Amit Rawal, J. - (1.) The appellant-constructor is aggrieved of the partial allowing of the claim by the Arbitrator and dismissal of the objection thereto.
(2.) Mr. Somesh Gupta, learned counsel appearing for the appellants submits that in pursuance of the terms and conditions of the agreement dated 02.01.2007, the appellant was to execute the work of additional SWD for Karsan Colony, Chandigarh. The total cost of the work was Rs. 39,91,330/-. The completion of the work was to be done within three months from the date of award of work i.e. 02.01.2007. The department rescinded the contract during the period of extension and imposed a penalty of 5% whereas the contract envisaged of 1%. In the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, the witness of the Engineering Department, Municipal Corporation, Mr. B.K. Dhawan, SDE had admitted that notice did not indicate the imposition of penalty of 1% per week and penalty imposed at 5% is lacking reasons, in essence, not backed by any logical order in terms of provisions of the contract. In support of his contention, he has also drawn attention of this Court to para 2 of the agreement. Only claim No.4 has been allowed and therefore, the objections were falling within the parameters of Section 34 of the 1996 Act. The Arbitrator ought to have noticed the aforementioned fact and allowed the claim on this point.
(3.) Ms. Deepali Puri, learned counsel appearing for the Municipal Corporation submits that the terms and conditions of the agreement are sacrosanct between the parties which envisaged induction of the penalty by Engineer-in-Charge and the contractor did not avail the remedy and it was not in the domain of the Arbitrator, rightly so, the claim was rejected, though the aforementioned claim has been declined on merits, thus, urges this Court for confirming the finding under challenge.;