Full Judgment
Being aggrieved by award dated 25 January 2010 the Petitioner-original Respondent has challenged the same by invoking Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the Arbitration Act").
2. The operative part of the award is as under:-
"CLAIM NO.1:-
"24.The claimant has claimed an amount of Rs.11,55,23,065/- being balance of the Award amount pertaining to Vol. I."
"24.1 It is an admitted fact that, the Respondents have received Award amount of Rs.31,40,60,958/- towards Vol. I Award. As per the terms of the subcontract /piece work contract, the Respondent is entitled for margin /commission of 11.5 %. The same works out to Rs.3,61,17,010/-. Thereby the share of BTP/SBP together works out to Rs.27,79,43,948/-. Out of this BTP has received an amount of Rs.15,50,98,891/-, leaving balance payable by Respondent to BTP and SBP which works out to Rs.12,28,45,057/-. SBP has not at all received its share out of Vol. I Award and accordingly, in the claim statement, SBP has claimed its full share to the tune of Rs.5,37,17,487/-. The details of the same are set out in Annexure C153 page-3, as well as in Annexure C-47. It is an admitted fact that the Respondents have not denied these calculations made in Annexure-C153 nor produced any counter calculations against demands of the Claimant to defend the differences, if any. On the contrary, the Respondent's witness -No.2 Sri Muraleedharan, who is the accountant of the Respondent, who was examined as a witness has not denied the correctness of this computation. Therefore, SBP is entitled for Rs.5,37,17,487/-, which I award along with interest at 18% p.a. from 15.06.2001 till date of award. The interest subsequent thereto is awarded under the separate head of interest."
"CLAIM NO.2:25.
The Claimant BTP has claimed an amount of Rs.4,14,88,793/- being balance of the Award amount pertaining to Vol. II."
"2
5.1 It is an admitted fact that, the Respondents have received Award amount of Rs.24,09,25,965/towards Vol. II Award. As per the terms of the subcontract /piece work contract, the Respondents are entitled for margin/ commission of 11.5%. This works out to Rs.2,77,06,486/-. Therefore, the share of BTP/SBP together works out to Rs.21,32,19,479/-. Out of this BTP has already received an amount of Rs.10,54,37,033/-. The balance payable by Respondent to BTP and SBP works out to Rs.10,77,82,446/-. SBP has not at all received its share out of Vol. II Award and accordingly, in the claim statement, SBP has claimed its full share to the tune of Rs.6,15,23,377/-. The details of the same are set out in Annexure -C153 page-5, as well in Annexure C48. Respondents have not denied these calculations made available in Annexure C153 nor produced any counter calculations against demands of the Claimant to defend the differences, if any. Sri Muraleedharan's statement of not examining the each Annexure-C151 to C-153. Therefore, SBP is entitled for Rs.6,15,23,377/-, which I award along with the interest thereon at 18% p.a from 13.04.2000 till the date of award. The interest subsequent thereto is awarded under the separate head of interest."
"CLAIM NO.3:
"26. The Claimant SBP has claimed an amount of Rs.1,88,06,775/- towards its share of the Award amount payable to it under the Award of amount pertaining to Vol. IV and V. The details of the calculations are made available by the Claimants in document marked as Annexure-C153 page 9 and C49. It is noticed from the summary sheet/abstract of financial implications that the Claimants have not deducted 11.5% margin/commission which Respondent is entitled to. After deducting this margin amount, the remaining amount works out to Rs.1,66,43,996/-. The Respondents were given ample opportunity to verify and submit counter calculations, if any, to this effect. On the contrary, the Respondent's witness- No.2 Sri Muraleedharan, who is the accountant of the Respondent, who was examined as a witness has not denied the correctness of this computation."
"26.1 It has been argued by the Senior Counsel for the Respondent that the claim in respect of Vol IV and V (Claim no.3) is in the nature of an interim Order and that while passing a final award, such direction cannot be issued by the arbitrator. The Claimant's counsel has submitted that the relief in respect of claim No.3 which relates to award pertaining to Vol. IV and V is not in the nature of an interim Order. The relief sought as is apparent from Para 67 of the claim statement, is for the payment of entire amount of Rs.1,88,06,775/- along with interest. Incidentally, it has been stated in the pleadings that the Claimant is entitled to the same treatment as the Respondent, and as an ad-hoc measure, during the pendency of the present proceeding, for a direction to pay 60% of the amount."
"26.2 It is an admitted fact that the Claimant has carried out the works in respect of part of the claims in Vol. IV and V and these works have been completed prior to February 2000. When these works have been completed, the Claimant is entitled to receive monies in respect thereof. It is also an admitted fact that the claim made in Vol. IV and V do not have elements of profit, but are the cost of work. The Respondent being the main contractor under whom the Claimant is working has a duty and obligation to pay to the Claimant for the works carried out by it and this has been so stated in the Sub Contract Agreement/ MOU/Piece Work Agreement. When that be so, the Respondent is duty bound to pay the amount relating to work carried out by the claimant and which are covered by Vol. IV and V. The claim is not in the nature of an ad-hoc/interim measure, but a final relief as is clear from paragraph 63, wherein the entire amount has been sought for. Undisputedly, an award has been passed by the arbitrators in respect of claim IV and V. Merely because it is challenged, that does not mean that the Respondent's obligation to pay this amount ceases. In view of the same, this claim has to be awarded."
"Computation is found in Annexure-C153. On the contrary, the Respondent's witness-No.2 Sri Muraleedharan, who is the accountant of the Respondent, who was examined as a witness has not denied the correctness of this computation. Claimant is therefore entitled to the above amount of Rs.1,66,43,996/- along with the interest thereon at 18% p.a. from 29.02.2008 till the date of award. The interest subsequent thereto is awarded under the separate head of interest."
"CLAIM NO.5:27.
"The Claimant has claimed an amount of Rs.2,92,07,110/- being illegal excess deduction towards escalation by adopting wrong methodology. In the Award passed, in respect of BTP, escalation in its entirety has to be given, since bifurcation of the escalation relatable to BTP and SBP portion of work has not been worked out and placed before the Arbitrator. In view of the same the entire escalation payable is to be awarded to BTP and consequently, the claim made in this regard by SBP will have to be rejected in its entirety. Such course of action will not prejudice any one, since both BTP and SBP are sister concern. It has been specifically stated by the Claimant SBP in para -4 of its claim statement that BTP is partner of SBP, apart from being its sister concern. There is no denial of this statement in the reply filed by the Respondent. Therefore, it has to be accepted that BTP is partner in SBP. Documents clearly indicate that BTP and SBP have been writing common letters, many a time same letter has the name of both BTP and SBP. Since the escalation is being claimed in its entirety by BTP, claim for escalation in respect of SBP will have to be rejected."
"CLAIM NO.6:
"28. The claimant submitted a claim for Rs.5,19,22,824/- being the amount payable towards running and final bill i.e illegal excess deduction made by the Respondent which includes escalation element also. The claim regarding running and final bill also overlaps with the claim made by BTP and the same reason and logic applicable to the illegal deduction will apply to this claim also. Since this claim is being awarded in its entirety to BTP, the claim made by SBP will have to be rejected."
"CLAIM NO.7:
"29. This claim is liable to be rejected."
"CLAIM NO.8:
"30. Interest is awarded on all the amounts awarded hereinabove at the rate of 18 % p.a. compounded monthly from the date of award till the date of payment."
CLAIM NO.9:
"31. Each parties will have to bear their own costs."
3. Both the learned counsel, by consent, made statement that the basic facts/ documents/ agreement and events are common as that of Arbitration Petition No.891 of 2010 (Patel Engineering Co. Ltd. Vs. B.T. Patil and Sons Belgaum (Construction) Pvt. Ltd.). Though the sole Arbitrator was common, two separate awards have been passed based upon the facts and circumstances and documents between the parties. The points and the issues so raised and decided are also common. Both the learned senior counsel made common submission on facts as well as on the law. They filed common written submissions accordingly. Therefore, the reasons so given and as decided in Arbitration Petition No.891 of 2010 on 4/4/2013 be treated as reasons for this Petition also. However, the claims are different and so also the amounts awarded by the Arbitral tribunal in the impugned award. Therefore, this separate order.
4. Resultantly, the following order:-
a) Award dated 25 January 2010 is quashed and set aside.
b) The matter is remanded for fresh reconsideration.
c) The learned Arbitrator and/or the other, to dispose of the matter as expeditiously as possible after giving opportunity to both the parties.
d) There shall be no order as to costs.
5. The learned senior counsel appearing for the Petitioner submitted to stay the order of remand. The other side has opposed the same. However, considering the facts and circumstances, as I am remanding the matter after setting aside the award, I am inclined to stay the order of remand for 10 weeks from today.