VidhiSangh

Supreme Court of India · 14/02/2020

CHANDIGARH CONSTRUCTION CO. PVT. LTD versus STATE OF PUNJAB & ANR.

[2020] 2 S.C.R. 825 · 2020 INSC 187

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Summary

The Supreme Court partly allowed a contractor’s appeals concerning an award under the Arbitration Act, 1940. The contract expressly required reasons, and the arbitrator’s unexplained adoption of a 93.12% premium was unsustainable. Instead of remitting the old dispute, the Court directed calculation of specified extra-work claims at the supported premium of 35.02%. Proven work in marshy soil was not rejected merely for failure to include it in monthly returns under the contractual procedure.

Issues

  1. Whether an unexplained premium award complied with the contractual requirement to give reasons.
  2. Whether extra work established in adjudication could be rejected solely for failure to submit monthly contractual returns, and what relief was appropriate.

Held

Result

Appeals partly allowed with costs. Claim 1 as allowed by the High Court sustained; claims 2, 3, 8 and 12 allowed subject to calculation at a 35.02% premium, with 12% annual interest. Calculation and payment directed within six weeks, failing which the amount would carry 18% annual interest until payment. Registry directed to draw the decree/award accordingly; pending applications disposed of.

Judgment PDF: Supreme Court of India, [2020] 2 S.C.R. 825.