Delhi High Court
Airports Authority Of India vs Sikka Associates on 21 December, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP (COMM) NO.164/2017
Reserved on: 29th November, 2017
Date of decision: 21st December, 2017
AIRPORTS AUTHORITY OF INDIA ..... Petitioner
Through: Mr. K.K. Rai, Senior
Advocate with Mr. Digvijay
Rai, Ms. Chetna Rai, Mr.
Anshul Rai and Mr. Pulkit
Tyagi, Advocates.
versus
SIKKA ASSOCIATES ...... Respondent
Through: Mr. Arun Kathpalia, Senior
Advocate with Mr. Angad
Mehta and Mr. Samaksh
Goyal, Advocates.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. The present petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'Act') has
been filed by the petitioner challenging the arbitral award dated 23 rd
March, 2015 passed by the Sole Arbitrator.
2. The petitioner had invited global design competition for
comprehensive architectural and engineering services for the
proposed new Domestic Terminal Building at NSCBI Airport at
OMP (COMM) No.164/2017 Page 1
Kolkata (West Bengal). The competitive design submitted by the
respondent was approved by the Assessment Committee of the
petitioner and the respondent was appointed as consultant on 1 st
June, 2007 for air side of the project. Since the proposed integrated
Passenger Terminal Building was to cater to 20 million passengers
annually, the petitioner also appointed another Architectural
Consultant for city side works of the Airport.
3. On 21st August, 2008, an agreement was entered into
between the petitioner and the respondent for execution of
'Architectural/Engineering Consultancy Services' for the proposed
new integrated passenger terminal building at NSCBI airport,
Kolkata. Some of the terms of this agreement are relevant for the
purposes of adjudication of the present petition and are quoted
herein below:-
2.0 PROFESSIONAL FEE
2.1 Professional fee shall be paid only for the items of
works for which professional services have been rendered by
the Consultant.
2.2 1n consideration of the professional services rendered
by the Consultant, he shall be paid a professional fee of 5%
of the actual cost of the work or the awarded cost whichever
is lower of the subhead of the works for which consultant has
rendered Professional services. In addition to the
professional fee, service tax will be paid as per the Act in
vogue at the time of the payment of the bill. The initial
payment shall be made on approved preliminary estimated
cost. The cost of the work shall not include costs of
aerobridges, in-line Baggage handling Conveyor system,
Baggage claim Belts, telephone exchange equipment,
OMP (COMM) No.164/2017 Page 2
Specialized hand/Baggage security scanning items, DG Sets,
FIDs, CCTV, Surveillance CCTV, check-in counters, custom
and immigration counters and dust bins. For effecting stage
wise payments the cost of works shall be as specified in
clause 4.1. Nothing extra shall be paid to the Consultant on
account of Soil investigation, site survey, vetting from IIT,
presentations, model, computer simulation, presentation
drawings etc.
Items like travellators, escalators, elevators, counters,
concourse and security hold chairs and furniture would be
included towards payment till stage 4.
The payment to State Electricity Board for dedicated power
supply may be included in the cost estimate of the project but
not to be included for payment to Consultant.
3.0 SCHEDULE OF PAYMENT
3.1 Details of services to be rendered at various stages
shall be as mentioned in Annexure 'A'.
3.2 The Consultant shall be paid professional fee in the
following· stages consistent with the work done plus other
charges and reimbursable expenses as agreed upon. On
submitting the bill the consultant shall certify completion of
stage work.
4.0 EFFECTING PAYMENT TO THE CONSULTANT
4.1 The fee payable to the Consultant shall be computed on
the actual cost of works or the awarded cost whichever is
lower. The payment due to the Consultant at different stages
shall be computed on the following basis:
(i) At Stage 1 : On rough estimate of cost
(ii) At Stage 2,3&4 : On preliminary estimate of
cost
(iii) At Stage 5 : On preliminary estimate of
OMP (COMM) No.164/2017 Page 3
cost excluding the estimated cost
of works /items specified in clause
4.4
(iv) At Stage 6 & 7 : On Awarded cost or actual cost
whichever is lower of the
packages specified in para 2.20
of Annexure A
(emphasis supplied)
4. The estimated cost of work put to tender for the entire project
was Rs.1123.418 crores (civil+E&M works). The share of
estimated cost amongst two consultants i.e. the respondent and M/s
Varinder Khanna and Associates (hereinafter referred to as M/s
VKA) was 72.98% and 27.02%.
5. The petitioner vide its letter dated 24th January, 2011
addressed to the respondent, stated that the Airport Authority of
India Board had approved the professional services rendered by the
consultant on being paid a professional fee @5% of the estimated
cost of the work or the awarded cost whichever is lower. It was
stated that the inadvertence clause 2.2 of the agreement had
wrongly recorded that the consultant shall be paid a professional fee
@5% of the actual cost of the work or the awarded cost, whichever
is lower. The petitioner, by the above letter, called upon the
respondent to forward its acceptance to the change in the agreement
so as to move in affirmative to the Board approval and to read that
OMP (COMM) No.164/2017 Page 4
the consultancy services shall be paid @ 5% of the estimated cost
of the work or the awarded cost whichever is lower.
6. The respondent vide its letter dated 14th March, 2011 refused
to give its consent to such modification. The respondent stated that
commensurate with the work completed by it, 70% of the fee has
already been paid. It was further submitted that as the respondent
was performing the work in joint collaboration with an international
firm of architects namely RMJM-Hong Kong and there are other
financial commitments which are based on the fee receivable by the
respondent under the agreement so executed, change suggested by
the petitioner was unworkable and no such unilateral change in the
terms was acceptable to the respondent.
7. The petitioner did not take any further action on its letter
dated 24th January, 2011, on the other hand, further work was
awarded to the respondent by the petitioner.
8. The respondent continued to provide service under the
agreement till completion of building in March, 2013 whereafter it
raised its final bill for payment by the petitioner. In the meantime,
as the petitioner has stopped making payments on the Running
Account Bills, the Sole Arbitrator was appointed by this Court vide
its order dated 8th October, 2012 in Arbitration Petition
no.363/2012.
9. The respondent raised the following claims in its statement of
claim:-
OMP (COMM) No.164/2017 Page 5
"a) Claim No.1- Payment of Rs. 21,31,40,955/- being the
balance fee amount withheld from each bill illegally by the
Respondent.
b) Claim No. 2- Payment of interest @ 18% per annum from
the date of each running account bill till the date of
reference.
c) Claim No. 3 - Payment of interest pendent lite and interest
till the date of realization of the said amount @ 18%.
d) Claim No. 4- Claim for an amount of Rs. 5 Crores as
damages for loss of reputation and goodwill.
e) Claim No. 5 - Payment of cost of Arbitration
proceedings."
10. The petitioner, on the other hand, raised the following
counter claims before the Sole Arbitrator:-
"a) Counter Claim 1 -Refund of an amount of Rs. 3.79
Crores being excess payment of Professional fee.
b) Counter Claim 2 - Cost of Arbitration Proceedings/
litigation Rs. 2,00,000/-.
c) Counter Claim 3 - Interest @ 18% p.a. from date of
Arbitration till realization on the counter claim amounts."
11. The Sole Arbitrator vide its impugned award has awarded a
sum of Rs.19,02,47,938/- in favour of the respondent under Claim
no.1 along with interest.
12. Learned senior counsel for the petitioner submits that the
Arbitrator has committed a grave error in ignoring the minutes of
96th Board Meeting of the petitioner held on 16th March, 2006,
wherein the following resolution had been passed:-
OMP (COMM) No.164/2017 Page 6
RESOLVED-that the approval of the Board be and hereby is
accorded for inviting EOI for the New Domestic Passenger
Technical at NSCBI Airport, Kolkata for short-listing and
then holding global design competition as per the guidelines
of the Council of Architecture for architectural and
engineering services for the New Domestic passenger
Terminal at NSCBI Airport, Kolkata. The firm appointed
for providing architectural and engineering services shall
be paid fee at the rate of 5% of the estimated cost or
awarded cost whichever is lower. Reimbursable charges
shall be in accordance to the provisions of Council of
Architecture."
(emphasis supplied)
13. He further submits that in the 110th Board Meeting of the
petitioner held on 17th May, 2007 again the following Board
Resolutions were passed:-
"RESOLVED FURTHER that the approval of the Board be
and is hereby accorded for AAI to appoint the winning
architectural firm i.e. M/s. Sikka and Associates, New Delhi
with consortium M/s RMJM Hong Kong Ltd., Hong Kong
and to prepare the detailed architectural design proposals,
engineering services and estimates for the Domestic building
of the Integrated terminal with enhanced scope of work (from
43200 sq.m. to 129624 sq.m) to meet the requirement of 16
million annual handling capacity at consultancy fee of 5% of
the estimated cost or awarded cost whichever is lower."
(emphasis supplied)
14. He submits that as the Board had accorded its approval only
on the fee being 5% of the estimated cost or the awarded cost
whichever is lower, the agreement by mistake records that such fee
would be paid at 5% of actual cost or the awarded cost whichever is
OMP (COMM) No.164/2017 Page 7
lower, and the petitioner could not have been held liable under the
same. He further submits that this mistake in the agreement was
known to the respondent as in a meeting held between the
respondent and the Member(Planning) of the petitioner on 13th July,
2007, the respondent had been informed that the latest agreement
signed between the petitioner and the consultant for the Integrated
Passenger Terminal Building at Madurai Airport in Tamil Nadu
was to be followed and in the said agreement, there was a term
correctly recording the fact that the consultant was to be paid 5% of
the estimated cost or the awarded work whichever is lower. He,
however, concedes that this agreement was not placed before the
Arbitrator and, therefore, in my opinion, no reliance can be placed
on the same and the submission of the learned senior counsel for the
petitioner based on Madurai Agreement cannot be accepted.
15. Learned senior counsel for the petitioner then submitted that
as the agreement between the parties was not in terms of the Board
Resolution, the same shall be deemed to have been executed
without authority and, therefore, not binding on the petitioner. He
further submits that as the agreement was executed due to a
mistake, the petitioner cannot be held bound by the same. He relied
upon the judgment of the Supreme Court in Sales Tax Officer,
Banaras & Ors vs. Kanhiya Lal Mukund Lal. 1959 SCR 1350 to
contend that under Section 72 of the Indian Contract Act, the
respondent cannot retain the benefit of a contract entered into by
mistake of the petitioner. Lastly, he contends that the Arbitrator in
OMP (COMM) No.164/2017 Page 8
his impugned award refused to place reliance on the above
mentioned Board Resolution only because extracts of the same had
been produced before him and not the full text. He further submits
that only the relevant portion of the Board Resolution were
produced before the Sole Arbitrator and as these were not denied by
the respondent, therefore, they should have been relied upon by the
Sole Arbitrator. Relying upon the judgment of the Supreme Court
in K.P.Poulose vs. State of Kerala & Anr. 1975 (2) SCC 236, he
submits that as these documents were relevant for the purposes of
adjudication of the disputes, it was the duty of the Arbitrator to
have called for the same and as he has not done so, the award
suffers from the manifest error apparent on the face of the award.
16. On the other hand, the learned senior counsel for the
respondent submits that the agreement is unambiguous in nature
and, therefore, has to be interpreted on its own terms. He submits
that the plea of the petitioner that there was an error in the contract
cannot be accepted as this term was repeated not only in clause 2.2
but also in clause 4.1 to the same effect. He further submits that for
the first time, a grievance recording the alleged mistake in the
agreement was raised only after about 3 ½ years of the execution of
the agreement. In unequivocal terms, this plea was not accepted by
the respondent. The petitioner thereafter took no action to terminate
the agreement but instead, not only continued to take work from the
respondent, but also awarded further works to the respondent on the
same terms. He further submits that the respondent cannot now
OMP (COMM) No.164/2017 Page 9
turn around and claim some mistake in the execution of the
agreement. He further submits that before the execution of the
agreement, the Board Resolutions were never brought to the notice
of the respondent and are, therefore, not binding on the respondent;
they, in any case, are matters of indoor management of the
petitioner. He submits that even before the Arbitrator no relief of
declaration was sought by the petitioner that it is not bound by the
terms of agreement executed between the parties. Relying upon
the judgment of the Associate Builders vs. DDA (2015) 3 SCC 49,
it was submitted that the test to judge an award under Section 30 of
the Arbitration Act, 1940 is no longer applicable under 1996 Act
and this Court cannot act as a Court of appeal while examining the
validity of the arbitral award under Section 34 of the Act.
17. I have considered the submissions made by the learned senior
counsels for the parties. Before proceeding further, I may only
quote the relevant extracts from the impugned arbitral award where
this issue of a purported mistake in the agreement has been
considered by the Arbitrator:-
(vi) After carefully going through all the documents
and records produced by the parties and hearing at
length both the parties, I have come to the following
conclusion. It is undisputed that clause 2.2 of the
agreement between the parties clearly stipulates that "In
consideration of the professional services rendered by
the consultant, he shall be paid a professional fee of 5%
of the actual cost of the work or the awarded cost
whichever is lower of the sub head of the works for which
consultant has rendered professional services." This
OMP (COMM) No.164/2017 Page 10
contract was entered into on 21st August, 2007 whereas
the board meeting of AAI is stated to have been held on
17th May, 2007 i.e. nearly three months prior to the
signing of the agreement. Since the decision of the
board was well known to the respondents as on the date
of signing of this agreement, the respondents could not
explain or place before me any documents or
circumstances explaining as to how this clause got
written differently in the contract document in the first
place.
Further, a careful study of the contract document reveals
that similar provisions (as at clause 2.2) are repeated at
least at two more places in the contract. At clause 4.1,
the contract states that "the fee payable to the consultant
shall be computed on the actual cost of the works or the
awarded cost whichever is lower". Again at sub clause
4.1 (vi) relating to the payment at stage 6 and 7 it states
"on awarded cost or actual cost whichever is lower of
the packages specified in para 2.20 of Annexure A". It
therefore appears that the contract document was framed
with the clear intent and understanding that the fee is to
be paid on the basis of lower of the awarded cost or the
actual cost since this aspect is reflected at least at three
different clauses in the contract document. This therefore
cannot be accepted as an inadvertent error or a typing
mistake as argued by the Respondents.
The argument of the respondents that upto stage 5
payment was to be made on rough cost estimate and
therefore this omission escaped their attention also does
not appear to be plausible. Clause 4.1 of the agreement
clearly states that payment at stage 1 only shall be made
on rough estimated cost. Payment at stage 2,3 and 4 is
to be made on preliminary estimate of cost. Similarly,
payment at stage 5 is to be made on the preliminary
estimate of the cost excluding the items specified in
clause 4.4. Payment at stage 6 and 7 is to be made on
awarded cost or the actual cost whichever is lower. It is
undisputed that when the matter was raised by the
OMP (COMM) No.164/2017 Page 11
respondent in January 2011, the consultancy works had
reached stage 6b(ii) which means 70% of the total fees
was payable at that stage and some payments had
already been made on the awarded costs (which is now
proposed to be replaced by estimated cost by the
Respondent). One cannot fault the field units of AAI on
this, as the payments released were as per the contract."
18. The Arbitrator has further held that:-
"In the face of large number of judgments of the apex court
and High Courts cited above, and the fact that for nearly four
years parties continued to act as per the provisions of the
clause 2.2 of the agreement, the principle of estopple also
comes into play. Considering all the factors mentioned
above, I hold that the modifications proposed to be carried
out in clause 2.2 of the agreement cannot be sustained in
view of the objections raised by the Claimant and a large
number of citations of the Apex court barring such unilateral
actions. Therefore, the letter of the respondents dated 24 th
January, 2011 proposing changes in clause 2.2 of the
contract is struck down. The respondent has to finalize the
final bill based on the terms and conditions of clause 2.2 as it
existed in the original agreement entered into between the
two parties."
19. I have extracted the award of the Sole Arbitrator in extensio
only to show that the Arbitrator has considered the documents
placed before him and the submissions of the parties. I do not even
find any error of law in the impugned award. The argument based
on Article 299 of the Constitution of India was not raised before
me, in fact, learned senior counsel appearing for the petitioner
OMP (COMM) No.164/2017 Page 12
conceded that the said Article would have no relevance to the facts
of the present case.
20. Reliance of the learned senior counsel for the petitioner on
the Letter dated 24.01.2011 addressed by the petitioner to the
respondent is unfounded. The proposal to amend the contract not
having being accepted by the Respondent, the Petitioner cannot
claim to be discharged of its obligations under the contract. Section
62 of the Indian Contract Act, 1874 provides as under:-
"62. Effect of novation, rescission, and alteration of
contract- If the parties to a contract agree to substitute a
new contract for it, or to rescind or alter it, the original
contract need not be performed".
21. Reading of the above provision would show that only if the
parties to a contract agree to alter the same, the original contract
need not be performed. An alteration in the contract can be made
only where the parties are ad idem to the same. A party to the
contract cannot unilaterally alter or modify the terms of the
agreement. In Bharat Sanchar Nigam Limited And Another Vs.
BPL Mobile Cellular Limited And Others (2008) 13 SCC 597,
Supreme Court held that:-
"44. If the parties were ad idem as regards terms of
the contract, any change in the tariff could not have
been made unilaterally. Any novation in the contract
was required to be done on the same terms as are
required for entering into a valid and concluded
contract. Such an exercise having not been resorted to,
OMP (COMM) No.164/2017 Page 13
we are of the opinion that no interference with the
impugned judgment is called for".
22. Similarly, in Delhi Development Authority And Another Vs.
Joint Action Committee, Allottee Of SFS Flats And Others (2008)
2 SCC 672 Supreme Court reiterated the above position of law as
under :-
"62. It is well-known principle of law that a person
would be bound by the terms of the contract subject of
course to its validity A contract in certain situations
may also be avoided. With a view to make novation of
a contract binding and in particular some of the terms
and conditions thereof, the offeree must be made
known thereabout. A party to the contract cannot at a
later stage, while the contract was being performed,
impose terms and conditions which were not part of
the offer and which were based upon unilateral
issuance of office orders, but not communicated to the
other party to the contract and which were not even
the subject- matter of a public notice. Apart from the
fact that the parties rightly or wrongly proceeded on
the basis that the demand by way of fifth installment
was a part of the original Scheme, DDA in its counter-
affidavit either before the High Court or before us did
not raise any contra plea. Submissions of Mr. Jaitely
in this behalf could have been taken into consideration
only if they were pleaded in the counter- affidavit filed
by DDA before the High Court.
Xxxxxx xxxxxx
66. The stand taken by DDA itself is that the
relationship between the parties arises out of the
contract. The terms and conditions therefor were,
therefore, required to be complied with by both the
OMP (COMM) No.164/2017 Page 14
parties. Terms and conditions of the contract can
indisputably be altered or modified. They cannot,
however, be done unilaterlally unless there exists any
provision either in contract itself or in law. Novation
of contract in terms of Section 60 of the Contract Act
must precede the contract-making process. The
parties thereto must be ad idem so far as the terms and
conditions are concerned. If DDA, a contracting
party, intended to alter or modify the terms of contract,
it was obligatory on its part to bring the same to the
notice of the allottee. Having not done so, it, relying
on or on the basis of the purported office orders which
are not backed by any statute, new terms of contract
could (sic not be) thrust upon the other party to the
contract. The said purported policy is, therefore, not
beyond the pale of judicial review. In fact, in the
realm of contract, it cannot be stated to be a policy
decision as such.
Xxxxxx xxxxxx
80. A definite price is an essential element of
binding agreement. A definite price although need not
be stated in the contract but it must be worked out on
some premise as was laid down in the contract. A
contract cannot be uncertain. It must not be vague.
Section 29 of the Contract Act reads as under:
"29. Agreements void for uncertainty- Agreements, the
meaning of which is not certain, or capable of being
made certain, are void."
A contract, therefore, must be construed so as to lead
to a conclusion that the parties understood the
meaning thereof. The terms of agreement cannot be
vague or indefinite. No mechanism has been provided
for interpretation of the terms of the contract. When a
contract has been worked out, a fresh liability cannot
be thrust upon a contracting party.
OMP (COMM) No.164/2017 Page 15
81. It is well settled that a definite price is an
essential element of a binding agreement. Although a
definite price need not be stated in the contract, but
assertion thereof either expressly or impliedly is
imperative".
23. The submissions of the learned senior counsel for the
petitioner that there was a mistake in the contract and therefore, the
respondent cannot be paid more than what was agreed to be paid
under the Board Resolution, is also ill-founded. Section 22 of the
Indian Contract Act provides that a Contract caused by one of the
parties to it being under mistake as to a matter of fact, does not
make the contract voidable. In the present case, even otherwise, the
petitioner on realising the alleged mistake in the contract, never
resended the same and on the other hand not only continued with
the same but also gave additional work to the respondent. The
judgment of Supreme Court in Kanhiya Lal Mukund Lal (Supra)
relied upon by the learned senior counsel for the petitioner would
have no application to the facts of the present case as it was a case
where the respondent claimed to have paid certain tax due to a
mistake of law and it was held that "Mistake" in Section 72 of the
Contract Act comprised within its scope mistake of law as well as a
mistake of fact. In the present case, there is neither a mistake of fact
nor a mistake of law. The parties agreed to a particular
consideration in the agreement and are bound by the same. As
observed above, a party cannot seek unilateral modification of such
consideration alleging that it has been agreed by it due to some
OMP (COMM) No.164/2017 Page 16
mistake, especially where more than 70% of the work had already
been completed by the other party.
24. With respect to reliance of the Petitioner on the Board
Resolution passed in the 110th Meeting, the Arbitrator holds as
under:
It is further noted that complete papers relating to the tenth
meeting of AAI Board held on 17th May, 2007 were not filed
before the arbitrator by the respondent. Only an extract of
the board resolution in a typed version has been filed before
this arbitrator. The respondents did not file a true copy of
the original board resolution which was signed by the board
members. Therefore, it is also not known what proposal was
put up before the AAI Board, which officer chaired the board
meeting as also the designations of other members involved
in decision making. Also whether at any stage the claimant
was made privy to the decision of the AAI board. This
information is vital to understand the sequence of events
which lead to formulation of clause 2.2 being different from
what was approved by the board. Is it possible that the
board resolution itself was improperly drafted by the officers
of the respondents without realizing its implications when
they knew all along that the current market practice is lower
of the tendered cost or the actual cost for calculating the fee?
The respondent could not convincingly explain as to how the
words tendered cost or the actual cost came to be written in
the agreement when this was never their intention. Further
why the respondents did not cancel or suspend further work
as the contract as per their own argument was void or
voidable being signed by parties not competent to contract?
The reference to the constitution of India has surfaced for the
first time during oral arguments only. According to the
arguments put forth by the learned counsel of the
respondents, the contract was voidable but the Respondent
took no action in that direction had that been their intention.
Therefore, clearly this argument is an afterthought. No
OMP (COMM) No.164/2017 Page 17
judgment of the Apex court or any high court was cited in
support of their contention. It is patently unfair to obtain full
consultancy work & thereafter turnaround and modify the
rates payable on some pretext. In absence of answers to
these questions the arguments of the respondents are not at
all convincing."
25. The Arbitrator has rightly concluded that in absence of all
material facts leading to the execution of the agreement being
placed on record by the petitioner, it was not proper to rely only
upon the extracts of the Minutes of Meeting. It is the duty of the
party to lead the best evidence in its possession, which could throw
light on the issue in controversy. It is not for the Arbitrator to go
searching for the evidence which a party possess but fails to
produce before him. Reliance of the learned senior counsel for the
petitioner on the judgment of Supreme Court in KP Poulose (Supra)
is to no avail as the same was a judgment under the Arbitration Act,
1940 and as held by the Supreme Court in Sundaram Finance
Limited Vs. NEPC India Ltd. (1999) 2 SCC 479, the 1996 Act is
very different from the Arbitration Act, 1940 and therefore, the
provisions thereof are to be interpreted and construed independently
uninfluenced by the principle underlined the 1940 Act. Supreme
Court in Associates Builders (Supra) has given broad parameters
within the confines of which, Court exercising its jurisdiction under
Section 34 of the Act, can set-aside an Arbitral Award. I do not find
any such ground being made out in the present case. Even
otherwise, in KP Poulose (Supra) the Court was dealing with the
situation where the documents had not been produced by the
OMP (COMM) No.164/2017 Page 18
department though the same were relevant to arrive at a just and fair
decision in favour of contractor. I cannot read the said judgment to
mean that even where a document is in possession of the party who
seeks to rely upon the same, but does not produce the same, there
should be an obligation on the Arbitrator to call for the said
document, failing which the Award can be set aside on the ground
of it being in conflict with the Public Policy of India. In any case,
the agreement has to be interpreted on its own terms. The terms of
the agreement being unambiguous in nature, the correspondence or
the conduct of the parties prior to the execution of such agreement
cannot be looked into for modifying the same.
26. As held in Associate Builders (supra), this Court applying the
'public policy' test to an Arbitral award, cannot sit as a Court of
appeal and even errors of fact cannot be corrected. The Arbitrator
is the ultimate master of the quantity and quality of evidence led
before him. Court cannot reassess or re-appreciate such evidence to
arrive at a different conclusion.
27. It is lastly submitted by the learned senior counsel for the
petitioner that the final award in favour of the respondent is also
incorrect as the actual cost of the work was Rs.15,60,52,16,015/-
and not Rs.2491.47/- crores as determined by the Arbitrator. It is
submitted that the completion cost of the project was not
Rs.2491.47 crores as it includes escalation and overheads.
28. I am unable to accept the said submission of the leaned senior
counsel for the petitioner. Once the contract provides for the
OMP (COMM) No.164/2017 Page 19
'actual cost', the cost on account of escalation and other project
over heads would necessarily form part of the actual cost. The
Arbitrator has also worked out cost based on the documents that
were produced before him and has held as under:-
In the 8th hearing held on 31st January, 2014 the respondents
had sought time till 21st February 2014 to finalise EOT and
the final bill. The respondents sought further extension till
31st March, 2014 which was also granted vide orders of the
arbitrator dated 05.03.2014. Even by this date, the details
were not submitted. Finally the respondents vide their mail
dated 29th May 2014 forwarded a final bill figure of the
contract as worked out by their Engineering (project)
division for the total work done including all deviations but
excluding price escalation as Rs. 15,60,14,17,818/-. This
figure was further modified by the respondents (G M F&A of
AAI) vide their mail dated 20.10.2014 where a final
completion cost of Rs. 2491.47 Crores is mentioned. After the
final hearing held on 2nd December 2014, the respondents
submitted final bill of the claimant vide their letter dated
22.12.2014. The Claimant vide their document dated
31.12.2014 has finally revised his bill as document C-VIII.
As per clause 2.2 of the agreement between the parties the fee
is payable on "actual cost of work or the awarded cost
whichever is lower". The completion cost intimated by the
respondents as above is Rs. 2491.47 Crore which is higher
than the tendered amount of Rs. 1602.61 Crores. Thus, the
amount of fee shall have to be worked out on the tendered
amount as laid down in clause 2.2 of the contract. The fee
has to be worked out on share of the work of the claimant i.e.
on Rs. 1169.58 Crores (Share of the claimant in total
tendered amount of Rs. 1602.61 Crores @ 72.98%) as
claimed in his document C-V plus the service tax as
admissible. Further consultancy fees at the same rates are
also payable for additional works done by the claimant as
brought out in this document. The claimant in document C-
OMP (COMM) No.164/2017 Page 20
VII has further submitted that a sum of Rs. 2,42,130/- (actual
fee Rs. 2,36,549 + Service Tax) has been remitted through
RTGS to his account by the Respondent on 8th of December,
2014. This amount has also been considered while working
out detailed calculations of fee payable in Annexure-I at the
end of the award.
29. As the actual cost of the work was more than the awarded
costs, the Arbitrator has rightly granted the fee payable to the
respondent on the basis of the awarded costs as it was lower of the
two. I find no reason to disagree with the said Award.
30. No contention was raised before me with respect to the rate
of interest awarded by the Arbitrator.
31. In view of the above, I do not find any ground to interfere
with the above finding of the Arbitrator and I find no merit in the
present petition. The same is accordingly dismissed with no order
as to costs.
NAVIN CHAWLA, J
DECEMBER 21, 2017
RN
OMP (COMM) No.164/2017 Page 21
