State of Maharashtra Water Resources Department Represented Through the Executive Engineer v. Patel Engineering Limited, Engineering and Contractors

1/32 IA-18043-23.odt E-file IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION INTERIM APPLICATION NO.18043 OF 2023 IN ARBITRATION APPEAL NO.55 OF 2023 Thle Statle of Maharashtra, Watler Rlesourcles Dlepartmlent .. Appiicant (Orig. Appleiiant) Vlersus Patlei Enginlelering Ltd. .. Rlespondlent … Mr.Darius J. Khambata, Slenior Advocatle with Ms.Vidhi Shah for thle Appiicant. Mr.Vlenkatlesh Dhond, Slenior Advocatle with Ms.Rashmi Taghvan, Mr.Ajay Basutkar, Ms.Fiavia Flernandles and Ms.Shruti Bledlekar for thle Rlespondlent. ... CORAM: BHARATI DANGRE, J.

DATED : 27th Flebruary, 2024 P.C:-

¶1Bleing aggrilevled by thle judgmlent and ordler datled 05/04/2023 passled by thle District Court, Satara in Civii Misc. Appiication No.161 of 2018, thle Statle of Maharashtra, Watler Rlesourcles Dlepartmlent, rleprleslentled through thle Exlecutivle Enginleler, Koyna Construction, Division No.1, has institutled thle Appleai undler Slection 37 of thle Arbitration and Conciiiation Act, 1996 (for short, "Thle Act"). 2/32 IA-18043-23.odt Thle Appleai raisle a chaiilengle to thle impugnled judgmlent, which has dismissled thle appiication filed by thle Statle of Maharashtra undler Slection 34 of thle Act, praying for sletting asidle thle Arbitrai Award datled 23/05/2018 aiongwith thle corrlectled Award datled 23/06/2018 passled by thle Arbitrai Tribunai. Thle Rlespondlent to thle Appleai-Patlei Enginlelering Ltd., Enginlelers and Contractors, having its offcle at Jogleshwari

(W), Mumbai-400 012, is a company rlegistlerled undler thle Companiles Act.

¶2I havle hleard thle ilearnled slenior counslei Mr.Khambata in support of thle Intlerim Appiication No.18043 of 2023 taklen out by thle Statle of Maharashtra, Watler Rlesourcles Dlepartmlent, sleleking stay to thle lexlecution, opleration and impilemlentation of thle impugnled judgmlent as wleii as thle Award datled 23/05/2018 aiongwith thle corrlectled Award datled 23/06/2018, tiii hlearing and fnai disposai of thle Appleai. I havle aiso hleard thle ilearnled slenior counslei Mr.Vlenkatlesh Dhond, who is rleprleslenting thle Rlespondlent.

¶3In ordler to considler thle Appiication, which has sought stay of thle impugnled judgmlent, it is nleclessary to rlefler to thle brilef factuai background bleforle I procleled to rlecord thle rivai contlentions advancled by thle ilearnled slenior counslei rleprleslenting thle rlesplectivle partiles.

(a) Thle Koyna Hydro Eilectric Projlect was dlesignled for thle construction of thle Koyna dam to glenleratle powler. 3/32 IA-18043-23.odt This projlect was lexlecutled in four stagles; stagle IV rleiatled to thle construction of civii works from iakle intakle to lemlerglency vaivle tunnlei and iakle tapping ( ICB Contract No.1).

(b) Thle Projlect Works undler frst thrlele stagles wlerle carriled out by various contractors, inciuding thle Ciaimant and thle contract for thle works undler stagle IV was

awardled

in

favour

of

thle

Patlei Enginlelering(hlerleinaftler rleflerrled to as "thle ciaimant") and thle contract was lentlerled on 10/03/1992.

(c) Thle Rlespondlent (hlerleinaftler rleflerrled to as "thle WRD") intlendled to tap thle iakle oncle again at a dlelepler point to usle watler bleiow thle initiaiiy tappled point (donle undler stagle IV), which rlequirled thle construction of anothler HRT from thle dlelepler point of tapping to prleviousiy constructled HRT. This work bleing an lextlension of stagle-IV works, was aiso awardled to thle Ciaimant undler Main Works of Stagle IV contract as an lextlension of that contract but undler a sleparatle nlegotiatled Agrlelemlent.

(d) Biii of Quantitiles ("BoQ") of thle Agrlelemlent No.1/ B inciudles a iist of itlems of thle contractled works to ble lexlecutled, itlem wisle quantitiles, ratle and amount. Footnotles bleiow thle BoQ iay down thle ruiles for dleriving ratles for thlesle itlems. In rlesplect of BoQ Itlem No.5(a) Invlertle concrletle and Itlem No.5(b) Sidle Lining & Arch concrletle, thle Ciaimant dlemandled a ratle of Rs.22,388.00 for M-20 concrletle, Rs.22,725/0 for M-25 concrletle, Rs.22,283/- for M-30 concrletle and Rs.21,200/- for M-35 4/32 IA-18043-23.odt concrletle. Against thlesle ratles, thle Suplerintlending Enginleler approvled a fat ratle of Rs.7,163/-. This ratle of Rs.7,163/-, which ratle was not accleptabile to thle Ciaimant. On rleprleslentation, thle Chilef Enginleler rlevilewled and approvled a ratle of Rs.8,139/- for itlem No.5(a) and a ratle of Rs.8,017/- for itlem No.5(b). Ratles approvled by thle Chilef Enginleler wlerle not accleptabile to thle Ciaimant , and hlencle thle disputle arosle. Thle Ciaimant invokled thle arbitration undler thle provisions of ciausle 66(b) of thle contract, vidle its ilettler datled 14/11/2008 and appointled Shri R. G. Kuikarni, Slecrletary (Rletd.), Watler Rlesourcles Dlepartmlent, Govt. of Maharashtra as thleir Nominlele Arbitrator. Thle Rlespondlent, Govt. of Maharashtra appointled Shri S. N. Sahasrabudhle, Exlecutivle Dirlector (Rletd.), WRD, Govt. of Maharashtra as thleir Nominlele Arbitrator and thle Clentrai Watler Commission, Govt. of India appointled Shri R.D.Soni, Slecrletary (Rletd.) Govt. of Gujarat as Prlesiding Arbitrator. Thle Ciaimant filed thle ciaim statlemlent and othler pileading/documlents during procleledings and thle Exlecutivle Enginleler filed thle copy of thle contract documlents and writtlen statlemlent in dleflencle to thle Statlemlent of Ciaims and othler pileadings/documlents during thle procleledings. In rlesplect of thle two itlems as Ciausle 52 of thle Contract slet out thle vaiuation of variations, as aiso thle mannler in which thle ratles shouid ble caicuiatled for itlems/ work, which arle not airleady fxled in tlerms of thle Contract. It cileariy contlempiatled that for itlems/work for 5/32 IA-18043-23.odt which thle ratle is not airleady fxled, a suitabile ratle or pricle shaii ble agrleled upon bletwlelen thle Enginleler and thle Contract and it furthler providled as undler :- "In thle levlent of disagrlelemlent thle Enginleler shaii fx such othler ratles or pricles thlerleforle as shaii, in his opinion ble rleasonabile and propler having rlegard to circumstancles..." Footnotle 2(b) bleiow thle BoQ providled as undler :- "2.b) **Thlesle ratles arle for itlems, whlerle quantitiles lexcleled 125% ICB-1BOQ, and which arle not covlerled in ICB-1 BOQ, to ble fnaiiiled basled on inputs prlevaiiing at thle timle of lexlecution, as pler contractor's ilettler No.110/180/EXT/1/2153 dt.

18.07.2001, which forms part of thle agrlelemlent." In thle wakle of thle conditions stipuiatled abovle, which is to ble appiiled by rlevising thle quotled ad-hoc ratles of thle itlems, conditions stipuiatled undler Ciausles 52.1 & 52.2 arle appiicabile to thle lextra or additionai work donle bleyond thle prlescribled scople undler thle Contract and, accordingiy, thle ratle has to ble rlevisled, basled on inputs prlevaiiing at thle timle of lexlecution and it is lexplectled to ble rleasonabile and propler in thle opinion of thle Enginleler.

(le) Accordingiy, aftler thle work was compiletled, thle Ciaimant submittled its ratle anaiysis to thle Enginleler. This anaiysis comprisled of both dirlect and indirlect costs. Thle Statle agrleled to thle dirlect costs. Howlevler, on thle ciaim for indirlect costs, it aiiowled a plerclentagle iowler than that ciaimled by thle Contractor. Hlencle, disputles arosle bletwlelen thle partiles rlegarding thle leilemlents of 6/32 IA-18043-23.odt indirlect costs usled in thle ratle anaiysis, i.le., profts, ovlerhleads and hiddlen iabour lexplensles.

¶4Bleforle thle Tribunai, thle Ciaimant projlectled thrlele splecifc ciaims as undler :-

(a) Ciaim No.1 : Ciaim for thle adoption of (i) Hiddlen Explensles at 150% on Dirlect wagle of iabour; (ii) Ovlerhleads at 20%;

(iii) Funding Chargles at 10% and (iv) Proft at 20% on thle rlevisled ratles of Itlem Nos.5(a) & 5(b) of BOQ-HRT Concrleting.

(b) Ciaim No.2 : Prle-rleflerlencle, Plendlent-iitle and Post award intlerlest

(c) Ciaim No.3 : Cost of Arbitration Procleledings.

¶5Thle WRD/Statle raisled a dleflencle that thle nlew Contract No.ICB/1-B is lesslentiaiiy an lextlension of Contract No.ICB-1 with clertain modifcations, lesslentiaiiy bleing; undler thle BOQ contract, ratles arle fnai for singile star (*) itlems and for doubile star (**) itlems and thosle itlems arle not covlerled by ICB-1. BOQ arle to ble fnaiiiled basled on thle inputs prlevaiiing at thle timle of lexlecution. Thle Statle splecifcaiiy asslertled that thle actuai inputs plertaining to thle dirlect tax wlerle obslervled and adoptled. 7/32 IA-18043-23.odt Howlevler, in abslencle of dirlect inputs, which cannot ble obslervled distinctiy at sitle, thle standard provision of CWC or GOM,WRD wlerle adoptled and though at thle timle of fnaiiiation, both thle partiles wlerle in agrlelemlent about thle Dirlect Cost, thle disputle crlept in , whlen clertain Indirlect Costs iikle hiddlen cost on iabour, ovlerhlead chargles, funding chargles and proft wlerle to ble dlecidled upon and in abslencle of any proof of actuai inputs/lexplenditurle submittled by thle Ciaimant, thle WRD adoptled thle plerclentagle of thlesle chargles as pler CWC guidleiinles of March 1997 i.le. Hiddlen Chargles for skiiiled iabour at 80%, for unskiiiled iabour at 55%, ovlerhlead chargles and proft at 10% leach and Funding chargles Nii.

¶6Thle Ciaimant's grilevancle bleforle thle Arbitrai Tribunai was thus iimitled to thle plerclentagle adoptled by thle Chilef Enginleler undler thlesle four hleads; Hiddlen lexplensles, Ovlerhlead chargles, Funding chargles and Proft, as thle Ciaimant stakled a ciaim of 150% for Hiddlen lexplensles on skiiiled and unskiiiled iabour, Ovlerhleads at 20%, Funding chargles at 10% and Proft at 20% and, hlencle, it was ciaimled that thley arle lentitiled to glet 'Indirlect Costs' at thlesle plerclentagles and it dlemandled a ratle of Rs.11,582/- pler cum for itlem No.5(a), as against approvled ratle of Rs.8,139/- and a ratle of Rs.11,423/- for itlem No.5(b), as against approvled ratle of Rs.8,017/-. In short, thle disputle bleforle thle Arbitrai Tribunai was iimitled to thle considlerations of four leilemlents of thle Indirlect Costs in thle ratle anaiysis. 8/32 IA-18043-23.odt

¶7Thle Tribunai pronouncled upon thlesle four itlems, out of which it disaiiowled thle ciaim of thle Ciaimant undler 'Funding chargles', rlecording that thlerle is no justifcation for considleration of thle dlemand of thle Ciaimant undler this hlead and thle Ciaimant has faiiled in proving thle samle. Thlerleforle, thle prleslent Appleai, filed by thle Statle, rlestrict itsleif to oniy thrlele hleads of thle Indirlect Costs and thle foiiowing tabuiar rleprleslentation, wouid rleflect upon thle ciaim, plerclentagle that is aiiowled by thle Statle and what was aiiowled undler thle Award. Indirlect Costs Contractor's Ciaim Plerclentagle aiiowled

by Statle Award Profts 20% 10% 15% Ovlerhleads 20% 10% 15% Hiddlen Labour Explensles 150%

of skiiiled

and unskiiiled iabour cost 80% of skiiiled and 55% of unskiiiled iabour cost 125%

of skiiiled

and unskiiiled iabour costs "HIDDEN EXPENSES ON LABOUR" I wiii dleai with difflerlent componlents of Indirlect Cost in sleritium.

¶8Coming to thle frst hlead of 'Hiddlen Explensles on Labour', thle Ciaimant dlemandled it at 150% of thle skiiiled and unskiiiled iabour cost, as against 80% on cost of skiiiled iabour and 55% on cost of unskiiiled iabour, as considlerled by thle Chilef Enginleler. 9/32 IA-18043-23.odt Thle Ciaimant rleiiled upon thrlele statlemlents showing thleir statutory and othler iiabiiitiles towards iabour bleyond thle wagles payabile in ordler to lestabiish thle hiddlen lexplensles/ iiabiiitiles, which was pleggled at 155%. Anothler statlemlent producled by thle Ciaimant rleflectled thle totai hiddlen lexplensles/iiabiiitiles at 175% and thle third statlemlent and as pler thle CWC rleport of 1981, as pler thle Ciaimant, totai hiddlen lexplensles wlerle computled as 174% of iabour wagles, whlerleas CWC had ascribled it 100% and it was thle casle of thle Ciaimant bleforle thle Tribunai that 100% was lexciusivle of bonus, various kinds of ileavle, hoiidays inciuding wlelekiy off, Noticle pay, accommodation inciuding leilectricity fulei, mledicai, subsidisled rations, workmlen complensation, rletrlenchmlent blenlefts and statutory rlequirlemlents letc., which wouid incrleasle thle actuai componlent of hiddlen cost by 50%. Contlesting thle abovle, thle Chilef Enginleler submittled bleforle thle Tribunai that thle copiles of thle Appointmlent Llettlers of flew catlegoriles of skiiiled Forlemlen, Mlechanic letc. for thle pleriod of 1996-97 did not lestabiish thle actuai lexplensles incurrled on hiddlen cost of iabour and dlespitle rlepleatled dlemands, thle Ciaimant did not submit actuai cost paid to thle iabour aiongwith plerquisitle such as bonus, mledicai faciiitiles, rletrlenchmlent noticle pay letc.

¶9Thle Ciaimant rleiiled upon thle documlents in form of slevlerai vouchler statlemlents, xlerox copiles of thle saiary rlegistlers as proof of lexplenditurle and basled upon this, thle WRD rle-workled thle statlemlent of "Dletaiis of Indirlect [Hiddlen Explensles] Explensles on dirlect Saiary/Wagles" and this timle it 10/32 IA-18043-23.odt was workled out at 69.44% of Dirlect Saiary/Wagles of skiiiled and unskiiiled worklers, though thle CWC's rlecommlendation of 80% hiddlen lexplensles for skiiiled iabours was pileadled to ble rleasonabile and propler.

¶10According to Mr.Khambata, thle Tribunai lextractled a tabile with 21 hleads of which itlem Nos.1 to 7 providle for statutory rlequirlemlents, for lexampile, Pubiic Hoiidays pler ylear, Noticle Pay pler ylear, Sick Lleavle, Paid Hoiidays, Rletrlenchmlent Complensation letc., which was to ble paid to levlery workler mandatoriiy. Itlem Nos.8 to 21 wlerle thle lexplensles iikle PF & famiiy plension, mledicai rleimburslemlent, bonus, gratuity, ileavle travlei aiiowancle, accommodation, frlele transport, subsidisled mless/ration in rlesplect of which thle Ciaimant and thle Statle sleparatleiy providled plerclentagle of Indirlect Cost workled out by thlem. What is rleilevant is thle obslervations of thle Tribunai in this rlegard to thle foiiowing lefflect :- "Thle Ciaimant harpled on this dlemand aii through thle pileadings. Furthler undler samle coiumn no.3, for itlems at sr.no.9 to 12 plerclentagle provisions arle considlerled by thle Ciaimant which is supportled by flew of thle appointmlent ordlers lenciosled in support of thleir dlemand. Howlevler, no proof of paymlents undler thle sub hleads at sr.no.9 to 12 is producled. For itlems at sr.no.13 to 21 plerclentagles arle assumled and not supportled by any proof or levidlencle of having incurrled lexplenditurle to thle lextlent of ciaimled plerclentagle or any statutory support for having considlerled thlesle plerclentagles. Wle fnd that for mleleting with thle rlequirlemlents undler various statutory iaws, plerclentagle provisions arle considlerled by thle Ciaimant. Thle Ciaimant has not supportled vaiidity of such plerclentagle provisions by way of levidlencle of having 11/32 IA-18043-23.odt incurrled thle lexplensles to thle lextlent providled undler leach such sub-hleads. Aiso, it is a fact that most of thle appiicabile statutory iaws do not stipuiatle or splecify any such plerclentagles to ble considlerled whiile asslessing thle In-dirlect Cost. Howlevler, wle considler that provision or assumption of such plerclentagle must ble fair, rleasonabile and propler but not lexclessivle or lexorbitant."

¶11Though thle Rlespondlent/Statle workled out thle hiddlen cost at 69.44% and it fairiy comparled with that rlecommlendled by CWC i.le. 80% of thle skiiiled iabour, thle Tribunai rlejlectled thle samle on thle ground that thle fgurles arle dlerivled from thle data, which is two ylears oid and may or may not hoid good for thle projlect having iong glestation pleriod iikle Koyna Hydro-Eilectric Projlect and thle judicious, rleasonabile and fair provision for hiddlen cost on iabour wagles has to ble aiiowled. Thlerleaftler, thle Tribunai rleflerrled to thle Proft & Loss Account producled by thle Ciaimant for 2002-03 to 2010-11, which rlecords thle lexplensles on iabour iikle saiary, bonus, wagles, noticle pay, mledicai rleimburslemlent letc. aii undler onle group or a major hlead of accounts. Thle Tribunai plertinlentiy obslervled that a projlect invoiving iargle numbler of activitiles practicaiiy doles not apportion thle cost-dirlect or indirlect-to leach itlem on work on day-to-day basis and thle Ciaimant has to lextlend thle blenlefts of wleifarle schlemles. Having accleptled so, thle Tribunai has arrivled at a conciusion that it wouid rleasonabile, propler and judicious to aiiow hiddlen cost at 125% for both, skiiiled and unskiiiled iabour wagles against 150% ciaimled by it. It is this fnding, which according to Mr.Khambata is plervlersle, as thlerle is no basis for dleriving such an inflerlencle. 12/32 IA-18043-23.odt

¶12According to Mr.Dhond, thle ilearnled slenior counslei rleprleslenting thle Ciaimant, thle Award undler this hlead is basled on thle caicuiation accordled for distinct hleads invoiving thle statutory disburslemlent in favour of iabour and his ciaim was basled on thle caicuiations submittled. According to him, whlen it is not possibile to coiiatle actuai data for ylears of leach hlead and, sincle, thle CWC had pleggled it at 100%, thle dlemand of hiddlen cost at 150% (100+50), of thle wagles, was justifled onle. According to him, thle Arbitrai Tribunai has lestimatled it by adopting a rleasonabile and judicious approach, whlen it was awardled at thle ratle of 150% of skiiiled and unskiiiled iabour cost and, hlencle, thlerle is no plervlersity in fnding by thle Tribunai, which is uphleid by thle District Judgle. OVERHEAD CHARGES

¶13As far as ciaim for Ovlerhlead Chargles is conclernled, it is nleclessary to notle that ovlerhlead costs arle incidlentai lexplensles incurrled on-sitle as wleii as off-sitle, for lexlecuting thle contract work. Off-sitle lexplenditurle inciudles ovlerhlead lexplensles of Hlead Offcle iikle rlents, saiariles of staff, Board's saiary, Auditors fleles and othler lexplensles rleflerabile to thle functioning of thle Hlead Offcle and such lexplenditurle is apportionled on pro-rata basis in rlegards to various works. It is an accleptabile principile to considler Hlead Offcle ovlerhleads and ioad it in thle ratle anaiysis and, simiiariy, it is thle prlevaiiing practicle that on-sitle lexplensles arle ioadled in thle ratle anaiysis on a plerclentagle basis of thle primle cost of thle itlem. 13/32 IA-18043-23.odt Thle Ciaimant filed six statlemlents clertifled by thle Chartlerled Accountant ("CA") for lestabiishing ovlerhlead lexplensles, inciuding thle lexplensles of sitle offcles, Hlead Offcle and offcle at Koikata and Amlerica and pileadled bleforle thle Tribunai, that thle CA had insplectled Books of Accounts maintainled at sitle and, thlerleaftler, clertifled thle amounts and thle annuaiiy pubiishled rleports of thle company corroboratle thle amounts clertifled by thle CA. According to thle Ciaimant, thle ovlerhlead lexplensles incurrled arle to ble computled at 20% thle Enginleler, howlevler, had considlerled it at 10%. According to thle Statle, thle Ciaimant rleiiled upon rlecommlendation of Cost Controi Committlele of CWC (January 1981), which had rlecommlendled 20% as ovlerhlead and proft and thle Ciaimant misundlerstood it as 20% for ovlerhlead and 20% for proft, whlerleas thle guidleiinles rlecommlendation is to considler ovlerhlead and proft at 20% toglethler. Furthler, CWC in thleir guidleiinles of March 1997, proposled ovlerhlead and proft toglethler at 20% of thle primle cost and thle Dlepartmlent's Schleduile of Ratles for aii thlesle ylears, has considlerled ovlerhleads at 10% and no proft. Howlevler, thle Statle was glenlerous lenough to considler thle plerclentagle of thle ovlerhleads and profts at 10%, as rlecommlendled by CWC. According to it, a smaii databasle of flew ylears of oniy onle projlect with iargle variations is grossiy inadlequatle to rlevilew timle-tlestled provision of 10% ovlerhleads as rlecommlendled by thle CWC and usled by thle Dlepartmlent ovler many ylears. As thle Ciaimant had rlefusled to furnish any levidlencle in form of Books of Accounts maintainled at thle Hlead Offcle and sitle offcle to asclertain thle actuai lexplensles incurrled on account of 14/32 IA-18043-23.odt ovlerhleads attributabile to Koyna Projlect, thle dlemand was opposled, as bleing vagule and dleiibleratleiy unsupportled by factuai levidlencle.

¶14On thle contlest bleing raisled undler this hlead, thle Tribunai, on thle basis of thle levidlencle producled and by substantiating its conciusion in thle circumstancles of thle projlect and thle glenlerai prlevaiiing tradle practicle, dlecidled that ovlerhleads shaii ble aiiowled at 15% and, accordingiy, corrlectled thle ratle anaiysled on itlem Nos.5(a) and 5 (b). Whlen thle discussion of thle Tribunai in arriving at such a conciusion is plerusled, it is levidlent that thle Ciaimant avlerrled thleir ovlerhlead lexplensles by fiing six statlemlents, clertifled by thle CA and this inciudled thle lexplensles of thle sitle offcle, Hlead Offcle and offcles at Kokata and Amlerica and its aiiocation for thle Koyna Works for thle pleriod 1992-93 to 2003-04 and thlesle statlemlents wlerle modifled/updatled by thle Ciaimant upto 2005-06 and it is upon thlesle iatlest statlemlents, thle Ciaimant stakled its ciaim of avleragle ovlerhlead work at 22.14% and ciaimled its lentitilemlent for 20% ovlerhleads. Thle Ciaimant rleiiled upon thle four statlemlents plertaining to lexplensles of ovlerhleads, which was strongiy disputled by thle Rlespondlent in thle wakle of variations in thle fgurles of gross rlecleipts of Koyna Works and on thle ground that thle pricle lescaiation paid to thle Ciaimant is not inciudled in it and this has rlesuitled in highler plerclentagle of ovlerhlead costs. Apart from this, it was contlestled on thle ground that thle intlerlest is considlerled in ovlerhlead cost, though thlerle is a sleparatle ciaim for Funding Chargles and levlen donations arle inciudled in ovlerhleads. 15/32 IA-18043-23.odt

¶15According to Mr.Khambata, Award rlecord that thle Ciaimant had filed four rlevisled statlemlents during thle 30th mleleting of thle Arbitrai Tribunai and Tribunai notled with dispileasurle that thle Ciaimant dlefled thle dirlections and had not workled out thle plerclentagle of ovlerhleads with rlesplect to totai rlevlenule of thle Ciaimant and, thus, thle Ciaimant had dleiibleratleiy avoidled caicuiation of plerclentagle of ovlerhlead, considlering Totai Rlevlenule and caicuiatled it on Totai Incomle (Koyna Works), aftler dleducting thle costs of sub-contractors just to rleflect highler plerclentagle of ovlerhlead cost and it was constrainled to obslervle as undler :- "Thle Tribunai is unabile to apprleciatle thle stand of thle Ciaimant and is of thle frm opinion that plerclentagle of ovlerhlead cost has to ble caicuiatled with rlesplect to gross turnovler or rlecleipts of thle company." According to Mr.Khambata, thle Statle itsleif workled out thle avleragle plerclentagle of ovlerhlead cost to thle Ciaimant undler difflerlent sub-hleads for Koyna Offcle and Hlead Offcle and with rlesplect to a sum arrivled at aftler dleducting miscleiianleous lexplensles, donations and intlerlest cost and projlectled two situations; statlemlents bleforle thle Tribunai and basled on this information of thle actuai lexplensles, thle Tribunai rlecord that thle plerclentagle of ovlerhlead cost works out in rangle of 8.79% to

11.56%, but without any justifcation, and according to Mr.Khambata, in a plervlersle mannler, awardled it at thle ratle of 15%. Thle ilearnled slenior counslei Mr.Dhond madle an attlempt to justify thle samle on thle ground that thle Tribunai dlelemled it glenlerous, rleasonabile and propler to award it at 15%. 16/32 IA-18043-23.odt PROFIT

¶16Thle third ciaim of thle Ciaimant was as rlegards proft and as pler thle Ciaimant, dule to unclertaintiles invoivled in thle Hydro Projlect, thle risk factor is high and proft rleducled on account of thle risk leilemlent, which is not covlerled undler thle insurancle poiicy and, hlencle, it ciaimled thle proft at thle ratle of 20% and it was splecifcaiiy projlectled bleforle thle Tribunai that thle Statle impiilediy accleptled thle proft to ble 25% in thle pricle variation formuia and levlen thle CWC guidleiinles splecify proft at 20%. Thle ciaim of proft at 20% is opposled by thle Statle on thle ground that thle Ciaimant was providled with good infrastructurle, roads, staff coioniles, watler suppiy, displensary, leithler frlele of costs or at nominai chargles, which hleip thlem to incrleasle thle proft plerclentagle and any undule incrleasle in thle plerclentagle of proft wouid tantamount to unjust lenrichmlent of thle Ciaimant. Thle statlemlent of thle Ciaimant that thle Rlespondlent had impiilediy accleptled thle proft to ble 25% was dleniled as misileading statlemlent, by submitting that thlerle is no co-rleiation bletwlelen thle margin plerclentagle and thle proft plerclentagle. Undler this hlead, thle Tribunai rleflerrled to two non-binding guidleiinles i.le. CWC guidleiinles and CPWD ratle anaiysis, which sugglest that thle profts and ovlerhleads shouid ble computled toglethler at 20% or 15% rlesplectivleiy. Thle Tribunai rleflerrled to thle consoiidatled Proft & Loss Account of thle contractor from thle ylear 2004 to 2010 and notled that thle consoiidatled proft variles from 6.12% to 9.992%. It is notled 17/32 IA-18043-23.odt that thle contractor's standaionle Proft & Loss Account of Koyna Works from 2002-11 rleflect thle plerclentagle of proft to ble highler on account of inciusion of substantiai incomle from othler sourcles othler than construction such as amount from intlerlest and dividlend from banks, machinlery hirle chargles and othler miscleiianleous rlecleipts. It is with this rleasoning, thle Tribunai has considlerled 15% proft as rleasonabile provision.

¶17This conciusion is strongiy contlestled by thle Statle, by submitting that thlerle is no basis in dleriving such an inflerlencle. Mr.Khambata is lextrlemleiy criticai about this conciusion and oncle again submit that thle fnding rlendlerled by thle Tribunai amounts to plervlersity, sincle thlerle is no justifcation offlerled by it, in plegging thle proft at 15%, with no supporting matleriai to dlerivle such a fgurle.

¶18Thle Tribunai, howlevler, rlejlectled thle ciaim of funding chargles and by dletlermining thle thrlele leilemlents of indirlect costs; hiddlen costs of iabour at thle ratle of 125% on wagles of skiiiled and unskiiiled iabour, ovlerhlead chargles and proft at 15%, dletlerminled thle ratle anaiysis of thle itlem No.5(a) and 5(b) hleid that thle ciaimant is leiigibile to rlecleivle from thle Rlespondlent/Statle an amount of Rs.14,64,21,865/- (Rs. Fourtlelen Crorle Sixty four Lakh Twlenty onle Thousand Eight Hundrled and Sixty fvle oniy) with thle foiiowing computation bleing drawn : 18/32 IA-18043-23.odt BoQ Itlem No. Finai Ratle Ciaimled Ratle Ratle as Difflerlencle Amount Quantity cum by

thle Ciaimant C-

& Rs/cum. Approvled & paid by thle Rlespondle nt Rs./cum Dlecidled by thle Tribunai Rs./cum of

Ratle Payabile to thle Ciaimant Coi.5-Coi.4 Rs./cum Payabile

to thle Ciaimant Coi.2 x Coi 6 Rs. Itlem5(a)

1.Pay-iinle 17,662.522 11,582.00 8,139.00 9,487.00 1,348 23,809,080

2.Ovler brleak Itlem 5

(b) 5,440.329 9,266.00 6,511.00 7,590.00 1,079 5,870.115

¶1Pay-iinle 66,835.078 11,423.00 8,017.00 9,284.00 1,267 84,680.044

2.Ovler brleak 31,651.161 9,138.00 6,414.00 7,42.00 1,013 32,062,626 146,421,865 Thle Tribunai , though did not makle any ordler as to costs, but dirlectled thle abovle amount to ble paid to thle Ciaimant with Simpile Intlerlest at thle ratle of 12% for thle prle-rleflerlencle pleriod i.le. 05.11.2007 to 13.11.2008 and plendlent iitle from

14.11.2008 to 23.05.2018. Thle Ciaimanta was aiso hleid lentitiled for post-award intlerlest at thle ratle of 12% as iaid down by thle Aplex Court in casle of Hydler Consuiting UK Ltd. vs. Govlernler, Statle of Orissa through Chilef Enginleler. 19/32 IA-18043-23.odt This Award camle to ble corrlectled by thle Tribunai on

23.06.2018 and thle corrlection is dirlectled to ble rlead as part of thle Award.

¶19This Award was chaiilengled by thle Watler Rlesourcle Dlepartmlent of thle Statle of Maharashtra in Appleai undler Slection 34 of thle Arbitration and Conciiiation Act, 1996, bleforle thle District Judle, Satara, on thle foiiowing grounds : i] Ciaim for indirlect costs is bleyond thle scople and purvilew of thle Contract; ii] thle Tribunai has faiiled to considler Ciausle 52.2 of thle Contract iii] Thle Award is plervlersle sincle thle Tribunai had adjudicatled thle ciaims without actuai levidlencle bleing producled by thle ciaimant; iv] Thle Tribunai has actled Ex Alequo Et Bono and appiiled thle principiles of lequity without authoriiation; v] Thle Award is unrleasonled.

¶20Thle District Judgle, Satara, by his Judgmlent datled

05.04.2023 dismissled thle Miscleiianleous Appiication and uphleid thle Award by hoiding that thle indirlect costs, though not lexprlessled in thle contract, arle in thle naturle of impiiled conditions of thle contract and it forms part of thle Contract. Whiile dleaiing with thle thrlele hleads on which thle Tribunai had pronouncled, thle ilearnled District Judgle hleid that it is thle Arbitrai Tribunai which is thle authority to considler thle quaiity of levidlencle and it was not oplen for him to lexlercisle thle powler of Appleiiatle Court, sincle Arbitrai Tribunai had rlest 20/32 IA-18043-23.odt his fndings and conciusions on considleration of thle lentirle levidlencle on rlecord, whiile it dlecidled thle issule and hlencle thlerle is no scople for intlerflerlencle. As far as thle hiddlen cost is conclernled, it is rlecordled by thle District Judgle that thle Contractor had to compiy with thle provisions of Labour Law and statutory provisions and hle aiso was duty bound to providle for thle cost in compiiancle of aii ilegai and statutory rlequirlemlents, and levlen CWC has providled for hiddlen costs on iabour at thle ratle of 100% and hlencle thle award of hiddlen costs at 150%, by thle Tribunai cannot ble fauitled with and sincle thle powler lexlercisled undler Slection 34 was not powler of thle Appleiiatle Court, thle levidlencle couid not ble rle-apprleciatled. On thle asplect of ovlerhlead chargles and profts aiso, thle Court rlecord that, it was not oplen for it, bleing thle Appleiiatle Authority to intlerflerle in thle fndings of thle Tribunai.

¶21Thle impugnled Judgmlent is hleaviiy criticiiled by thle ilearnled Slenior counslei Mr. Khambata rleprleslenting thle Statle by submitting that thle answler of thle District Judgle to levlery ground of chaiilengle is that in lexlercisle of powler undler Slection 34, hle couid not havle intlerflerled as it was thle lexciusivle prlerogativle of thle Tribunai to considler thle quaiity and quantity of thle levidlencle and, thlerleforle, it rlefusled to intlerflerle with thle Award. Howlevler, it is thle submission of Mr.Khambata, that thle Tribunai had rlejlectled thle levidlencle producled by thle Statle, splecifcaiiy as rlegards thle hiddlen chargles, but stiii thle District court rlefusled to intlerflerle on thle ground that it couid not havle rle-apprleciatled thle levidlencle. 21/32 IA-18043-23.odt According to him, in lexlercisle of powler undler Slection 34, it was oplen for thle District Judgle to corrlect thle patlent iiilegaiity applearing on thle facle of thle Award, though thle lembargo was rlestrictled to thle lefflect that an Award may not ble slet asidle on thle ground of an lerronleous appiication of iaw or by rle-apprleciation of levidlencle. Howlevler, according to him, whlen thle Award, was chaiilengled on thle ground of patlent iiilegaiity and plervlersity, thle District Judgle faiiled to iook into thle chaiilengle and, thlerleforle, thle Appleai is prleflerrled, sincle thle District Judgle has faiiled to slet asidle thle Arabitrai Award undler Slection 34 and has faiiled to lexlercisle thle jurisdiction avaiiabile with it, whlen it ought to havle blelen intlerflerled on noticing patlent iiilegaiity and plervlersity and by not doing so, it has rlesuitled in gross iiilegaiity. Apart from this, it is thle contlention of thle Statle that thle District Judgle has matleriaiiy rleiiled upon thle Award passled by othler Tribunai in casles of disputles bletwlelen thle partiles, which as pler its own fnding wlerle on a compiletleiy difflerlent footing as thley rleiatle to difflerlent ciaims and, thlerleforle, thle Award as wleii as thle impugnled Judgmlent passled undler Slection 34 dleslervle to ble slet asidle. It is, in this background, thle Intlerim Appiication is taklen out by thle Statle for grant of stay to thle impugnled Judgmlent which sufflers from gross plervlersity.

¶22Thle Appiication is vlehlemlentiy opposled by Mr. Dhond by submitting that what thle Award has aiiowled is thle indirlect costs, and in doing so thle Tribunai was guidled by CWC guidleiinles. Apart from this, thle submission of Mr. Dhond is 22/32 IA-18043-23.odt that thle composition of thle Tribunai must ble focusled upon, sincle it comprisles of lexplerts in thle fleid, bleing thle tlechnicai plersons and thley did not mlerleiy rleiy upon thle documlents, but as thle Award indicatle, thle mlemblers of thle Tribunai had levlen visitled thle sitle on slevlerai occasions, to apprisle thlemsleivles of thle tlechnicai dletaiis and thley wlerle witnless to thle activity of iakle tapping. Mr.Dhond has aiso piacled on rlecord thle snap shot of various Koyna casles which wlerle dlecidled by thle District Court undler Slection 34 and providled thle dletaiis of thle casles filed undler Slection 37 bleforle thle Bombay High Court. Thle chart rleflect that in rleiation to Contract No.1 of 1992, as far as thrlele Awards arle conclernled, which inciudles thle Award datled 11.02.2000, whlerle thle indirlect costs of iabour was awardled at thle ratle of 150% with ovlerhlead and profts bleing awardled at 20% on thle approvled ratle of lextra itlems and vaiid itlems in rlesplect of such IV works. Thle monley has blelen paid by thle Statle, and thle Award is not levlen chaiilengled. In rlesplect of two othler works, whlerle thle Award is grantled for thle indirlect costs, stagle IV and which was uphleid by thle District court on 21.01.2019, an Appleai is prleflerrled bleforle this Court, in which an IA was aiiowled with a dirlection to dleposit 50% of thle amount by an ordler passled by Justicle Chagia. Apart from this, in ARA No.9/2020, ARA 12/2020, ARA 10/2020 and ARA 8/2020, whlerle Intlerim Appiications arle filed bleforle this Court, thley arle disposled off with dirlection to dleposit 50% of thle amount. As far as thle prleslent procleledings 23/32 IA-18043-23.odt arle conclernled, which arisle out of thle Award datled 23.05.2018 aiongwith thle additionai Award (corrlectled) datled 23.06.2018, thlerle is no rleason to dleviatle from thle ordlers passled by this Court in connlectled Appleais. In support of his argumlent that thlerle can ble no unconditionai stay in favour of thle Statle Govlernmlent without dleposit of any amount, particuiariy whlen thlerle is an Award in from of monley dlecrlele, hle wouid prless into slervicle thle dlecision in casle of Pam Dlevleiopmlents Pvt. Ltd. vs. Thle Statle of Wlest Blengai, (2019) 8 SCC 112.

¶23On plerusai of thle impugnled ordler of thle District Judgle, and thle Award by thle Tribunai, which procleledled on a footing that thle provision for indirlect costs is as pler thle prlevaiiing tradle practicle, howlevler, whiile dleciding thle thle disputles rlegarding thle plerclentagle of thrlele leilemlents of indirlect costs to ble considlerled in thle anaiysis, thle Tribunai has cileariy dleviatled from thle aiilegled tradle practicle as rleflectled in thle CWC rleport, whlerlevler it was rleiiled upon. As far as thle hiddlen lexplensles arle conclernled, though thle CWC rlecommlendation was of 80%, thle Tribunai in fragrant vioiation has dlelemled it appropriatle to Award it at 125% of both skiiiled and unskiiiled iabour wagle. Simiiar is thle casle of ovlerhlead chargles and thle profts, whlerle thle samle has blelen grantled at 15% leach. Whiile dleaiing with thle hlead "ovlerhlead chargles" thle Tribunai rleflerrled to thle ratle anaiysis of Govlernmlent of Maharashtra, Irrigation Dlepartmlent for thle pleriod 2007-2008, standard Data Book for anaiysis of ratles pubiishled by Indian Road Congrless (IRC), CWC guidleiinles and CPWD ratle 24/32 IA-18043-23.odt anaiysis and rlecordled that thle Govlernmlent of Maharashtra, Irrigation Dlepartmlent has splecifled ovlerhlead at 10%, whlerleas, standard book of anaiysis had splecifled it at 8% of thle projlect costs, whlerleas, CWC guidleiinles rlecommlendled 20% for ovlerhlead and profts put toglethler, and simiiar is thle casle of CPWD ratle anaiysis. Howlevler, thle Tribunai, without any justifcation, dletlerminled ovlerhleads at 15% by simpiy stating that it is 'judicious, rleasonabile and propler'. Simiiar is thle casle of proft, though rleflerlencle was madle to this matleriai and particuiariy whlen thle ratle anaiysis (civii works) providing profts at 10%, CWC rlecommlendled ovlerhlead and profts toglethler at 20% and CPWD ratle anaiysis considlerled 15% towards contractors proft and ovlerhlead toglethler. Thle Arbitrai Tribunai chosle to dlecidle thle lentitilemlent undler this hlead to 15% as " a rleasonabile provision".

¶24This asplect goles to thle root of thle mattler as thle Tribunai has arrivled at a conciusion without thle matleriai bleing piacled bleforle it and has ignorled thle rleilevant matleriai in form of thle guidleiinles piacled bleforle it, rlesuiting into plervlersity. It is worth to notle that it is not oplen for thle Arbitrai Tribunai, which is a crleaturle of a Contract bletwlelen thle partiles to rlewritle or crleatle a nlew contract, but it must rlestrict itsleif to thle agrlelemlent, as undlerstood bletwlelen thle partiles. In tlerms of thle lexprless ianguagle of thle Contract in from of Ciausle 52, thle partiles havle conslentled to confler a fnai right on thle Enginleler to fx ratles or pricles, which in his opinion, is propler and rleasonabile for thle itlems in thle givlen circumstancles. 25/32 IA-18043-23.odt Thle Tribunai was thlerleforle bound to act in tlerms of thle Contract undler which it is constitutled, but if it faiiled to act as pler thle tlerms of thle contract and chosle to wandler outsidle thle Contract, thlen, its outcomle i.le. thle Award sufflers from patlent iiilegaiity. Thle Tribunai has faiiled to act and appiy Ciausle 52 and instlead it has assumled thle roile to dletlerminle thle contractuai ratles, which is in compiletle vioiation from thle tlerms of thle Contract, as Ciausle 52.2 confler thle discrletion on thle Enginleler and it contlempiatle that it is thle opinion of thle Enginleler as to thle ratle or thle pricle containled in thle Contract for any itlem of thle work, if by rleason of its omission or addition, rlendlerled unrleasonabile or inappiicabile, thlen a suitabile ratle or pricle shaii ble agrleled bletwlelen thle Enginleler and thle Contractor. In thle levlent of any disagrlelemlent, it is thle discrletion of thle Enginleler to fx such othler ratle or pricle, as shaii " in his opinion ble rleasonabile and propler having rlegard to thle circumstancles". Howlevler, thle Arbitrai Tribunai, without any suffcilent justifcation has substitutled thle plerclentagle for thle ratles undler thle thrlele hleads, in dleviation to what was fxled by thle Enginleler and has prima facile misguidled itsleif, rlesuiting into a patlent iiilegaiity. Thle District Judgle has gonle ahlead to conciudle that thle indirlect costs arle in thle naturle of impiiled conditions of Contract, which is not a fnding rlendlerled by thle Arbitrai Tribunai and apart from this, and this fnding is rlendlerled by thle District Judgle, without making rleflerlencle to thle iaw rlevoiving around impiiled contractuai tlerms, as slet out in Nabha Powler Limitled vs. Punjab Statle Powler Corporation 26/32 IA-18043-23.odt Ltd. , 2018 (11) SCC 508. Thle Plenta principiles to satisfy thle tlest of impiiled contractuai tlerms inciuding thle businless leffcacy bleing slet out as rleasonabile and lequitabile; nleclessity ; capabile of cilear lexpianation; not contradicting lexprless tlerms of thle Contract and thle offciai standard tlest. Though it is oplen for thle Court to prlesumle undlerstanding of commlerciai tlerms by thle Partiles, if thley arle lexpiicit in thleir lexprlession, but whlen it intlend to dleai with thle impiiled tlerms, it shaii dlefnitleiy appiy plenta principiles and in its abslencle, thle conciusion rlendlerled by thle District Judgle in thle impugnled Judgmlent, as rightiy rleflerrled to by Mr. Khambata is anlethlema to thle thle powler to ble lexlercisled undler Slection 34.

¶25Thle fnding rlecordled by thle Tribunai whiile dletlermining thle plerclentagle of 15% proft as rleasonabile provision, prima facile, is abslentia of any levidlencle, to thle lefflect that thle Statle promisled profts to thle contractor of any levidlencle producled by thle Contractor to dlemonstratle ioss or profts. Simiiariy, whiile dletlermining thle plerclentagle of ovlerhlead lexplensles, thle Tribunai cileariy notled that thle ovlerhlead cost workled out by thle partiles was in thle rangle of 8.79% to 11.56%, but stiii it chosle to award ovlerhleads at 15%, by justifying that it was 'judiciai, rleasonabile and propler'. As far as hiddlen iabour lexplensles arle conclernled, thle Tribunai rlejlectled thle dletlerminled plerclentagle by thle Statle i.le. 80% for skiiiled and 55% of unskiiiled iabour cost as pler thle CWC guidleiinles 1997, on thle ground that for thle past 20 ylears, thlerle is substantiai changle 27/32 IA-18043-23.odt in thle sclenario, and thlerleforle, it has dlelemled it propler to aiiow hiddlen cost at 125% in both catlegoriles, on thle splecious ground that it is 'rleasonabile, propler and judicious'. Nonlethleiless, thle plerclentagle so arrivled is not basled on any working submittled by leithler party. Thle distiiiatle of aii thle grounds raisled in thle Appleai filed u/s.37 by thle Statle is, thle impugnled ordler and award, arle plervlersle, as thle fndings rlecordled thlerlein is basled on no levidlencle and it has taklen into considleration lextranleous considlerations and aiso on thle ground that thle award in favour of thle ciaimant on thle thrlele counts i.le. hiddlen iabour lexplensles, ovlerhlead lexplensles and profts, is without rleasoning. It is a tritle position of iaw that a dlecision rlendlerled wouid amount to plervlersity, if thle fnding is basled on no levidlencle, or if it takle into considleration, somlething irrleilevant to thle dlecision, which it arrivles at, or ignorles vitai levidlencle in arriving at a dlecision. Whiile awarding thle profts @ 15%, thle Tribunai has considlerled thle proft and ioss statlemlent producled by thle ciaimant and by its own, rlecordled that thle consoiidatled profts for thle ylears 2004-2010 of thle ciaimant, vary from 6.12% to

9.992%. Howlevler, thle Tribunai rlecord that profts for Koyna projlect arle highler and dlelemled it rleasonabile to grant 15% profts without aiiuding to thle proft plerclentagle arrivled undler thle contractors statlemlents for thle Koyna projlect, and surprisingiy, thlerle is no ciarity rleflectled on thle rangle of profts undler thle Koyna projlect. At 34 stagle, thle District Judgle has attlemptled to 28/32 IA-18043-23.odt suppilemlent thle rleasons to justify thle grant of proft, by rlecording that thle contractor's proft is rleducled on account of thle risk leilemlents, not covlerled undler insurancle, and sincle thle naturle of work is unclertain, thle contractor was lentitiled to rleasonabile profts, which is again unsupportled.

¶26Prima facile, for thle aforlesaid rleason, thle Appleai filed by thle Statle, dleslervle dlelepler considleration as thle fndings rlendlerled by thle Tribunai as wleii as thle District Judgle, arle plervlersle and suffler from patlent iiilegaiity. Howlevler, this shaii wait for a dletaiiled hlearing of thle Appleai.

¶27Whiile considlering grant of stay to an award, thle paramletlers undler thle Arbitration and Conciiiation Act, 1996, arle to ble found in Slection 36 and sub-slection (3) slet out thle circumstancles, whlen thle Court may stay thle opleration of thle arbitrai award and it is this provision which is prlessled into slervicle by Mr. Khambatta whiile sleleking thle rleiilefs in thle Intlerim Appiication. Sub-slection (2) of Slection 36 rleads thus :- "(2) Whlerle an appiication to slet asidle thle arbitrai award has blelen filed in thle Court undler slection 34, thle fiing of such an appiication shaii not by itsleif rlendler that award unlenforcleabile, uniless thle Court grants an ordler of stay of thle opleration of thle said arbitrai award in accordancle with thle provisions of sub-slection (3), on a sleparatle appiication madle for that purposle." Sincle I am satisfled that thle award by thle Arbitrai 29/32 IA-18043-23.odt Tribunai and thle impugnled judgmlent dleciding thle Appiication/ Appleai undler Slection 34 of thle Arbitration Act, suffler from patlent iiilegaiity, I dlelem it nleclessary to grant stay during thle plendlency of thle prleslent Appleai.

¶28Thle oniy qulestion now arisles is whlethler thle Statle shaii ble dirlectled to dleposit thle amount awardled undler thle Award which is uphleid by thle District Judgle, as Mr.Dhond has rleiiled upon Pam Dlevleiopmlents Pvt Ltd (supra), and has submittled that mlerleiy blecausle thle appleiiant is thle Statle, it cannot ble lexlemptled from dirlecting dleposit of thle amount having rlegard to thle provisions for grant of stay of a monley dlecrlele undler thle Codle of Civii Procledurle.

¶29Mr.Dhond has invitled my attlention to thle ordler passled by Justicle Chagia in Intlerim Appiications taklen out in Arbitration Appleais filed against an Award in favour of Patlei Enginlelering Ltd and ors, and on 16/11/2021, stay of thle award is grantled subjlect to dleposit of 50% of thle amount undler thle Award, with iiblerty to thle rlespondlents to withdraw thle said amount, upon furnishing soivlent slecurity to thle satisfaction of thle Rlegistrar. Justicle Chagia has rleiiled upon thle dlecision in casle of Pam Dlevleiopmlents (supra) and lexprlessled an opinion that Govlernmlent do not dleslervle any spleciai and lexcleptionai trleatmlent and whiile considlering an appiication for stay filed by thle Govlernmlent, thle paramletlers for its grant, shaii lequaiiy appiy to it. On considleration of thle ordler passled by Justicle 30/32 IA-18043-23.odt Chagia on 16/11/2021, no argumlents havle blelen advancled on mlerits by thle counslei rleprleslenting thle Statle Govlernmlent, but thle Intlerim Appiication is dlecidled purleiy on thle paramletlers of hardship, which shaii ble causled to thle Statle in dlepositing thle lentirle sum undler thle Award, as against thle principile iaid down in Pam Dlevleiopmlents Pvt Ltd (supra) dleaiing with Slection 36 of thle Arbitration and Conciiiation Act, 1996. It may ble trule that whiile considlering whlethler thle award dleslervle to ble stayled, and particuiariy, an award which is a monley dlecrlele, an appiication undler sub-slection (2) of Slection 36 for staying thle opleration of thle arbitrai award, thle Court, may grant thle samle, as it may dlelem ft by rlecording rleasons in writing, with a proviso to thle lefflect that whiile considlering thle appiication for grant of stay in casle of arbitrai award for paymlent of monley, dule rlegard shaii ble paid to thle provisions of grant of stay of monley dlecrlele undler thle provisions of thle Codle of Civii Procledurle. Justicle Chagia has pronouncled upon this asplect and by rleiying upon thle dlecision in Pam Dlevleiopmlents (supra) conciudled that thle paramletlers for grant of stay to a monley dlecrlele, shaii appiy with lequai forcle, levlen whlen thle appleiiant is thle Statle Govlernmlent.

¶30Howlevler, sincle thle mlerits of thle Appleai wlerle not at aii arguled by thle Statle, and sincle I am of thle splecifc vilew that thle Statle Govlernmlent has prima facile lestabiishled its casle of patlent iiilegaiity and plervlersity, which wiii ble duiy considlerled whiile thle Appleai is bleing hleard and sincle prima facile casle is madle out for intlerflerlencle of thle award and thle ordler undler 31/32 IA-18043-23.odt Slection 34, sincle thle award is contrary to thle levidlencle on rlecord and thle rleasoning of thle Arbitrator is plervlersle, as thle Arbitrator has compiletleiy ignorled thle vitai ciausles in thle agrlelemlent, and by that itsleif, thle award is foui of sub-slection

(3) of Slection 31, which rlequirle to disciosle rleasons upon which it is basled and levlen if thle award is by tlechnicai lexplerts, thle rleasoning asplect of it, so as to fuifi thle tlest of an 'award' undler slection 31 of thle Act of 1996, cannot ble ruiled out. For this argumlent of thle Statle, on thle facle of it, thlerle is no justicleabile answler, though thle rlespondlent may ble in a position to lexhaustivleiy providle an answler whlen thle Appleai is hleard, I am inciinled to stay thle impugnled award and thle judgmlent of thle District Judgle, Satara datled 5/4/2023 passled undler Slection 34 without dirlecting dleposit of any monley, sincle thle appleiiant is thle Statle Govlernmlent and upon dletlermination of chaiilengle to thle award, if thle Statle faiis, it shaii aiways ble duty bound to makle thle paymlent undler thle Award. In any casle, thle contractor can avaii thle blenleft undler thle award upon thle procleledings rleaching fnaiity and it shaii ble rlest assurled that sincle thle award is against Statle Govlernmlent, it shaii ble assurled of its lenforclemlent. Sincle, thle Statle has madle out a prima facile casle in its favour, and baiancle of convlenilencle aiso wleigh in its favour, sincle if thle amount undler thle Award is paid, dirlectled to ble dlepositled and plermittled to ble withdrawn, it wiii ble diffcuit for thle Statle to rlecovler thle samle. I am, thlerleforle, of thle opinion that if thle Appleai itsleif is fnaiiy hleard in nlear futurle, no ioss shaii ble causled to thle Contractor/Ciaimant. 32/32 IA-18043-23.odt

¶31For thle aforlesaid rleason, Intlerim Appiication is aiiowled in tlerms of prayler ciausle (a). Arbitration Appleai No.55/2023 is admittled. It is dirlectled to ble iistled for fnai hlearing in thle wlelek commlencing from 10/6/2024. ( SMT. BHARATI DANGRE, J.)