ASSAM STATE ELECTRICITY BOARD AND ORS. versus BUILDWORTH PVT. LTD.

Citation: [2017] 7 S.C.R. 123 · Decided: 04-07-2017 · Supreme Court of India · Bench: J.S. KHEHAR · Disposal: Disposed off

Cited by 3 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

[2017) 7 S.C.R. 123 
ASSAM STATE ELECTRICITY BOARD AND ORS. 
A 
v. 
BUILDWORTH PVT. LTD. 
(Civil Appeal No. 484 of2008) 
JULY04, 2017 
[JAGDISH SINGH KHEHAR, CJI, 
DR. D. Y. CHANDRACHUD AND 
S~NJAY KISHAN KAUL, JJ.) 
Arbitration Act, 1940: 
Award - Price escalation - Work contract - Claimant was 
allowed to work beyond the formal extended time - Respondent-
Board cannot be allowed to take the stand that claimant is not entitled 
to escalation price for the period he worked even though there is 
no formal extension of time and taking refuge under the clause of 
contract wherein ceiling of contractual amount is fixed. 
Award - Idling charges - Arbitrator noted in the award the 
contributory delay on the part of claimant -
Once the aspect of 
contributory delay was present to the mind of the arbitrator, as is 
reflected in the reasons in the award, and taken into consideration 
B 
c 
D 
in the assessment 'of damages, the award does not call for 
E 
interference. 
s.29 - Award of interest - Arbitrator has power to grant 
interest on damages u/s.3(/)(b) of the Interest Act, 1978, from the 
date mentioned in this regard in a written notice claiming such 
interest -
The contract in the instant case contains no bar or 
F 
prohibition against the award of interest - The claimant is entitled 
to interest on the sum awarded from the date ·of notice i.e. 20 April 
1987 to 31December1997 and thereafter from the date of the decree 
of the trial Court until payment or realisation -
The rate of interest 
is, however, modified to 12 per cent per annum, in respect of both 
the above periods - Interest Act, 1978 - s.3(1)(b). 
G 
Disposing of the appeals (in favour of claimant), the Court 
HELD: 1. The arbitrator has taken the view that the 
provision for price escalation would not bind the claimant beyond 
123 
H 
124 
SUPREME COURT REPORTS 
[2017) 7 S.C.R. 
A the scheduled date of completion. This view of the arbitrator is 
based on a construction of the provisions of the contract, the 
correspondence between the parties and the conduct of the Board 
in allowing the completion of the contract even beyond the formal 
extended dated of 6 September 1983 up to 31 January 1986. 
B 
c 
D 
E 
Matters relating to the construction of a contract lie within the 
province of the arbitral tribunal. Moreover, in the present case 
the view which has been adopted by the arbitrator is based on 
confidential material which was relevant to the decision. There 
is no error apparent on the face of record which could have 
warranted the interference of the court within the parameters 
available under the Arbitration Act, 1940. The arbitrator has 
neither misconducted himself in the proceedings nor is the award 
otherwise invalid. The award does not suffer from any error 
apparent on the face of the record insofar as the aspect of price 
escalation is concerned. [Paras 12, 15][130-F-G; 132-F] 
P.MPaul v. Union of India (1989) Suppl. 1 SCC 368; 
Food Corporation of India v. A.M.Ahmed & Co. and 
Another (2006) 13 SCC 779 : [2006] 8 Suppl. SCR 
148; K.N.Sathyapalan (Dead) by Lrs. v. State of Kera/a 
and Another (2007) 13 SCC 43 : [2006) 9 Suppl. SCR 
864 - relied on. 
General Manager, Northern Railway v. Sarvesh Chopra 
(2002) 4 SCC 4:5 : (2002] 2 SCR 156 - referred to. 
2. On the aspect of idling charges for machine and labour, 
the arbitrator noted that three additional items of work were . 
F 
required to be carried out by the claimant which did not form part 
of the original work. These items of work required the 
mobilization of labour and machinery separately from that which 
had already been mobilized. The arbitrator held that to some 
extent, the claimant contributed to the delay in the execution of 
the work and referred in that connection to· the letters addressed 
G by the Board to the claimant. The arbitrator also observed that 
the inability of the claimant to place the required number of 
supervisors at the site also contributed to the delay in the 
completion of the work. The point of the matter is that the 
arbitrator has duly borne in mind the circumstance that "the 
H claimant also contributed to a certain extent and must share 
ASSAM STATE ELECTRICITY BOARD v. BUILDWORTH PVT. LTD. 
125 
responsibility for causing delay in completion of the project. The A 
award does indicate that the contributory delay on the part of the 
claimant was present to the mind of the arbitrator and has been 
duly taken into consideration in computing the extent of

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