TaxTMI 
TaxTMI 
2012 (11) TMI 1179
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....pondent could and, therefore, did invoke the arbitration. 2. The disputes in the present case culminated in a reference to arbitration of three technical persons who have made the award dated 30.03.2010. The award is unanimous on certain aspects while, on other aspects, there is a dissenting view of one of the arbitrators. The appellant being aggrieved by both the unanimous view and the majority view preferred objections under section 34 of the Arbitration and Conciliation Act, 1996 (the Act), which have been rejected by the learned Single Judge vide the impugned order dated 30.11.2011. We may notice that there are two sets of objections registered as O.M.P. Nos. 455/2010 and 456/2010 to two arbitral awards both dated 30.03.2010, which have been dealt with by this common order relating to the same contract but arising out of two different references to the same arbitral tribunal. Reference No.1 related to Dispute Nos.1, 2, 3 and Reference No.2 related to Dispute Nos.4, 5, 6 and 7. It was agreed that the present appeal, which arises out of the order in O.M.P. No. 456/2010 may be taken up separately as the issues are distinct from the other. 3. Learned senior counsel for the appell....
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....l Leave Petitions preferred by the NHAI against the aforesaid decisions of the Division Bench, being S.L.P. (Civil) No. 21466/2011 titled National Highways Authority of India & Another Vs. M/s OSC-GIL J.V. and S.L.P. (Civil) No. 9799/2010 titled National Highways Authority of India Vs. ITD Cementation Limited, wherein leave has been granted by the Supreme Court. 3. The learned Single Judge has also rejected the submission of the appellant founded upon the Supreme Court decision in Union of India & Others Vs. West Coast Paper Mills Limited, AIR 2004 SC 1596, to contend that this Court should, in view of the pendency of the Special Leave Petition, defer the hearing of the objection petitions to await the decision in the said Special Leave Petitions by observing that similar request had been declined by the Division Bench of this Court in the appeal of M/s OSE-GIL J.V. 6. On merits, the submission of learned counsel for the appellant is that the learned Single Judge should have awaited the decision of the Supreme Court in the two Special Leave Petitions aforesaid and not dismissed the objection petition. Before us as well, reliance is placed by the appellant on the judgment of the ....
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....ood of different views being expressed by co-ordinate Benches. Needless to state, the Appellant before us will not be precluded from filing a Special Leave Petition before the Hon'ble Supreme Court. In such a situation, we are in no manner of doubt that both the SLPs will be heard together. That is, however, for Their Lordships to decide. The impugned Judgment is premised on NHAI vs- ITD Cementation India Ltd., with which we respectfully concur. We also find no error in the impugned Judgment. In these circumstances, the Appeal is dismissed. Pending Application also stands dismissed." 9. Learned counsel for the appellant has not even urged before us that the decision of the Division Bench in ITD Cementation Limited (supra) needs re-consideration by a larger bench of this Court and we find no reason to adopt that course of action. The decision in ITD Cementation Limited (supra) and OSE-GIL J.V. (supra) being judgments of coordinate benches, we are bound by the same. So far as the decision in West Coast Paper Mills Limited (supra) is concerned, the reliance placed on the said decision appears to be wholly misplaced. That was a case dealing with the aspect of applicability of Sect....
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....yer to make payment within the times stated, the Employer shall pay to the Contractor interest compounded monthly at the rate(s) stated in the Appendix to Bid upon all sums unpaid from the date upon which the same should have been paid in the currencies in which the payments are due. The provisions of this Sub-Clause are without prejudice to the Contractor's entitlement under Clause 69 or otherwise." 9. The Supreme Court in State of Haryana v. S.L. Arora, (2010) 3 SCC 690 has held that compound interest can be awarded only if there is a specific contract or authority under a statute for compounding of interest. This has also been observed in the case of Pt. Munshi Ram v. Delhi Development Authority, (2011) 163 PLR 20, where one of us (Sanjay Kishan Kaul, J.) was a member of the Division Bench and rendered the opinion on behalf of the Bench. 10. In addition to the fact that the contractual terms, in the present case, itself prescribed the rate of interest, learned senior counsel for the respondent points out that this aspect has not even been urged before the learned Single Judge and forms no part of the adjudication. This aspect has also not been disputed by learned senior co....
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....ore and two twenty one only lakhs ninety six thousand only b) with pond CuM 3252000 Rs. 252 Rs. 819,504,000 ash two eighty one hundred crore and fifty ninety five two only lakhs four thousand only 14. The controversy which has arisen for adjudication is that while on behalf of the appellant it is contended that the rate per cubic metre has to be paid dependant on the quantum of soil or pond ash used, on behalf of the respondent it is submitted that the two rates operate in different situations. According to the respondent, if only soil is used then sub clause (a) would apply and if pond ash is used alongwith soil then sub clause (b) would apply. The respondent submits that in case sub clause (b) applies, irrespective of the quantum of pond ash or soil used, the per cubic metre rate quoted against item (b) has to be paid for the total quantity. 15. Insofar as the aforesaid aspect is concerned, it is pointed to us that the DRB, qua this issue, opined in favour of the appellant, but the respondent was not satisfied with the same. There is also a divergence of view in the arbitral tribunal as the finding has been reached in favour of the respondent by a majority of 2:1. 16. It is ....
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.... canvass that the IPC was not final but was only provisional. The said clause reads as under: "The Engineer may by any Interim Payment Certificate make any correction or modification in any previous Interim Payment Certificate which has been issued by him, and shall have authority, if any work is not being carried out to his satisfaction, to omit or reduce the value of such work in any Interim Payment Certificate." 20. It is however submitted that a reading of the aforesaid clause would show that the power lies only with the engineer and in the present case, the engineer himself ultimately had opined in favour of the appellant. 21. Learned senior counsel for the appellant submits that it was not open for the majority arbitrators to accept the plea of the respondent that it was only an inadvertent error which was sought to be corrected subsequently. 22. Learned senior counsel for the respondent on the other hand seeks to contend that the aforesaid submission of learned counsel for the appellant, at best, can be styled as one possible view of the clause. Since the arbitral tribunal, albeit by a majority, has taken a particular view, it is not for this Court to substitute its min....
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.... and the delay in raising the issue would not make a difference, as the parties should be bound by the terms of the contract. 28. If we peruse the majority view of the arbitral tribunal, we find that the findings are as under: (a) BoQ Item 2.02 (a) and 2.02(b) for embankment construction is for finished items of works mentioned for each of the items in all respects and not for the type of materials to be used in the respective items; (b) The manner of measurement is same for both the nature of embankment, whether the embankment is covered by clause 2.02 (a) or clause 2.02(b), by taking a composite cross section as a whole of the embankment and determining the volume by average end area method; (c) There is no scope to separate out different cross sections of embankment being taken by measuring the area occupied by soil and pond ash separately, for determination of the quantum; (d) The methodology adopted by the engineer to make measurement is contrary to the provisions of the contract; (e) It cannot be said that there was consensus ad idem between the parties with regard to the method of measurement of pond ash embankment in view of the plea of the respondent that there ....
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.... is not warranted." 31. We have examined the aforesaid submissions. There is no doubt in our mind that insofar as the principle of law is concerned, it is well settled that it is not for this Court to substitute its mind as that of an arbitral tribunal if there are different possible views qua the interpretation of clauses of the contract. Interference would be called for only if the terms of the contract are lucid and clear, and a completely different version is accepted by the arbitral tribunal which borders on absurdity. Thus, it cannot be that if the contract says „A‟, the arbitrator can say „B‟, and the Court is devoid of jurisdiction to interfere with that aspect. 32. We find from a perusal of the impugned order of the learned Single Judge that there has been no discussion on this crucial issue. This is the reason we have been called upon to pen down a more detailed order appreciating the rival contentions of the parties. In our view, the first fallacy in the majority view of the arbitral tribunal is the manner of extraction of the terms of the contract itself. Para 11.3.11 of the Majority award where BoQ Item 2.02(a) and (b) have been extracted seek....
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....il). It would hardly be expected that irrespective of the ratio of pond ash used (which is determined by the engineer), one rate for embankment would have to be paid and that too the higher rate, where the price differential is almost 2 ½ times. Adoption of such a mechanism for payment would lead to absurd results. 34. In our view, the terms of the contract can brook of no two views at all and the terms are clear. The learned Single Judge has, in fact, only observed that the view taken by a technical team being one possible view, he would not like to examine the same any further. He has, however, not examined the submission of the appellant as set out above. This, to us, appears to be a clear error in the impugned judgment. On a conjoint reading of BOQ item No.2.02 and clause 305.8 of the technical specification, to us, it is clear that the cross sections have to be taken in respect of the different materials used, i.e. soil and pond ash. Pertinently, it is not the case of the respondents that the two are mixed into a mixture and then used. Soil and pond ash are used separately. Thus, the cross sections are to be taken at intervals. We cannot permit the respondent to conten....