NDLI: State of Haryana Vs. M/s. Shiv Shankar Construction Co. & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Arbitration and Conciliation Act 1996
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Arbitration and Conciliation Act, 1996: ss.34 and 37 – Contract awarded for maintenance of road for Rs.5.26 crores – The rate of maintenance of the road was accepted at Rs.1,000 per km p.m. – Maintenance contract was valid up to 31.07.2010 – Contract was meant for only 3364 PCUS per day – Dispute arose when contractor was required to incur additional expenditure on maintenance due to diversion of traffic from Palwal Aligarh Road to the present road and heavy traffic of 24418 PCUS per day started plying on the road which damaged the road – Contractor claimed the amount towards additional expenditure for maintenance – Arbitrator awarded Rs.1.51 crores taking loss at Rs.45,000 per km per month (claim Nos.1 and 8) – Case on behalf of the State-appellant was that in the statement of claim, the claimant claimed an amount of Rs.1.03 crores under claim Nos. 1 and 8 and, therefore award was in excess of amount claimed – Held: No substance in this contention – The statement of claim submitted by contractor specifically stated that amount of Rs.1.03 crores was worked out up to May, 2007 and details of expenditure beyond May,2007 will be submitted during the course of hearing – Therefore,amount awarded by the arbitrator cannot be said to be in excess of the claim – So far as the submission on behalf of the appellant that the arbitrator exceeded the scope of reference while awarding an amount beyond 19.05.2007-the date on which the High Court appointed the sole arbitrator is concerned, same has no substance – Case of appellant that Arbitrator ought to have restricted the claim either up to 06.03.2006-the date on which the contractor invoked the arbitration clause or 23.04.2007, the date on which the High Court appointed the sole arbitrator or at least up to 19.05.2007-the date on which the arbitrator entered into reference cannot be accepted since the award made by the arbitrator was till the traffic was diverted which was up to January, 2008 – Therefore, the arbitrator was justified in awarding the amount beyond the said periods and till the additional traffic was diverted – Third submission on behalf of the appellant was that by awarding Rs.45,000 per km per month, the arbitrator has rewritten the contract with respect to the amount payable than what was specified in the contract – At the time when contract was entered into the mutually agreed, the rate fixed was Rs.1,000 per km per month and the estimated traffic was 3364 PCUS per day – Cause of action arose subsequently due to diversion of traffic from Palwal Aligarh Road and plying of more heavy vehicles due to which the contractor was required to incur additional expenditure for maintenance of the road – Therefore, the contractor was entitled to the loss on account of the additional expenditure incurred for maintenance of the road – By no stretch of imagination, it can be said that there was rewriting the terms of the contract as submitted on behalf of the appellant – However, arbitrator ought not to have awarded an amount of Rs.45,000 per km p.m. beyond the time period of additional traffic – Arbitrator has awarded the loss/amount at Rs.45,000 per km per month up to 31.05.2010 i.e. till the end of the contract which is wholly impermissible diversion of the additional traffic cease dto exist w.e.f. January, 2008 – Therefore, the arbitrator ought not to have awarded any amount beyond the above time period beyond January, 2008 – To that extent the award passed by the arbitrator can be said to be perverse and to that extent the present appeals are required to be allowed.
Judge	Hon'ble Mr. Justice M.R. Shah
Neutral Citation	2021 INSC 888
Petitioner	State Of Haryana
Respondent	M/s. Shiv Shankar Construction Co. & Anr.
SCR	[2021] 12 S.C.R. 294
Judgement Date	2021-12-14
Case Number	7379

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