Arbi.appeal 7.10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD ARBITRATION APPEAL NO. 7 OF 2010 M/s Balraje Construction, 4, Saraswati Colony, Georai, Tal. Georai, Dist. Beed. ..Appellant. Versus The Maharashtra State Electricity Transmission Co. Ltd. (Formerly Maharashtra State Electricity Board) through the Executive Engineer, Civil Division, EHV, Civil Construction Division Complex, 3rd Floor, Aurangabad – 431 001. ...Respondent. Mr. Amol K. Gawali, for appellant. Mr. A.S. Golegaonkar, for respondent. CORAM : A.V. NIRGUDE, J. Reserved on : 25th January, 2011. Pronounced on : 25th April, 2011 JUDGMENT 1. By this arbitration appeal the appellant has challenged judgment and order dated 18/01/2010 passed by the Principal District Judge, Aurangabad in M.A.R.J.I. No. 414/2008, by virtue of which, the learned District Court had set aside part of the award passed by the sole arbitrator Shri M.D. Tambekar passed on 02/09/2008. This Court by its order dated 23rd July, 2010 had issued notice to the respondent returnable three weeks, clarifying that the matter would be finally disposed of at the stage of admission and in the mean time record and proceedings were called for. After hearing both the parties, I am disposing of the present arbitration appeal by following order. 2 Factual matrix necessary to decide the present appeal is as under. Arbi.appeal 7.10 2 The appellant was selected as a successful tenderer by respondent No.1 i.e. the Maharashtra State Electricity Board for carrying out the civil work at 2020 K.V. Sub station at Jalna comprising construction of W.B.M. Road, road side gutter, oil sunp, light mast, G.I. Pipe line and metal spreading as appearing in Schedule B of tender. The estimated cost of the tender was Rs.18,07.452/-. The appellant had quoted amount 25% below the estimated cost of work. The offer of the appellant to complete the contract work for Rs.13,55,569/- had been accepted and work order was issued to the appellant on 15/11/2002. It is the contention of the appellant that due to breach of reciprocal promises on the part of the respondent, and non performance of necessary contractual obligation, he had to suffer various difficulties and hindrances in completion of work. By reasons of these difficulties, he could not complete the work within the stipulated time and was required to work on the site for prolonged period, over and above the stipulated period of contract. It was the case of the appellant that he had suffered financial losses, for reasons attributable to the respondents, for which he had claimed damages by making correspondence with the respondent. It is further the case of the appellant that since respondent did not amicably resolved the dispute, he had invoked arbitration clause. Both the parties to the dispute appointed Shri M.D. Tambekar, Retired Chief Engineer as the sole arbitrator. 3 The ld. arbitrator on 02/09/2008 declared the award thereby awarding amount of Rs. 11,96,801/- to the appellant with future interest @ 15% per annum. 4 The respondent being aggrieved and dis-satisfied by the Arbi.appeal 7.10 3 award passed by the sole arbitrator, had challenged the same by filing M.A.R.J.I. No. 414/2008 under section 34 of the arbitration and conciliation Act, 1996, before the Principle District Judge, Aurangabad. The learned District Judge had partly allowed the arbitration appeal and thereby rejected most of the claims of the appellant and set aside most of the award. 5 The appellant has filed this appeal under section 37 of the arbitration Act and challenged the part of the judgment passed by the learned District Court dated 18/01/2010, setting aside some of the claims which were awarded by the sole arbitrator. 6 In this arbitration appeal No. 7/2010, the first claim is in respect of additional work allegedly done by the Contractor. The original contract was for approx. Rs. 18,00,000/- (Rs. Eighteen lakhs). When the work was about to be completed, the Contractor asserted that the employer asked him to do some additional work, which was said to be contingent to the main work. He said that he was required to remove larger boulders and hard murum for leveling the ground. He said that while doing this, he excavated and threw out 859 brass of earth / Murum / boulders. He stated that no amount for compensation was paid to him for this additional work. He stated that he was entitled to claim an amount of Rs. 11,65,000/- (Rs. Eleven lakhs sixty five thousand). The employer opposed this claim by filing reply, in which,they stated that the claim is totally false. However, the Arbitrator held that the Contractor was entitled to compensation to the tune of Rs. 4,50,000/- (Rs. Four lakhs fifty thousand) only for the additional work. The learned District Judge rejected this claim mainly on the ground that this was contingent work, and since the Executive Engineer did not certify it to be a contingent work, the claim is Arbi.appeal 7.10 4 baseless. 1. 7. The reasons recorded by the learned District Judge are found more accurate and based on facts that prevailed between the parties. Besides, the exaggeration on the part of Contractor gives rise to strong suspicion about genuineness of the claim. If the contract work was valued at Rs. 18,00,000/- (Rs. Eighteen lakhs) and odd, the additional work could not have cost at Rs. 11,65,000/- (Rs. Eleven lakhs sixty five thousand). This claim itself was so exaggerated that it is, most probably, a false one. Besides, if the additional work which was contingent, was of such magnitude, it was incumbent on the part of the Contractor to get the work certified as contingent one. Thereupon, he should have asked the Employer to take measurements for making a bill. Admittedly, the employer did not prepare any bill in respect of the disputed work at the later stage. 8. The second claim which has been set aside by the learned District Judge is in regards to the cost incurred by the claimant on account of extra lead for which the arbitrator has awarded amount of Rs.55,700/-. I for the reasons assigned in the arbitration appeal no. 8/2010 in respect of the similar claim of extra lead, have set aside the order of the learned District Judge and remitted the matter back to the arbitrator. 9. The next claim which has been rejected by the learned District Judge is in respect of interest on delayed payment of R.A. Bills awarded by the sole arbitrator. The arbitrator while considering claim no. 9 had awarded Rs.48,990/- as against the amount of Rs.97,000/- claimed by the contractor. I for the reasons assigned in arbitration appeal no. 8/2010 in respect of a similar claim have set aside the order of the learned District Court in respect of setting aside the award Arbi.appeal 7.10 5 on account of interest on delayed payment of R.A. Bill and have remitted back the matter to the arbitrator for assigning reasons for fixing the responsibility for the delay caused. ORDER 1 The judgment and orders of the learned District Judge & Sessions Judge, Aurangabad dated 18/01/2010 passed in M.A.R.J.I. no. 414/2008 is quashed and set aside, to the extent of his setting aside Claim No.2 i.e. extra lead of sand and claim No.9 i.e. interest on delayed payment of R.A. Bill. 1) Utilizing the powers under section 34(4) of the Arbitration and Conciliation Act, 1996, I am sending the case back to the Arbitrator who shall record his reasons as to: a) why the contractor was entitled to transportation charges incurred by him in procuring sand from distant quarries. b) Responsibility of delay caused. 2) The parties shall appear before the Arbitrator on or before 09-05-2011. 3) The record be remitted to the Arbitrator before the date given above. A.V. NIRGUDE JUDGE ts k/2011/April18/arbi.appeal7.10/