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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 ..... withdrew the work relating to the construction of two ROBs (LC-200 and LC-233) from the scope of work and certified the completion of the remaining work. There is no dispute that we are not concerned with LC-200 and LC-233 in this appeal. In the case of LC- 89 and LC-228, the scheduled completion date was 15th September, 2013. For LC-108, it was 16th July, 2013. As per the completion certificate dated 22nd March 2016, the work of LC-89 was completed on 8th October 2014, and the work of LC-228 was completed on 21st March 2015. According to the appellant's case, work at LC-108 was completed on 31st March 2017. 3. On 19th June 2013, the appellant addressed a letter to the respondent's General Manager stating that the construction delay of ROBs at LC-108 was due to various hindrances at the site. By the said letter, the appellant requested the respondent 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tles the appellant from raising any claim for damages or compensation for failure or delay caused by the respondent in fulfilling its obligations under the contract. The Arbitral Tribunal passed the order in the respondent's application under Section 16 of the Arbitration Act in nature of an award dated 21st December, 2019 by which all claims were rejected based on clause 49.5 of GCC. 8. Aggrieved by the impugned award dated 21st December 2019, the appellant preferred a petition under Section 34 of the Arbitration Act. The learned Single Judge of the High Court of Delhi dismissed the petition, holding that a term like clause 49.5 of the GCC would bar the appellant's claim. Moreover, the appellant had accepted the communication dated 14th October 2014, issued by the respondent dismissing the claim. It was also held that clause 49.5 was valid and, after 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of ONGC v. Wig Brothers Builders and Engineers Private Limited (2010) 13 SCC 377. He submitted that the appellant made an irreversible election to accept the extension of time in terms of the agreed scheme of the contract between the parties without payment of liquidated damages. Therefore, the appellant is not entitled to make any additional claim for compensation and/or damages beyond the stipulations in the contract and contrary to the express prohibition in clause 49.5 of GCC. He pointed out the letters addressed by the respondent by which initially liquidated damages/penalty were imposed on the appellant for the delay. However, on the request made by the appellant, the respondent granted an extension of time by waiving liquidated damages. Therefore, the appellant made an irreversible election to accept an extension of time under clause 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 15th December, 2014 respectively, without penalty. It is pertinent to note that in these letters, the appellant did not state that it would be making any claim on account of the delay on the part of the respondent. On 28th February, 2014, 9th April, 2014 and On 19th April, 2014, by separate letters, the appellant applied for grant of extension of time for all three ROBs without penalty. 14. By letter dated 24th May, 2014, the respondent approved the extension of time for LC-228, LC-89 and LC-108 up to 31st January, 2015, 30th November, 2014 and 15th December, 2014 respectively. The extension was granted without penalty. Thus, based on the requests made by the appellant, while granting further extension, the respondent waived the penalty. 15. Thereafter, on 03rd September, 2014, the appellant addressed three separate letters to the respondent raising monetary 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 admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of time on three occasions; b) The claim in the letter dated 25th January, 2017 was made by the appellant after giving solemn undertaking on 14th January, 2015 not to make any claim other than escalation in respect of delays in the completion of work. The claim made was contrary to the undertakings; c) By the undertakings, the appellant agreed not to make a claim contrary to what is provided in clause 49.5; and d) Therefore, by conduct, the appellant was estopped from challenging the validity of clause 49.5. 20. At this stage, we must refer to the decision of the learned Single Judge in the petition under Section 34 filed by the appellant. The contentions raised by the appellant have been reproduced by the learned Single Judge of Delhi High Court in paragraphs 12 and 13 of the Judgment. Paragraphs 12 and 13 read thus: "12. Mr. Naveen Kumar, 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid issue. Careful perusal of the judgment of the learned Single Judge shows that the contention that the validity of clause 49.5 ought to be decided in the light of Sections 23 and 28 of the Contract Act was not raised before the learned Single Judge in a petition under Section 34. The said contention was not raised even before the Division Bench in appeal under Section 37. Therefore, it is not open to the appellant to raise the said contention in this appeal for the first time. 25. A contention was raised for the first time in appeal under Section 37 that clause 49.5 was waived by the respondent. Apart from the fact that said contention could not have been raised for the first time in appeal under Section 37 of the Arbitration Act, on the applications made by the appellant specifically invoking clause 49, the respondent granted an extension of time 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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" [ref : Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , SCC p. 81, para 42]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34." (emphasis added) 28. In the case of Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking (2023) 9 SCC 85 in paragraph 18, this court held thus: "18. At the outset, we may state that the jurisdiction of the court under Section 37 of the Act, as clarified by this Court in MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] , is akin to the jurisdiction of the court under Section 34 of the Act. [Id, SCC p. 167, para 14:"14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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