01 Regular HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR AA 5/2025 Arb P No. 6/2025 M/s Navnirman Construction Company ….. Appellant (s) Through: Mr. Arif Sikander, Adv. Mr. Syed Muhatasam, Adv. V/s Union of India and Ors. ….. Respondent(s) Through: Mr. Vikas Malik, Adv. With Mr. Hamzah Draboo, Adv. Coram: Hon’ble Mr. Justice Sanjay Dhar, Judge ORDER(Oral) 25.07.2025 AA No. 05/2025: 1. This is a petition under Section 9 of the Arbitration and Conciliation Act, seeking a direction upon the respondents to preserve the construction till verification of work is done so that joint measurement of the work executed be carried out. A further direction has been sought upon the respondents that they should deposit the security amount till the P a g e | 2 AA 5/2025 Arb P No. 6/2025 pendency of the Arb P No. 6/2025 whereby the petitioner has challenged the arbitral award. 2. Heard and considered. 3. It appears that certain dispute arose between the parties, which were referred to the Arbitral Tribunal presided over by Hon’ble Mr. Justice Rashid Ali Dar, a Former Judge of this Court. Vide award dated 15.10.2024, the claims petitions of the petitioner as well as the counter claims filed by the respondent were finally adjudicated upon by the learned Arbitrator. While passing the award, the relief prayed for by the parties was dealt with in the award exhaustively. The relevant portions of the award are reproduced as under: “132.. Since there are no basis to opine that conduct of Claimant is above board or free from blemish or Respondents have behaved in a manner which has lead to either cessation or break down of contractual relationship or has incapacitated the claimant to an extent that it could not proceed even at moderate pace towards execution of work, claimant is found to have no cause to get compensation on the heads, above referred from this forum including for execution at a higher cost if respondents would have conceded for it or the claimant held entitled for same by this forum. It is also relevant to P a g e | 3 AA 5/2025 Arb P No. 6/2025 note that the claimant firm had been under an obligation in terms of contract entered into with respondents to engage manpower and machinery and to do all necessary things towards accomplishment of project as jotted down in agreement, i.e., for execution of the work (which however it has not been able to execute, except to a decimal extent). It is also pertinent to have in view and as also convassed by respondents that no creditworthy evidence has been brought on record by claimant for estimation of this forum to manifest the appropriation of any specific amount on any part of the subject work or towards the accomplishment of job assigned, which the respondents in fairness or equity or contractual relationship, can be said had any obligation to reimburse the claimant. Claim 1, and 2, are thus disallowed. 133. In view of the finding recorded regarding the termination letter contained in Annexure 49 to claim petition, Communication No. 81205/Durga/Br:43/E8 dated 12" of May 2023 issued by Col: Tanaja as Officiating Chief Engineer ,and said communication being adjudged as non-est, claim No. 3 has to be treated to have been determined in favour of Claimant and awarded accordingly. Respondent competent authority is directed to pass fresh orders in the light of relevant material including communications/diligence notices addressed to claimant firm, the replies and communications received from the claimant firm and of course subject to limitations and observations indicated herein. Fate of performance security and action contemplated to be taken if any in the light of agreement entered into between the parties, will depend on the outcome of this finding including how the part of work executed by claimant is to be treated. 134. Claim no 4 is disallowed while taking note of above discussion. Profits cannot be claimed on a work which is P a g e | 4 AA 5/2025 Arb P No. 6/2025 allotted for execution and is yet to be executed. Earning of profits is contingent on a number of factors till the work is executed and have to be calculated on some concrete facts and not hypothesis. 135. The fate of Claim no 5 is also linked thus, with the decision likely to be taken by accepting officer hereinafter. The accepting officer/Respondent no 4 Chief Engineer would also consider while examining the matter in the light of finding on claim 3, the admissibility of any amount for any part of work done by the claimant firm. Claim no 5 awarded accordingly. 127. Claim No. 6,7 and 8 are also dependent on action/decision of accepting officer to be taken hereinafter and be determined by said officer in terms of contract agreement, while examining the scope of action in the light of conclusion drawn above and other relevant material. 136. Entitlement to interest on any amount in case the claimant is found has any right to get shall be also considered by the said officer, (Accepting Officer ) on the basis of conditions of contract and the practices in vogue in department. Claims 9,10 and 12 of the claimant are determined accordingly. 137. It is not found proper to saddle the respondents with costs either on arbitration or on any other count in the light of facts and discussions noted above .Claim 11 awarded accordingly. 138. Similarly claim No. 13 too cannot be awarded as there are no basis to opine that claimant has an entitlement or right to execute the work at an escalated cost of rupees 17.30 crore. Same is disallowed thus. P a g e | 5 AA 5/2025 Arb P No. 6/2025 139. No merit is found in the plea of claimant for directing the respondents to take into considerations the circular issued by Ministry of Road Transport and Highways, dated 22'* of February 2022 on the subject. Needless to say it was for the claimant if interested in same ,to ask the respondents to take note of this circular during the currence of the contract and the claimant was expected as a prudent and reasonable person to approach the respondents without any laches. Even otherwise no scope is left to have any observations or to pass any direction regarding the applicability of the circular herein noted vis- a-vis the contract in question in view of findings noted above. Claim 14 be treated to have been determined and awarded accordingly. Counter Claims of Respondents Counter Claim no. 1 of Respondents 140. In view of adjudging of Communication No. 81205/Durga/Br.43/E8 dated 12 of May 2023 issued by Col. Tanaja as Officiating Chief Engineer non-est, Counter Claim No. 1 preferred by the Respondents has to be linked with the outcome of decision to be made by the Competent Authority/Accepting officer herein after. Decision regarding fate of forfeiture of performance security and related issues noted in this award shall be made by Accepting Officer, within a period of 4 weeks, hereinafter. Counter claim no 1 determined accordingly. Claims No 2 of Respondents/ Counter Claim 2. 141. Delay in execution of work as per bid/contract document envisages compensation to be paid a 10% of total cost, by the party at fault. Since execution of work remains interrupted on the part of claimant with justifications that have been held herein not to be tenable coupled with the fact that respondents have also P a g e | 6 AA 5/2025 Arb P No. 6/2025 contributed to delay which is assessed as 20% to 25% of the term of delay, it would be fair to allow only 7.5 % of total cost of CA in an amount of Rupees 77,77,500 as compensation. The respondents are held entitled to be compensated so, with limitation indicated hereinafter, under head Counter Claim 5. Claim 2 is awarded accordingly in favour of respondents. Counter Claim 3 of Respondents. 142. In my opinion, any amount cannot be claimed, for injury to prestige and reputation in arbitral proceedings unless there had been a provision for it, in an agreement entered into between the parties, which lays down the scope and parameters for settlement of differences/ disputes through arbitration, and of course subject to the satisfaction of artibral tribunal that prestige has been harmed. Since no such provision has been found for this in the agreement entered into between the parties, counter claim no.3 is not allowed. Counter Claim no 4 of Respondents. 143. Expenses incurred on instant arbitral proceedings, for settlement of differences are not allowed as there had been a good ground to ask for settlement of differences through arbitration by Claimant. Counter Claim no. 5 of Respondents 144. Page 12 of objections is concluded with total of claims 1 to 4 as rupee 2.12 crores. However serial number of counter claim at 5 noted herein above is quoted as: "All these losses attributed to claimant non completion of bridge within stipulated time for which the responsibility be fixed and he shall be liable to pay." P a g e | 7 AA 5/2025 Arb P No. 6/2025 145. Condition 54 of General Conditions of Contract referred above, pertains to cancellation of contract and the powers of Accepting Officer to complete the work by any means at contractors risk and cost. Estimated cost of completion as certified by GE (in case work is to be executed through alternative arrangement) can be recovered, for contractors default unless the contractor pays it himself. 146. Claimant as noted above had expressed its readiness to execute the contract, during the period when differences came to surface at a value of Rupees 17.30 Crores, whereas the amount allocated for execution of the job was 10.37 crores. Lowest tenderer, M/s Purbanchal Suppliers and contractors, referred above had offered to do it for an amount of rupees 18.51 crores. There is a gap of 7.00 - 8.51 crores, in the previous bid amount and the amount herein referred. 147. It indicates respondents have to appropriate more money least 7 crores, (unless any other factor in future brings the cost down) if alternative arrangement has to be put in practice for completion of project which had been finalised for execution at an estimated cost of 10.37 crores. 148. Pertinent decision regarding the fate of contractual relationship has now to be taken by Accepting Officer in the light of above observations. In case the Accepting Officer is of the view that contract shall be cancelled or otherwise there are no prospects or scope of it being got done through the agency of claimant or any other impediment has lead or likely to lead to fait accompali of contract, claimant would have to then compensate the Respondents of the loss likely to suffered by the Respondents of the additional expenditure to be incurred. P a g e | 8 AA 5/2025 Arb P No. 6/2025 149. Actual loss suffered by respondents for adopting an alternative has to be compensated by claimant under condition 54 of General Conditions of Contract and the claimant is held liable for same. Relief granted in favour of Respondents viz Claim no 2 shall stand merged with the amount of compensation to which respondents are held entitled under the head claim no 5, as grant of compensation for delay would be operational only if contract with Claimant is decided to be kept intact by the Accepting Officer and if the project is completed within previous allocated amount. Counter Claim no. 5 determined according. 150. Parties are advised to affix stamp duty to the set of awards provided to them by me. Fee of the arbitrator as admissible and of which the parties have been made conversant and may be made aware again, along with dues realisable in favour of International Arbitration Center Srinagar, be cleared. by parties 4. From a perusal of the aforesaid observations of the learned Arbitrator, it is clear that Claims No. 1, 2, 4, 11, 13 and 14 of the petitioner herein have been disallowed. With regard to other claims, the learned Arbitrator has remanded the matter to the Accepting Officer for determination. As against this, the learned Arbitrator has allowed counter claim No. 2 to the tune of Rs. 77,77,550/- in favour of the respondent P a g e | 9 AA 5/2025 Arb P No. 6/2025 and remanded counter claim No. 1 to 5 to the discretion of the Accepting Officer. 5. At this stage, there is an award existing in favour of the respondent to the tune of Rs. 77,77,500/- This much Claim of the respondent has been accepted by the Tribunal, whereas none of the claims of the petitioner has been accepted by the learned Arbitrator, though certain claims of the parties have been left to the adjudication of the Accepting Officer. The same does not indicate that there is a prima facie case in favour of the petitioner herein. Merely because the award of the learned Tribunal has been stayed by this Court in a connected petition filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, does not mean that the petitioner has carved out a prima facie case in his favour so as to persuade the court to pass an order of interim protection in his favour. The petition lacks merit and is, accordingly dismissed. P a g e | 10 AA 5/2025 Arb P No. 6/2025 Arb P No. 06/2025: Learned counsel for the respondents seeks time to file reply. Needful be done positively by next date of hearing. List on 10.09.2025. Record of the Arbitral Tribunal be summoned. (Sanjay Dhar) Judge SRINAGAR 25.07.2025 Aasif