Delhi High Court
M/S. Gammon India Limited vs National Thermal Power ... on 6 September, 2012
Author: Sanjay Kishan Kaul
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 28.08.2012
% Date of decision: 06.09.2012
+ FAO (OS) No.337 of 2008
M/S. GAMMON INDIA LIMITED ..... APPELLANT
Through: Mr. Sameer Parekh,
Ms. Sonali Basu Parekh,
Mr. Kshatrashal Raj & Ms. Shweta Sharma,
Advs.
Versus
NATIONAL THERMAL POWER
CORPORATION LIMITED ..... RESPONDENT
Through: Mr. Ramesh P. Bhatt, Sr. Adv. with
Mr. Inderbir S. Alag &
Mr. Jagdeep S. Lamba, Advs.
+ FAO (OS) No.430 of 2008
NATIONAL THERMAL POWER
CORPORATION LIMITED ..... APPELLANT
Through: Mr. Ramesh P. Bhatt, Sr. Adv. with
Mr. Inderbir S. Alag &
Mr. Jagdeep S. Lamba, Advs.
Versus
M/S. GAMMON INDIA LIMITED ..... RESPONDENT
Through: Mr. Sameer Parekh,
Ms. Sonali Basu Parekh,
Mr. Kshatrashal Raj & Ms. Shweta Sharma,
Advs.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE VIPIN SANGHI
_____________________________________________________________________________________________
FAO (OS) No.337 of 2008 & FAO (OS) No.430 of 2008 Page 1 of 20
SANJAY KISHAN KAUL, J.
1. The dispute pertaining to a contract entered inter se parties in 1988
is still pending resolution!
2. National Thermal Power Corporation Limited (for short „NTPC‟)
invited tenders on 3.10.1986 for construction of two Natural Draft
Cooling towers at their Thermal Power Station for generation of
electricity at Kawas in Surat District, Gujarat on a lump sum basis.
Gammon India Limited (for short „GIL‟) submitted its bid on
18.12.1986 read with the final price bid dated 23.7.1987. In
pursuance of the negotiations inter se parties the bid of GIL was
accepted by NTPC on 20.10.1987 for a lump sum contract value of
`5,70,07,000.00. The letter of award was issued on 17.2.1988.
The work was completed albeit belatedly. The first cooling tower
which was to be completed on 31.10.1989 with a further period of
thirty (30) days was completed on 30.9.1991 with a delay of 22
months. The second cooling tower was to be completed by
31.1.1990 with a further period of thirty (30) days but was
completed on 10.2.1993 with a delay of 36 months. In case of
both the towers extension was granted by NTPC from time to time.
GIL claimed amounts on account of delays as it had incurred
additional expenses and suffered losses such as loss of
productivity, loss of site overheads and head office over heads,
loss of profit, cost of additional mobilization of plants, equipment,
manpower, etc., rise in cost of labour, material and abnormal rise
in the price of aggregates apart from other additional
miscellaneous costs. In order to resolve these issues a joint
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meeting was held between the parties at Mumbai on the
outstanding issues on 15/16.10.1993. The minutes of this meeting
were drawn which is the most crucial document. The said
document is reproduced as under:
"MINUTES OF MEETING HELD BETWEEN NTPC AND
GAMMON INDIA LIMITED AT GIL's OFFICE AT
BOMBAY ON 15TH & 16TH OCTOBER 1993 ON THE
OUTSTANDING ISSUES UNDER NATURAL DRAFT
COOLING TOWERS PACKAGE FOR KAWAS GPP.
Present:
NTPC GIL
1. Mr. J.N.Sinha 1. Mr. G.V.Hingorani
2. Mr. K.V.Rao 2. Mr. S.Chakrabarti
3. Mr. S.Ray 3. Mr. G.D.Chotraney
4. Mr. A.K.Srivastava 4. Mr. M.U.Shah
5. Mr. A.K.Sharma 5. Mr. R.B.Sainani
6. Mr. P.Balakrishnan
7. Mr. S.K.Mahapatra
8. Mr. Yash Gupta
The meeting was convened to discuss and resolve the
outstanding issues under the Contract. It was specifically
agreed and confirmed by GIL that with the resolution on
various issues brought out in the meeting there would be no
other issues or claims raised by them in future. The
following was discussed and agreed between NTPC & GIL.
1. NTPC asked GIL to conduct the PG test on Cooling
Tower No. 1 immediately but after giving a clear notice of
one week for conductance of test.
2. GIL requested NTPC to consider extra payment on
account of CNS treatment and mass fill which, as per them
was not originally envisaged in the contract. NTPC clarified
that the aforesaid claims of GIL were not tenable as per
provisions of contract and same had also been clarified to
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GIL earlier. GIL agreed to withdraw their claims for CNS
and mass fill.
3. GIL stated that the actual time taken for execution of
contract was much longer than the scheduled period as per
the contract schedule, in view of initial delays, the time
taken for CNS treatment and mass fill and malaria etc.
Further GIL stated that during the execution they had to face
unprecedented monsoon which also resulted in delays.
Accordingly GIL requested that though they have agreed to
withdraw their claims for CNS and mass fill, NTPC should
sympathetically consider payment of escalation on the basis
of actual work done instead of scheduled period as per L2
Schedule....
NTPC stated that though GIL request was not as per
provisions of contract, under the circumstances, NTPC
would examine and consider their request favourably and
revert back on the matter. However, it was clarified to GIL
that NTPC's decision in this regard would be final and
binding on them. GIL agreed.
4. The primer for joint filling component for NDCT - 1. Has
failed to give the required result during testing. The issue is
pending with GIL SINCE A LONG TIME. GIL suggested
for suitable deduction for the same. NTPC agreed for
appropriate deduction for same. Other rectification and
clearance of area will be carried out by GIL immediately.
5. Issue of Calibration certificate for pitot tube used in PG
Test was discussed. GIL stated that this was tested in IIT,
but NTPC stated that as per BS:4485 the same is not coming
within the specified tolerance. GIL handed over documents
to prove the results of the PG tests report, being within the
guaranteed parameters, after considering the variation of IIT
test results and BS:4485 Part II tolerances for approval.
6. NTPC informed that the Special loan advance was given
to GIL on specified request of GIL with interest on such
loan agreed by GIL and that their request for refund of
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interest was not acceptable.
7. The issue on return of BGs shall be examined by NTPC.
8. The Hydraulic door closer has not been fixed so far. GIL
expressed that such type of hydraulic door closer is not
available. GIL will propose suitable deduction for same
which was also agreed by NTPC.
9. GIL stated that just after the award of contract there was
an unprecedented hike in the cost of aggregates and as such
NTPC should compensate GIL for the extra cost incurred by
them for the aggregates. NTPC clarified that GIL's
contention was not as per provisions of Contract and hence
not tenable. GIL agreed to withdraw their claim.
10. Regarding cement, steel consumption reconciliation it
was pointed out by GIL that there is some difference in
quantities finalized by NTPC. NTPC requested GIL to send
their authorized Engineer for reconciliation purpose to
Kawas site so that final figure can be arrived. GIL requested
that the Cement consumption on account of casting of
louvers due to breakage may also be considered in
consumption.
11. Further it was agreed that GIL's request for extra
consumption of cement and steel for change in piling system
from under reamed piles to cast in situ driven piles and their
request for globalization of M.S. and torn steel along with
the issue of excess scrap generated and returned by them
would be considered by NTPC favourably after the
reconciliation of Cement and Steel quantities by GIL with
Kawas site.
12. NTPC stated that since as per provision of contract only
cement is to be issued free of cost by NTPC and empty
cement bags are the property of NTPC, GIL should confirm
acceptance to the amendment to the contract issued on
30/01/89 on the return of empty cement bags. It was agreed
that since GIL has already returned substantial quantity of
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empty cement bags, NTPC will not insist for any further
return of empty cement bags.
NTPC GIL
sd/- sd/-
(emphasis supplied)
3. It is the case of the GIL that though NTPC had agreed to consider
the case sympathetically with respect to the price escalation,
nothing was done and since payments were not forthcoming the
dispute was initially referred to the "Engineer" as provided in
clause 26.1 of the General Conditions of Contract (for short
„GCC‟) on 30.4.1997. GIL filed a claim of `3,07,68,145.00 under
six heads along with a claim for interest of `3,67,53,342.00
calculated up to 30.4.1997 totaling to `6,75,21,487.00 plus (+)
interest from 1.5.1997 to 28.8.1997 when the demand for reference
to arbitration was made apart from the pendente lite and future
interest. This claim was denied by NTPC which also filed its
counter claim on 26.7.1997. The Engineer rendered his decision
on 31.7.1997 allowing part of the claims of GIL while allowing the
counter claim of the NTPC to the tune of `2.33 crore.
4. The GIL not being satisfied with the decision of the Engineer
invoked the arbitration clause on 28.8.1997. The claims and
counter claims of the two parties were referred to the Arbitral
Tribunal of three arbitrators.
5. The arbitration proceedings continued for four (4) years which
published the award on 21.10.2004. The Arbitral Tribunal
examined the claims and the counter claims of the parties which
were as under:
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Claims filed by GIL:
1. Balance price variation payment: `83,31,452/-
2. Extra payment on account of mass concrete fill `30,68,300/-
3. Extra payment on providing CNS layer `52,32,810/-
4. Compensation due to increase in cost
on account of delay `67,56,000/-
5. Extra expenditure/cost towards abnormal
hike in price of coarse aggregates `53,64,200/-
6. Payment of balance work done `21,15,483/-
7. Payment of interest @ 20%
[For pre-reference period, Pendent lite period and
Post award period (to be given later)] `3,67,53,342/-
8. Cost of reference to arbitration
9. Any other claim on finalization of the claim
Total:- `6,75,21,487/-
Counterclaims filed by NTPC
1. Award by the Engineer `2,33,21,347/-
2.(A) Against excess consumption of owner
issue materials. Balance amount over and above
the amount for this item in the Engineer's Award. `9,91,457/-
2.(B) Differential cast for using SRC in place of PSC `27,80,638/-
3. Liquidated damages for delay. Balance amount
over and above the amount for this items
in the Engineer's award `7,03,516/-
4. Interest on counter-claims over and above
the amount in the Engineer's award `1,54,41,773/-
5. Cost of arbitration `10,00,000/-
Total amount of counter-claims `4,44,36,363/-
6. The Arbitral Tribunal rejected all the counter claims and partly
allowed claim No.1 for Balance Price Variation Payment and
partly for Payment of balance work done. Against the claim of
`83,31,452.00 for balance price variation, the amount awarded was
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`78,64,197.00 as corrected by GIL. The claim for balance work
was allowed partly on the basis of admission of NTPC and it is
stated that this amount already stands paid after filing of the
appeals before us.
7. The NTPC aggrieved by the award filed objections under Section
34 of the Arbitration & Conciliation Act, 1996 (hereinafter
referred to as the „said Act‟). The learned single Judge in terms of
an order dated 26.5.2008 has partly set aside the award to the
extent that it awarded the balance price variation claim of GIL.
FAO (OS) No.337/2008 has been filed by GIL while FAO (OS)
430/2008 has been filed by NTPC. The grievance of GIL is
confined to the award being set aside in terms whereof the claim of
GIL for balance price variation has been allowed while the appeal
of NTPC is qua the amount awarded for the balance payment of
`18,51,102.29 towards balance price. It has also been urged that
the learned single Judge having come to the conclusion that the
award spoke of delays on the part of the GIL with no delay on the
part of the NTPC, failed to grant the counter claim.
8. A perusal of the arbitral award shows that it arrived at a conclusion
- that the main reason for delay in completing the construction of
the two towers was the inadequate data supplied by NTPC about
soil conditions at the site of the two cooling towers. The data
given in the tender document was found to be inadequate on two
accounts - (i) Sub soil water condition at the foundation level was
found to contain sulphates and ultimately sulphate resistant cement
had to be used; (ii) Abnormal variation in soil condition - soil
swelling pressure encountered was 34 tones/per sq.mtr. as against
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10 tonne/per sq. mtr. indicated in the tender, with the result that the
mass fill and CNS layer treatment had to be given to resist the
upward pressure. However, qua the adjudication of GIL blaming
NTPC for delay in execution of work the finding is that both
parties had contributed to the delay in some manner or the other,
while some delay occurred on account of heavy rainfall.
9. The Arbitral Tribunal took note of the minutes of the meeting
dated 15/16.10.1993 (exhibit C-117) recognizing it as the most
crucial piece of evidence. The meeting had been called to settle all
outstanding issues and claims under the contract with resolution on
various issues and the understanding that no other issues or claims
would be raised by GIL thereafter. This crucial piece of evidence
was relied upon by the Arbitral Tribunal to reject various claims of
GIL as those aspects stood compromised by exhibit C-117. The
counter claim was also rejected on this ground that none of these
aspects were raised during the minutes of the meeting and cannot
be raked up subsequently.
10. The learned single Judge, however, found that the award was
contrary to the express terms of the contract as it was categorically
provided that it was the obligation of GIL/contractor to inspect and
examine the site and its surroundings. Clause 13.2 in this behalf
reads as under:
"13.2 The Contractor shall inspect and examine the site and
its surroundings and shall satisfy himself before submitting
his bid as to the nature of the ground and sub-soil the form
and nature of the site, metrological information, soil data,
local and International Regulations,the quantities and nature
of work and material necessary for the completion of the
works and the means of access to the site, the
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accommodation, he may require and in general shall himself
obtain all necessary information as to risks, contingencies
and other circumstances which may influence or affect his
bid. Owner shall not entertain any claim under any
circumstances, arising out of variation in site/soil data,
whether such data is indicated in the bid documents or not,
as the contractor is expected to ascertain in all such data
himself to his entire satisfaction."
11. The learned single Judge has also observed that as per clause 8.0.0
of the Technical Specification Section c (o), GIL was to carry out
the soil investigation itself and it was specified that the information
like soil characteristics given by NTPC in the tender were only
indicative for guidance. Thus, the bidder was to fully satisfy itself
about the nature of the soil strata, its bearing capacity and other
characteristics to be encountered at the site of the cooling towers
prior to the submission of bid. The detailed discussion in this
behalf is contained in para 21 of the impugned order, which reads
as under:
"21. In addition to this as per Clause No. 8.0.0 of Technical
Specification Section c(o), the respondent/GIL was to carry
out soil investigation itself. It was specified that information
like soil characteristics given by the petitioner/NTPC in the
tender were only indicative for guidance. Bidder was to fully
satisfy himself about the nature of soil strata, its bearing
capacity and other characteristics to be encountered at the
site of cooling tower prior to submission of the bid. It was
specifically stated by the petitioner that owner (NTPC) does
not take any responsibility for actual soil data or for
variation between the actual soil data and the indicative data.
In view of this specific provisions in the contract and in
view of the fact that the tenders were invited on 3rd October,
1986 and tenders were to be submitted in December 1986
and there was a gap of more than 2 1/2 months between
invitation and submission of the bids, there was sufficient
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time with every tenderer to do the soil investigation, find out
the data and then submit his bid. Despite this specific
provision in the contract, the observation of the Tribunal
regarding soil condition and that the delay was due to
inaccurate soil data supplied by the petitioner is contrary to
the contract and does not stand the scrutiny of law. It was
not the obligation of the petitioner to give a data to the
claimant/respondent in respect of sub soil, water conditions
or about soil pressure to be encountered. The tenderer who
was to give bid, was at liberty to conduct sub soil testing
before giving bid. The bid was being given for a work,
which ran into several crores of rupees and every tenderer
knew that the work involved below ground construction and
sub soil structure for which proper soil testing and knowing
the nature of soil was necessary. If the tenderer gives bid
despite warning in the tender documents, without doing the
actual soil testing only relying on the indicative data, no
blame can be put on the owner (petitioner) and no
compensation could be awarded on this ground. It is settled
law that the Arbitrator is bound by the contract between the
parties. The Arbitral Tribunal cannot re-write the contract
and award claims. It can interpret the contract and arrive at a
conclusion about meaning of a particular clause. Such an
interpretation would be binding on the parties and Courts
would not find faults with interpretation unless it shocks the
conscience of the Court. But the Arbitral Tribunal cannot
altogether ignore the terms of contract governing
relationship of parties and make an award contrary to the
contract. In this case the Arbitral Tribunal at the very outset
came to the conclusion that delay in completion of work by
GIL was due to inadequate supply of soil data by NTPC.
These observations are contrary to express terms of the
contract. The Tribunal has not even bothered to look into
those terms and conditions of contract which deal with this
aspect what to talk of interpreting the contract. The award of
amount against claim No. 1 is liable to be set aside on the
ground of being contrary to contract itself."
12. Learned counsel for GIL made its three-fold submissions before us
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- (i) the contract itself provided for escalation and extension; (ii)
even if two views are possible the view of the arbitrator must
prevail; (iii) the contract was based on a factual situation which
went through a complete change and, therefore, escalation has
been granted.
13. Learned counsel referred to various legal pronouncements of the
Supreme Court. Learned counsel sought to rely upon the
judgement of the Supreme Court in K.N. Sathyapalan (Dead) By
Lrs. Vs. State of Kerala & Anr. (2007) 13 SCC 43, where in para
25 it was observed as under:
"25. In support of his submissions, Mr. Dave firstly
referred to the decision of this Court in P.M. Paul v. Union
of India [1989]1SCR115/1989 Supp (1) SCC 368 , wherein
a dispute arose regarding payment of escalated costs. By an
order of this Court, the dispute between the parties was
referred to a retired Judge of this Court to ascertain who was
responsible for the delay in completion of the building, what
was the repercussions of the delay and how the
consequences were to be apportioned. It had been contended
therein that in the absence of any escalation clause it was not
permissible for the Arbitrator to grant any escalation price
sought by the contractor. The Arbitrator, however, noted that
the claim related to the losses caused due to increase in
prices of materials and costs of labour and transport during
the extended period of the contract and accordingly allowed
20 per cent of the compensation sought. The question before
this Court was whether the Arbitrator had travelled beyond
his jurisdiction in awarding escalation costs and charges.
This Court came to a finding that the Arbitrator had not mis-
conducted himself in awarding the amount as he had done.
Once it was found that there was delay in execution of the
contract due to the conduct of the respondent, respondent
was liable for the consequences of the delay, namely,
increase in prices. It was held that the claim was not outside
the purview of the contract and arose as an incidence of the
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contract and the Arbitrator had jurisdiction to make such
award."
14. The plea that in the absence of any escalation clause it was not
permissible for the arbitrator to grant any escalation was examined.
The finding was that the arbitrator had not travelled beyond his
jurisdiction in awarding escalation costs and charges once it was
found that there was delay in execution of the contract due to the
conduct of the respondent and the respondent was liable for
consequences of delay. The Supreme Court relied upon an earlier
pronouncement in P.M. Paul Vs. Union of India (supra). We may,
however, note a crucial aspect in the aforesaid case, i.e., the
finding that there was delay in execution of the contract on account
of the conduct of the opposite party, while, in the present case
there is no such finding. On the other hand, at best it can be said
that both sides were responsible for the delay and, thus, it is a case
of contributory negligence on factors, apart from the certain
unforeseen circumstances as concluded by the Arbitral Tribunal,
which were held to be responsible for delay.
15. In Food Corporation of India Vs. Joginderpal Mohinderpal & Anr.
(1989) 2 SCC 347 while dealing with the Arbitration Act, 1940 it
was held that if the view taken by the arbitrator was a plausible
view, a speaking award was not required to be interfered with. To
the same effect are the observations in M/s. Sudarsan Trading Co.
Vs. Government of Kerala & Anr. (1989) 2 SCC 38.
16. Learned counsel also relied upon the judgement of the Supreme
Court in State of U.P. Vs. Allied Constructions (2003) 7 SCC 396
to contend that even if a view is taken by the arbitral tribunal on an
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aspect, in the absence of any specific clause dealing with that
aspect, the same was not required to be interfered with.
17. Learned counsel relied upon the observations in Tarapore &
Company Vs. Cochin Shipyard Ltd., Cochin & Anr. (1984) 2 SCC
680 to advance the third proposition where it was observed that
once rates quoted became irrelevant on account of the
circumstances beyond the control of the contractor, it would be
open to the contractor to make a claim for compensation.
18. Learned counsel for the NTPC, on the other hand, relied strongly
on the terms & conditions of the contract itself. Clause 13.2 quote
aforesaid was referred to, to contend that it was the duty of GIL as
per the contract to have satisfied itself as to the nature of the
ground and sub soil, the form and nature of the site/the quantities
and nature of work and material necessary for completion of the
works and the means of access to the site, etc. It clearly provided
that NTPC was not to entertain any claim under any circumstances
arising out of variation in site/soil data, whether such data is
indicated in the bid documents or not as the contractor was
expected to ascertain all such data himself to his entire satisfaction.
It was, thus, submitted that the clause was comprehensive and,
thus, the very premise of the award of the Arbitral Tribunal was
contrary to this clause as the aspect of soil variation had to be
taken into account by GIL who was also required to do all
search/testing in that behalf.
19. Learned counsel also sought to rely upon the instructions to the
bidders where the relevant clauses read as under:
"13.0 LOCAL CONDITIONS
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13.1 It will be imperative on each Bidder to fully inform
himself of all local conditions and factors which may have
any effect on the execution of the Works covered under
these documents and specifications. The Owner shall not
entertain any request for clarifications from the bidders,
regarding such local conditions.
13.2 The Contractor shall inspect and examine the site and
its surroundings and shall satisfy himself before submitting
his bid as to the nature of the ground and sub-soil, the form
and nature of the site, metrological information, soil data,
local and International Regulations,the quantities and nature
of work and material necessary for the completion of the
works and the means of access to the site, the
accommodation he may require and in general shall himself
obtain all necessary information as to risks, contingencies
and other circumstances which may influence or affect his
bid. Owner shall not entertain any claim under any
circumstances, arising out of variation in site/soil data,
whether such data is indicated in the bid documents or not,
as the contractor is expected to ascertain in all such data
himself to his entire satisfaction.
14.0 PRICE BASIS AND PAYMENTS
14.1 The bidders shall quote in their proposals lump sum
price for the entire scope of furnishing and erecting the
equipment (covered under the Technical Specifications) as
required in the Bid Proposal Sheets on a base price plus
escalation basis unless otherwise specified in the Technical
Specifications. Bidders quoting a system of pricing other
than that specified run the risk of rejection.
Bidder shall indicate bid prices in Indian Rupees only."
20. The aforesaid clauses, thus, require the bidders to fully inform
themselves of the local conditions and factors and the bid had to be
made on an agreed condition that the bidder had already properly
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investigated and considered such factor while submitting the
proposal. No claim for financial adjustment qua the contract
awarded was to be entertained. It is in these circumstances that it
was a firm price bid.
21. We had specifically asked learned counsels for the parties as to the
cause of the delay in preferring the claim as the list of dates seems
to indicate a complete silence between the time exhibit C-117 was
drawn on 15/16.10.1993 and the reference of the dispute to the
Engineer on 30.4.1997. We are informed that the final bill was
made only on 26.7.1996. The final bill was sent under the cover of
the letter dated 27.8.1996. Learned counsel for GIL also referred
to exhibit C-118 dated 25.8.1994 which is a fax addressed by GIL
to NTPC. The fax records that there was considerable delay in
receiving substantial payments from NTPC which has defeated the
very purpose of an amicable settlement through a joint meeting
and requested release of outstanding payments including escalation
immediately without further delay. On the other hand learned
counsel for the NTPC has relied upon a communication dated
5.11.1989, exhibit C-120 which is addressed by NTPC to GIL. It
refers to the minutes of the meeting dated 15/16.10.1993 in terms
whereof NTPC had agreed to consider and examine the request for
escalation. The letter also states that a decision in this behalf by
NTPC was to be final and binding as per the provisions of the
contract. NTPC states in the letter, thus, there is no question of
payment as per bill of the GIL especially because the actual
execution of the work was considerably delayed. As regards extra
item of work, it is stated that the bill already stands withdrawn.
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22. In the aforesaid factual matrix we have given our thought to the
rival contentions of the learned counsels for the parties. It is trite
to say that the arbitrator is a creation of the contract and must be
bound by the terms & conditions of the contract as observed by
constitution bench of the Hon‟ble Supreme Court in Secy.
Irrigation Department, Govt. of Orissa and Ors. v. G. C. Roy,
(1992) 1 SCC 508 and the same view was further considered in
New India Civil Erectors (P) Ltd. V. ONGC, (1997) 11 SCC 75.
No doubt the arbitrator has a leeway to interpret terms &
conditions of the contract and so long as the view taken by the
arbitrator is a plausible view, it is not required to be interfered with
merely because there is another plausible view. In the context of
this legal principle if the terms of the contract are analyzed we find
that clause 13.2 was all encompassing in its terms. This is the
clause relied upon by the learned single Judge also. Clause 13.2
puts an obligation on GIL to satisfy itself as to the nature of
ground and sub soil and that no claim by NTPC would be
entertained under any circumstances arising out of "variation in
site soil data, whether such data is indicated in the bid document or
not". GIL was expected to ascertain all such data itself to its entire
satisfaction. Not only that, as per the instructions to the bidders
clause 13.0 dealt with local conditions and the bidder was to fully
inform itself of all local conditions and the factors which may have
any effect on the execution of the work and no financial
adjustment was to be entertained in this behalf, the price basis
being firm.
23. It is also the finding of the Arbitral Tribunal that the allegation of
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GIL, that NTPC was responsible for the delays, is not correct. At
best the finding is that of contributory delays as GIL also delayed
in the execution of the contract.
24. The most important aspect to our mind is the minutes of the
meeting dated 15/16.10.1993 (exhibit C-117). There are two
aspects to these minutes. Firstly they record how the parties have
understood the contract. Secondly they provide for settlement of
all issues within the parameters of the minutes.
25. If the aforesaid document is scrutinized it will be seen that a
number of claims made by GIL were beyond the terms of the
contract which NTPC refused to honour and the claims were
withdrawn by GIL, e.g., extra payment on account of CNS
treatment and mass fill. However, in view thereof GIL pleaded
that NTPC should sympathetically consider payment of escalation
on basis of actual work done instead of the scheduled period and
NTPC agreed to examine the claim even though it was beyond the
provisions of the contract. This was, however, with the
clarification that NTPC‟s decision in this regard would be final and
binding on them to which GIL agreed.
26. It was initially sought to be pleaded before us that there was
neither any acceptance nor rejection in this behalf and that is why
in the list of dates after the minutes of this meeting the next date
mentioned is of 30.4.1997. However, when we probed the matter
further and asked learned counsel for the GIL as to why there was
absence of any communication from both sides for such a long
period of time, C-118 was supplied to us which was dated
25.8.1994 and sought to rake up the issue of balance payment by
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GIL with NTPC. NTPC, however, relied upon C-120 which was a
subsequent communication dated 5.11.1996 rejecting this claim as
beyond the terms of the contract. Learned counsel for GIL sought
to contend that this document was not really a rejection but we fail
to appreciate the plea in view of what has been categorically stated
therein. As per the minutes of the meeting dated 15/16.10.1993
the decision of NTPC in this behalf was to be final. Thus, the
chapter qua this issue also stood closed with that rejection.
27. As noticed above even while making the claim it was
acknowledged that this claim was beyond the pale of the terms of
the contract but towards the objective of arriving at a settlement
NTPC had agreed to examine the claim which it ultimately did not
accede to as it wanted to make payments only in terms of the
contract.
28. We are, thus, of the view that the Arbitral Tribunal went beyond
the specific terms of the contract to award an amount and, thus, the
learned single Judge was right in interfering with the same. The
judgements referred to by learned counsel for the GIL do not assist
it as none of them lay down a proposition and cannot lay down a
proposition that arbitrator can go beyond the terms of the contract.
It is not as if the terms of the contract are silent on a particular
aspect and, thus, the Arbitral Tribunal on the basis of the evidence
has awarded some amount. It is not absence of any specific clause,
but a view taken in the teeth of a specific clause which is in
question. We have also noticed while referring to the judgement in
K.N. Sathyapalan (Dead) By Lrs. case (supra) that the crucial
aspect in that case was that the blame for the delay lay at the door
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of the opposite party which is not so in the present case.
29. In so far as the appeal of NTPC is concerned, it is strange that on
the one hand NTPC has relied upon the minutes of the meeting of
15/16.10.1993 which are all encompassing and yet sought to rake
up the counter claim which is, thus, rightly rejected by the Arbitral
Tribunal - an aspect which has not been interfered with by the
learned single Judge. We are unable to accept the contention of
learned counsel for NTPC that the minutes only dealt with the
claims of GIL and not the counter claims of NTPC. It is an all
encompassing discussion and obviously the counter claims of the
NTPC was in the nature of a counter blast. This finding is also,
thus, not required to be interfered with.
30. We, thus, find no merit in these cross appeals which are dismissed
leaving the parties to bear their own costs.
SANJAY KISHAN KAUL, J.
SEPTEMBER 06, 2012 VIPIN SANGHI, J.
b'nesh
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