Ashoka Buildcon Ltd. v. The State of Maharashtra & Ors

Judgment

. The present respondent No. 1/State of Maharashtra invited offers vide tender notice from entrepreneurs for the construction of Railway Over Bridge on build, operate and transfer (B.O.T.) basis with private finance and toll rights. After the tenders were received a pre-bid conference was held with all the bidders by the respondents and various issues including those raised by the bidders were discussed. Thereafter, common set of deviation along with detailed tender forms were supplied to the entrepreneurs.

02. The tender of the present appellant M/s. Ashoka Buildcon Ltd. was approved and it was issued the work order. The parties entered into a written agreement titled as the concession agreement. The appellant commenced the work. The appellant raised certain claims by way of compensation in the nature of extension of period of concession for collecting the toll at the toll booth, for the reason that considerable delay has been caused on the part of the Government of India and State of Maharashtra on various counts. The claim for extra work was also made. The claims made by the appellant were discussed by the parties and the steering committee consisting of the representative of the Government of India, State of Maharashtra and the appellant. 5 aa 11.11 Except one claim all other claims of the appellant were rejected. The matter was referred to the Arbitrator.

The Government of India nominated Shri M. C. Bhide as sole arbitrator to whom the dispute was referred. The arbitrator allowed the claims of the appellant against the State of Maharashtra. The State of Maharashtra assailed the said award U/Sec. 34 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as "Act of 1996" for the sake of brevity) before the District Judge. The present appellant also moved an application U/Sec. 9 of the Act of 1996 seeking injunction restraining the State of Maharashtra from taking any coercive step against it and preventing it from collecting toll in respect of the said bridge. The District Judge vide his judgment and order dated 06th May, 2011 allowed the application filed by the present respondent/State of Maharashtra U/Sec. 34 of the Act of 1996 and set aside the award passed by the arbitrator, at the same time rejected the application filed by the appellant U/Sec. 9 of the Act of 1996. The said judgment and order are assailed by the present appellant by way of the present appeals.

04. The Arbitration Appeal No. 10 of 2011 is against the rejection 6 aa 11.11 of application U/Sec. 9 of the Act of 1996, whereas the Arbitration Appeal No. 11 of 2011 is directed against the judgment of the District Judge allowing the application of the respondent U/Sec. 34 of the Act of 1996 and setting aside the award of the arbitrator.

05. I have heard Shri R. N. Dhorde, the learned counsel for the appellant and Shri N. N. Singh, the learned counsel for the respondent. They have also submitted written notes of arguments.

06. Shri R. N. Dhorde, the learned counsel for the appellant strenuously contends : a) The District Judge has committed an error in the exercise of its jurisdiction U/Sec. 34 of the Act of 1996. The District Judge could have exercised the jurisdiction only if the award dealt with the dispute not contemplated by or not falling within the terms of submission to the arbitration or in respect of the matters beyond the scope of submission to the arbitration. In view of Clause 11 of the agreement, all the disputes are covered and none of the dispute is beyond the purview of the agreement. The District Judge has committed an error in setting aside the award. b) The District Judge could not have sat over the award as an appellate Court and ought not have re-appreciated the whole 7 aa 11.11 evidence, when appreciation of evidence by the arbitrator was neither perverse, but was the correct appreciation based on the documents on record. For the said purpose the learned counsel relies on the judgment of the Apex Court in a case of Ravindra Kumar Gupta and Company Vs. Unior of India reported in (2010) 1 SCC 409, so also the judgment of Apex Court in a case of K. V. Mohd. Zakir Vs. Regional Sports Centre reported in 2009 AIR SCW 6217. c) The view taken by the arbitrator interpreting the agreement and the clauses of the agreement is a possible view and the District Judge could not have interfered in the matter only because he formed another view. For the said purpose the learned counsel relies on the judgment of the Apex Court in a case of State of Rajasthan Vs. Nav Bharat Construction Company reported in (2010) 2 SCC 182, in a case of G. Ramachandra Reddy and Company Vs. Union of India and another reported in (2009)6 SCC 414 and in a case of Steel Authority of India Limited Vs. Gupta Brother Steel Tubes Limited reported in (2009) 10 SCC

63. d) The reasons given by the Arbitrator for passing the award 8 aa 11.11 and its reasonableness cannot be gone into in view of the provisions of Sec. 34(1)(iv) of the Act of 1996. For the said purpose, the learned counsel relies on the judgment of the Apex Court in a case of Visakhapatana Port Trust Vs. Continental Construction Company (2009) 4 SCC 546. e) Even if there is no clause of escalation in the agreement, still, the escalation can be granted by the arbitrator and in the present matter escalation is granted only on item of diesel that too for a period beyond one year i. e. beyond the period of agreement. The learned counsel relies on the judgment of Apex Court in a case of K. N. Satyapalan (Dead) By Lrs. Vs. State of Kerala and another reported in 2006(12) Scale 654, in a case of Food Corporation of India Vs. M/s A. M. Ahmed and Co. and another reported in AIR 2007 SC 829, in a case of M/s Associated Construction Vs. Pawanhans Helocopters Pvt. Ltd. reported in 2008 AIR SCW 4893, in a case of Union of India Vs. Saraswat Trading Agency and another reported in 2010 AIR SCW 2540. f) The arbitrator is an experienced Engineer who is appointed by the Central Government and when an experienced engineer 9 aa 11.11 possessing technical knowledge takes a view which is a possible view, the interference by the learned District Judge adopting its own interpretation is not permissible. The learned counsel relies on the judgment of the Apex Court in a case of M/s Hind Builders Vs. Union of India reported in AIR 1990 SC 1340. g) The learned counsel further submits that, the work was to be done as per Clause Nos. 1.2.3, 1.2.4 and 1.2.5. The drawings and designs had to be finally approved by the Railway Authorities for railway over bridge for which there was delay. The approval by the Central Railway Authorities was must as per the agreement and the R. O. B. was being constructed over Central Railway Property. Therefore, the delay caused by Central Railway in approving the designs and drawings shall have to be considered. The Appellant is not at fault for said delay. The appellant deserves to be compensated for the same. h) The learned counsel further submits that, as per the Clause at Sr. No. 1.2, 1.3 and 1.4, the said work has to be carried out under the supervision of the Chief Engineer, Nasik Division, Nasik of the Government of Maharashtra and his subordinates who have authority to carry out the work of National Highway on behalf of Central Government. Similarly, even as the delay for carrying out 10 aa 11.11 work due to delay for approval of decision by Railway has been recommended by Executive Engineer, Superintending Engineer and Chief Engineer of concerned authorities for compensation. Therefore, clause (iv) is applicable only to work which has to be carried out at Sr. No. 1.2, 1.3 and 1.4 and not to the Clause No. 1.1 construction that the said work is excepted matter is not correct and the appellant has been granted claim only for work at 1.1. i) The concessionaire was to be compensated for the delay by extension in the concession period beyond two months of reasonable period for approval of drawings and design as per clarification given by the Government in the pre-bid meeting. The clarifications (P-IV) were submitted by all the tenderers at the time of submission of tenders which has been finding of fact by the arbitrator recorded in the minutes dated 01.07.2008. The District Judge could not have gone into finding of fact on record by trying to interpret the contract ignoring the fact. j) The extra work has been carried out about which there is no dispute. The clause in the agreement which is Clause No. 6.4.1 specifically provides for the additional work, which include any class of work. The extra work which has been carried out at rates as per agreement and or schedule of D.S.R. rates of P.W. division 11 aa 11.11 prevailing at the time. The extra work has been held to be proved in respect of Claim Nos. 2, 4, 5 and 6. The appellant is entitled for cost of the same at the rates prevailing. The appellant has not been granted any claim for escalation on the additional work which has been carried out. Therefore, the additional work which has been carried out by the appellant has been rightly awarded by the Arbitrator and this is not Excepted matter, as there is specific provision for additional work i. e. clause No. 6.4.1. The clause No.

6.4.1 clearly indicates that the extra work is envisaged by the parties, and therefore, the clause No. 6.4.1 has been incorporated and, the Arbitrator has acted within his jurisdiction. The permission of Steering Group is not at all necessary. The Arbitrator has rightly interpreted the clause No. 6.4.1. The District Judge has erroneously held that the permission of the Steering Group is necessary in view of Clause No. 6.4.1. The permission of Steering Group is necessary only when rates are not mutually agreed upon between Steering Group and Entrepreneur, but in the present case there is no dispute regarding rates, as rates are charged as per schedule of P. W. Division prevailing at the time, in respect of the extra work and same is as per Agreement. All the extra work which has been carried out are recommended by Executive Engineer, Superintending Engineer and Chief Engineer of concerned authorities. 12 aa 11.11 k) The learned counsel contends that the conclusion of the learned District Judge about the clarification bing not part of the agreement and, therefore, though delay has been caused, the Arbitrator cannot award the compensation is erroneous. It is also erroneous on the part of the District Judge to observe and hold that for extra work done the permission of Steering Group was necessary and in absence of the same, the appellant is not entitled for the claim cannot be sustained. l) All the claims are approved by the department by their various letters as is discussed by the Arbitrator in his well reasoned judgment and award. All the claims were accepted by the department and even they had recommended the claims of the appellant. In view of that the extension granted by the Arbitrator was just and proper and the District Judge has committed grave error of law and of fact in allowing the application U/Sec. 34 of the Act of 1996 of the respondent.

07. Shri N. N. Singh, the learned counsel for the respondent during the course of his elaborate submissions submits that 13 aa 11.11 a) The Arbitrator had passed the award exceeding his scope and authority i. e. jurisdiction. The award was against the terms of contract, the substantive law and against the public policy of India. For the said purpose the learned counsel relies on the judgment of the Apex Court in a case of Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd. reported in AIR 2003 SC 2629. b) The Arbitrator was biased against the respondent as is evident from his conduct. The Arbitrator has accepted the contents of clarification Clause No. 53.7 while passing the award in favour of the appellant which is not part and parcel of the agreement and most of the claims of the appellant were based on Clause 53.7 of the clarification submitted at the time of pre-bid conference, but not accepted. c) Only 11 points of clarification out of 53 points were agreed at the time of pre-bid conference. The common set of deviation is the part and parcel of concession agreement. It consists of 11 points of clarification which is signed by the State Government, Ministry of Surface and Transport i. e. Central Government and entrepreneur. In view of law laid down by the Apex Court in a case of Ace Pipeline Contract (P) Ltd. Vs. Bharat Petroleum Ltd. 14 aa 11.11 reported in (2007) 5 SCC 304, the award passed by the learned Arbitrator is without jurisdiction. The declaration given by the entrepreneur at the time of submission of tender and acceptance of concession agreement makes it clear that the bid was unconditional. d) As per clause No. 4.2 and 4.4 of the Concession Agreement, it was the responsibility of the entrepreneur to get drawing and design approved from the railways authorities. As per clause 4(iv) page 87 of the Concession Agreement if any delay is caused in respect of the approval of the design, no claim shall be granted on account of late approval of design and consequent delay in the execution of work as it comes under "excepted matter". Therefore, the appellant has waived his right to get claim No. 1, 3, 7 and 8 in view of the law laid down by the Apex Court in a case of GENERAL MANAGER NORTHERN RAILWAYS & ANR VS. SARVESH CHOPRA reported in 2002(4) SCC 45 and in a case of Steel Authority of India Ltd. Vs. J.C. Budharaja Government and Mining Contractor reported in AIR 1999 SC

3275. e) As per the Concession Agreement clause 1.10 project cost 15 aa 11.11 includes all taxes and price variation. Entrepreneur has specifically quoted price variation during construction which is nil. The Arbitrator has exceeded his scope of authority while granting Claim No. 3 i. e price variation for construction of R.O.B in view of the law laid down by the Apex Court in a case of Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd. reported in AIR 2003 SC 2629. f) As per the Concession Agreement Clause 3.4 entrepreneur must carry out soil survey before quoting their bid. In the present case, the entrepreneur failed to carry out soil survey, therefore, they have waived their right to get claim Nos. 2, 4, 5 and 6, which has been granted by the Arbitrator in biased manner. As per the Concession Agreement Clause 10.1 the entrepreneur ought to have studied the work and site conditions. The investigation report submitted by entrepreneur vide page No. 217 para (a) of Concession Agreement, clearly indicates that entrepreneur was aware about the soil condition i. e. black cotton soil. The Arbitrator has considered black cotton soil for 3M i. e. claim No. 2 as per page No. 51 of 115 of arbitral award, which clearly proves that Arbitrator was biased against the respondents. g). The entrepreneur was to work out the cost details for 16 aa 11.11 different components and the project cost etc. by properly studying the scope of work site conditions and available date by using his own expertise and judgment. The tentative cost of R.O.B. is expected to be around Rs. 3.18 croers. The cost of special work as per clause 4.7 is expected to be around Rs. 6.05 lacs. Four copies of M. O. U. to be entered are already sent to the entrepreneurs who have purchased the bidding documents before pre-bid conference vide Executive Engineer, National Highway Division No. IX, Dhule. h) It would be clear that the arbitrator has acted in excess of his jurisdiction, has granted claim in respect of excepted matters and has awarded the amount in respect of ruled out or prohibited by the terms of agreement. The Arbitrator did not have the power to decide the dispute raised by the claimant in view of specific bar in the contract. i) The claims made by the appellant were rejected by the steering committee. The Government of India dealt with each and every claim of the appellant and rejected the claims. j) The claims made by the present appellant before the Arbitrator were barred by limitation. The agreement is signed on

16.11.1998. The construction period is specified initially for one 17 aa 11.11 year and admittedly extended upto 24.07.2000, whereas the reference was made to learned Arbitrator on 06.07.2006. The same is beyond limitation. The reliance by the appellant on Clause No.

1.11 is misplaced. The concession period cannot be a part of the construction period. The cause of action of the appellant rests on the basis of stipulation relating to the construction period and, therefore, the limitation relating to construction period in isolation would apply for the purpose of calculating the limitation. The said dispute/claim is relating to contract of construction as per Article 137 of the Limitation Act. The limitation period is of three years from the date of cause of action. k) The claim of interest of the appellant is not tenable. Sec. 31(7) of the Arbitration and Conciliation Act cannot be invoked and applied to the instant case. l) The Court cannot correct errors of the arbitrator. It can only quash the award. The learned counsel relies on the judgment of the Apex Court in a case of Mcdermott International Inc. Vs. Burn Standard Co. Ltd. & Ors. reported in (2006) 11 S.C.C.

181. m) The award passed by the arbitrator is exceeding scope of 18 aa 11.11 authority of his jurisdiction, against the terms of contract, against the substantive law and against the public policy of India. The learned counsel relies on the judgment of Apex Court in a case of Oil and Natural Gas Corporation Vs. SAW Pipes Ltd. reported in AIR 2003 S.C. 2629. n) The learned Arbitrator has given undue emphasis to the so called recommendation letters issued by the Executive Engineer, Superintending Engineer and the Chief Engineer of the State Government, Department of Public Works i. e. contracting party No. 2. However, the learned arbitrator has ignored the legal stand with reasonings taken by the Government of India i. e. contracting party No. 3 while deciding the claims vide letter dated 21.06.2005 along with his enclosures. Each and every claim is dealt by the Government of India i. e. the Steering Committee while rejecting the claims. The claim Nos. 1, 7 and 8 are granted by the Arbitrator against the terms of contract which comes under excepted matters i. e. Clause Nos. 1.2.4, Clause No. 4.2, Clause No. 4.22, Clause No.

4.35. The learned counsel relies on the judgment of the Apex Court in a case of General Manager Northern Railways and another Vs. Sarvesh Chopra reported in (2002) 4 S.C.C. 45 and in a case of Dandu Laxmi Reddy Vs. State of A. P. reported in AIR 1999 19 aa 11.11 S.C. 3275. o) The arbitrator has granted claim No. 3 in violation of Clause No. 1.10 r/w Clause No. 4.35 i. e. the said claim is against the terms of contract. The same could not have been granted. The learned counsel relies on the judgment of the Apex Court in a case of Oil and Natural Gas Corporation Vs. SAW Pipes Ltd. reported in AIR 2003 S.C. 2629. p) The cost of arbitration also could not have been granted, as the award passed by the Arbitrator is without jurisdiction. q) The entrepreneur has given declaration that the soil, special soil survey is conducted before bidding and the amount of excavation of black cotton soil is also quoted. It clearly indicates that the entrepreneur is well aware of the soil condition and soil quality. The arbitrator has granted the claim towards the extra work for remolding of black cotton soil, the same is not as per the terms of contract and comes under the accepted matter and the same is without jurisdiction. r) The arbitrator has granted pre-reference, pendante-lite and post award interest as given in cash flow statement of the arbitral 20 aa 11.11 award. The interest is calculated from the date of work order till the completion of awarding concession period i. e. 29.09.2020. It does not have jurisdiction to grant interest from 1998. The arbitration clause was invoked on 06.06.2006 by the contractor. It is after eight years from the date of cause of action as per the cash flow statement prepared by the arbitrator. The said granting of interest from the date of work order to the end of awarded concession period is against the substantive law. s) The arbitrator was biased against the respondent and as such has awarded extra claim as well as interest without jurisdiction and in violation of concession agreement. The learned counsel relies on the judgment of the Apex Court in a case of Ace Pipeline Contracts Private Limited Vs. Bharat Petroleum Corporation Limited reported in (2007) 5 S.C.C. 304.

09. With the assistance of learned counsel I have gone through the agreement, award and the judgment of the District Judge.

08. The undisputed facts which can be culled out are as under : i) The tender was floated by the respondent for construction of Railway Over Bridge with approaches near Nashirabad village district Jalgaon. The agreement was entered into between the parties. The scope of work as per the agreement signed on 21 aa 11.11

16.11.1998 is as under : NAME OF WORK :- CONSTRUCTION OF R.O.B. WITH APPROACHES NEAR NASHIRABAD VILLAGE AT Km. 415/800 OF DHULE NAGPUR ROAD N. H. 6 IN LIEU OF LEVEL CROSSING AT RAILWAY Km 433/17-19 WITH STRENTHENING TO Km 414/00 TO 419/00 OF N. H. 6 UNDER B.O.T. WITH TOLL RIGHTS - : SCOPE OF WORK :-

1.0 The project basically consist of construction of following Four Compartments.

1.1 Construction of Railway Over Bridge proper at CH 415/800 near Nashirabad village in lieu of level crossing Gate No. 154, Railway Km 433/17-19.

1.2 Construction of approaches for R. O. B. at CH No. 415/800 (Length 1145 Meters.) 22 aa 11.11

1.3 Strengthening to Km 414/00 to 415/385 & 416/340 to 419/00 (Length 4.045 Kms).

1.4 Construction of Toll Plaza in Km No. 419/00. ii) The period of agreement was one year i. e. from 16.11.1998 to

15.11.1999. The period of work was extended up to 23.07.2000. iii) The work was completed on 23.07.2000. There is no dispute amongst the parties regarding the quantum and the quality of work. iv) The claims were raised by the present appellant. The Department i. e. the respondent recommended the claims. The Government of India/Steering Committee rejected the said claims except the claim No. 2 made to it on 01.02.2006. Thereafter, the arbitrator came to be appointed by the respondent/State and the matter was referred to the arbitrator on 07.06.2007.

09. After the matter was referred to Arbitrator, the arbitrator by a reasoned award partly allowed the claim and the concession period was extended. The respondent filed an application U/Sec. 34 of the Arbitration Act. The District Judge set aside the award passed by the arbitrator basically on the count that, the extra work 23 aa 11.11 done was without the concurrence of the Steering Committee as required under Clause 6.4 of the Concession Agreement and as such, the claims could not have been awarded by the Arbitrator. Para 53.7 of the said clarification did not form part of the agreement or the common set of deviation. As such, the delay caused in getting designs and drawings approved from the Railway could not have been considered.

10. The District Judge came to the conclusion that before execution or undertaking extra work approval of streering committee was not taken. As such, the contractor was not entitled for the claim towards the extra work. The District Judge further observed in para 48 that had it been a case that the company had taken any advance permission of steering group for the performance of extra work, then things would have been different. The learned Judge also relied on Clause No. 12 and held that because of the said clause also the claims were excepted. The learned District Judge in concluding para 64 observed as under : "64. The Entrepreneur could not have undertaken the extra work, which according to the Concession Agreement could only be carried out subject to the approval of Steering Committee. This and for such other reasons I hold that the Award rendered by the Arbitrator cannot 24 aa 11.11 stand the test. I record my finding on Points No. 2 to 6 accordingly." Perusal of the claims, it transpires that majority of the claims

11. for compensation are towards the delays faced by the claimant during the execution of the work and because of extra work so also for extra work done. Major reasons put forth by the claimant for delay is non approval of designs and drawings by the Railway authority and other authorities. It was a specific clause in the agreement i. e. clause No. 1.2.4 that the designs and drawings should be got approved from the Railway Authorities. The claimants contended that as per tender document under Clause

14.2.1 a pre-bid conference of the entrepreneur was held and an opportunity was given to obtain clarification regarding work and bid condition. The clarification was sought by the contractor as to what will be the normal time taken for design approval after submission and if approval is delayed, then it should be considered in concession period. The clarification given by the Chief Engineer was that the entrepreneur shall assume a period of two months for clearance of proposal for design and drawings. Excessive time if required will be compensated in concession period. Relevant clause as will be approved by the Streering Committee.

12. It is a matter of record that the said clarification was not 25 aa 11.11 included in the common set of deviation. The common set of deviation forms part of the contract. As the said clarification was not embodied in the common set of deviation, naturally it cannot be said that the said clarification 53.7 formed an essential part of the contract.

13. The period of contract agreed was one year. When the period of contract agreed was one year and as per the clause in the agreement, the designs and drawings will have to be got approved from the Railway Authorities, naturally the same should be within a reasonable period. No doubt, approval of drawings and designs was the responsibility of the contractor as per the clauses contained in the agreement. There is nothing on record to even remotely suggest that the contractor failed in its duty in submitting the designs and drawings immediately or the contractor was at fault at any point of time or had submitted faulty designs and drawings.

14. Under clause 1.2.4 the contractor was to get approval of drawings and designs from S. E., Design Circle, P.W.D. Government of Maharashtra and Railway Authorities. The foundation and concept structure, designs and drawings were immediately submitted on 21.11.1998, but the same were not approved. The arbitrator has taken into consideration the dates of 26 aa 11.11 the submissions of the designs and drawings and the dates of approval which would show that there was no delay on the part of the contractor, but the delay was on the part of the respondent authorities and the Railway Authorities in approving the same.

15. Even if the said clarification is not considered to be the integral part of the agreement, as not having been incorporated in the agreement, still the concept of "reasonableness" i. e. "Reasonable Time" will have to be considered. The two months period would be considered as reasonable period. Considering the same, the delay has been worked out. The arbitrator has considered the said aspect. If the time is not stipulated for approval of the designs and drawings and the respondent or the Railway authorities do not approve the designs and drawings for a considerable length of period, the contractor cannot be blamed for the same. At the same time, the contractor will be entitled for compensation for the loss sustained by him on account of the delay caused by the respondent. In view of the said aspect, I do not see any error on the part of the arbitrator in granting the said claim. The arbitrator has gone on premise that the said clarification is a part of agreement. Even if it is not part of agreement, still the two months period can be considered to be the "reasonable period", 27 aa 11.11 within which the designs and drawings should have been approved. Much emphasis was laid by the respondents on the count that claim for compensation towards delay in approving designs and drawings cannot be granted as same is an "excepted matter" as per Clause 4(iv) of the agreement and as per Clause 4.2 and 4.4 of the agreement it was the responsibility of the contractor/entrepreneur to get the designs and drawings approved.

16. It would be seen as discussed above that contractor was not at fault for delay in getting designs and drawings approved. The delay in the same was at the behest of respondent and railway authorities. The said clause would operate during contract period. The said clause would not operate as an excepted matter after the contract period. The contractor would be entitled for compensation on account of such delay after the contract period. The respondent cannot take advantage of their own wrong. Moreover, the said clause does not contain any stipulation if the delay is on account of Railway authorities. It only lays down about delay in approval at the hands of Superintending Engineer. For all these reasons it cannot be said to be an excepted matter.

17. The second reasons for setting aside the award by the District Judge was interpreting the Clause 6.4 titled as additional work which reads as under : 28 aa 11.11 "If additional work ordered by Government relating to this project includes any class of work for which no rate is specified in this contract, then such class of work shall be carried out at the rates figuring in the relevant Schedule of Rates of the Public Works Division prevailing at the time when the extra work crops up or at the rates mutually agreed upon between the Steering Group and the Entrepreneur."

18. In my opinion the District Judge has not properly construed the said clause 6.4. Perusal of the said clause it would be clear that the rates decided by the Steering Group and the Entrepreneur would be payable in respect of extra work. It lays down that if additional work was ordered by the Government, relating to this project and includes any class of work for which no rate is specified in this contract, then such class of work shall be carried out at the rates figuring in the relevant Schedule of Rates of the Public Works Division or at the rates mutually agreed between the Steering Group and the Entrepreneur. The said clause nowhere lays down a pre-condition of sanction of Steering Committee for undertaking extra work as ordered by the respondents. On the contrary, it states that "if additional work ordered by the Government relating to this project" meaning thereby that the Government can order the additional work to the contractor which the contractor was bound 29 aa 11.11 to do and it was only in respect of rates that the Steering Group was required to be consulted.

19. It is not disputed that, the extra work has been carried out. The Officers of the respondent have time and again in no uncertain words vide their various letters as detailed in the award of Arbitrator have accepted that the extra work has been done by the contractor. They have even recommended the claim of the contractor. The Steering Group rejected those claims on the ground that those were not extra works, but ancillary works. Even the Steering Committee has not rejected the said claims on the ground that, their concurrence was not obtained before the work was done. The learned District Judge has misconstrued the said clause in negativing the claim in respect of extra work.

20. Perusal of the various dictums' of the Apex Court, relied by the learned counsel for respective parties, the law is now well settled that the application U/Sec. 34 of the Arbitration Act for setting aside award is not an appeal in disguise. Re-appreciation of evidence is impermissible. There is distinction between the disputes as to jurisdiction of the Arbitrator and the disputes as to in what way that jurisdiction should be exercised. The Court cannot substitute its own evaluation with regard to the law or facts 30 aa 11.11 to come to the conclusion that the arbitrator has acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid is a decision within the competency of arbitrator. If the decision of the arbitrator is a possible view, though perhaps not the only correct view, the award cannot be examined by the Court.

21. The clause relied by the respondent herein while refusing the claim of the appellant would show that the clause 1.40 and 4.35 will have to be read along with other clauses. In Clause 6.4.2 if the scope of the work is altered, then the revised cost of the work will be worked out on the basis of Schedule of Rates and the concession period, then will be re-worked on the basis of cash flow statement in the contract. In the said clause the extension of the concession period is stipulated.

22. The Steering Committee had rejected all the claims of the contractor but accepted claim No. 2 i. e. one of the claim for extra work. While allowing said claim No. 2, even the Steering Committee had observed and held that said claim No. 2 can be compensated by extension of concession period. This would show that for extra work the compensation can be granted by extension of concession period. 31 aa 11.11

23. The Arbitrator has considered the total documents, correspondence on record. In fact, the engineers of the respondents themselves have accepted and recommended the claims made by contractor on account of extra work done and in respect of delay. The District Judge had interfered with the award on the ground that permission of steering committee was not obtained before extra work was done. The extra work was done is not a disputed fact. The letter issued by the respondent authorities and their recommendation to grant the claim itself would testify said fact.

24. The arbitrator has considered each and every document on record and the various clauses of the agreement threadbare and has passed a reasoned award. Reasons are also given by the arbitrator for passing the said award.

25. In my opinion, there cannot be much dispute over factual matrix of the claim made by the appellant/contractor as the respondents' Engineers have time and again accepted and admitted that delay has been occasioned in according sanction to the designs and drawings. So also contractor was required to do extra work. The Arbitrator is an expert in said field, U/Sec. 34 of the Act, this Court would not enter into the calculation part about the delay. 32 aa 11.11

26. In view of the aforesaid facts, it does not appear that the award of the arbitrator is bad in law on account of any bias, nor the same can be said to be against the public policy. Even the District Judge has held that arbitration clause exists between the parties. In view of the above, the judgments relied by the learned counsel for the respondent for the purpose of showing that the award is tainted with bias would not be of any avail.

27. The Arbitrator has not granted any separate claim towards interest as is seen from the award. The interest is calculated while considering the cash flow statement. The contention of the respondent that interest has been granted since 1998 and as such the same is without jurisdiction is not sustainable. In fact, the arbitrator has relied upon the same principle which was made applicable when the initial cash flow statement was made while calculating concession period on the premise that agreement is for one year.

28. While going through the arbitration award I could notice that the arbitrator while considering the claim No. 07 regarding compensation for additional expenditure/charges occurred towards the idleness of tools and plants, material, crew (operator) required 33 aa 11.11 to be continued due to prolongation of contract has considered the period from 16.07.1999 to 23.07.2000. The agreement was for a period of one year that is since 16.11.1998 to 15.11.1999. As such, the arbitrator could have considered the period for computing the compensation only after 16.11.1999 and not prior to that. The period till 15.11.1999 would be within the period of contract for which the contractor cannot claim any compensation. As such, the period from 16.07.1999 to 15.11.1999 considered by the Arbitrator while awarding the compensation in respect of the said claim will have to be deducted and the award to that extent will have to be set aside. The Arbitrator has considered the period for grant of claim No. 7 from 16.07.1999 on the ground that the contractor had earlier stated that he would complete the work within eight months, so he would be in a position to collect the toll after eight months. That cannot be a ground. When both the parties have arrived at contract wherein the contractor had undertaken to complete the work within a period of one year, then the claim in respect of idleness of machinery, crew, etc. could not have been considered for a period prior to lapse of one year. The same was improper and incorrect on the part of the arbitrator. The Arbitrator has awarded the claim towards the same at Rs. 90,11,000/-. The claim of about Rs. 30,00,000/- will have to be deducted and the concession period would be commensurately reduced. 34 aa 11.11

29. I had called upon the parties to give the cash flow statement. If the said claim is proportionately deducted i. e. by an amount of about Rs. 30,00,000/-, as the period for which compensation for claim No. 7 is awarded will have to be reduced by almost four months. The respondents did not file any cash flow statement. However, the contractor has filed the said cash flow statement which is not commented upon by the respondent. As per the same the concession period granted by the Arbitrator would be reduced by almost two years six months.

30. Further for claim No. 1 i. e. compensatory claim towards various delays faced by the claimants amounting to an extension in concession period, the arbitrator has granted additional concession period of 12 months and 12 days. The arbitrator has calculated the month wise delays in approval of designs, drawings and other works. Thereafter had added all the month. But the contract period itself was upto 15.11.1999, it had to be extended upto

13.07.2000, so delay from 15.11.1999 to 23.07.2000 only could have been calculated for extension. The same would be 8 months 7 days instead of 12 months 12 days as awarded by the arbitrator. The 35 aa 11.11 arbitrator had gone on the premise that the contractor would have completed work in 8 months and would have been entitled to collect the toll earlier, which is incorrect. The same cannot be considered. The original concession period agreed was on the basis that contract is for 1 year. The additional period that, the contractor would be entitled to get, is the period after lapse of 1 year and till the completion of contract i. e. from 16.11.1999 to 23.07.2000. The same would be 8 months and 7 days. So in claim No. 1 the extension of concession period would be reduced by four months.

31. The question of limitation in this case would not arise. The completion certificate was issued by the respondents on 29.11.2001. The contractor had submitted consolidated statement of claims on

22.07.2001. The work was completed on or about 23.07.2000. The same was pending consideration with the respondent and the steering committee. The said claim was referred to the Steering Committee and the Steering Committee rejected the claim on

01.02.2006. It was only after the claim was rejected by the Steering Committee, the matter could be referred to the Arbitrator. Thereafter, immediately the steps were taken and the matter was referred to the arbitrator. The respondent appointed Arbitrator and referred the matter to Arbitrator on 07.06.2007. In view of the 36 aa 11.11 aforesaid facts, the objection of limitation raised relying on Article 137 of the Limitation Act is not sustainable. The concession agreement is upto the year 2010.

32. After I had heard the matter and in fact, had reserved it for judgment, while going through the facts, it was thought necessary to seek some explanation from the learned counsel for respective parties and had taken the matter on board. At that time, the National Highway Authority of India filed Civil Application No. 7879/2012 in Arbitration Appeal No. 10/2012 and Civil Application No. 7880/2012 of Arbitration Appeal No. 11/2012 for intervention on the ground that the applicant therein has undertaken work for development of 4 laning of the Amravati - Jalgaon section of National Highway No. 6 spanning to 275.225 K.M. i. e. from K.M.

166.725 to K.M. 441.95. The work of strengthening from KM 414/oo to 419/00 of National Highway No. 6 done by the present appellant in respect of which the present appeal is filed would become part of the work undertaken by it. For this under the proposed development of bridge of four laning of 275.225 k.m. long Amravati - Jalgaon section.

33. I had heard Shri A. V. Patil, the learned counsel for the applicant/National Highway Authority of India, Shri Dhorde, the 37 aa 11.11 learned counsel for the appellant herein and Shri Singh, the learned counsel for the respondent.

34. Shri Patil, the learned counsel for the applicant/National Highway Authority of India states that, the applicant is acquiring lands on the said stretch and which are to be shortly handed over to concessioner for development and construction of four laning. In the said development of Amravati - Jalgaon section within the stretch of KM 414 to 419 the present road will be increased from two lane to four lane which would include another railway over bridge, cross drainage works, service road, etc. If the present appellant is allowed to carry the collection of toll by extension of term of concession on the given stretch of road, then the applicant and the new concessioners who are involved in the development of the Amravati - Jalgaon section will face severe technical and financial difficulties in carrying out implementation of work of bridge. The said development work is necessary to accommodate the present growth in traffic and the increased traffic volume on the said stretch. For the purpose of carrying out four lane of road lot of alterations and modifications are required to be done to the existing stretch of two lane road. The learned counsel further submits that existing two lane road has seven meters carriage way. 38 aa 11.11 However in four lane standard road, the seven meters width will be increased up to 8.75 meters carriage way. At present the camber of carriageway is on both side, but in 4 lane standard, the existing 2 lane road will have to be designed for one way traffic. The existing pavement of road i. e. 7 meters will be completely embedded in the body of proposed 4 lane road. Apart from the development issues, even maintenance issues of this lane would arise, as there will be overlapping of two concessioners on same stretch of road and both the concessioners i. e. the appellant and the entrepreneur cannot co-exist on the said stretch.

35. The learned counsel further states that, if the said stretch of 5 K.M. is kept undeveloped, the same will cause bottle neck in the flow of the traffic on the otherwise 4 lane road causing high possibilities of disruption in the flow of the traffic and which would increase chances of accident. The continuation of existing toll which is within two K.M. within the up coming toll for on going four lane development, will cause queuing up, intermingling and clashing of traffic which would result in chaos and loss of fuel, time and money. On the said grounds the applicant seeks to intervene and to be added as party respondent in the present arbitration appeal. The learned counsel relies on the judgment of the Apex 39 aa 11.11 Court in a case of Amitkumar Shaw Vs. Farida Khatun reported in 2005(3) Mh. L. J. 330 to contend that the object of Order I Rule 10 of the Code of Civil Procedure is to discourage contest on technical pleas. The learned counsel submits that the person on whom the interest has developed can be added as party. The learned counsel also relies on another judgment of the Apex Court in a case of Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd. reported in AIR 2003 S.C. 2629.

36. Shri Dhorde, the learned counsel for the appellant submits that a person who is not party to the arbitration agreement cannot be added as party in the appeal. This Court would consider the legality of the judgment passed by the District Judge and the award of the arbitrator. The contentions of the applicant herein are alien to the present dispute. The learned counsel submits that Sec. 2(1)(h) of the Arbitration Act defines party to mean a party to an arbitration agreement. The third party cannot support or oppose the award or judgment. The learned counsel relies on the judgment of the learned Single Judge of this Court in a case of Onyx Musicabsolute. Com. Pvt. Ltd. Vs. Yashraj Films Pvt. Ltd. reported in 2008 (Suppl- ) Arb.L.R 274 and the judgment of the learned Single Judge of the Delhi High Court in a case of 40 aa 11.11 National Highway Authority of India Vs. China Coal Construction Group Corporation reported in 2006 (1) Arb.L.R. 265, wherein it is held that a person who is not party to the agreement cannot be a party in arbitration proceedings and has no locus standi and the application for impleadment cannot be allowed.

37. Shri Dhorde, the learned counsel further submits that, the applicant in the tender itself has included the following clause : "The New Concessionaire shall be constructing two lanes ROB at this location. However, the Existing Concessionaire shall continue to collect toll for ROB portion till end of concession period i. e. 11th November, 2021. The new Concessionaire will develop / construct the new additional two lane ROB adjoining to the existing alignment. However, the existing concerned Concessionaires will collect the Toll upto end of their Concession Period. Temporary Toll Booth (5-lane) will be constructed by the new concessionaires at the suitable locations to check the leakage of traffic. After completion of the concession period.----"

38. The learned counsel further submits that the Highway Authority has already entered into an agrement with the new concessionaire and now it has no interest left as new contractor has accepted the terms and the said clause is also included in the 41 aa 11.11 agreement. The learned counsel submits that, there are four such similarly situated contractors like the present appellant and the appellant is not the sole one. No objection is taken in respect of other three contractors who are collecting the toll in the said route. The learned counsel relies on the judgment of the Apex Court in a case of S. N. Prasad M/s. Hitek Industrial (Behir) Vs. Monnet Finance Ltd. and others reported in 2010 (11) Scale 225. So also the judgment of the Division Bench of Madrass High Court in a case of Chennai Container Terminal Pvt. Ltd. Vs. Union of India reported in AIR 2007 Madrass 325.

39. Shri Singh, the learned counsel for the respondent did not oppose the application for intervention.

40. These are the proceedings arising against the arbitration award and the decision by the District Judge on an application U/Sec. 34. The intervenor was not a party before the Arbitrator, nor was a party when the said ward was set aside by the learned District Judge. In the present appeal the judgment of the learned District Judge passed on an application U/Sec. 34 setting aside the award is assailed.

41. In view of that, the intervenor would not be a necessary, nor a 42 aa 11.11 proper party. The judgments of the Apex Court in a case of S. N. Prasad and the Madras High Court in a case of Chennai Container referred supra would be clearly applicable and the intervenor would not get any right to get impleaded as party.

42. Be that as it may, still as the intervenor is a public authority and is engaged in the implementation of the public work, I had heard the learned counsel. It appears that, there are four other contractors who are engaged in the collection of toll in the said area where the intervenor has floated tenders for expansion of the road. Even the intervenor in its tenders has made it known to the proposed contractors that the present contractor has been granted extension in concession period by the award of the arbitrator up to the year 2020.

43. Still with a view that public work is undertaken, I had asked the learned counsel for intervenor, so also the learned counsel for the respondent/State of Maharashtra as to whether if the judgment of the District Judge is set aside and it is held that the appellant is entitled for the compensation amount, whether instead of extension of concession period, they would compensate the contractor by paying the compensation amount. In spite of granting opportunity, 43 aa 11.11 they are not in a position to state that the respondent would pay the compensation. In the light of the said fact, the contentions of the intervenor cannot be considered. Moreover, the appellant has continued after the lapse of the original concession period pursuant to the award of the Arbitrator and the interim orders passed by the District Judge and this Court. Again it would not be possible to calculate the compensation amount as after the lapse of concession period provided under the agreement, the contractor has collected toll for extended two years. The intervention application in view of all these facts stands rejected and cannot be considered.

44. In view of the above conspectus of the matter, the impugned judgment and award passed by the learned District Judge in Misc. Application No. 181 of 2009 and Mis. Application No. 77/2010 is set aside and the award of the arbitrator is also partly set aside and modified. The extension of concession period granted by the arbitrator is reduced by 2 years 10 months. The respondents are directed to award additional concession period of seven years and 20 days over and above the original accepted concession period.

45. In view of the fact that, the judgment of the District Court setting aside and the concession period is extended, the applications U/Sec. 9 filed by the appellant stands accordingly 44 aa 11.11 allowed. The respondents shall not restrain the contractor from collecting the toll during the extended concession period without due process of law. The parties would be governed by the stipulations in the agreement executed between them.

46. The Arbitration Appeal No. 10 of 2011 and Arbitration Appeal No. 11 of 2011 are accordingly allowed in above terms. No costs. [ S. V. GANGAPURWALA, J. ] Sd/- bsb/April 12