M/S National Highways Authority Of INDIA vs. M/S Oriental Structural Engineers PVT LTD

2026

In both Claim Nos. 3&4, the Tribunal also directed the Engineer to verify the admissible amounts or quantities, as the case may be, and certify the amount payable to the Respondent.

Aggrieved by the impugned Award, the Petitioner has preferred the present petition under Section 34 of the Act.

The facts leading to the present controversy are briefly set out hereunder:

The Petitioner invited competitive bids for the project in which M/s Oriental Structural Engineers Ltd. – Gammon India Ltd. (Joint Venture)7 participated and were declared as the successful bidder. A Letter of Acceptance was issued which was followed by an execution of the Contract Agreement on 26.03.20028 for a value of Rs.2,627,950,259/- and US $13,661,625/-.

Due to the scale and duration of the project, the Contract had clauses dealing with the consequences of delays during execution, price adjustment on account of fluctuations in input costs, and additional financial burdens arising from subsequent legislative changes etc. In that regard, Clauses 6.4, 12.2 and 42.2 provide for extension of time and reimbursement of additional costs in specified situations, Clause 70 provides for adjustment of the Contract Price, and Sub-Clause 70.8 deals with reimbursement of additional costs incurred due to change by subsequent legislation. The disputes in the present petition substantially arises as to the interpretation and application of these clauses.

In terms of the contract, the project was required to commence on 30.03.2002 and were to be completed within thirty-six months.

The project, however, did not progress in accordance with the original stipulated schedule. During its execution, the agreed dates of completion was extended on several occasions and the period of completion stood extended upto 31.03.2009. According to the Respondent, the delay was caused by the Petitioner’s failure to hand over the work front/site in time, physical obstructions, land acquisition issues and delays relating to the Tundla Railway Over Bridge. The Petitioner, on the other hand, attributed the delay to the Respondent’s slow progress in execution of the works.

During the execution of the Contract, Service Tax was enhanced and Education Cess was introduced, resulting in an additional tax burden on the Respondent in respect of goods and services availed for execution of the works. Taking the position that the additional financial burden had arisen after the bid date and was not covered by the price O.M.P. (COMM) 206/2016

Disputes also arose between the parties with respect to the Respondent’s claim for payment towards “filler type expansion joints”. According to the Respondent, the Bill of Quantities9 did not provide for payment of the “filler type expansion joints” used in retaining walls, crash barriers, separators and drains. The Respondent, therefore, claimed that the use of such “filler type expansion joints” constituted a variation for which separate payment was payable. The Petitioner, on the other hand, contended that the agreed BOQ rates were all-inclusive and that no separate payment was payable.

The aforesaid developments gave rise to disputes between the parties.

Broadly, the disputes related to three issues. Firstly, whether the Respondent was entitled to compensation on account of the prolongation of the contract and expenses incurred in the extended period of execution. Secondly, whether the Respondent was entitled to reimbursement of the additional expenditure incurred due to imposition/enhancement of Service Tax and Education Cess, during the execution of the contract. Thirdly, whether the Respondent was entitled to separate payment for “filler type expansion joints” used in reinforced

In terms of Clause 67 of the Contract, the disputes were initially referred to the DRB. As the recommendations of the DRB did not attain finality, the disputes were, thereafter, referred to Tribunal under Clause 67.3 of the Contract.

Upon invocation of the arbitration agreement, a three-member Arbitral Tribunal comprising Shri Surjeet Singh as the Presiding Arbitrator and Shri S. Venkatesan and Shri Prem Nath as Co-Arbitrators entered upon the reference. The Respondent initially filed its Statement of Claims raising four substantive claims.

During the pendency of the arbitral proceedings, Claim No. 1, relating to prolongation costs was amended two times due to the continued extension of the Contract period. The Petitioner also filed its amended reply to amended Statement of Claim. However, the Respondent pressed only the following three claims for adjudication and withdrew the Claim No.2:

Before the Tribunal, the Petitioner resisted all the claims in entirety. Insofar as Claim No. 1 was concerned, it was contended that the delay in completion was either attributable to the Respondent or, in any event, did not entitle it to any additional compensation under Clauses 6.4, 12.2 and 42.2 of the Contract.

As regards Claim No. 3, the Petitioner submitted that no reimbursement was payable in terms of 70.8 of the Contract towards Service Tax and Education Cess. In relation to Claim No. 4, it was contended that “filler type expansion joints” were already covered under the BOQ read with Technical Specification Clause 809 and, therefore, no separate payment was payable.

By the impugned Award, the learned Arbitral Tribunal partly allowed Claim Nos. 1, 3 and 4, and Claim No. 2 was dismissed as withdrawn. Under Claim No. 1, the Tribunal awarded a sum of Rs.45,88,91,806/- together with simple interest at the rate of 12% per annum from 19.10.2007 till the date of the Award.

In regard to Claim Nos. 3 and 4, the learned Arbitral Tribunal rendered a declaratory Award. Under Claim No. 3, it held that the Respondent is entitled to reimbursement of Service Tax and Education Cess, subject to verification and certification of the admissible amount by the Engineer.

For Claim No.4, the Tribunal held that “filler type expansion joints” used in retaining walls, separators and drains has to be paid separately as they are not already covered in the BOQ and fixed the rate O.M.P. (COMM) 206/2016

The Tribunal also directed payment of the awarded amounts within sixty days, failing which future interest at the rate of 12% per annum would be payable till realization.

Learned Counsel for the Petitioner assailed the impugned Award pertaining to Claim No. 1 on the ground that the Tribunal has awarded this claim without recording the necessary findings on the causes of delay or the actual loss allegedly suffered by the Respondent. Reliance was placed on OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd.10. 26. Elaborating his submission, learned Counsel submitted that the impugned Award does not identify the extent of delay in handing over the site, issuance of drawings, removal of physical obstructions or approvals from the Railway Authorities, nor does it examine the impact of these events on the execution of the work.

It was next contended that the Tribunal has acted contrary to Clauses 6.4, 12.2, and 42.2 of the Contract. According to the Petitioner, under these clauses, any claim for additional cost was required to be determined by the Engineer. Since the Engineer had not certified or 10 (2025) 2 SCC 417 O.M.P. (COMM) 206/2016

In support, it was pointed out that the Tribunal has also failed to properly consider the Engineer’s letters. He submits that, while granting extensions of time, the Engineer had consistently recorded slow progress on the part of the Respondent and had not recommended any additional cost.

Learned Counsel further submitted that the Respondent failed to prove the actual additional expenditure incurred during the extended period. According to the Petitioner, in the absence of such material, the Tribunal erred in quantifying the claim by adopting the Standard Data Book of the Ministry of Road Transport & Highways11 and percentage- based calculations.

It was further contended that the methodology adopted by the Tribunal is dehors the Contract and, in any event, could not have been applied in the absence of evidence showing the actual additional expenditure allegedly incurred by the Respondent. It was also submitted that the deduction of 20% towards mitigation is a guesswork and unsupported by any material on record and therefore, perverse in nature.

In view of the above reasons, the assessment of costs incurred during prolongation, as well as the deduction towards mitigation, was stated to be speculative, suffering from patent illegality and perversity warranting interference under Section 34 of the Act. Reliance was 11 “MoRTH” hereinafter O.M.P. (COMM) 206/2016

Learned Counsel for the Petitioner further submitted that the learned Arbitral Tribunal has erred in allowing Claim Nos. 3 and 4. It was contended that the Respondent had no entitlement either to reimbursement of Service Tax and Education Cess under Sub-Clause 70.8 or to separate payment for “filler type expansion joints” as its cost already stood included in the BOQ rates and specifications.

Learned Counsel further submitted that the Tribunal could not have left the quantification under Claim Nos. 3 and 4 to the Engineer. According to him, once the claims were before the Tribunal, it was for the Tribunal itself to determine the amount payable. By leaving the quantification to the Engineer, what has been passed is only a declaratory award, which, according to the Petitioner, lacks finality and such a course was beyond the juri iction of the Tribunal.

Learned Counsel for the Petitioner further submitted that the award of interest on Claim No. 1 is unsustainable. Reliance was placed upon Interstate Construction v. National Projects Construction Corporation Ltd.13, to contend that the power under Section 31(7) of the Act is procedural in nature and the entitlement to interest must have its source in the Contract or other substantive law. According to the him, as the Contract does not provide for payment of interest on the 12 2024 (2) SCC 375 13 (2026) 2 SCC 780 O.M.P. (COMM) 206/2016

In support the above arguments, learned Counsel for the Petitioner has also relied upon NHAI v. P. Nagaraju Cheluvaiah14, NHAI v. M/S Uem Essar joint15, NTPC v. Deconar Services Private Limited16, Penna Electricity v. Tamil Nadu17 , EFS Facilities Services v. Indian Bio Power Limited18, K P and SONS v. UOI19, Nangia Construction Pvt Ltd. v. National Building Construction Corporation Limited20, HJ Bakers and Brothers v. Minerals and Metal Trade Corporation21, Bawa Paulins Pvt. Ltd v. UPS Freight Services (India) Pvt. Ltd. and Another22, Satyabrata Ghose v. Mugneeram Bangur and Co. and Another23, NHAI v. IRB Pathankot Amritsar Toll Road24, M/S GMR Pochanpalli expressway v. NHAI25, MD and Others ( J&K power development corporation ) v. M/S Trust House Construction Engineers and Builders26, M/s. Larsen Air Conditioning and Refrigration Company v. Union of India and Others27, M/s Jsw Ispat Steel Limited (Now Known As Jsw Steel Limited) v. M/S Gas Authority Of India Limited28, Sujit Kumar Jaiswal v. Managing

It was further submitted that the Tribunal has neither accepted the Respondent’s claim mechanically nor awarded a lump sum amount. On the contrary, it scrutinised the material placed before it, rejected the Respondent’s original computation, adopted a reasonable methodology for quantification, and arrived at the amount awarded by making appropriate exclusions and deductions.

According to the learned Senior Counsel, such an exercise falls squarely within the domain of the Arbitral Tribunal and does not 29 329 (2026) DLT 748 30 330 (2026) DLT 54 31 327 (2026) DLT 423 32 2025 (7) SCC 1 33 2024 SCC OnLine Del 5594 34 2025:DHC:9867-DB O.M.P. (COMM) 206/2016

For interest, learned Senior Counsel for the Respondent submitted that the Tribunal has awarded interest only from the date of invocation of arbitration and not for the pre-reference period in terms of Section 31(7) of the Act.

As the present case requires this Court to exercise its power under Section 34 of the Act, before examining the rival submissions, I find it appropriate to briefly notice the scope of interference under Section 34 of the Act. The law in this regard is well settled and has been consistently reiterated by the Hon’ble Supreme Court. More recently, in Ramesh Kumar Jain v. Bharat Aluminium Company Limited36, the Supreme Court reiterated the principles in the following terms:

Similar observations are also found in the recent decision of the Hon’ble Supreme Court in Consolidated Construction Consortium Ltd. v. Software Technology Parks of India37:

It is apparent from the aforesaid decisions that the juri iction of this Court under Section 34 is circumscribed and a limited one. This Court does not sit in appeal over the findings of the Arbitral Tribunal and, therefore, cannot re-appreciate the evidence or interfere merely because another view on the facts or interpretation of the Contract is possible. Interference is warranted only where the Award is shown to suffer from one of the statutory grounds recognised under Section 34, including conflict with the public policy of India, contravention of the fundamental policy of Indian law or patent illegality appearing on the face of the Award.

As the challenge in the present petition is based on the ground of patent illegality and perversity, I am mindful that not every error of fact or law would amount to a patent illegality. The illegality should be of such a nature that goes to the root of the Award and not be confined to a mere erroneous application of law or appreciation of evidence. In a similar manner, a finding can be characterised as perverse only where it is based on no evidence, ignores material evidence having a direct bearing on the controversy, or is such that no reasonable person could have arrived at it. In OPG Power Generation (P) Ltd (supra), the Hon’ble Supreme Court has succinctly explained the concepts of patent illegality and perversity in the following terms:

Bearing the aforesaid principles in mind, I shall now examine the challenge to the impugned Award in a claim-wise manner. O.M.P. (COMM) 206/2016

Since this Court, while exercising juri iction under Section 34 of the Act, is required to examine the correctness of the findings by the learned Arbitral Tribunal, I find it necessary to first reproduce the relevant findings rendered by the learned Arbitral Tribunal while adjudicating Claim No.1:-

A perusal of the aforesaid findings shows that the impugned Award under Claim No. 1 rests on certain findings of fact rendered by the learned Arbitral Tribunal after appreciation of the pleadings, evidence and the terms of the contract. Broadly, those findings are as follows: i. The Tribunal found that the delay in completion of the project was largely on account of delay in handing over the site, physical obstructions, delay in land acquisition, delay in obtaining approvals for the Tundla Railway Over Bridge and other hindrances. On reading Sub-Clause 20.4 of the Conditions of Particular Application38 in the 38 “COPA” hereinafter O.M.P. (COMM) 206/2016

Now adverting to the objections raised by the Petitioner, the first limb of the Petitioner’s challenge rests on interpretation of the Clauses 6.4, 12.2 and 42.2 of the Contract. According to the Petitioner, under O.M.P. (COMM) 206/2016

Since the Engineer did not recommend any such additional cost and had also recorded that the Respondent’s progress was slow, the Tribunal could not have awarded the costs incurred during the prolongation period by taking a different view. It was further submitted that the Tribunal had ignored the Engineer’s letters and proceeded only on the basis that extension of time had been granted.

I am unable to accept the aforesaid submission. I have gone through Clauses 6.4, 12.2 and 42.2 of the Contract. These clauses require the Engineer to determine the extension of time and the additional cost, if any, payable to the Contractor. However, they do not attach finality to the Engineer’s determination or exclude the juri iction of the Arbitral Tribunal in cases where such determination itself becomes the subject matter of dispute. Clause 44 also merely sets out the procedure for claiming and determining extension of time in the circumstances specified and does not disentitle the Contractor from raising its claim before the Arbitral Tribunal or take away the Tribunal’s power to adjudicate upon it.

Further, the impugned Award does not proceed on the premise that the grant of extension of time, by itself, entitled the Respondent to claim prolongation costs. The Tribunal independently examined the reasons which led to the grant of those extensions and found that the delay was primarily due to delay in handing over of the site, physical O.M.P. (COMM) 206/2016

It can also not be said that the Tribunal ignored the Engineer’s letters. It took note of the letters recording slow progress on the part of the Respondent but treated those delays as concurrent and insufficient to displace its finding that the principal cause for the delay was the Petitioner’s failure to provide a hindrance-free site. Whether another view could have been taken on the same material is not the enquiry under Section 34. This Court cannot re-appreciate the evidence and substitute its own view when the view taken by the Tribunal is a possible and plausible view.

Once the above findings were rendered, the Tribunal proceeded further. Reading Clauses 6.4, 12.2 and 42.2 together with the definition of “Cost”, it concluded that the Respondent was entitled to recover the additional costs incurred during the extended period. The impugned Award, therefore, rests on an independent appreciation of the clauses in the contract, the evidence on record, and not merely on the Engineer’s recommendations or the grant of extensions of time.

The power of the Arbitral Tribunal relating to interpretation of the clauses are also not res integra. This view also finds support from the decision of a Coordinate Bench of this Court in NHAI v. BEL- TBL39, wherein it was held that once the delay is found to be attributable to the employer, Clauses 6.4, 12.2 and 42.2 entitles the contractor to 39 2016 SCC OnLine Del 4025 O.M.P. (COMM) 206/2016

In this backdrop, the Tribunal, while placing reliance upon Clause 42.2 of the GCC, held that the contractor was entitled to costs towards entitlement of additional resources over the extended period of the GCC. The learned Single Judge, while relying upon Clause 42.2 of the GCC, has returned a categorical finding that the contractor was entitled to compensation for delay for handing over the site. The learned Single Judge also and rightly so, held that reliance on Clause 110.1 of the Technical Specifications was without any force. We find no infirmity in the view so taken by the arbitrator as also by the learned Single Judge. All the contentions sought to be raised by the counsel for the appellant have been duly

However, the challenge of the Petitioner does not rest only on the Tribunal’s interpretation of the Contract. The Petitioner next contends that the impugned Award is also vitiated by perversity for want of specific findings on the causes of delay. According to the Petitioner, the Tribunal did not examine the extent of delay in handing over the site, the delay in issuance of drawings, the nature and duration of the physical obstructions or whether the delay in obtaining approvals for the Tundla Railway Over Bridge could be attributed to the Petitioner.

In my view, the above submission of the Petitioner also cannot stand after a whole reading of the Award. As noticed while dealing with the earlier objection, the Tribunal did not proceed merely on the grant of extensions of time. It independently examined the reasons for the prolonged execution of the project and recorded specific findings on the causes of delay. Those findings cannot be read in isolation or by searching for a separate discussion on every document or every instance of delay. The Award has to be read as a whole.

On a holistic reading of the impugned Award, the basis of the Tribunal’s conclusion is clearly made out. It identified the causes which, in its view, led to the prolongation of the project, considered the allocation of risk in terms of the contract and only thereafter, reached its conclusion on the attribution of delay. The mere absence of a separate discussion on each letter or every period of delay does not, by itself, render the impugned Award vulnerable under Section 34. 59. Moreover, the attribution of delay is a finding of fact resting on the Tribunal’s examination of the evidence before it. Unless such a finding is shown to be perverse or based on no evidence, it is not open for this Court to undertake a fresh appraisal of the material under Section 34. 60. That brings me to the principal challenge raised by the Petitioner about the quantification of prolongation costs. According to the Petitioner, the Respondent failed to produce evidence of the actual expenditure incurred during the extended period and, in the absence of such evidence, the Tribunal could not have devised its own methodology for quantification.

The submission, in my view, proceeds on an incorrect reading of the impugned Award. Before undertaking the quantification, the Tribunal first examined whether the Respondent had, in fact, incurred additional expenditure on account of the prolonged execution. In that context, it considered the audited details of salaries and wages, site and corporate overheads, the monthly progress reports, and minimum essential requirements as per the contract. On the basis of this material, the Tribunal was satisfied that the Respondent had established the additional expenditure incurred during the extended period. The authenticity or reliability of these records has neither been questioned nor disputed by the Petitioner.

Further, this Court finds that the Arbitral Tribunal has not accepted the Respondent’s computation in its entirety. While the material placed on record was accepted, the method adopted for O.M.P. (COMM) 206/2016

Once the entitlement to compensation stood established and the relevant material was available on record, the choice of methodology lies primarily within the arbitral domain and does not warrant interference under Section 34 merely because another method of assessment may also have been possible. This principle stands recognised by the Supreme Court in McDermott International Inc. (supra), where it was held that, in the absence of direct proof of every item of minute expenditure, the use of standard formulae is a permissible method to compute these damages.

An identical challenge, arising out of similar terms of the contract, came up for consideration before the Division Bench of this Court in National Highways Authority of India v. Oriental Structural Engineers (P) Ltd.

While dealing with objections substantially similar to those argued in the present case, the Division Bench observed as follows:

A similar challenge was considered by this Court in DMRC v. GYT TPL Joint Venture42. In this case as well, it was contended that the Tribunal had quantified prolongation costs by adopting a formula- based approach without sufficient documentary proof and reliance was placed on Batliboi Environmental Engineers Limited (supra). Rejecting the challenge, this Court held as follows:

The same view has been taken by the Division Bench of this Court in NHAI v. Oriental Pathways43. It was observed that the choice of a particular method for quantification lies with the Arbitral Tribunal and would not justify interference under Section 34 merely because another method could also have been adopted, so long as the one adopted is a reasonable one. The relevant observations read as thus- “38. It is trite that it is open to the arbitrator to adopt any reasonable formula for arriving at the computation of the compensation. In this regard, reference may be made to the pronouncement of the Supreme Court in, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204, Associate Builders v. Delhi Development Authority extracted above.

In para 43 of the judgment, the Supreme Court has held that the construction of the contract by the arbitrator is also within the juri iction of the arbitrator. It is trite law that such construction is clearly beyond the scope of consideration by the Court while considering objections under Section 34 of the Arbitration and Conciliation Act, 1996. 40. In para 56 of the judgment, the Supreme Court has held that the adoption and application of a formula by an arbitrator is a pure question of fact. Clearly, the same is beyond the purview of objections under Section 34 of the Arbitration and Conciliation Act.

In view of the above statement of law, the objections of NHAI to the Arbitral Award were clearly beyond the scope and purview of Section 34 of the Arbitration and Conciliation Act and have been rightly rejected by the learned Single Judge.”

Applying the aforesaid principles to the facts of the present case, no substance remains in the Petitioner’s objection. The Tribunal was satisfied that the Respondent had incurred additional expenditure and therefore, it was open to the Tribunal to adopt a reasonable

The challenge, however, does not rest there. The Petitioner further contends that the Tribunal travelled beyond the Contract by adopting the MoRTH Standard Data Book and recognised engineering practices for quantifying the claim and that the whole exercise of quantification undertaken was arbitrary, unsupported by the record and based on surmises and conjectures.

To my mind, no arbitrariness or perversity can be made out on a reading of the award as suggested by the Petitioner. In my reading, at every stage, the Tribunal was cautious in determining the final amount payable as is evident from the fact that it did not accept the computation of the Respondent as it is. It found that the Respondent had worked out the delay costs by carrying forward the deployment of manpower and machinery beyond March 2005 for the entire prolonged period. The Tribunal found that such an approach did not reflect the manner in which the project had actually progressed, particularly when the deployment of resources kept changing from one stage to another.

Further, the Tribunal did not treat the project as one homogeneous unit. Since each section had a different commencement date, completion schedule and period of extension for Section-I, the period of delay and extension in each section were examined separately. O.M.P. (COMM) 206/2016

Even thereafter, the Tribunal excluded the period falling outside the reference and, keeping in view the nature of work that could be executed during the rainy season, deducted 80% of that period. The figures of 686, 462, 390 and 1151 days did not emerge from broad estimates but from the detailed exercise undertaken by the Tribunal itself.

The same degree of scrutiny by the Tribunal is evident while assessing the monetary claim. The Tribunal first declined the claim towards loss of profit in view of the definition of “Cost”. It then assessed the machinery component with reference to Clause 70.3(xi) of COPA. The MoRTH Standard Data Book was relied upon only for working out the overhead component after recording that the Contract itself did not provide a workable basis in that regard.

Learned Counsel for the Petitioner has not been able to point out any provision in the Contract which explicitly prohibited such an approach.

Further, the Tribunal has not awarded the amount so worked out in its entirety. It also made deductions of 10% towards unutilised spares and 20% on account of mitigation. These deductions formed part of the Tribunal’s overall assessment based on the material before it and cannot be characterised as arbitrary. As recognised in McDermott International Inc. (supra) and M/s Cobra Instalaciones Y Servicios, O.M.P. (COMM) 206/2016

A similar approach has recently been adopted by a Coordinate Bench of this Court in Airports Authority of India v. URC Construction (P) Ltd45. Repelling the contention that overhead charges could not be awarded in the absence of salary registers, vouchers or other minute proof of expenditure, the Court held that once the delay is attributable to the employer, the use of recognised standard formulae or industry benchmarks for quantification does not render the award arbitrary. It was observed that in construction contracts, it is not always possible to establish every component of prolongation costs by direct evidence and a reasonable method of quantification based on accepted standards falls within the domain of the Arbitrator. The relevant observations are as follows: Claim No. 4: Compensation for Overheads:

The Petitioner has challenged the award of Rs. 89,18,765/- towards Overhead expenses, on the ground that the Respondent failed to lead specific evidence, such as salary registers, vouchers, or books of account, to prove that it incurred actual expenditure during the extended period. The Petitioner relies on the principle that damages must be proved and contends that the Arbitrator's reliance on the CPWD Circular dated 14.12.2007 acts as a substitute for evidence, which is impermissible.

To adjudicate this challenge, it is necessary to appreciate the commercial nature of construction contracts.

Overheads refer to the indirect costs incurred by a contractor which cannot be directly allocated to a specific physical item of work, but are necessary for the sustenance of the business and the project. These include Head Office administrative costs

It is a judicially recognized fact that when a Project is delayed due to the fault of the Employer, the Contractor is forced to keep its resources and establishment deployed for a period longer than anticipated. This inevitably results in the consumption of overheads without corresponding revenue generation from the project. As observed by the Supreme Court in McDermott International Inc. (supra), in the absence of direct proof of every minute expenditure, the use of standard formulae is a permissible method to compute these damages.

In the present case, the Arbitrator was faced with the task of quantifying the loss after having already established the factum of delay attributable to the Petitioner. Instead of applying a complex international formula, the Arbitrator adopted the CPWD Circular, which specifically quantifies overheads at 7.5%.

This Court finds that the approach of the Arbitrator is neither arbitrary nor perverse as the CPWD Manual and Circulars are standard reference documents, in government infrastructure contracts. Adopting a percentage fixed by the CPWD as a reasonable estimate of overheads, is a plausible method of quantification.

As held in A.T. Brij Paul Singh v. State of Gujarat, (1984) 4 SCC 59, it is not always possible for a contractor to produce minute proof of every rupee lost due to the prolongation of the contract. In such cases, a broad evaluation based on industry norms, is legally sustainable.

The award of 7.5% towards overheads is not an exaggerated figure that would shock the conscience of the Court. It is a conservative estimate of the administrative costs required to maintain a construction setup for an additional 477 days.

The Petitioner's argument that there was no evidence is, therefore, misconceived. The evidence was the prolongation of the contract itself and the industry standard evident from the CPWD Circular establishing the norm for such costs. The Arbitrator applied the law of damages by using a reasonable yardstick for quantification. This falls squarely within the domain of the Arbitral Tribunal, as the master of facts.

Consequently, this Court finds no patent illegality in the Arbitrator's order to award overhead charges based on the CPWD Circular.”

The reliance placed on Batliboi (supra) is also misplaced. That decision does not lay down that a reasonable method of quantification can never be adopted. Rather, it cautions against quantification resting O.M.P. (COMM) 206/2016

The use of the MoRTH Standard Data Book for quantifying the claim for compensation of additional overhead expenses due to prolongation of the Contract Period has also received judicial recognition. In National Highways Authority of India v. IJM-Gayatri Joint Venture46, this Court upheld the Tribunal’s adoption of the MoRTH Data Book after it had rejected the claimant’s own computation. A similar view was taken in National Highways Authority of India v. DIC - NCC (JV)47, and Public Works Department (NH Wing) v. GVR Infra Projects Ltd.48, where this Court recognised the MoRTH Standard Data Book as an accepted basis for assessment of costs arising from prolongation attributable to the employer. The percentage ultimately adopted also cannot be said to be so unreasonable as to shock the conscience of this Court. The final amount awarded under this claim was also not some figure in air but was determined on a reasoned basis at each stage after taking into account the material on record.

For all the aforesaid reasons, I find no infirmity in the Tribunal’s determination of Claim No.

Moving to the challenge to Claim No. 3, the Tribunal examined Sub-Clause 70.8 of the Contract and held that reimbursement was available only in respect of such additional statutory burden which was not already covered by the other Clauses related to price adjustment. On that basis, it excluded the Education Cess relatable to excise duty on goods as it already stood reflected in the WPI-based price adjustment but allowed reimbursement of Service Tax and the corresponding Education Cess on services such as insurance, and other services, as these were found to fall outside the price adjustment clauses.

I find no ground to interfere with the aforesaid view. The Tribunal has interpreted the terms of the contract and returned a finding as to what was, and what was not, covered by the price adjustment clauses. Whether that distinction was correctly drawn is essentially a matter of interpretation of the Contract and material on record. At the cost of repetition, so long as the view taken is a plausible one, this Court cannot substitute its own interpretation in challenge under Section 34. O.M.P. (COMM) 206/2016

The view taken also finds support from the decision of the Supreme Court in NHAI v. ITD Cementation India Ltd.49, where it was held that a contractor is entitled to reimbursement when a subsequent legislative change imposes an additional burden not already covered in the initial prices provided in the Contract.

Further, in regard to Claim No. 4, on examining the BOQ, the drawings and the Technical Specifications, the Tribunal found that “filler type expansion joints” formed part of the BOQ only for crash barriers. Insofar as retaining walls, separators and drains were concerned, no such provision was found. The claim was, therefore, rejected in respect of crash barriers but allowed for the remaining structures at the rate already approved by the Engineer’s Representative.

The challenge to this finding is nothing but an invitation to re- appreciate the evidences. Once the Tribunal, upon examining the BOQ, the drawings and the Technical Specifications, has found that the item was neither provided for nor priced under the Contract, this Court cannot re-examine those documents to arrive at a different conclusion. No perversity or patent illegality in that finding has been demonstrated.

Having dealt with the merits of Claims Nos. 3 and 4, I now turn to the principal objection pressed by the Petitioner.

The common thread running through the Petitioner’s challenge to Claims Nos. 3 and 4 is not directed against the findings rendered under Claims Nos. 3 and 4, but with the form of the relief granted. According to the Petitioner, by leaving the quantification to the Engineer instead of determining the amount itself, the Tribunal rendered a merely declaratory award, which, according to the Petitioner, is beyond the juri iction of the Tribunal.

Recently, a Coordinate Bench of this Court in State (NCT of Delhi) v. Harbel Singh50, had considered the permissibility of a declaratory award. Upholding such an award, the Court observed as follows:

The principle was explained further by another Coordinate Bench of this Court in Union of India v. Reliance Industries Ltd. & Anr51, undertaken thereafter. The relevant observations are as follows:

What would be required, therefore, for a purely declaratory award to be executed like a money decree is, therefore, that the award must, firstly, identify one of the parties to the dispute as entitled to receive a quantifiable sum of money from the other, and, secondly, to set out the principles on the basis of which such quantification is to be done, so that all that is required to be done by the executing Court is application of pure arithmetic.” (Emphasis supplied)

It emerges from the aforesaid decisions that the validity of a declaratory award does not depend upon whether the exact amount is quantified in the award itself or not. The real test is whether the Tribunal has finally adjudicated the rights and liabilities of the parties and laid down the basis on which the liability is to be worked out, leaving no adjudicatory function to be performed thereafter. If what remains is only the verification of the relevant record and application of the principles already declared, such an award cannot be faulted merely because the final figure is to be worked out subsequently.

The impugned Award, in my view, falls squarely within the above parameters. The Tribunal has finally determined the entitlement of the Respondent under both claims and laid down the basis on which the liability is to be worked out. Nothing has been left for the Engineer to adjudicate. He is only required to verify the record and quantify the amount payable in terms of the Award.

In view of the above, no merit remains in the Petitioner’s challenge to Claim Nos. 3 and 4. The Tribunal has finally determined the Respondent’s entitlement. No patent illegality or perversity has been shown in adopting such a course. The authorities relied upon in regard to price escalation and others are also of no avail. Therefore, there is no need of any interference with this part of the impugned Award while exercising juri iction under Section 34 of the Act.

As far as challenge to interest is concerned, it is wholly misconceived and devoid of merit. The Tribunal has not awarded any pre-reference interest. Under Claim No. 1, interest has been awarded only from the date of invocation of arbitration till the date of the Award.

Reliance placed on Interstate Construction (supra), is also of no avail. The said decision distinguishes between pre-reference interest and pendente lite interest. While entitlement to pre-reference interest must be based on substantive law, pendente lite interest is governed by Section 31(7)(a) of the Act. Since the Tribunal has awarded interest only for the pendente lite period, the said decision does not advance the Petitioner’s case.

In any case, the substantive right of the Respondent for interest lies under Clause 60.8 of the Contract. This Court in NHAI v. Hindustan Construction Co. Ltd.53 has held that 60.8 also applies to the sums found to be due and payable. In the present case as well, the Tribunal has also that interest is payable under Clause 60.8 from the dates on which the respective payments became due. The mere absence of elaborate reasoning on this aspect cannot warrant interference so long as the basis for the Tribunal’s conclusion is discernible from the Award. As held in OPG Power Generation (P) Ltd (supra) and Dyna Technology Private Limited v. Crompton Greaves Limited54, a brief reasoning, where the underlying basis is apparent, is sufficient and does not invite interference under Section 34. 94. In view of the aforesaid, I find no infirmity in the award of interest. The Petitioner has not been able to demonstrate that the grant of interest is contrary to any provision of the Contract or suffers from any patent illegality or perversity warranting interference under Section 34 of the Act.

For all the aforesaid reasons, I find no merit in any of the grounds raised by the Petitioner. The Petitioner has essentially sought a re- appreciation of the terms of the Contract, the evidence and the conclusions drawn by the Tribunal. That is not the scope of interference under Section 34 of the Act. I find that the view taken by the Tribunal

Insofar as Claim No. 1 is concerned, the Tribunal has returned a reasoned finding on the attribution of delay, and the Respondent’s entitlement in terms of the clauses of the contract. The methodology also adopted for quantification cannot be said to be arbitrary or contrary to the Contract, nor does it suffer from any patent illegality.

In respect of Claim Nos. 3 and 4, the Tribunal has interpreted the relevant provisions of the Contract and finally determined the Respondent’s entitlement, leaving only the ministerial exercise of verification and certification to the Engineer.

The petition is, accordingly, dismissed.

Pending application(s), if any, shall also stand disposed of.

There shall be no order as to costs.