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TMI Blog2019 (4) TMI 2160X X X X Extracts X X X X X X X X Extracts X X X X ..... plank that contractor had not reviewed the design to the entire satisfaction of RSP, i.e., for successful completion of the project. This Court has also reminded itself of Hodgkinson principle. Hodgkinson principle has been explained by Hon'ble Supreme Court in the oft-quoted and celebrated Associate Builders case being Associate Builders Vs. Delhi Development Authority [ 2014 (11) TMI 1114 - SUPREME COURT] . Hodgkinson principle in simple term means that AT is the best judge with regard to quality and quantity of evidence before it. This coupled with Vedanta principle if put in the form of a theorem would translate into 'as long as interpretation of covenant in a contract by AT is a possible view and as long as it is based on reasonable construction, the Court will not interfere under section 34'. In this view of the matter, this court is unable to persuade itself to believe that there is infarction of sub section (3) of section 28. To put it differently, this Court is unable to persuade itself to hold that AT has not decided in accordance with the terms of contract. This court has no hesitation in holding that the instant O.P is liable to be dismissed. - THE HON' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of disputes by way of arbitration. It is not necessary to advert to the same as there is no disputation before this court about the constitution of AT or jurisdiction of AT. This is mentioned only for completing narration of facts. 5 From the narration thus far, it will come to light that work which the contractor had an obligation to do under said contract is in the nature of supervision services which has been alluded to supra and for the sake of convenience and clarity, this shall be referred to as said services . Suffice to say that arbitrable dispute arose between contractor and RSP with regard to said services which were to be provided by contractor under said contract resulting in constitution of AT in the aforementioned manner. As already mentioned supra, before AT, RSP was the sole claimant and contractor was the lone respondent. 6 RSP as claimant before AT made claims under three heads and they are as follows : 1. Claim No. 1 Claim due to Breach of Contract Rs. 8,37,10,916/-. 2. Claim No. 2 Claim due to non usage of road Rs. 14,72,92,500/- 3. Claim No. 3 Payment of interest @ 18% per annum from the date of submission of the claims to the sole arbitrator till the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the Respondent is entitled for an amount of Rs. 21,36,489/- towards rehabilitation design services. 10) Whether the Respondent is entitled for an amount of Rs. 3,89,676/- towards other expenses viz. remuneration, insurance, travel etc. 11) Whether the parties are entitled to interest and if so, to what rate and for what period? 12) To what other reliefs are the parties entitled? 10 No oral evidence was let in before AT, but as many as 52 documents were marked on the side of RSP as claimant (Exs.C.1 to C.52) and as many as 54 documents were marked on the side of contractor as sole respondent (Exs.R.1 to R.54) . Oral hearings were held before AT. After full contest, AT made the impugned award. Impugned award is largely in favour of RSP as it had directed the contractor to pay a sum of Rs. 47,07,849/- along with pendent lite interest at the rate of 8% per annum and 12% post award future interest. 11 With regard to claim No. 1 of RSP being a claim of little over Rs. 8.37 Crores towards breach of said contract, it was partly allowed and Rs. 1,41,42,656/- (little over Rs. 1.41 Crores) was awarded. With regard to claim No. 2 made by RSP being a claim of little over Rs. 14.72 Crores t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards have been made by different ATs and arbitrable disputes arose out of different contracts, but the common thread is they pertain to the same project and RSP is the common entity in all three O.Ps. As it was contended by contractor in each of the O.Ps that they were not aware of disputes and as to what transpired before AT in other matters, this course was adopted. To be noted, when each of the three O.Ps were heard out, counsel in the other O.Ps were present before this Court. Ultimately, each of these O.Ps are being decided on their own merits. In this view of the matter, independent orders are being pronounced in the other two O.Ps also. To be noted, though orders in the other two O.Ps are also being pronounced on the same day, they are independent orders which have been made on the basis of the merits of respective O.Ps. 16 Reverting to the instant O.P, Mr.S.V.S.Chowdhry, learned counsel representing the counsel on record was before this Court on behalf of contractor and Mr.Sricharan Rangarajan, learned Special Government Pleader was before this court on behalf of RSP. 17 Learned counsel for contractor contended that AT has fallen in error in the construction of covenants in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice could not have been received by noticee / addressee prior to 16.7.2013, for the purpose of convenience, it is taken as date of commencement of arbitral proceedings notional though. There is no disputation or disagreement before this Court that 17.04.2015 is the date on which AT entered reference. As both parties agreed that argument of the contractor predicated on section 28(3) , as it existed prior to 23.10.2015, can be considered, the question as to whether the provision as it existed prior to 23.10.2015 or post 23.10.2015 will apply to cases of this nature is left open to be decided in a matter where there is serious contest in this regard. 20 Be that as it may, in the light of the specific and pointed submission made by learned counsel for contractor, this court deems it appropriate to extract clauses 6.2.1 and 11.2 in entirety and the same read as follows : Clause 6.2.1: 6.2.1 The principal responsibilities of the Engineer will be, but not limited to, the following: (a) to carry out generally all the duties of the Engineer as specified in the construction Contractor, within the limitations specified therein. (b) to carry out design review for pavements struc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment certificates when quality of works are satisfactory and quantities are correct; (n) To assist the Employer in monitoring the progress of the works and in project implementation through computer aided project management techniques and Management Information Systems (MIS) ; (o) To direct the contractors to take all necessary steps including those mentioned in the construction contract to protect the environment on and off the site which arise due to construction operations; (p) To control and appraise the progress of the works, to order suspension of works and to authorize, with the Employer's approval, extensions of the period of completion of works. (q) To inspect the works, during the construction period and the Defects Liability Period and to issue Defects Liability Certificates after the rectification, by the Contractor, of possible defects; (r) to advise the Employer on all matters relating to execution of the works, claims from the Contractor and to make recommendations thereon, including the possible recourse to arbitration; (s) to prepare as necessary detailed recommendations to the Employer for contract variations and addenda to ensure the best possible technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the contract negotiations. (hh) Has to refer to the civil works agreement before taking decision according to the Contract Administration clauses [Variations, EoT, assignment of works changes in legislation, termination etc.] Clause 11.2 : 11.2 SCOPE OF WORK FOR MAJOR DESIGNS MODIFICATIONS AND/ OR NEW DESIGNS ON CALL BASIS The scope of work shall cover the following, but not limited to: (i) additional input of supervision consultant shall be required on structural design revisions conforming to latest IRC specifications; (ii) design changes suggested to meet the requirements and getting approval of Southern Railway for Road Over Bridges and Public Works Department (PWD) for structures across their regulated river courses besides liasoning with Southern Railway and PWD; (iii) major design changes and/or new designs, which may arise due to change in alignment or due to other reasons during implementation in the absence of PCC; (iv) The consultant shall be responsible for modifications of designs for Geometrics, pavements, culverts, both minor and major bridges, RoBs, etc and preparation of detailed drawings, BoQs and cost estimates for any major changes in designs and/ or new de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not plead what it was doing for the first two months from the start of the assignment earmarked for review of design and bid documents. Therefore, the Respondent failed to perform its principal duty of reviewing the design and thereby breached the contract. The issue No. 4 is decided in favour of the Claimant and against the Respondent. 23 To buttress the aforesaid submissions, learned counsel for contractor submitted that contract with J.S.R. Constructions Pvt. Ltd. is dated 23.6.2008 but for the period between 23.6.2008 and 2.3.2009, there was no supervision consultant, the Divisional Engineer (Highways) officiated as supervision consultant and the contractor stepped in only with effect from 2.3.2009. 24 The aforesaid argument does not hold water in the light of the finding rendered by AT while dealing with issue No. 3. After analysis of documentary evidence before it, AT has returned a finding that the DPR was available with the contractor from the month of July 2009 and it is not from 2.3.2009. Thereafter, AT on a further analysis of documentary evidence, has also returned a finding that design for one retaining wall alone might have been approved by the Superintending Engin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in (2019) 4 SCC 163 for the proposition that interpretation of the term of contract, conduct of parties and correspondence exchanged are within the Arbitrator s jurisdictional domain. Vedanta judgment was pressed into service to emphasis that even with regard to construction of terms of agreement, if the view taken by the AT is a possible view based on reasonable construction of terms of contract, High Courts exercising its power under Sections 34 and 37 of A and C Act will be slow to exercise judicial intervention. Relevant paragraphs are paragraphs 26 and 16 which reads as follows : 26.Based upon the above discussion, in our opinion, the view taken in the majority award, as confirmed by the High Court in the exercise of its powers under Sections 34 and 37 of the 1996 Act, is a possible view based upon a reasonable construction of the terms of the agreement dated 14-12-1993 between the appellant and the respondent and consideration of the material on record. We are also of the opinion that the dispute was covered under the agreement between the appellant and the respondent dated 14-12-1993, and as such the dispute is governed by the arbitration clause under the said agreement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractor is to the effect that there is infarction of section 28(3) of A and C Act and therefore, that has resulted in impugned award being in conflict with public policy of India. When answer to the infarction of section 28(3) itself is in the negative, it would be otiose and a completely superfluous exercise qua adjudication in instant O.P to examine whether such infarction in the factual backdrop of this case can be elevated to saying that it has resulted in impugned award being in conflict with public policy of India. 31 To be noted, this court has noticed that sheet anchor submission of learned counsel for petitioner was that contractor cannot review the geo-technical report / design or DPR. To put it in the language of learned counsel for petitioner / contractor Mr.S.V.S.Chowdhry, learned counsel submitted that DPR design and geo technical design are petitioner's bible and any review is forbidden. Therefore, as this court has come to the conclusion which is not in the affirmation qua sheet anchor submission of learned counsel for contractor / petitioner, instant O.P fails. This court has no hesitation in holding that no judicial intervention qua impugned award is warran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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