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1989 DIGILAW 334 (DEL)

PRIDE CONSTRUCTION COMPANY v. DELHI DEVELOPMENT AUTHORITY

1989-08-29

D.P.WADHWA

body1989
D. P. Whadhwa ( 1 ) IN this petition under Ss. 14 and 17 of the Arbitration Act 1940 (for short the Act ), the respondent Delhi Development Authority (DDA) objector has filed objections under Ss. 30 and 33 of the Act to the award dated 15. 2. 1988 . made by the arbitrator, the second respondent herein. The objections have been registered as IA No. 4086/88. On the objections, the court framed the following issue : "whether the award is liable to be set aside on the grounds as mentioned in the objection petition of the D. D. A. ?" ( 2 ) FOR the decision of the present controversy, it is not necessary to go into the details of the contract between the parties or the arbitration agreement between them, except to note that in respect of certain contract pertaining to construction of houses by the petitioner, disputes arose which were referred to sole arbitration of the second resident by letter dated 1. 1. 1987 of the Engineer Member, D. D. A. , who was authorised to appoint the arbitrator. The arbitrator gave his award on 15. 2. 1988. The petitioner had rasised nine claims. The arbitrator allowed claim Nos. 1, 3, 4, 5 and 8 in full and claim Nos. 2 and 7 in part. Claim No. 6 was disallowed. The arbitrator also allowed claim No. 9 and held that the petitioner was entitled to 10% simple interest on the amounts found due under the award from 1. 1. 1987 till payment or till the award was made rule of the court, whichever was earlier. ( 3 ) THE objections regarding claim Nos. 2, 3, 4, 5, 7 and 8 are that these are bad in law being based on no evidence. There are no other particulars given in the objections. I have gone through the award and I am unable to agree with the contention that there was no evidence in support of these claims before the arbitrator. These have, therefore, to be upheld. ( 4 ) UNDER claim No. 1, the petitioner claimed Rs. 1,25,866. 00 as the amount payable to it under clause 10-C of the contract. I have gone through the award and I am unable to agree with the contention that there was no evidence in support of these claims before the arbitrator. These have, therefore, to be upheld. ( 4 ) UNDER claim No. 1, the petitioner claimed Rs. 1,25,866. 00 as the amount payable to it under clause 10-C of the contract. Clause 10-C is to the following effect :- "if during the progress of work the wages of labour are increased as a direct result of the coming into force of any fresh law statutory rule or order and if such increase exceeds. 0% of the wages prevailing at the time of receipt of the tender for the work and the contractor thereupon necessarily and properly pays the increased wages for the execution of the work then the amount of the contract has to be accordingly varied. "it appears that the Delhi Administration issued notification on 23. 2. 1982 by which the minium wages of construction labour were increased. This increase was to be effective from 1. 3. 1982. The petitioner submitted its tender for works on 25. 2. 1982 and thus it was contended by the D. D. A. that since the gazette notification for increase in labour wages was earlier in time, i. e. , issued on 23. 2. 1982, the petitioner was not entitled to claim any extra amount under clause 10-C reproduced above. This contention of the D. D. A. did not find favour with the arbitrator. He observed that the increase in labour wages was to be effective from 1. 3. 1982 under the notification in question and that the D. D. A. itself worked out increased payments which were to be paid to the petitioner under clause 10-C for the increase in minimum wages of labour in terms of the aforesaid notification. The petitioner was paid upto the 13th running account bill for escalation in labour wages and the amount on that account was Rs. 1,25,866. 00. In the 14th running account bill, however, this amount was withheld. The learned arbitrator observed that intimation of increase in minimum labour wages was not sent to Public Works Department or to the contractors association. The D. D. A. was as much ignorant about the notification as the contractors. 1,25,866. 00. In the 14th running account bill, however, this amount was withheld. The learned arbitrator observed that intimation of increase in minimum labour wages was not sent to Public Works Department or to the contractors association. The D. D. A. was as much ignorant about the notification as the contractors. The arbitrator was also of the view that the public was informed only through news items published in leading newspapers and he found that this news item was not published in any of the leading newspapers on 23rd, 24th and 25th February 1982. The arbitrator, therefore, held that the petitioner could not come to know about the increase in labour wages upto the time of submitting of its tender. The contractor becomes entitled for the extra amount only under clause 10-C if he properly pays the increased wages under the notification. It is not disputed that the contractor did pay the wages as increased by the notification dated 23. 2. 1982. The petitioner is, therefore, claiming only that amount. Its claim as such has been upheld by the arbitrator. 1 see no reason to differ with the view taken by the arbitrator which is most reasonable. The objection of the D. D. A. to claim No. 1 is, therefore, rejected. ( 5 ) LASTLY, is the objection regarding award of interest. Mr. Sehgal, learned counsel for the petitioner, conceded that in this case the reference was without intervention of the court and the arbitrator could not have awarded interest pendente lite, i. e. , interest for the period from 1,1. 1987 till the date of the award. However, he relied on the decision of the Supreme Court in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gajarat) (P) Ltd. and Aw. , to contend that this court could grant interest from the date of the award till payment. This would appear to be correct. Accordingly, I would hold that the arbitrator was not right in awarding interest for the period from 1. 1. 1987 till 15. 2. 1988. To that extent, the award is modified. ( 6 ) ACCORDINGLY, the award as modified is made rule of the court and a decree in terms thereof is passed. The petitioner will be entitled to interest at the rate of 10% per annum on the amount awarded from the date of the award till payment. 1987 till 15. 2. 1988. To that extent, the award is modified. ( 6 ) ACCORDINGLY, the award as modified is made rule of the court and a decree in terms thereof is passed. The petitioner will be entitled to interest at the rate of 10% per annum on the amount awarded from the date of the award till payment. There will, however, be no order as to costs.