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1989 DIGILAW 447 (DEL)

SHIV KUMAR WASAI AND COMPANY v. DELHI DEVELOPMENT AUTHORITY

1989-12-09

body1989
Y. K. Sabharwal ( 1 ) DISPUTES and differences between the parties in regard to agreement No. 7/ee/cd II/dda/ace/80-81 were referred to sole arbitration of Shri G. P. Hingorani. The disputes relate to the work awarded to the petitioner for construction of certain flats at Sidhartha Enclave (under the SFS) Group III. Pursuant to directions issued by this court the arbitrator has filed the award dated 18th April, 1988 and the arbitration proceedings. The respondent DDA has filed objections to the award under Sections 30 and 33 of the Indian Arbitration Act. On the pleadings of the parties the following issues were framed : "1. Whether the award is liable to be set aside on the grounds stated in the objection petition ? 2. Relief. " ( 2 ) I have heard learned counsel for the parties who have also taken me through the award and the arbitration record. ( 3 ) THE DDA has challenged the award in regard to Claims No. 1, 2, 5, 12, 14 and 15. ( 4 ) CLAIM No. 1-The objection raised by the learned counsel for the DDA is that it was not necessary for the authority to give notice to the contractor intimating it that technical staff had not been employed and as such the award directing refund of Rs. 2,000. 00 to the claimant is illegal. It may be noticed that DDA had made two recoveries of Rs. 2,000. 00 each from the bills of the contractor. The said recoveries were challenged by the contractor before the arbitrator. The arbitrator uphold one recovery of Rs. 2,000 but came to the conclusion that since only one notice dated 24th March, 1981 (Ex. R-8) had been produced, only one recovery of Rs. 2,000. 00 was justified and accordingly directed refund of balance of Rs. 2,000. 00 to the contractor/claimant. Learned counsel for DDA submits that in view of the admission of the claimant that technical staff had not been employed the arbitrator acted illegally in awarding this amount simply on the ground that notice had not been given. Howewer, I have not been shown as to where is the said admission of the contractor. It appears that DDA had made a grievance in one case that technical staff had not been employed and to that extent the recovery of Rs. 2,000. 00 was held to be justified by the arbitrator. Howewer, I have not been shown as to where is the said admission of the contractor. It appears that DDA had made a grievance in one case that technical staff had not been employed and to that extent the recovery of Rs. 2,000. 00 was held to be justified by the arbitrator. No such grievance appears to have been made in the case of other recovery and thus the arbitrator directed refund of Rs. 2,000. 00. In any case, these are all matters on merit and cannot be gone into in these proceedings in the manner contended by learned counsel for the DDA. This court is not sitting as a court of appeal against the award of the arbitrator. By no stretch of imagination it can be said that the reasons-given by the arbitrator are perverse. It is not for this court to go into the reasonableness of the reasons. Consequently, I do not find any merit in the objection to this claim. ( 5 ) CLAIM No. 2-Learned counsel for the DDA objected to the award under this claim contending that the rates mentioned in Ex. C-18 were ad hoc and when the rates were finally fixed the DDA was justified. in withholding payment of Rs. 16,500. 00 worked on the basis of the rates finally approved. This item relates to construction of RCC Circular Tank of 540 litre capacity. Under the agreement only RCC tank of 400 litre capacity was required to be constructed. After the award of the work, this work was substituted and instead it was required of the contractor to construct RCC Circular Tank of 540 litre capacity. From Ex. C-18 it appears that the specification and rates as approved by the Superintending Engineer were conveyed to the contractor. Ex. C-18 does not show that the rates approved by the Superintending Engineer and conveyed to the contractor were ad hoc as contended by the learned counsel for the authority. The claim was on the basis of the rates approved by the Superintending Engineer. In view of the above, there is no substance in the challenge of the award of this claim by the arbitrator. The claim was on the basis of the rates approved by the Superintending Engineer. In view of the above, there is no substance in the challenge of the award of this claim by the arbitrator. ( 6 ) CLAIM No. 5 -The objection to the award under this claim was that on theortical working and even by allowing the permissible variation 400 bags of excess cement have been supplied to the contractor and as such the department was justified in making penal recovery on double rates for 400 bags of cement. It is contended that the theoritical working was in accordance with the terms of the agreement. However, the arbitrator found that the cement was being issued to the contractor on day to day basis and the work was regulated by departmental officer and no allegation of misuse or exchange of cement by the contractor had been made by DDA. Counsel for the DDA contends that it was not for the DDA to make allegation of misuse or exchange of cement and rather it was for the contractor to prove that for the work it bonafide consumed cement of more quantity then permissible under the agreement working it on theoritical basis. In this regard, it may be mentioned, as stated while deciding claim No. 2, that there was variation in the specification and size of the water tank. Instead of rectangular maisonary it was substituted by RCC Circular tank and that too of higher capacity. Under these circumstances, it cannot be said that the reasons given by the arbitrator about the consumption of cement for bonafide use for the work and there being no allegation of misuse or exchange by the department can be said to be extraneous or irrelevan. Even if two views are possible this court cannot substitute its own view for the view expressed by the arbitrator. There is no substance in the objection raised by DDA. ( 7 ) CLAIM No. 12 -The only objection raised by the DDA is that the award is contrary to the agreement condition under head specification and Condition at Serial No 15 which provides that rates quoted by the contractor shall hold good for all works at all heights and depths. It cannot be disputed that CPWD specifications are also applicable to the contract in question. The arbitrator has based this claim on CPWD specifications. It cannot be disputed that CPWD specifications are also applicable to the contract in question. The arbitrator has based this claim on CPWD specifications. In these proceedings it is not permissible to contend that the arbitrator should have applied condition referred to above and relied upon by the counsel for DDA particularly when the applicability of CPWD specification cannot be disputed. The objection is without substance and award under this head cannot be set aside. ( 8 ) CLAIM No. 14-The objection under this head was that there was no delay in handing over the site or designs. The contention of learned counsel for the authority was that the work undertaken by the contractor was defective and its rectification caused delay. Mr. Anand also contended that the amount was wrongly calculated by the arbitrator. All these conditions touch on the merits of the disputes before the arbitrator. As noticed hereinbefore, it is not for this court to go into the merits and the factual aspects sought to be raised on behalf of the DDA. It may, however, be mentioned that the arbitrator has found that foundation designs were given to contractor after 40 days. He also found that there was some delay in handing over the full site at work. The arbitrator has, however, attributed certain delay of work to the contractor also and after coming to the conclusion that the contractor ought to have completed 90% of the work within the stipulated period, restricted the award of damages to 10% of the total work. It is not permissible for me to go into the calculations made by the arbitrator for arriving at the amount. The method of calculation cannot be said to be perverse or extraneous. Thus, there is no substance in the objection to the award under this head. ( 9 ) CLAIM No. 15-The award was made and published on 18th April, 1988. The arbitrator has, however, awarded interest at 12% p. a. from 12th January, 1985. It is well settled that the arbitrator has no power to award pendente lite interest as the arbitrator is not a court (See : Executive Engineer v. Abhanduta Jena . The award for pendente lite interest has accordingly to be set aside. ( 10 ) HOWEVER, the contractor would be entitled to interest from the date of the publication of the award, namely, 18th April, 1988 till date of decree. The award for pendente lite interest has accordingly to be set aside. ( 10 ) HOWEVER, the contractor would be entitled to interest from the date of the publication of the award, namely, 18th April, 1988 till date of decree. The rate awarded by the arbitrator is 12% which is just and reasonable. Thus, I direct that respondent will be liable to pay interest at 12% p. a. on the awarded amount from 18th April, 1988 till date of decree. ( 11 ) ISSUE No. 1 is decided in the above terms. Issue No. 2-For the reasons stated above, the objections are partly allowed in regard to the award of pendente lite interest only. The rest of the objections are dismissed and the award is made a rule of the court and decree passed in terms thereof. The award shall form part of the decree. It is implied that the award in regard to items not challenged is also being made a rule of the court and a decree passed in terms thereof. In case the decretal amount is paid within two months from the date of this order, it will carry no interest. In case the payment is not made within two months the decretal amount will carry interest at the rate of 12% p. a. from the date of decree till the date of payment. On the facts and circumstances of the case, the parties shall bear their own costs.