: 1 : USJ IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.30 OF 2007 Union of India .. Petitioner V/s. Shri Indrajitsingh Chhabra .. Respondent ..... Mr. Suresh Kumar for the petitioner Mr. Uday Shankar Samudrala for the respondent ..... CORAM : S.C. DHARMADHIKARI, J. DATE : 24th AUGUST, 2009. P.C. : 1. This is a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an award made by the Arbitrators on 11th October, 2006. 2. It is not in dispute before me that the Union of India has filed this petition through the Division Railway Manager (Works), Western Railway, Mumbai -400 008. 3. The petitioner had awarded a contract in favour of the respondent for carrying out the following works:- : 2 : Udhna-Jalgaon Section CTR (P) on existing 90R Rails on CST + 9 sleepers at M + 7 density including deepscreening and recoupment of ballast on existing standard on 15 cum and 223 and 135 to 237 + 15 Kms. 4. It is not in dispute before me that work was started on 1st May, 1998. The period of completion was 7 months. It expired on 20th October, 1998. However, the respondent claimant requested for extension of time by a letter dated 2nd February, 1999. The extension was granted up to 30th June, 1999. Further, a complaint was made on 8th August, 1999 that no work was going on and, therefore, the work should be completed at the earliest. However, reminders were issued but there was no mobilization of work at site. The respondent claimant applied for further extension up to 31st March, 2000 which was granted by letter dated 17th November, 1999. It is the case of the petitioner that the respondent failed to show adequate progress and, therefore, he was given 7 days time but the work would not be completed by him. Since, there were rail fractures frequently, the petitioner got the work done through another contractor M/s. Sayyed Naeemuddin. In the meantime, the respondent started the work again on 26th January, 2000. He was advised by letter dated 8th August, 2000 to complete the remaining work within the period stipulated in the letter. However, he failed to carry out the work and a final extension came to be granted up to 30th April, 2002. : 3 : 5. It is the case of the petitioner that the running bills for the works actually carried out were paid from time to time and it was clarified to the respondent that having sought extension of time for non-completion of the works within the stipulated period, he would not be entitled to any claims including damages or extra work. In these circumstances, there were no question of any dispute or differences which could have been referred to arbitration. 6. In any event, according to Mr. Suresh Kumar all that could have been referred to for arbitration is the dispute with regard to non-payment of the running bills for the works actually carried out and all other claims could not have been awarded. He has invited my attention to clause 17-A(iii) of the Standard General Conditions for use in connection with Engineering works. He has also invited my attention to clause 64 and has contended that so far as the award on claim Nos.3 to 5 and for interest is concerned, the same is clearly contrary to the terms and conditions of the contract and, therefore, the award must be set aside. 7. on the other hand, Mr. Samudrala appearing for the contractor respondent urged that the Arbitrators have rightly awarded the claims in so far as final bill and refund of security deposit. In so far as claim Nos.3 to 5 : 4 : and interest is concerned, he urged that the award is based on material produced and, therefore, there is no question of any interference with the same. The award is not contrary to the contract and, therefore, the petition challenging the award be dismissed. 8. After the matter was argued for sometime and the attention of the Court was invited to the relevant terms of the contract, it was agreed by both sides before me that the Award cannot be sustained so far as the claim Nos.3 to 5. The Award also cannot be sustained in so far as grant of interest @ 8% per annum for 4 years (claim No.10). This was the agreement in the light of the terms and conditions which have been relied upon before me and which were also brought to the notice of the Arbitral Tribunal. Further, in each of the letters including the letter dated 8th August, 1999, it was clarified that no amount would be paid for any extra work or damages. Clause No.43(2) and clause No.64(1)(iv) so also clause No.17-A(iii) are concerned, were relevant and, therefore, the Arbitrators could not have ignored the same. In these circumstances, the parties are agreeable that the award be set aside so far as claim Nos.3 to 5 are concerned. It also be set aside partially in so far as claim No.10 (interest is concerned). 9. Both sides are agreeable that claim Nos.1 and 2 pertain to the amount claimed under final bill so also for : 5 : refund of security deposit. The petitioner would have no objection to making payment to these sums which it would make within a period of eight weeks from today. However, the said sum shall carry interest @ 8% from the date of filing of the present petition till payment and / or realization. 10. The award is set aside but since there is an agreement to pay the amounts under final bills and refund of security deposit, these amounts shall be paid. However, from the sum that would be now due and payable, the petitioner would be entitled to deduct a sum of Rs.40,160/-. Hence, after making appropriate deductions from the amount under claim Nos.1 and 2, the balance sum shall be paid with interest as directed above. In the peculiar facts and circumstances, there shall be no order as to costs. Arbitration Petition is disposed off in the above terms by consent of parties. (S.C. DHARMADHIKARI, J.)