TEHRI HYDRO DEV. CORPN. LTD.& ANR. versus JAI PRAKASH ASSO. LTD.

Citation: [2012] 8 S.C.R. 813 · Decided: 25-09-2012 · Supreme Court of India · Bench: RAJENDRA MAL LODHA · Disposal: Case Partly allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2012] 8 S.C.R. 813 
TEHRI HYDRO DEV. CORPN. LTD.& ANR. 
A 
v. 
JAi PRAKASH ASSO. LTD. 
(Civil Appeal No. 3682 of 2007) 
SEPTEMBER 25, 2012 
[R.M. LODHA, ANIL R. DAVE AND 
RANJAN GOGOi, JJ.] 
B 
Arbitration - Maintainability - Contract for execution of 
works contained an arbitration clause -
Grievance of C 
respondent-contractor that though the works had been 
completed, tile final bill was not prepared - Arbitration 
proceedings initiated, in course of which, final bill prepared 
and placed before the arbitrators by the appellant-corporation 
- Subsequently, another process of arbitration initiated for the 
D 
specific claims of respondent-contractor - Maintainability of 
the second round of arbitration proceedings - Held: The 
entitlement of respondent-contractor was not the subject 
matter of the earlier proceedings before the arbitrators - The 
claim of respondent-contractor got crystallized once the final 
E 
bill was prepared and placed before the arbitrators - It is these 
specific claims, after quantification, that were referred to the 
arbitrators in the subsequent arbitration proceedings - Thus, 
it cannot be said that the arbitration proceeding in respect of 
the specific claims of respondent-contractor stood barred in 
F 
view of the earlier arbitration proceedings between the parties. 
Arbitration - Arbitral award - Challenge to - Power of the 
Court - Contract for execution of works - Disputes arising 
therefrom - Matter referred to arbitration in terms of the 
arbitration clause contained in the contract -
Claim of G 
respondent-contractor for refund of security deposit not 
adjudicated upon by the arbitrators on the ground that it was 
not arbitrable - Held: In such a situation, it was clearly beyond 
the power of the trial court to decree the claim - The High 
813 
H 
814 
SUPREME COURT REPORTS 
[2012] 8 S.C.R. 
A Court was justified in setting aside the claim, however, it erred 
in directing adjudication of the claim by an arbitrator 
nominated by it -
The issue should have been left for 
determination in accordance with the procedure agreed upon 
B 
by the patties. 
Arbitration - Arbitral award - Grant of interest pendente 
lite - Justification - Held: Not justified, in view of the express 
bar contained in the contract between the patties. 
Arbitration - Arbitral award - Grant of interest for the past-
e award period - Justification - Held: Justified. 
The appellants and the respondent-contractor had 
entered into a contract for execution of certain works in 
connection with the Tehri Hydro Dam Project. Though the 
0 works in question were completed, the final bill of 
respondent-contractor was not prepared and security 
money, furnished by way of bank guarantee was not 
released. The parties went to arbitration in accordance 
with the arbitration clause under the contract/agreement. 
E In course of the arbitration proceedings, the appellant-
Corporation submitted the final bill. 
Subsequently, another arbi.tration proceeding 
commenced between the parties for the specific claims 
of respondent-contractor. The arbitral award passed in 
F the aforesaid arbitration proceeding held the respondent-
contractor entitled to Rs.10.17 lakhs on account of the 
work done with interest @ 6% p.a. from the date of 
invocation of the claim till the date of the award and @ 
12% p.a. from the date of the award till payment or till the 
G award was made Rule of court, whichever was earlier. 
H 
Insofar as the claim of respondent-contractor of Rs.12.50 
lakhs lying in deposit with the appellant-Corporation, the 
Arbitrators held the same to be beyond the scope of the 
dispute raised in the arbitration proceeding. 
TEHRI HYDRO DEV. CORPN. LTD.& ANR. v. JAi 
815 
PRAKASH ASSO. LTD. 
Objections against specific parts of the award by 
A 
which the respective parties felt aggrieved were filed 
before the District Judge. The District Judge (trial court) 
held the respondent-contractor entitled to both the 
amounts- Rs.10.17 lakhs as also Rs.12.50 lakhs and 
thereafter passed a decree in respect of the two amounts 
B 
alongwith interest thereon at the rate of 12% pendente lite 
and 6% for the post award period. In appeal, the High 
Court maintained the award of Rs.10.17 lakhs, however, 
as regards the claim of Rs.12.50 lakhs, it took the view 
that the said amount could not have been awarded by the c 
trial court as the said entitlement was not gone into by 
the Arbitrators, and remanded such claim to be settled by 
an Ar

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