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TMI Blog2025 (2) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... e granted at the instance of the appellant by invoking clause 49. Hence, the argument of waiver of Clause 49.5 by the respondent deserves to be rejected. Moreover, detailed claim, as stated in the letter dated 14th October, 2013 was not submitted by the appellant. As far as scope of interference in an appeal under Section 37 of Arbitration Act is concerned, the law is well settled. In the case of Larsen Air Conditioning and Refrigeration Company v. Union of India and Ors. [2023 (8) TMI 985 - SUPREME COURT], this court held that 'the limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality i.e. that "illegality must go to the root of the matter and cannot be of a trivial nature"; and that the Tribunal "must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground"' In the case of Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking [2023 (8) TMI 1227 - SUPREME COURT], this court held 'Scope of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent to grant an extension of 264 days. The appellant contended that the delay in construction work has resulted in an additional financial burden on account of the establishment and overheads, etc., for a longer period than planned, for which the appellant would be claiming separately. By the reply dated 14th October 2013, the respondent informed the appellant that the statement of the appellant that it would be claiming separately for financial burden was not acceptable. The respondent stated that the claim would have to be considered along with the prayer for extension. Therefore, the respondent requested the appellant to submit a detailed claim immediately so that the prayer for an extension of time could be considered. Separate letters dated 30th August, 2013 were addressed by the appellant to the respondent regarding LC-89 and LC-228 for grant of extension by 430 and 437 days, respectively. By a letter dated 29th November, 2013, the respondent granted an extension of time as follows: LC No. Extension Upto Penalty 228 20th March, 2014 With Penalty 89 28th February, 2014 With Penalty 108 31st March, 2014 Without Penalty 4. On 28th February, 2014, 09th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appellant accepted the same, it could not contend to the contrary. 9. Being aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court of Delhi by invoking Section 37 of the Arbitration Act. While dismissing the appeal, the Division Bench held that the requirement of clause 49.5 was never waived by the respondent. The Division Bench held that clause 49.5 was a valid clause. After holding that the powers of the Court while dealing with an appeal under Section 37 of the Arbitration Act are limited by Section 34, the Division Bench dismissed the appeal. SUBMISSIONS 10. The learned counsel appearing for the appellant has made detailed submissions. His first submission is that the award of the Arbitral Tribunal was contrary to public policy and suffered from patent illegality. The learned counsel also pointed out that the main issue was whether a clause prohibiting the payment of damages, like clause 49.5, could be enforced. He submitted that the Arbitral Tribunal and the learned Single Judge failed to appreciate the crucial aspects striking at the root of the award. The learned counsel pointed out vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 49.5 of GCC. He relied upon three letters addressed by the appellant in which the appellant agreed not to make any claim other than escalation against the respondent because of the delay on the part of the respondent for which an extension of time has been sought. He pointed out that the claim for damages was raised two years after the date of the last extension. Learned counsel would, thus, submit that the appellant has lost its right to challenge clause 49.5 and therefore, no interference is called for with the impugned judgment. OUR VIEW 12. We are concerned with three ROBs bearing numbers LC-89, LC- 228 and LC-108. Clause 49.5 of GCC reads thus: "49.5 Delays due to Employer/Engineer In the event of any failure or delay by the Employer/Engineer in fulfilling his obligations under the contract, then such failure or delay, shall in no way affect or vitiate the contract or alter the character thereof; or entitle the Contractor to damages or compensation thereof but in any such case, the Engineer shall grant such extension or extensions of time to complete the work, as in his opinion is/are reasonable." (emphasis added) 13. Initially, by a letter dated 11th February, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onetary claims on account of the delay on the part of the respondent. The respondent replied on 14th October, 2014 by separate letters. The letters are identical. For the sake of convenience, we are referring to the letter of the respondent in respect of LC-108, which reads thus: "The claim of Rs. 65696068/- is not at all admissible and acceptable. The time extension which has been granted to you without penalty is not at all basis of any claims as per clause 49 of General Conditions of Contract. As per clause No. 4.1 of Special Conditions of Contract your claims is not tenable. The same was already discussed with you earlier and in response to that you had removed your lines of "It is also to mention here that delay in work is resulting in additional financial burden on us on account of establishment and over heads and cost overrun etc., for a lengthier period than planned, for which we will be claiming separately" from your request letter for extension of time. That time you were also agreed with it and re submitted your request letter without such lines. Once again you are requested to complete the work within the extended period and do not waste your time as well as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar, learned counsel for the petitioner has primarily submitted that the Tribunal has clearly erred in accepting the application of the respondent under Section 16 of the Act of 1996. The Tribunal should have allowed the petitioner to produce evidence that the delay in discharging the obligations under the contract was clearly on the respondent and as such, the petitioner was entitled to the claims, which were in the nature of damages. 13. That apart, he has drawn my attention to various documents to contend that the respondent had by its own conduct, not adhered to Clause 49.5 of the GCC. In support of his submission, he has drawn my attention to page 670 of the documents, wherein the respondent in its communication to the petitioner has stated for grant of extension of time, the petitioner's claims for additional financial burden has to be dealt together. In other words, the respondent has agreed with the claim of the petitioner for additional financial burden. Mr. Kumar has relied upon the judgment reported in MANU/SC/1620/2009, Asian Techs Ltd. v. Union of India, in support of his submission that de-hors a stipulation which bars a claim, still the Arbitrator can conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on more than one occasion. On this behalf, much capital was sought to be made about what is stated by the respondent in its letter dated 14th October, 2013. Though the said contention could not have been raised in an appeal under Section 37 still, we are examining the same. In the letter dated 14th October, 2013, the respondent stated: "Vide above mentioned letter, you have requested for extension of time for a total of 264 days. However, in, your letter you have mentioned as under: "it is also mentioned here that delay in work in resulting in additional financial burden on us on account of establishment and over heads etc., for a longer period than planned, for which we will be claiming separately" For grant of extension of time, your claim for additional financial burden has to be dealt together with the proposal of extension of time. Hence, your statement that you will be claiming separately for additional financial burden is not acceptable. Hence, you are requested to submit your detailed claim immediately so that your request for extension of time can be processed early." 26. By no stretch of imagination, after reading the said letter it can be inferred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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