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TMI Blog2017 (3) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... k order dated 12th February 2007 issued by BHEL in favour of the Respondent for "for execution and handing over of Civil works of switchyard and transformer yard for M/s. Neyveli Lignite Corporation 220/33 KV substation at Barsingsar in Rajasthan." 2. The clauses of the work order relevant for the present purposes are as follows: (i) Under Clause 3.1 the total contract price was Rs. 5,11,14,000. (ii) Under Clause 3.2 the actual payment to be made to the Respondent was based on measurement taken at the site and verified by the Engineers of BHEL as per the unit rate agreed between the parties. (iii) Under Clause 5.7 no interest was payable by BHEL "on security deposit or on any money due to the Contractor." (iv) Under Clause 9 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to this request. On 22nd June 2009, BHEL wrote to the Respondent complaining of the slow progress in the work and asking the Respondent to take immediate action to get the work started by 23rd June 2009 failing which they would have no choice to take suitable action as per the contract agreement. This was reiterated by BHEL by its letter dated 28th June 2009. 5. By its letter dated 28th June 2009 the Respondent informed the Petitioner that the EOT had been granted by BHEL till then for the convenience of BHEL. The Respondent did not accept or agree to any work to be done thereafter. BHEL was asked to close the contract as on 26th June 2009 and award the balance work to any other party after releasing the Respondent's overdue payments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Award then interest @ 18% per annum from the date of payment till realisation. To repeat, only the above two items have been challenged by BHEL in the present petition. 11. Mr. Sanjeev Anand, learned counsel for the Petitioner submitted that there was no occasion for the learned Arbitrator to have granted the claim for over run charges. It was submitted that each of the EOT was granted without any financial implication to BHEL and, therefore, the question of BHEL having to pay such over run charges did not arise. According to Mr. Anand, the EOTs were on account of delays caused by the Respondent. 12. The Court finds that in the impugned Award the learned Arbitrator has discussed Clause 9 pertaining to over run charges. He has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run charges is concerned. No ground has been made out under Section 34(2)(b)(ii) of the Act in this regard. 15. However, as regards the award of pendente lite interest, learned counsel for the Petitioner is right in his contention that under Clause 5.7 no pendente lite interest could be granted. The Award to the extent that it has awarded pendente lite interest is contrary to the express terms of the contract and is hit by Section 28(3) of the Act. The Award to this extent is opposed to the fundamental policy of Indian law and is hereby set aside. Only the postAward interest in the manner awarded in the impugned Award is upheld. 16. As a result the challenge to the impugned Award as regards over run charges is hereby rejected. The Award ..... X X X X Extracts X X X X X X X X Extracts X X X X
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