Vijay Kumar Sharma vs. State Of Hp And Others

Held

The Court upheld the arbitral award regarding Claim 1(b), finding that the petitioner had undertaken to complete the work as per the revised GAD within the lump sum cost of Rs. 7.50 Crore. However, the Court modified the award concerning Claims 1(a) and 2. While the Arbitrator had allowed these claims, the Court directed that the petitioner would be entitled to interest at the rate of 8% on the awarded amounts from the date they became due until the date of actual payment. The Court reasoned that the petitioner was forced to resort to arbitration to recover these amounts, which were due to him, and therefore, set aside the award concerning arbitration costs (Claim 3) and directed that the petitioner be entitled to costs of arbitration amounting to Rs. 4.00 Lakh. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Vijay Kumar Sharma, filed objections under Section 34 of the Arbitration and Conciliation Act challenging an arbitral award dated July 24, 2023. The dispute arose from a tender for the construction of a bridge. The petitioner was the successful bidder, and the agreement was signed on November 4, 2016, for Rs. 7.50 Crore. A key point of contention involved sub-soil investigations and the resulting design changes. The petitioner claimed additional costs for an increased bridge span (Claim 1(b)) and reimbursement of withheld GST (Claims 1(a) and 2). The Arbitrator awarded claims 1(a) and 2, but rejected claim 1(b). The petitioner sought to set aside the award on claim 1(b) and modify it for claims 1(a) and 2.

Key Issues

1. Whether the Arbitrator erred in rejecting the petitioner's claim for additional costs for the construction of an additional span of 27 meters (Claim 1(b)), considering the petitioner had agreed to the revised GAD within the lump sum cost of Rs. 7.50 Crore, and whether the respondents communicated that no extra amount would be paid for this additional span. (Question of mixed law and fact, turning on the interpretation of the agreement and subsequent communications). Petitioner's arguments: The petitioner contended that the Arbitrator erred in rejecting Claim 1(b) because the respondents had not clearly communicated that no extra amount would be paid for the additional span. They also pointed to communications where the respondents recommended the petitioner's case for this claim. The petitioner argued that they were forced to go to arbitration to recover amounts due to them, including GST, which were ultimately allowed. Respondents' arguments: The respondents argued that the petitioner had given an undertaking to complete the work as per the revised GAD within the lump sum cost of Rs. 7.50 Crore, thus precluding any claim for additional costs for the increased span. The judgment does not explicitly record arguments from the respondents regarding claims 1(a) and 2, but notes that claim 2 was not resisted.