2021 (5) TMI 623 - SC - Indian Laws

Refund of the rebate agreed upon by the parties - grant of escalation of charges for work done beyond the scheduled period - costs imposed on the appellant by all three forums - HELD THAT - It is an admitted fact that there was substantial delay attributable to the appellant in handing over the sites for the 68 B, C and D quarters to the respondent. The appellant has not contested this finding before us. 16. With respect to the first issue, viz., on the issue of refund of rebate, the Arbitrator held that the rebate of 16% on the price of construction of 100 units of A and B quarters was given by the respondent on the condition that he would be able to execute both the works simultaneously. The Arbitrator interpreted the rebate as a conditional one on analysis of the documents on record, particularly the letter dated 14.06.1988 sent by the respondent to the appellant subsequent to the negotiations held between them, the award of both contracts to the respondent on the same date and the works programme (L2) for both the works. Grant of escalation charges for work done by the respondent beyond the scheduled period of the contract - HELD THAT - The Arbitrator took a view on the construction of the clauses of the contract that the firm price clause operated only with respect to the period for which the contract subsisted, and would not subsist beyond the scheduled period of the contract. The Arbitrator also noted that the appellant accepted the work undertaken by the respondent beyond the period of the contract without objections. The Arbitrator also carefully assessed the period of delay attributable to the appellant and awarded escalation to the respondent only for the same. The contractual clause stipulates only that the price would be firm during the period of execution of the contract , which the Arbitrator took to refer only to the 12 month period originally stipulated for the execution of the contract. This may appear to be a technical distinction, but it must be remembered that construction of a contract is in the domain of the Arbitrator, and as long as the interpretation given is a possible view, the Court may not interfere with the same - the view taken by the Arbitrator was a possible one, and cannot therefore be interfered with by the Courts. Any decision regarding the issue of whether an arbitrator can award a particular claim or not, will revolve on the construction of the contract in that case, the evidence placed before the arbitrator and other facts and circumstances of the case. No general principle can be evolved as to whether some claim can be granted or not. The judgments placed on record by the appellant, wherein claim for escalation was denied, have to therefore be read in the context of their facts, and cannot be read in isolation - the appellant has neither been able to point out any error apparent on the face of the record, nor otherwise made out a case for interference with the award by the Arbitrator with respect to this issue. Appeal dismissed.

Summary

Issues Involved:
1. Refund of the rebate agreed upon by the parties.
2. Grant of escalation of charges for work done beyond the scheduled period.
3. Costs imposed on the appellant by all three forums below.

Issue-wise Detailed Analysis:

1. Refund of the rebate agreed upon by the parties:
The Arbitrator held that the rebate of 16% on the price of construction of 100 units of A and B type quarters was conditional upon the respondent being able to execute both works simultaneously. The Arbitrator based this interpretation on documents, particularly a letter dated 14.06.1988, the award of both contracts on the same date, and the works programme (L2) indicating simultaneous execution. The appellant's failure to deny the L2 programme supported this interpretation. The Arbitrator concluded that the appellant's delay in handing over the sites breached the condition for the rebate, entitling the respondent to a refund. The Court agreed that the Arbitrator's interpretation was reasonable and upheld the award, emphasizing that it does not sit in appeal over an arbitrator's decision as long as a possible view is taken.

2. Grant of escalation of charges for work done beyond the scheduled period:
The Arbitrator awarded escalation charges for work done beyond the contract period, attributing the delay to the appellant. In Civil Appeal No. 6483 of 2014, the Arbitrator awarded ?17,86,212 against a claim of ?66,98,773, and in Civil Appeal No. 6484 of 2014, ?3,03,419 against a claim of ?42,20,261. The Arbitrator interpreted the firm price clause as applicable only during the original contract period, not beyond. The Arbitrator's decision was based on the appellant's acceptance of work beyond the contract period without objections. The Court upheld this interpretation, referencing similar judgments (e.g., Assam State Electricity Board v. Buildworth Private Limited) and distinguishing the present case from others cited by the appellant, such as New India Civil Erectors (P) Ltd. v. ONGC, where specific contract clauses excluded price escalation.

3. Costs imposed on the appellant by all three forums below:
The appellant contested the costs imposed by the forums below. However, the counsel for the appellant did not press this issue, and considering the quantum involved, the Court was not inclined to interfere with the costs imposed.

Conclusion:
The Supreme Court found no reason to interfere with the High Court's judgment. The Civil Appeals filed by the appellant were dismissed, and the appellant was directed to pay the pending amounts to the respondent within six months from the date of the judgment. Pending applications were also disposed of.