IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. Arb. Case No. 19 of 2009 Reserved on : 18.8.2010 Decided on:22.9. 2010. National Hydroelectric Power Corporation Limited. ...Petitioner. Versus M/s. R.S. Construction Engineers and others. ... Respondents. Coram The Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1 Yes For the Petitioner : Mr. Rajnish Maniktala, Advocate with Mr. Puneet Rajta, Advocate vice Mr. K.D. Shreedhar, Advocate. For the Respondent : Mr. Ajay Kumar, Advocate for respondent No.1. Justice Rajiv Sharma, Judge. This petition has been preferred by the petitioner under section 34 of the Arbitration and Conciliation Act, 1996 against the award dated 8.12.2008 passed by the Arbitral Tribunal. 2. Material facts necessary for the adjudication of this petition are that the letter of award was granted in favour of the respondent-claimant on 30.6.2005 for the construction of “Temporary Executive and Non-Executive Field Hostels, Office Building and Store at Behali/Sapangini for Parbati (Stage-III). The 1Whether the reporters of the local papers may be allowed to see the Judgment? Yes value of contract was Rs. 1,69,42,063/-. The date of start of the work as per clause 2 of the letter of award was 15.7.2005. The proposed date of completion of work as per agreement was 14.4.2006. The dispute arose between the petitioner and respondent-claimant. Respondent-claimant invoked arbitration proceedings. It filed statement of claims on 8.10.2007. Petitioner filed written statement of defence on 16.11.2007. Respondent- claimant filed rejoinder on 18.12.2007. The admission/denial of documents was held on 28.12.2007. Following issues were framed on 22.5.2008: 1. “Whether the jurisdiction of the Engineer-in-charge will be attracted in terms of Clause 53 : Finality Clause in respect of claims 2,3,4 and 5 in so far as they relate to “matters regarding materials, workmanship, removal of improper waste, interpretation of the contract drawing and contract specifications, mode of procedure and carrying out of work”? 2. Whether the acceptance of the contractual work by the claimant and reduction in rates was a result of pressure by the respondent during the negotiations? 3. Whether the site allotted was technically not safe. And whether the flash flood in river Sainj washed away the entire site along with the infrastructure raised on it? Whether the flash flood was unprecedented to attract the ‘force majeure’ clause 32 of the Contract and whether the possession of the site was given before the occurrence of flash flood and work undertaken before the occurrence of the flash flood? 4. Whether the claimant suffered any loss on account of flash floods, and, if so, whether he is eligible to claim losses incurred for the same from NHPC? 5. Whether the claimant suffered any loss due to prolongation of contract period? 6. Whether the claimant suffered any loss on account of reduction of work and whether abandonment of work by the claimant was the result of any default on the part of NHPC and whether the claimant suffered any loss in this regard? 7. Whether claimant sustained any loss on account of steel being issued to him without following standard procedure of measurement and weighing? 8. Whether there was any loss of business and social reputation suffered by the claimant? 9. relief.” 3. Respondent-claimant tendered evidence. It produced three witnesses. CW-1 Vijay Patial was examined on 27.6.2008. He was cross-examined on 27.6.2008 and 28.6.2008. CW-2 Joginder Pal was examined on 12.9.2008 and was cross- examined on 12.9.2008 and 13.9.2008. CW-3 was discharged being not examined on 27.6.2008. Petitioner-corporation tendered evidence by producing Jaswant Rai, Engineer (C) PHEP-III. He was examined on 13.9.2008 and was cross- examined on that day itself. The learned Arbitral Tribunal awarded a sum of Rs. 23,16,750/- in favour of the respondent- claimant and the same was directed to be paid within 90 days from the date of receipt of award dated 8.12.2008. 4. Mr. Rajnish Maniktala has strenuously argued that the learned Arbitral Tribunal could not award the compensation from the date of occurrence of flash flood upto 21.2.2006. He then contended that respondent-claimant being unregistered firm, could not institute arbitration proceedings. 5. Mr. Ajay Kumar has supported the award passed by the learned Arbitral Tribunal. 6. I have heard the learned counsel for the parties and have perused the pleadings carefully. 7. Flash flood came in the river on 6/7.7.2005. Claimant prayed vide Ex.C-10 dated 7.7.2005 to provide alternative site. The total loss caused as per letter Ex. C-10 was Rs. 1,35,330/-. The respondent-claimant claimed a sum of Rs. 15,53,460/- on account of loss vide letter Ex.C-10/A dated 9.7.2005. The request for allotment of alternative site was reiterated by the claimant on 28.8.2005. The claimant has given the list of workers to the petitioner-corporation on 23.9.2005. The claimant again reiterated the request for allotment of site on 13.10.2005. The claimant informed the corporation about the non-availability of the site due to which the labour was sent to Palampur. Petitioner-corporation gave option to the claimant whether he wanted to execute the work or abandon the same vide letter dated 17.11.2005. Respondent-claimant informed the petitioner on 24.11.2005 that it was interested to execute the work. The claimant informed the petitioner-corporation on 14.1.2006 that it was not interested to execute the work and same may be treated to be abandoned. Consequently, petitioner-corporation ordered to abandon and foreclose the work vide Ex. C-23 dated 21.2.2006. 8. A bare perusal of the documents discussed hereinabove makes it abundantly clear that the claimant had been requesting the petitioner to provide alternative site for execution of Group ‘A’ and ‘B’ works. The claimant requested the petitioner for extension of completion of period and prayed for revised date as per letter dated 2.1.2006 (Annexure C-17). It is in these circumstances, the claimant abandoned the work. It is not in dispute that the flash flood occurred on 6/7.7.2005. CW-1 in his cross-examination admitted that notice of abandonment was received by the corporation. The corporation had offered to give alternative site. The proposal was though acceptable to the claimant but he could not execute it since the nature of work was shifted from temporary to permanent. Petitioner-corporation vide letter dated 17.11.2005 admitted that there may be slight variations due to modification in the buildings leading to extra items/deletion of items and gave option to the claimant as to whether it wanted to execute the work of temporary executive and non-executive field hostels as per modified drawings or wants to abandon the same. The nature of work had changed from temporary to permanent. The claimant was provided with revised drawings/design relating to column footings and foundation adopting RCC structure. RW-1 has admitted in his cross- examination that Group ‘A’ and ‘B’ works allotted to the claimant were temporary in nature, whereas presently the type of construction underway was totally permanent. The Arbitral Tribunal on 29.7.2008 has directed the petitioner to produce relevant records and documents (revised drawings) on 12.9.2008. Petitioner did not produce the same. CW-1 has not been cross- examined by the petitioner-corporation regarding the details of loss due to prolongation. It is in these circumstances, that the learned Arbitral Tribunal has relied upon Hudson formula to come to a conclusion that respondent-claimant was entitled to compensation of Rs. 23,16,750/-. The contract period was 9 months or 39 weeks. The date of contract was 1.6.2005 and the date of abandonment was 21.2.2006 as per Ex.C-23. The delay has been calculated by the Arbitral Tribunal for a period of 261 days or 37.3 weeks. 9. Mr. Rajnish Maniktala has argued that the respondent-claimant could not initiate the arbitration proceedings under the Arbitration and Conciliation Act, 1996. It has come on record that the petitioner-corporation has moved an application under section 16 of the Act on 16.11.2007. The reply was filed by the respondent-claimant on 18.12.2007. Arguments were heard by the Arbitral Tribunal on 12.3.2008 and the application was decided on 10.5.2008. The Tribunal has come to a right conclusion that the respondent partnership firm has been registered in the name and style of “R.S. Construction” and the contract agreement was signed by the R.S. Construction. 10. Mr. Ajay Kumar also submitted that the partnership deed was supplied to the petitioner-corporation. The work in question was allotted to M/s R.S. Construction, Palampur, District Kangra. Necessary documents to this effect were filed with the tendering authority, i.e. petitioner-corporation. The same were accepted by the petitioner-corporation prior to signing of the contract agreement. Each page of contract agreement was signed and stamped by R.S. Construction and the payment cheques were also issued in the name of R.S. Construction. It is only after the petitioner satisfied itself on the validity/legality of the partnership deed, the work was allotted to the respondent- claimant vide letter dated 30.6.2005. Accordingly, it is held that respondent-claimant has rightly instituted the arbitration proceedings under the Arbitration and Conciliation Act, 1996. 11. The method adopted for computation of damages will always dependent on facts and circumstances of each case. It is open to the Arbitral Tribunal to adopt either Hudson Formula, Emdon Formula or Eichley Formula on the basis of the facts of case. In the instant case, Hudson Formula adopted by the Arbitral Tribunal is approved. How the claim is to be determined is for the Arbitral Tribunal to decide. 12. Learned Tribunal on the basis of correct appreciation of oral as well as documentary evidence has made the award. Learned Tribunal has given elaborate reasons while passing the award. There is neither any illegality nor any procedural irregularity in the award made by the Arbitral Tribunal. The scope of interference by the Court in these matters is very limited. It can re-appreciate the evidence only if there is any perversity or the findings are based on no evidence. The Arbitral Tribunal has given sufficient reasons in support of the award. 13. Accordingly, in view of the observations made hereinabove, there is no merit in the petition and the same is dismissed. However, there shall be no order as to costs. (Rajiv Sharma), Judge. 22.9. 2010. *awasthi*