SANYUKT NIRMATA v. DELHI DEVELOPMENT AUTHORITY — 1986 DIGILAW 217 (DEL)

Charanjit Talwar ( 1 ) THIS judgment will dispose of the two Suits as the questions raised in both cases are common. ( 2 ) ON applications filed by M/s Sanyukt Nirmata, Engineers and Contractors, the learned Arbitrator Shri S. P. Banwait filed his two awards which were published on 31st December, 1984. The Delhi Development Authority (defendant in the two suits) filed objections to the awards being made a rule of the Court. In Suit No. 110-A/85, the objections were registered as IA 1788/85 and in the other suit i. e. Suit No. lll-A/85, the objections were registered as IA 1789/85. The plaintiff filed replies to the objections. On the pleadings of the parties, the following two issues were framed in Suit No. 110-A/85 : " (1) Whether the award is liable to be set aside on the grounds raised in para 5 of the objection petition ? O. P. Objector. (2) Relief. " In Suit No. lll-A/85, similar issues arose for consideration. The parties agreed that the Suits be tried on affidavits. In support of their rival contentions affidavits/counter-affidavits have been filed. I may notice here that in the first Suit, there were three claims of the plaintiff which were referred to adjudication Those claims read as follows : " (1) The claimant claims a sum of Rs. 13,160. 00 towards the refund of cost of Rs. 470. 00 cement bags having set in the cement store. (2) The claimant claims a sum of Rs. 2,350. 00towards disposal of 470 set cement bags including removal from the store, loading and unloading from the truck, (lead of 2 k. m. ). (3) The claimant claims Rs. 5,40,500. 00 towards difference in agreement rates and rates as intimated by him before executing the work beyond deviation limit under clause 12-A of the agreement. " In the second Suit, there was only one claim and it reads : "the claimant claims sum of Rs, 3,56,801. 00 towards difference in agreement rates and rates as intimated by the claimant, before executing work beyond the deviation limit under clause 12-A of the agreement. " ( 3 ) THE main claim in both the cases was thus based on the work executed beyond the deviation limit under clause 12-A of the agreement. The learned Arbitrator in the said awards has upheld the claims put forth by the plaintiff herein. " ( 3 ) THE main claim in both the cases was thus based on the work executed beyond the deviation limit under clause 12-A of the agreement. The learned Arbitrator in the said awards has upheld the claims put forth by the plaintiff herein. Be has held that clause 12-A of the agreement between the parties is applicable. ( 4 ) MR. Ramesh Chander, learned counsel for the objector (D. D. A.) strenuously urged that in the present case clause 12-A was not attracted but in view of the judgment of this Court in Mehta Teja Singh and Company v. U. O. I, in Suit No. 693-A/79 decided on November 25, 1980 wherein in similar facts and cirumstances, it was held that clause 12-A was applicable, it was apparently not open to the Arbitrator to come to any other decision. At any rate the learned Arbitrator before whom this judgment was cited has after through examination of the facts concluded that the said clause applies. It is useful to quote a paragraph from the award (in Suit No. 11 1-A/85) which brings out his reasoning for coming to that conclusion. "the next step is to examine whether clause 12-A is attracted in respect of claim No. 1 of the claimant. The respondent has submitted written arguments on 18-10-84 and he has tried to prove that clause 12-A is not attracted and calculations have been given in support of this contention. It has been contended that the over all effect of additions/alteiations/deletions is within the limits prescribed under clause 12 (vi) (a) and clause 12 (vi) (b ). But, I find from the figures furnished by the respondent that the gross estimated excess on agreement items under the trade "rcc" is Rs. 8,57,527. 00. If the value of the items under this trade executed in foundation, amounting to an estimated value of Rs. 1,15,282. 00 is substracted, the net estimated excess is Rs. 7,42,245. 00. In contractor s enhancement is added to this figure, the tendered excess under the trade "rcc" as per execution works out to Rs. 11,65,324. 65. By adding the value of the extra/substituted items executed under the trade "rcc" the net tendered excess under the trade "rcc" amounts to Rs. 11,70,362. 65. The estimated value of the trade "rcc" included in the contract is Rs. 8,97,754. 00 and the corresponding agreement amount is Rs. 14,09,473. 78. 11,65,324. 65. By adding the value of the extra/substituted items executed under the trade "rcc" the net tendered excess under the trade "rcc" amounts to Rs. 11,70,362. 65. The estimated value of the trade "rcc" included in the contract is Rs. 8,97,754. 00 and the corresponding agreement amount is Rs. 14,09,473. 78. The excess which could occur on the individual trade as per contract is 50% i. e. up to Rs. 7,04,736. 69 as against net tendered excess of Rs. 12. 15,677. 69 as per actual execution. Thus it is seen that the individual trade "rcc" has exceeded by more than 50%. The tendered amount is Rs. 71,86,160. 00. If in the most stretched case the deviation limit of 50% is applied on this value, the overall amount of contract on the higher side up to which the contractor had to execute the work at the agreement rates is Rs. 89,82,700. 00. It is now necessary to refer to clause l2 (vi) (c) of the agreement. " After quoting the sub-clause is was observed that : "it is clear from the above that it is the trade "rcc" that has exceeded by more than 50%. Hence, I hold that clause 12-A is clearly attracted. " Thereafter the learned Arbitrator while summing up has stated : "in the instant case it is not only the items under the trade "rcc" as have individually exceeded the deviation limit, but it is also the subhead "rcc" itself that has exceeded by more than 50% (emphasis added) The reasons of the learned Arbitrator in the other case for holding that clause 12-A is applicable are similar. ( 5 ) ONE of the grounds of attack of Mr. Ramesh Chander is that it was incumbent on the learned Arbitrator to have found out the market rates of the said exceeded work. According to him a bare reading of the award (the reference is to the first case i. e. case No. 110-A/85) shows that the Arbitrator had failed to do so. He has drawn may attention to last but one paragraph of the discussion on claim No. 3 therein. It is useful to quote that paragraph also. "from the above, I am of the firm view that the claimant has been able to prove his claim beyond any doubt and he has fulfilled the requirements of 12-A for claiming the enhanced rates. It is useful to quote that paragraph also. "from the above, I am of the firm view that the claimant has been able to prove his claim beyond any doubt and he has fulfilled the requirements of 12-A for claiming the enhanced rates. A copy of the amended statement of the claimant in this regard was supplied by the Arbitrator to the respondent during the course of hearing on 20-10 84. The quantities shown in this statement are those filed by the respondent vide his No. 67 (169) 84/hdx/ Arbn. 5434, dated 13-10-1984. Accordingly, I award Rs. 4,22,219. 13 in favour of the claimant by taking into account the quantity of item No. 3. 9 (6) in foundations as filed by the respondent. " ( 6 ) TO appreciate this contention I may note an admitted fact. The quantities on which the enhanced rate has been allowed by the learned Arbitrator were the quantities as per the statement of the respondent a before him i. e. the DDA. The claimant (plaintiff herein) had accepted those quantities and submitted an amended statement of claim based on those quantities to theArbitrator. The Arbitrator as is apparent from the portions of the award which are quoted above has accepted the rate claimed by the claimant. As I have noticed, the first attack is that it was for the Arbitrator to find out the market rate and the second is that at any rate for awarding the amount of Rs. 4,22,219. 13. 00, the learned Arbitrator has given no reasons whatsoever. ( 7 ) IT is the admitted case of the parties that the learned arbitrator was required to give his reasons for the award. The contention of the objector is that the learded Arbitrator s reasons are no reasons in the eyes of law. The plea is that on pursuing the awards as far as claim No. 3 in Suit No. 110-A/85 and claim No. 1 in the other suit are concerned, it is not possible for any of the parties to the arbitration proceedings to find out or analyse the reasons for allowing those claims. At this stage, it is useful to quote clause 12-A of the contract which clause is common in both the cases. At this stage, it is useful to quote clause 12-A of the contract which clause is common in both the cases. The said two claims arise out of the operation of that clause : "in the case of contract or substituted items which individually exceed the quantity stipulated in the contract by more than the deviation limit, except the items relating to foundation work, which the contractor is required to do under clause 12 above, the contractor shall, within 7 days from the receipt of order, claim revision of the rates supported by proper analysis in respect of such items for quantities in excess of the deviation limit, notwithstanding the fact that the rates for such items exist in the tender for the main work or can be derived in accordance with the provisions of sub-clause (ii) of clanse 12 and the Engineer-in-Charge may revise their rates, having regard to the prevailling market rates and the contractor shall be paid in accordance with the rates fixed. The Engineer-in-Charge shall, however, be at liberty to cancel his order to carry out such increased quantities of work by giving notice in writing to the contractor and arrange to carry it out in such a manner as he may consider advisable, but under no circumstances the constractor shall suspend the work on the plea of non-settlement of rates of items falling under this clause. All the provisions of the preceding paragraph shall equally apply to the decrease in the rates of items or quantities in excess of the deviation limit, notwithstanding the fact that the rates for such item exist in the tender for the main work or can be derived in accordances with the provisions of sub-clause (ii) of the preceding Clause 12, and the Engineer-in-Charge may revise such rates having regard to the prevailing market rates. " ( 8 ) AS I have noticed above, it has been found by the learned Arbitrator that the items under The trade "rcc" in both these contracts have not only individually exceeded the deviation limits but also the sub-head "rcc" itself that has exceeded by more than 50%. " ( 8 ) AS I have noticed above, it has been found by the learned Arbitrator that the items under The trade "rcc" in both these contracts have not only individually exceeded the deviation limits but also the sub-head "rcc" itself that has exceeded by more than 50%. ( 9 ) NOW adverting to the findings on claim No. 3 (in Suit No. 110a/85), the learned Arbitrator held that not only the claimant has been able to prove his claim beyond any doubt under the requiremens of 12-A for claiming the enhanced rates but the quantities shown in his Statement are those filed by the respondent herein vide his statement No. 67 (169) 84/hdx/arbn /5434 dated 13-10-1984, Accordingly, he awarded Rs. 4,22,219. 13 in favour of the plaintiff "by taking into account the quantity of item No. 3. 9 (b) in foundations as filed by the respondent. " ( 10 ) IN the other suit, his finding is even more specific. It reads : "in view of the foregoing deliberations, 1 conclude that the claimant has been able to establish claim No. 1 beyond doubt. Accordingly, I award Rs. 3,54,385. 52 in favour of the claimant on the basis of the quantities of the affected items of work under the trade "rcc" as filed by the respondent and taking in to account the quantity of agreement item No. 3,9 (6) executed in foundation. In the consequence, 1 order that the respondent shall pay to the claimant a sum of Rs. 3,54,385. 22. " ( 11 ) TO appreciate the contention urged on behalf of the objector, it is useful at this stage to notice the law laid by a Division Bench of this Court in in D. D. A. v. M/s Alkarma, New Delhi1 wherein the question regarding the adequacy of the un-reasonableness of the reasons given by the Arbitrator has been gone into. In their separate but concurring judgments the two learned Judges have dealt with this very question. Avadh Behari, J. has observed as follows : "what reasons are sufficient in any particular case must, of course, depend upon facts of the case, I approach the matter in this way : that reasons are not deficient merely because every process of reasoning is not set out. Avadh Behari, J. has observed as follows : "what reasons are sufficient in any particular case must, of course, depend upon facts of the case, I approach the matter in this way : that reasons are not deficient merely because every process of reasoning is not set out. 1 further think that reasons are not insufficient merely because they fail to deal with every point raised before the Arbitrator at the hearing. No universal generalisation can be made. Everything depends on the subject-matter. In deciding a controversy the arbitrator works in an environment which is different from that of the Judge. He is not bound by the technical rules of evidence. "the ropes and pulleys" that he uses in the arbitral process are different from the foot rules and set squares that we use in the judicial process. From the arbitrator what is wanted is "a practical decision on the disputed issues" ( 12 ) AFTER analysing the case law on this question, Leila Seth, Jobserved thus : "in my opinion when an arbitrator gives a reasoned award he is not required to write a detailed judgment setting out each logical step of his reasoning but it is sufficient if he indicates the trend of his thought process, so that errors can be eliminated and arbitrariness avoided. But the Court s function remains restricted. It does not permit reviewability of the reason, nor a combing through as an appellate forum would be advised to do, as this would amount to an impeachment of the award which is not permissible, the purpose 1. AIR 1982 Delhi 365. of arbitration being speed, cheapness and certainty a necessary requirement for commercial conduct of business. However, the court can set aside the award if it is apparent therefrom that the reasons referred to therein are based on no evidence and/or on an erroneous proposition of law. Neither is true in the present case. " ( 13 ) FROM the above observations, it is abundantly clear that in these proceedings it is not open to me to review the reasons of the learned Arbitrator. It cannot be said that the reasons of the learned Arbitrator are based on no evidence. Neither can I say that the reasons have proceeded on an erroneous proposition of law. On this finding alone, the awards are likely to be made a rule of the Court. It cannot be said that the reasons of the learned Arbitrator are based on no evidence. Neither can I say that the reasons have proceeded on an erroneous proposition of law. On this finding alone, the awards are likely to be made a rule of the Court. However, to assure myself whether the calculations by the learned Arbitrator were correct I asked learned counsel to give me a chart based on the evidence on record of the arbitration proceedings showing as to how theamount of Rs. 4,22,219. 13 (in Suit No. 110-A/85) has been arrived at. As I have stated, it was only for my assurance and not that under law I was required to do so. It is obvious from the findings of the arbitrator that the quantity of "rcc" used in item No. 3. 9 (b) has been deducted from the revised claim of the claimant which claim as I have noticed above was based on the quantities supplied by the respondent. A copy of that chart was also banded over to learned counsel for the objector. ( 14 ) I may note that it is not the requirement of law even for the arbitrator to have given the complete arithmatical calculations showing as to how he arrived at the sum of Rs. 4, 22,219. 13 while awarding claim No. 3 (in Suit No. 110-A/85) or claim No. 1 amounting to Rs. 3,54,385. 22 (in Suit No. Ill A/85 ). However, the calculations arrived at seeme to be correct. ( 15 ) I may not that Mr. Ramesh Chander, learned counsel for the objector in Suit No. 110-A/85 had also addressed me regarding the claims 1 and 2 being unterable in the eyes of law. The first claim of Rs. 13,l60. 00 was towards the refund of cost of 470 cement bags and the second claim relates to the disposal of those cement bags. With the assistance of the learned counsel, I have gone through the reasons of the learned Arbitrator for awarding those claims. The reasons stated cannot by any stretch of imagination be termed as un-reasonable nor can it be said that those are based on no evidence. Those findings have also to be upheld. With the assistance of the learned counsel, I have gone through the reasons of the learned Arbitrator for awarding those claims. The reasons stated cannot by any stretch of imagination be termed as un-reasonable nor can it be said that those are based on no evidence. Those findings have also to be upheld. ( 16 ) BEFORE I part with the case, I may notice that in the objections filed by the DDA in both these cases, the specific ground of challenge regarding the market rate is not that the claim No. 3 in one case and claim No. 1 in the other were based on rates other than the market rate, The objection was that the learned arbitrator had accepted the rates with analysis claimed by the contractor in the year 1981 where as according to the objector the accepted market rates ought to have been those submitted by them in the year 1982 when the trade as such exceeded. The learned Arbitrator has given his reasons in the award for accepting the rates submitted by the claimant in the year 1981. The law laid in DDA v. M/s Alkaram, New Delhi (supra) is clearly applicable on this aspect also. It is not open to me to review those findings of the learned Arbitrator. ( 17 ) FOLLOWING the ratio of Mehta Teja Singh s case and the law laid in DDA v. Mis Alkarma, New Delhi (supra) objections of the objector are liable to be dismissed. I order accordingly. ( 18 ) THE two awards filed in this court by the learned Arbitrator are thus to be made a rule of the court. I direct that decrees in accordance with those awards be made. If the decretal amount is not paid within two months from the date of the decrees, then the said amount to carry interest @ 12% per annum from the date of the decrees to the date of realisation. No order as to costs.