TaxTMI 
TaxTMI 
2021 (5) TMI 623
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....fter negotiations between both parties, the appellant decided to award both contracts to the respondent on the basis of an offer by the respondent of 16% rebate on the prices for completing the first project, in the event he was awarded both contracts. The two letters of award were issued on 29.06.1988 to the respondent. It appears from the record that there was some delay in the handing over of sites by the appellant, which resulted in a delay in the completion of the construction of quarters in both projects. Since there were disputes between the parties regarding the final payment due to the respondentcontractor, the respondent sought arbitration under the dispute resolution clause, and an Arbitrator was appointed. 3. The learned Arbitrator, vide awards dated 07.07.2000, granted relief to the respondent under different heads of the contract. With respect to the first contract pertaining to the construction of 100 units of A and B type quarters, the Arbitrator awarded a sum of Rs. 23,89,424/with interest at 18% per annum pendente lite and 21% future interest to the respondent. With respect to the second contract pertaining to the construction of 68 units of B, C and D type qua....
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.... the scope of interference in an arbitral award was limited, as the Court did not sit in appeal over an award. As long as the Arbitrator has taken a reasonable view, the Court should not interfere in the same. 11. Before proceeding further, it is necessary to make note of the scope of interference by Courts in arbitral awards passed under the Arbitration Act, 1940. This Court has consistently held that the Court does not sit in appeal over an award passed by an arbitrator. In Kwality Manufacturing Corporation v. Central Warehousing Corporation, (2009) 5 SCC 142 this Court held as follows: "10. At the outset, it should be noted that the scope of interference by courts in regard to arbitral awards is limited. A court considering an application under Section 30 or 33 of the Act, does not sit in appeal over the findings and decision of the arbitrator. Nor can it reassess or reappreciate evidence or examine the sufficiency or otherwise of the evidence. The award of the arbitrator is final and the only grounds on which it can be challenged are those mentioned in Sections 30 and 33 of the Act. Therefore, on the contentions urged, the only question that arose for consi....
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.... and Company v. Union of India, (2010) 1 SCC 409; Oswal Woollen Mills Limited v. Oswal Agro Mills Limited, (2018) 16 SCC 219]. 14. Keeping in view the above principles, the question before us is whether the arbitral awards in question are assailable on any of the available grounds. While deciding this, due regard must also be given to the fact that both the learned Single Judge, and subsequently the Division Bench, of the Delhi High Court have concurrently held against the appellant herein. 15. Coming to the facts at hand, it is an admitted fact that there was substantial delay attributable to the appellant in handing over the sites for the 68 B, C and D quarters to the respondent. The appellant has not contested this finding before us. 16. With respect to the first issue, viz., on the issue of refund of rebate, the Arbitrator held that the rebate of 16% on the price of construction of 100 units of A and B quarters was given by the respondent on the condition that he would be able to execute both the works simultaneously. The Arbitrator interpreted the rebate as a conditional one on analysis of the documents on record, particularly the letter dated 14.06.1988 sent by the resp....
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....d only with respect to the period for which the contract subsisted, and would not subsist beyond the scheduled period of the contract. The Arbitrator also noted that the appellant accepted the work undertaken by the respondent beyond the period of the contract without objections. The Arbitrator also carefully assessed the period of delay attributable to the appellant and awarded escalation to the respondent only for the same. 19. With respect to the question of law as to whether the Arbitrator could order such an escalation, this Court has, in a catena of judgments, upheld the same. A threeJudge Bench of this Court in Assam State Electricity Board v. Buildworth Private Limited, (2017) 8 SCC 146, was faced with almost identical circumstances. In that case, the Arbitrator granted escalation charges beyond what was permissible under the contract between the parties, which prescribed a cap on the same. Upholding such an award, the Court in that case held as follows: "13. The arbitrator has taken the view that the provision for price escalation would not bind the claimant beyond the scheduled date of completion. This view of the arbitrator is based on a construction of the p....
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....cific clause of the contract in that case, the granting of escalation prices was not a possible view. This is not the case in the present matter. As we have already held above, we are of the opinion that in the facts and circumstances of the present case, the view taken by the Arbitrator was a possible one, and cannot therefore be interfered with by the Courts. 23. In State of Orissa v. Sudhakar Das (Dead) by Lrs, (2000) 3 SCC 27, this Court was not seized of the issue of grant of escalation charges beyond the period of the contract or with respect to delay. As such, it has limited applicability to the present case. 24. In General Manager, Northern Railway v. Sarvesh Chopra, (2002) 4 SCC 45, the Court was seized of a matter pertaining to a reference to arbitration. The considerations of a Court in such a matter are distinct from those of a Court in appeal over the final award of an Arbitrator. Be that as it may, in that case, a contractual clause between the parties specifically excluded any claims of the contractor arising out of delays attributable to the opposite party, which is not the case in the present matter. 25. It is clear from the above analysis that any decisio....