Delhi High Court
Gail (India) Limited vs Gupta Bros (India) on 11 January, 2022
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 11th January, 2022
+ O.M.P. (COMM.) No.474/2018
GAIL (INDIA) LTD. ..... Petitioner
versus
M/s GUPTA BROS (INDIA) ..... Respondent
Advocates who appeared in this case:
For the Petitioner :Mr. Yoginder Handoo with Mr. Ashwin
Kataria & Mr. Raghav Bhalla, Advs. along
with Mr. Mrinal Singh (Law Officer) for
GAIL India.
For the Respondent : Mr Sanjiv Kakra, Senior Advocate with Mr
Abhishek Batra, Advocate.
CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
Introduction
1. GAIL (India) Ltd. (hereinafter 'GAIL') has filed the present
petition under section 34 of the Arbitration and Conciliation Act, 1996
(hereinafter the 'A&C Act') impugning an arbitral award dated
31.07.2018 (hereinafter the 'impugned award') delivered by an
Arbitral Tribunal constituted of Justice (Retd.) Aftab Alam, former
Judge of the Supreme Court as the Sole Arbitrator (hereinafter the
'Arbitral Tribunal').
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By:DUSHYANT
RAWAL
2. The impugned award was rendered in the context of disputes
that have arisen between the parties in connection with a contract for
construction of a residential colony for the employees of GAIL who
are employed at LPG Recovery Plant at Ghandhar, District Bharuch,
Gujarat (hereafter 'the Contract'). GAIL had terminated the Contract
alleging that the respondent, M/s Gupta Bros (India), had failed to
perform its obligations and complete the work within the stipulated
period.
3. GAIL had, thereafter, engaged another contractor for
completion of the balance work at the risk and costs of the respondent.
GAIL claimed that in terms of the Contract, it was entitled to be
reimbursed the additional amount paid for completion of the works
(the amount spent in excess of the agreed consideration) along with
administrative charges at the rate of 10% of the additional amount.
Accordingly GAIL claimed a sum of ₹7,38,10,000/- on account of
balance works executed at the respondent's risk and cost. GAIL
recovered part of the amount by encashing the Contract Performance
Bank Guarantee (hereafter 'the PBG') of ₹1,65,00,000/- and selling
certain construction equipment belonging to the respondent for a sum
of ₹5,00,000/-. GAIL claimed the remaining amount along with
interest at the rate of 18% per annum.
4. The respondent disputed the claims made by GAIL. It
contended that GAIL was responsible for the delay in execution of the
project and therefore, the termination of the Contract by GAIL was
illegal. It also claimed that GAIL's termination of the Contract was
motivated to punish the respondent for taking recourse to Courts to
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By:DUSHYANT
RAWAL
challenge GAIL's of blacklisting the respondent in respect of another
contract. The respondent also raised several counter-claims premised
on the aforesaid assertions.
5. The Arbitral Tribunal accepted the respondent's case that GAIL
did not have any grounds to terminate the Contract and the termination
of the Contract werewrongful and unsustainable. The Arbitral
Tribunal rejected the claims raised by GAIL. Insofar as the counter
claims are concerned, the Arbitral Tribunal allowed the respondent's
claim for payment of work done but not paid; refund of the amount
recovered by encashment of PBG; and refund of bank charges along
with interest at the rate of 12% per annum from 10.10.2014 till the
date of payment. The remaining counterclaims were rejected.
6. The respondent has accepted the impugned award and has not
challenged the impugned award to the extent it has rejected the
counter-claims. GAIL, being aggrieved by the impugned award, has
filed the present petition.
Factual Context
7. GAIL issued a Notice dated 16.03.2010 inviting offers for
construction of residential accommodation / quarters / bachelors
accommodation for its employees / officials at Bharuch in Gujarat,
Rajamundry in Andhra Pradesh and Khera in Madhya Pradesh. The
bidders were permitted to submit separate bids for the projects at the
aforesaid three locations. The bidssubmitted by the respondent for the
project at Bharuch in Gujarat and Rajamundry in Andhra Pradesh
were accepted. On 27.07.2010, GAIL issued a Fax of Acceptance
(FOA) on 27.07.2010 communicating its acceptance ofthe bids
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RAWAL
submitted by the respondent for the projects at the said two locations
(Bharuch and Rajamundry).
8. The controversy in the present case relates to the Contract for
executing the works at Bharuch (hereinafter 'the Project'). The
Project involved construction of a colony comprising of 67 houses,
Bachelor Hostel and Badminton Court including civil, sanitary,
internal and external electrifications and other developments. On
02.08.2010, GAIL issued a Letter of Acceptance (LOA) to the
respondent awarding the contract for execution of the Project. The
consideration for executing the Project was divided into two parts.
One part was on lumpsum basis for certain works and the remaining
part was on items rate basis. The total consideration was agreed at
₹16,58,19,917.05/- inclusive of all taxes.
9. GAIL also appointed a company, M/s Potential Semac
Consultant Pvt. Ltd., as Engineer-in-Charge (hereafter 'the EIC') for
monitoring the works at site.
10. The execution of the Project was delayed from the very
commencement. The site was a low laying area and had black cotton
soil. The sub-soil water was high and therefore, the site required due
watering to commence any work. In addition, the respondent found
that the drawings submitted did not match with the site and the site
conditions. The reference points in the layout did not match with the
drawings as forwarded. On the respondent pointing out the same, it
was advised to get a survey done by the Total Station Method for
revised drawings to be issued. In addition to the above, there were
several other reasons on account of which the Project was delayed
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By:DUSHYANT
RAWAL
including stoppage of work due to heavy rains; disruption of work
caused by the village residents / Gram Panchayat; changes in the
scope of work; delay in release of payments; delay in rendering the
required decisions and approval of material etc. The respondent
sought extension of time and on recommendations of the EIC granted
the same on six occasions, albeit, subject to certain conditions. The
time for completion of the Contract was extended (under the sixth
extension) upto 31.07.2014.
11. The works could not be completed before the extended date and
the respondent sought further extension upto 30.11.2014 for
completing the Project. However, the EIC did not recommend that the
extension as sought be granted. It advised GAIL to terminate the
Contract and get the remaining work executed at respondent's risk and
cost.
12. By a letter dated 05.08.2014, GAIL informed the respondent
that the reasons stated by it for the delay in completion of the works
were not convincing and therefore, unacceptable. It further stated that
the Contract had become ineffective from 01.08.2014. The respondent
was called upon to be present at site on 10.08.2014 for joint
measurements and reconciliation of the work done. Thereafter, by
letter dated 14.08.2014, the EIC called upon the petitioner to vacate
the Project site immediately and handover the site and the works in the
condition as extant for completion of the balance work at itsrisk and
cost.
13. By a letter dated 10.10.2014, GAIL terminated the Contract. It
also invoked the PBGfora sum of ₹1,65,00,000/- which was furnished
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By:DUSHYANT
RAWAL
by Canara Bank. Thereafter, GAIL engaged another contractorviz.
M/s Siddhi Construction, Surat, for execution of the balance work.
GAIL issued the FOA, accepting the said contractor's offer, on
08.01.2015. The same was followed by a LOA dated 15.01.2015.
14. It is material to note that on 01.08.2013, prior to termination of
the Contract, GAIL had issued an order blacklisting the respondent
and proscribing it from participating in any bidding process or
furnishing any tenders. The respondent's Vendor Code was blocked
and resultantly, no amount could be released to it. This blacklisting
order was issued not in the context of the Contract but in respect of
another contract between the parties unconnected with the Project.
15. The respondent challenged the blacklisting order dated
01.08.2013 by filing a writ petition in this Court [being W.P.(C)
No.5011/2013]. The said writ petition was allowed by an order dated
19.09.2013. This court held that the blacklisting order was illegal as
GAIL had not afforded respondent any opportunityof being heard
before issuing the blacklisting order. Notwithstanding that the
blacklisting was set aside by this Court on 19.09.2013, GAIL did not
unblock the respondent's Vendor Code. Aggrieved by the same, the
Contractor filed a Contempt Petition [Cont. Cas. (C) No. 732/2013].
However, the said contempt petition was withdrawn on 27.03.2014 as
in the meantime, GAIL had issued another order dated 01.10.2013
blacklisting the respondent.
16. The said blacklisting order dated 01.10.2013 was impugned by
the respondent in another writ petition filed in this Court [being
W.P.(C) No.6844/2013]. On 01.11.2013, this Court passed an order in
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By:DUSHYANT
RAWAL
that writ petition granting ad-interim protection to the respondent and
restrained GAIL from taking any coercive action against the
respondent in respect of "Ongoing Projects". By a subsequent order
dated 31.07.2014, this Court clarified that GAIL would be at liberty to
take such action as available in law in respect of any contractual
dispute between the parties arising in respect of the ongoing projects.
It is clarified that the order dated 01.11.2013 was only in respect of the
actions resulting from the blacklisting order passed by GAIL and not
in respect of any other contractual matters between the parties.
17. Subsequently, W.P.(C) No.6844/2013 was allowed by an order
dated 17.08.2017. In the meanwhile, the respondent had commenced
the arbitral proceedings.
18. In view of the disputes between the parties, they invoked the
arbitration agreement. However, the parties could not concur on the
appointment of an Arbitrator. In the circumstances, the respondent
filed a petition under Section 11 of the A&C Act [ARB(P)
No.813/2016] which was allowed by an order dated 22.12.2016 and
the Sole Arbitrator (Arbitral Tribunal) was appointed to adjudicate the
disputes between the parties.
19. Before the Arbitral Tribunal, GAIL raised a claim of
₹5,68,10,000/- for completing the Project; a sum of ₹1,61,90,850/- as
interest at the rate of 18% per annum with effect from 07.10.2015 (the
date on which the Project was completed) till 05.05.2017.
20. GAIL claimed that it was entitled to ₹6,71,00,000/- towards the
additional amount incurred for completion of the Project. The same
was calculated as under:
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By:DUSHYANT
RAWAL
"Total amount paid to M/s Gupta Rs.10.49 Crores
Brothers
Total executed value of +Rs.12.79 Crores
balancework
Total Cost incurred =Rs.23.28 Crores
Security expenditure after +Rs.0.09 Crores
termination of Contract
Grand Total Rs.23.37 Crores
Original Contract value given (-)Rs.16.66 Crores
toM/s Gupta Bros
Total excess Cost incurred Rs.6.71 Crores"
21. In addition to the above, GAIL claimed that it was entitled to
10%of the risk and costs amount, quantified at ₹67,10,000/-, towards
administrative overheads in terms of Clause 78 of the General
Conditions of Contract. Thus it claimed an aggregate amount of
₹7,38,10,000/- (₹6,71,00,000 + ₹67,10,000/-). GAIL had recovered a
sum of ₹1,65,00,000/- by invoking the PBG and a sum of ₹5,00,000/-
by sale of certain construction equipment. GAIL reduced the said
amount of ₹1,70,00,000/- and claimed the balance amount of
₹5,68,10,000/- as its first claim (Claim No.1). In addition, GAIL also
sought award of pendente liteand future interest at the rate of 18% per
annum as well as costs of the arbitration proceedings.
22. The respondent disputed the aforesaid claims. It also raised
certain counterclaims (sixteen in numbers). The said counter-claims
are summarised below:
Counter-claim 1 Letter dated 05.08.2014of
GAIL suspending the
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By:DUSHYANT
RAWAL
Contract, letter dated
14.08.2014 directing for
stoppage of work and
vacating the site and letter
dated 10.10.2014
terminating the Contract
were wrongful in nature
Counter-claim 2 Payment for the work done ₹3,81,92,884.09/-
as per the 15thR.A. Bill plus
interest thereon @18% per
annum
Counter-claim 3 Payment for work done ₹1,85,22,345.66/-
after submission of 15th
R.A. Bill upto 31.07.2014
Counter-claim 4 Refund of Performance ₹1,78,69,180/-
Bank Guarantee amount plus ₹12,87,180/-
wrongfully invoked by
GAIL plus payment on
account of unrecovered
bank commission and bank
charges plus interest
thereon @18%
Counter-claim 5 Increased cost for entire ₹2,90,45,768.41/-
period of delay and default
on (i) on construction and
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By:DUSHYANT
RAWAL
building material; (ii) on
labour wages; and (iii) fuel
charges
Counter-claim 6 Use of the Contractor'ssite ₹82,92,200/-
infrastructure by GAIL
Counter-claim 7 Use of the Contractor's ₹21,34,200.43/-
materials lying at the site by
GAIL
Counter-claim 8 Cost of the Contractor's ₹9,03,963/-
plant & machinery
impounded by GAIL
Counter-claim 9 Cost of overhead and other ₹2,92,20,834/-
expenses during the
extended period of Contract
plus interest @18% thereon
Counter-claim 10 Loss of profits under the ₹2,92,20,834/-
Contract
Counter-claim 11 Account of loss of bonus ₹41,45,500/-
for early completion
Counter-claim 12 Account of loss of goodwill ₹4,89,33,000/-
for illegal and wrongful
cancellation of Contract
Counter-claim 13 Refund of liquidated ₹83,35,995.65/-
damages illegally levied
and deducted from the
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By:DUSHYANT
RAWAL
Contractor's bill
Counter-claim 14 Legal expenses for pursuing ₹8,00,000/-
legal remedies against
illegal blacklisting
Counter-claim 15 Pendente lite interest and
post award interest @18%
per annum till realization of
the awarded amount
Counter-claim 16 Cost of arbitration
proceedings
23. As noticed above, the Arbitral Tribunal found that the
termination of Contract was wrongful and accordingly, rejected the
claims raised by GAIL. The Arbitral Tribunal also accepted the
respondent's claim Nos.2 and 3 for work done (15th RA Bill and
beyond). It faulted GAIL for not furnishing the joint measurements of
the work done which wereavailable with GAIL.And, accordingly,
accepted that the respondent was entitled to payment of the invoices
raised by it. The Arbitral Tribunal also found that GAIL had wrongly
invoked the PBG and thus, awarded an amount of ₹1,78,69,180/-
towards the amount of PBG wrongfully invoked by GAIL. In
addition, the Arbitral Tribunal also awarded an amount of
₹12,87,180/- towards bank commission and bank charges in respect of
the PBG. The Arbitral Tribunal rejected all other counter-claims
except Counter-claim No. 15 for interest due to the respondent.
Against the interest claimed at the rate of 18% per annum, the Arbitral
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By:DUSHYANT
RAWAL
Tribunal awarded interest at the rate of 12% per annum from
10.10.2014 till the date of payment.
Submissions
24. Mr. Handoo, learned counsel appearing for GAIL assailed the
impugned award essentially on three grounds. First, he submitted that
the impugned award is vitiated by patent illegality as the finding of the
Arbitral Tribunal that GAIL'stermination of the Contract was
wrongful is, ex facie, erroneous. He submitted that the Arbitral
Tribunal had faulted GAIL for not making payment of the 14th RA Bill
within a reasonable time, which is, ex facie, erroneous. He submitted
that the 14th RA Bill was submitted on 31.07.2013. However, the
amount payable under the said bill was ₹69,61,293.67/-, which was
less than ₹75,00,000/- and therefore, the said Bill was not liable to be
processed. He submitted that the said bill was returned on the same
date, however, the respondent had re-submitted the same on the same
date. He stated that thereafter, the respondent had re-submitted the
bill on 04.02.2014 for an amount of ₹42,98,390/- and the same was
processed. He earnestly contended that the Arbitral Tribunal ignored
the contractual provisions that required the running bill to be at least
for a sum of ₹75,00,000/- and thus, the Arbitral Tribunal's conclusion
that there was no explanation for the delay in payment of the 14th RA
bill is not only, ex facie, erroneous but contrary to the terms of the
Contract.
25. He submitted that the Arbitral Tribunal's reliance on the
Minutes of the Meeting dated 22.04.2014 were also misplaced. The
said Minutes recorded that the progress of the work was satisfactory.
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By:DUSHYANT
RAWAL
However, there were communications issued thereafter which
indicated that the progress of work was unsatisfactory, which were
overlooked. He submitted that the conclusion of the Arbitral Tribunal
was vitiated as the Arbitral Tribunal had ignored vital evidence.
26. Second, he submitted that the Arbitral Tribunal had grossly
erred in allowing the claim for payment for work done as invoiced
under the 15th RA bill and thereafter. He submitted that the Arbitral
Tribunal had allowed the said counter-claims (Counter-claim Nos. 2
and 3) solely on the basis that GAIL had not submitted the joint
measurements. He stated that this finding is ex facie erroneous. First
of all, the joint measurements were conducted in the presence of the
representative of the respondent but he had refused to sign the same.
Second that the joint measurements were produced before the Arbitral
Tribunal. He submitted that although, the said measurement sheets
recorded the work yet to be completed; the amount of work done
could be determined on the basis of the said measurement sheets by
reducing the total work by the work yet to be completed. Thus, the
Arbitral Tribunal was wrong in holding that the quantum of work
executed could not be determined on the said basis.
27. Third, he submitted that in any event, the respondent had failed
to establish the quantum of work done and therefore, was not entitled
to any amount as claimed.
Reasons and conclusions
28. The first question to be examined is whether the finding of the
Arbitral Tribunal that the termination of Contract by GAIL vitiates the
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By:DUSHYANT
RAWAL
impugned award as patently illegal and/or contrary to the public policy
of India.
29. Undisputedly, the execution of the Project was delayed. In
terms of the Contract between the parties, the Project was required to
be completed within fifteen months but it had remained incomplete
even after forty-eight months from the date of its commencement. The
applications for extension of time to complete the Contract were
allowed by GAIL on six prior occasions. In each of its applications,
the respondent had set out the reasons for the delay, which were duly
examined by the EIC and GAIL. It is apparent that the same were
found to be justified as EIC had recommended extending the term of
the Contract and GAIL had granted the extensions. GAIL had
extended the time for completion of the Project till 31.07.2014 (the
sixth extension). Thus, the Arbitral Tribunal found that the
controversy regarding justification of delays prior to 31.07.2014
would not be of much relevance. And, the question whether the
termination of the Contract was illegal was required to be considered
on account of justification for seeking the extension of the Contract
beyond 31.07.2014 (the Seventh extension).
30. GAIL had rejected the Contractor's request for extending the
Contract beyond 31.07.2014 and had terminated the Contract. Thus,
the Arbitral Tribunal examined the material circumstances relevant for
extending the Contract beyond 31.07.2014 (the respondent's
application for seventh extension).
31. The respondent contended that the GAIL's termination of the
Contract was mala fide and motivated to punish the Contractor for
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By:DUSHYANT
RAWAL
seeking recourse to the Court for challenging GAIL's action in issuing
the blacklisting orders. The Arbitral Tribunal held that the action of a
party to terminate the Contract could not be questioned on the grounds
of motivationas in public law. If the action was in terms of the
Contract, the same was immune to challenge. Accordingly, the
Arbitral Tribunal rejected the said contention.
32. However, the Arbitral Tribunal found in favour of the
respondent in respect of other grounds. The Arbitral Tribunal also
took note of the minutes of the internal meeting held between the
officers of GAIL and EIC on 22.04.2014. The progress of the Project
was reviewed at the said meeting and the Director (Project), GAIL had
expressed satisfaction over the progress of the work. It is material to
note that in the said internal meeting, the respondent's representative
was not present. The Arbitral Tribunal found that the Minutes of the
said meeting were material and did indicate that GAIL had no
grievance with regard to progress of the work as on 22.04.2014. The
Arbitral Tribunal noted that GAIL had blocked the respondent's
Vendor Code as a result of the blacklisting orders issued by it. The
same had resulted in denial of payments due to the respondent and had
disabled it from carrying on works at the Project site.
33. The Arbitral Tribunal found that on 30.07.2013(two days prior
to blacklisting), EIC had noted that a sum of ₹ 58,75,000/- was due
and payable to the respondent. The said amount was also not paid to
the respondent as GAIL had blocked its Vendor Code.
34. The Arbitral Tribunal also found that the respondent had
submitted its 14th RA bill (Ex.RW1/100) on 31.07.2013 but the same
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RAWAL
was processed in February, 2014 that too under pressure of Contempt
Petition filed by the respondent. The respondent was made to re-
submit the 14th RA bill on 04.02.2014 which was processed on
4.02.2014 by temporarily unblocking the respondent's Vendor Code.
The Arbitral Tribunal found that there was no explanation as to why
the respondent's RA bill was not processed/paid for more than six
months.
35. As noticed above, Mr. Handoo earnestly contended that the said
finding of the Arbitral Tribunal was, ex facie, perverse and erroneous.
He states that the Arbitral Tribunal had ignored the contractual
provisions which provided that the RA bill to be at least ₹75,00,000/-.
36. This Court finds that the aforesaid contention isrequired to be
rejected as no such contention wash advanced by GAIL before the
Arbitral Tribunal. The respondent had asserted that it had submitted
the bill on 31.07.2013. However, in its pleadings, GAIL had denied
the said assertion. Thus, according to GAIL no such bill was
submitted on 31.07.2013. The Arbitral Tribunal had found that in fact
the respondent had submitted the 14th RA bill on 31.07.2013. GAIL
does not dispute this finding is correct. It is now contended by GAIL -
contrary to the assertions made in its pleadings before the Arbitral
Tribunal - that the respondent had submitted the 14th RA Bill on
31.07.2013 but the same was returned as it was below ₹75,00,000/-
and had certain other defects. However, the respondent had re-
submitted the bill on the very same date without curing the defects.
Mr. Kakra, learned Senior Counsel appearing for the Contractor had
referred to the 14th RA bill and pointed out that in fact the bill was for
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RAWAL
a gross amount of ₹76,55830.63, which was more than ₹75,00,000/-.
He submitted that there were certain deductions which had reduced the
final amount payable to ₹74,66,000/- and therefore the contention that
the 14th RA bill was less than ₹75,00,000/- is erroneous.
37. This Court is of the view that GAIL attempt toraise this
controversy in this petition is unjustified to say the least. The Arbitral
Tribunal had no occasion to examine this controversy in view of
GAIL's stand that the respondent had not submitted the 14th RA bill
on 31.07.2013. The contention that the said bill could not be
processed since it was less than ₹75,00,000/- is clearly an
afterthought. GAIL had presented no explanation whatsoever as to the
delay in processing the 14th RA bill as according to it, the same hadnot
been submitted on 31.07.2013.
38. The Arbitral Tribunal had found that the delay in processing of
the bills has a serious and adverse effect on the progress of the work at
site. After evaluating the evidence and material on record, the Arbitral
Tribunal had concluded that the delay in execution of the Project after
01.08.2013 was primarily for reasons attributable to GAIL and not by
the respondent. The said conclusion is well considered and cannot be
by any stretch of imagination be assailed as perverse or patently
illegal. Thus, it warrants no interference by this Court in these
proceedings.
39. The next question to be examined is whether the decision of the
Arbitral Tribunal to draw an adverse inference against GAIL for not
providing the measurement of the work done to the respondent or
producing the same, warrants any interference in this proceeding.
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RAWAL
40. GAIL had asked the respondent to be present at the site on
10.08.2014 for joint measurement and reconciliation. Concededly, the
joint measurements were not taken on that date. The joint
measurements were stated to be taken on 25.08.2014. The Arbitral
Tribunal found that this was in the absence of any authorized
representative of the Contractor since notices were sent to the
respondent at an address at which it was not available at the material
time. Mr. Handoo had contended that the joint measurements were
taken at the presence of the representative of the respondent but he had
refused to sign the same.
41. This Court is unable to accept the aforesaid contention. There
is no material to indicate that the authorized representative of the
respondent was present at site on 25.08.2014 for taking joint
measurements. According to GAIL, the accountant of the respondent
had not signed the joint measurements. According to the respondent,
its representative had gone to the site on 12.08.2014 but was not
allowed to enter the Project site. Admittedly, it is not disputed that no
technical person from the respondent was present at the site when the
work done is stated to have been measured. Thus, the finding of the
Arbitral Tribunal that the joint measurements were allegedly done in
the absence of any representative of the respondent cannot be faulted.
42. Having noted the above, it is also material to note that the
Arbitral Tribunal did not reject the measurements and drawn an
adverse inference only on the ground that the measurements
weretaken in the absence of the representative of the respondent.
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RAWAL
43. The Arbitral Tribunal had drawn an adverse inference,
essentially on three grounds. First, it found that GAIL had not
provided the the measurements of the work done as on 25.08.2014 to
the respondent despite the respondent demanding the same on several
occasions.
44. Second, the said material was available with GAIL but it had
not produced the same before the Arbitral Tribunal.Some
measurement sheets (177 in number) were produced before the
Arbitral Tribunal pursuant to an order passed by the Arbitral Tribunal
on 17.02.2018 at the stage when the matter was being heard finally.
The said sheets as produced did not reflect the measurements of the
work done. The said sheets apparently contained the schedule of
items of balance work in respect of which tenders were invited. The
Arbitral Tribunal found that it was impossible to make a reasonable
assessment of the work done on the basis of such measurement sheets.
45. Third, the Arbitral Tribunal found that the measurements were
not entered into SAP (the ERP package used by GAIL). The import of
the same was that the quantum of work done was not recorded in
GAIL's system for processing any payment.
46. There is no dispute that therespondent had demanded copies of
the joint measurements dated 25.08.2014 but GAIL had failed and
neglected to provide the same to it. Finally, the Arbitral Tribunal
issued an order dated 17.02.2018 calling upon GAIL to furnish the
joint measurements recorded on 25.08.2014. In compliance with the
said direction, GAIL filed a volume captioned "Copy of Joint
Measurements dated 25.08.2014" which contained 177 sheets with the
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RAWAL
Arbitral Tribunal on 26.02.2018 (two days before the final hearing).
The first page of the said sheets was captioned as "Schedule of Items
for Balance Works of Bharuch Township". It is not disputed that the
said sheets contained items of the work for which tenders were
invited. The contention that the work / items for which tenders were
invitedcouldbe reduced from the total scope of work to arrive at the
joint measurements, is unpersuasive. This Court has examined the
measurement sheets and it is not possible to ascertain the quantum of
work done by the respondent. Admittedly, GAIL had not carried out
any exercise to reduce the balance items of work to be done from the
scope of work, to place on record any statement to reflect the
measurement of the work done by the respondent. According to GAIL,
the work done by the respondent was measured on 25.08.2014. The
said measurements would clearly indicate the quantum of work done
and not the quantum of balance work to be done. However, no such
measurements were produced by GAIL before the Arbitral Tribunal.
47. The said sheets also indicate that certain works which were on
lumpsum basis werenow awarded on item rate basis. Finally, there is
no dispute that the measurements made were not fed into the SAP
system maintained by GAIL and therefore, would the same are not
captured in the records which were necessary for effecting payments
to the respondent. Clearly, in the given facts, the decision of the
Arbitral Tribunal to draw an adverse inference against GAIL for
withholding the measurements cannot be faulted.
48. The contention that there was no evidence for Arbitral Tribunal
to award the amount raised in 15th RA bill and the work done
Signature Not Verified
By:DUSHYANT
RAWAL
thereafter is also unmerited. The respondent had raised the Bills along
with measurement sheets. The same is sufficient material for the
Arbitral Tribunal to enter the award in respect of Counter-claims No.2
and 3 keeping in view that GAIL had withheld the best evidence
available with it.
49. It is trite that the scope of interference with an arbitral award is
limited to the grounds as set out in Section 34 of the A&C Act and this
court is not required to re-examine the disputes as in original action or
as the first appellate court.
50. This Court is unable to accept that the impugned award is
vitiated on account of patent illegality or falls foul of public policy of
India.
51. The petition is unmerited and is accordingly dismissed.
VIBHU BAKHRU, J
JANUARY 11, 2022
'gsr'/v
Signature Not Verified
By:DUSHYANT
RAWAL
