under section 37 of the Act of 1996, the scope of interference is quite restrictive and the division bench had exceeded its jurisdiction by re-appreciating the quantity and quality of evidence which was impermissible in eye of law. Finally, accepting the evidence so relied upon by the Arbitrator in form of trade usage for taking note of 5% as overhead values in such contract, the said claim was allowed in the appeal and the award of the Arbitrator involved in the said case was restored. It is submitted that it is no more res-integra that trade usage forms part of an evidence which can be taken note of while allowing the claim for overheads.
Further, the next document i.e. Report of the Rates and Cost Committee which is again a Government of India formed Committee provides that the Government of India considered it necessary to evolve comprehensive standard schedule of rates including detailed analysis of such rates which can be used for basic schedule for all projects.
Both the aforesaid reports suggest that in similar kind of work it is expected that the overhead cost would be 10% of the value of work as such the same forms part of trade usage or industrial practices which has been accepted all along by the Contract Act, 1872 under section 1 as well as under section 28 of the Act of 1996. Further, trade usage has also been accepted in the aforementioned judgment of Batliboi Environment Engineers (Supra) at paragraph 44. Acceptance of trade usage also find mention in the latest judgment of the Hon'ble Supreme Court in the case of "DMRC Ltd. Vs. Delhi Airport Metro Express (P) Ltd." reported in (2024) 6 SCC 357 at paragraph 35. The learned arbitrator has taken a plausible view and need not be interfered under section 34 or section 37 of the Act of 1996.

31. It has been rightly pointed out by the learned counsel appearing on behalf of the State that Article 2.36.1 of the Report of Rates and cost committee published by Ministry of Power and Irrigation, Central Water Power Commission which concerns calculation of estimates for projects is an irrelevant material to allow delay damages on account of overhead expenses. This Court is of the considered view that such approach of the learned Arbitrator and reliance on such material dealing with preparation of estimates for projects goes to the root of the matter and by no stretch of imagination the same can partake character of trade usage much less trade usage pertaining to the transaction. The term used in section 28(3) of the Act of 1996 is trade usage pertaining to the transaction. When seen in the light of the aforesaid judgments regarding scope of interference in arbitral award, this Court is of the view that the award of delay damages on account of loss of overheads is ex- facie perverse being based on no evidence and by taking into consideration irrelevant material in the name of 'trade usage' as explained above. This Court is of the considered view that no fair minded or reasonable person would adopt such a course and is not even a possible view which could have been taken by the learned Arbitrator.