SHIV KUMAR WASAI AND COMPANY v. DELHI DEVELOPMENT AUTHORITY
1992-02-28
C.L.CHAUDHRY
body1992
DigiLaw.ai
C. L. Chaudhry ( 1 ) THE Delhi Development Authority awarded the work of construction of 144 LIG Houses in Block-B, East of Kailash, New Delhi to the petitioner vide Agreement No. 53/ace/ee/cd-II/dda/81-82. Certain disputes arose between the parties out of the execution of the said work. The Engineer Member of the Delhi Development Authority appointed Mr. G. R. Hingorani as a sole arbitrator to adjudicate the disputes and differences between the parties. ( 2 ) THE arbitrator entered upon the reference and made and published his award on 4th April, 1988. On a direction given by this court, the arbitrator filed the award along with the arbitration proceedings in this court. M/s. Shiv Kumar Wasal and Co. , the petitioner, has accepted the award, however, the award has been challenged on behalf of the Delhi Development Authority by filing objections under Section 30 and 33 of the Arbitration Act, which is the subject matter of I A, 7516/88. Alongwith this objection petition, the Delhi Development Authority has also filed an application under Section 5 of the Limitation Act being I. A. No. 7530/88 for condonation of delay in filing the objection petition. The objection petition as well as application under Section 5 of the Limitation Act has been contested on behalf of the petitioner. ( 3 ) ON the pleadings of the parties, following issues were framed : (1) Whether there is sufficient cause to condone delay in filing objections ? (2) If issue No. 1 is answered in favour of the objector, is the award liable to be set aside on the grounds set out in the objection- petition ? (3) Relief. Issue No. 1 : Whether there is sufficient cause to condone delay in filing objections ? ( 4 ) THE case pleaded by the Delhi Development Authority is that there is delay in filing the objections. The notice issued by this court informing the parties about the filing of the award in court, was received by the Executive Engineer in his office on 16. 8. 1988, though the same was wrongly left in some other office of the D. D. A. which was not the concerned office, on 12. 8. 1988 in the evening. 13. 8. 1988 to 15. 8. 1988 were Gazetted Holidays.
8. 1988, though the same was wrongly left in some other office of the D. D. A. which was not the concerned office, on 12. 8. 1988 in the evening. 13. 8. 1988 to 15. 8. 1988 were Gazetted Holidays. On receipt of the court notice, the Executive Engineer concerned processed the file, prepared his comments to the award and sent the same to the Higher Authorities for approval. As per the procedure, the approval of Vice Chairman was necessary for filing the objections. The file was sent to the Vice Chairman for approval. Vice Chairman raised certain queries and the replies to the queries was submitted to the Vice Chairman. In the mean time, time for filing the objections to the award expired. The objections were actually filed in this court on 24. 9. 1988. In these premises, it is prayed that the delay in filing the objections be condoned. ( 5 ) IN the reply filed on behalf of the petitioner, it is stated that no sufficient cause has been shown for condonation of delay. The ground stated for the condonation of delay is no ground in the eyes of law for condonation. ( 6 ) I have considered the relevant contentions of the parties. In the affidavit filed by the Chief Engineer of the D. D. A. , the details are given how the matter was dealt with by the department. I have perused the material placed on record. In my opinion, the delay caused by the department has satisfactorily been explained. In the result, I hold that there is sufficient cause for condonation of delay in filing the objections and the delay is condoned. Issue No. 1 is decided in favour of the objector. Issue No. 2 : If Issue No. 1 is answered in favour of the objector, is the award liable to be set aside on the grounds set out in the objection-petition ? ( 7 ) THE D. D. A. has challenged the award against Claim No. 5. The challenge is that the arbitrator erred in awarding a sum of Rs. 21,485 against Claim No. 5 for glazed tiles in favour of the petitioner. The arbitrator has taken an incorrect basis for awarding this amount. The arbitrator failed to consider Clause 12 of the Agreement between the parties.
The challenge is that the arbitrator erred in awarding a sum of Rs. 21,485 against Claim No. 5 for glazed tiles in favour of the petitioner. The arbitrator has taken an incorrect basis for awarding this amount. The arbitrator failed to consider Clause 12 of the Agreement between the parties. The arbitrator failed to appreciate that as per the terms and conditions of the contract deviation in any individual item of the agreement does not necessary attract clause 12-A, as long as the work executed is within the deviation limits prescribed in the agreement and Clause 12 remains applicable. The arbitrator has not at all examined the claim under Clause 12 of the agreement and has awarded the claim against the respondent under Clause 12 (a) as per the analysis given by the petitioner. The arbitrator therefore misconducted the proceedings. The case of the petitioner is that the arbitrator awarded a sum of Rs. 21,585 under Claim No. 5 strictly in accordance with the provisions contained in Clause 12-A of the contract agreement. It had been an admitted case of the respondent before the arbitrator that quantities in excess of those given in the contract plus 50% shall be payable as per rates given in the contract and for the quantities executed over and above the limits prescribed shall be determined in accordance with the provisions of Clause 12-A of the contract agreement. The arbitrator after carefully going through the provisions of the contract agreement, documentary evidence produced and after hearing arguments of both the parties, made an award of Rs. 21,485. ( 8 ) I have heard the learned counsel for the parties and perused the award of the arbitrator against this item, which reads as under : "the claimants are entitled to payment for the quantity beyond 50% deviation limit, at the rate of Rs. 268 50 paise quoted in their letter dated 6. 2. 1984 (C-23) and reiterated in subsequent letters dated 18. 2. 1984 (C-24) and 12. 3. 1984 (C-26 ). Hence the claim is justified for Rs. 185,75 x (Rs. 268. 50-Rs. 152. 80)=rs. 21,485. "the arbitrator has awarded the amount to the claimants for the quantity beyond 50% deviation limit. This is in accordance with Clause 12-A of the agreement.
2. 1984 (C-23) and reiterated in subsequent letters dated 18. 2. 1984 (C-24) and 12. 3. 1984 (C-26 ). Hence the claim is justified for Rs. 185,75 x (Rs. 268. 50-Rs. 152. 80)=rs. 21,485. "the arbitrator has awarded the amount to the claimants for the quantity beyond 50% deviation limit. This is in accordance with Clause 12-A of the agreement. I do not see any force in the objection filed on behalf of the D. D. A. Even otherwise, the objection relates to the merits of the award, which cannot be gone into while dealing with objections under Section 30 of the Arbitration Act. ( 9 ) THE next objection is in respect of Claim No. 11. It is stated that the arbitrator misconducted himself and the proceedings as much as he awarded a sum of Rs. 50,250 on account of damages for delay in commission of the work against the respondent. The arbitrator has based his claim on contradictory observations in his findings. On the one hand, the arbitrator has observed that there was delay of only one month in handing over the site by the respondent to the petitioner, but on the other hand, it was argued that the progress of the work by the petitioner was slow and the petitioner had to be reminded by the Executive Engineer by his various letters to expedite the work. The arbitrator failed to appreciate that the little delay inhanding over the site would not delay the completion of work to such an extent that the same could not be completed within the stipulated period. The respondent had granted extension of time to the petitioner without levying of any compensation. No justifiable loss has been suffered by the petitioner. It is the respondent, who has suffered loss on account of the delay in completion of the work. The petitioner is not entitled to any increase of rate from 81. 65% to 97% above DSR 1975, as has been done by the arbitrator. ( 10 ) THE reply of the petitioner to this objection is that as against Claim of Rs. 4,02,034 on account of damages suffered in consequence of various breaches of contract on the part of the respondents resulting in overstepping the schedule of time, the learned arbitrator awarded a meagre sum of Rs. 50,250.
( 10 ) THE reply of the petitioner to this objection is that as against Claim of Rs. 4,02,034 on account of damages suffered in consequence of various breaches of contract on the part of the respondents resulting in overstepping the schedule of time, the learned arbitrator awarded a meagre sum of Rs. 50,250. The extension of time performa (R-46), relied upon by the respondents, clearly states the various hinderances and obstructions created by the respondents. The arbitrator has rightly awarded the amount. ( 11 ) I have heard the learned counsel for the parties and perused the award, against this claim, which reads as under : "there was initial delay of about a month in handing over the site by D. D. A. However, the progress of the contractor was very slow as revealed by a number of letters written by E. E. to the contractor. Taking into consideration the initial delay of one month, the contractor should have reasonably completed 90% work within the stipulated time of 12 months. Hence his claim for increase in rates from 81. 65% to 97% above DSR 1977 is justified for only 10% of total work done namely Rs. 59,46,570. This work out to Rs. 59. 46. 570 X (197-181. 65) 10 181. 65 =rs. 50,250. "the arbitrator has found that there was initially a delay of about one month in handing over the site by the D. D. A. However, the progress of contractor was very slow as revealed by a number of letters written by the Executive Engineer to the contractor. He has taken into consideration the totality of circumstances and has awarded an amount of Rs. 50,250. The objection relates to the merits of the award. It is not for this court to go into the merits and the factual aspects sought to be raised on behalf of the D. D. A. The arbitrator has however attributed certain delay of work to the contractor 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 preverse and extraneous.
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 preverse and extraneous. Thus, there is no substance in the objection to the award under this claim. ( 12 ) THE award is also challenged in respect of Claim No. 12. It is stated that the arbitrator has misconducted himself and the proceedings while awarding interest @ 12% from 13. 8. 1985 till the payment or decree whichever is earlier. The arbitrator had no jurisdiction to award interest during the pendency of the arbitration proceedings. In this connection, reliance is placed on a judgment of Supreme Court in the matter of Executive Engineers1. ( 13 ) I have considered this objection also. In the latest judgment of Supreme Court in the case of Secretary, Irrigation Department, Government of Orissa and others v. G. C. Roy2, it has been held that the arbitrator has jurisdiction to award pendents lite interest. Of course, the arbitrator could not award the interest from the date of the award till payment, in view of the law laid down by the Supreme Court in the case of Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. and another3. So, the award against Claim No. 12 is modified to the extent that the interest would be payable from 29th December, 1986 to 4th of April, 1988, at the rate of 12% p. a. ( 14 ) THE next objection is in respect of Claim No. 2. The objection is that the arbitrator has wrongly awarded Rs. 6,968 on account of difference of derivation of rates between DSR 1977 CE and rates derived under Clause 12 (iii) by the department. The arbitrator did not appreciate the documents filed by the respondent in support of their contentions. Hence, there is an error apparent on the face of the award. Against this claim, the arbitrator came to the conclusion that the rate had not been correctly analysed by the Department under Clause 12 (iii), the rate could be derived from the DSR 1977. On that calculation, he has awarded a sum of Rs. 6,968. I do not find any fallacy with the reasoning given by the Arbitrator. The method of calculation cannot be said to be perverse or extraneous.
On that calculation, he has awarded a sum of Rs. 6,968. I do not find any fallacy with the reasoning given by the Arbitrator. The method of calculation cannot be said to be perverse or extraneous. Even otherwise, this objection relates to the merits of the award, which cannot be gone into under Section 30 of the Arbitration Act. The objection is without any force. ( 15 ) THE next objection is regarding Claim No. 3, under which the arbitrator has awarded a sum of Rs. 1,696. The objection is that the arbitrator has wrongly awarded Rs. 1,696 against this claim for carriage of steel including loading, unloading and stacking at site for a lead of 25 km. The steel was to be issued at any DDA store free of cost and as per clause 4 (d) of the acceptance letter, only labour charges for bending, binding and placing of reinforcement, beyond 10% of stipulated quantity was payable. The arbitrator misconstrued the provisions of the agreement and the award is liable to be dismissed. ( 16 ) UNDER this claim, the arbitrator came to the conclusion that in addition to the labour charges paid for bending, binding and placing in position for the steel issued free of cost from the stores, the contractor was entitled to payment of carriage of steel including loading, unloading and stacking at site for a lead of 25 KM. The objection relates to the merits of the award, which cannot be gone into under Section 30 of the Arbitration Act. I do not see any force in this objection. ( 17 ) THE objection against Claim No. 7 is that the arbitrator failed to give reasons as to how the rates were short. In the absence of any valid reason, the award is liable to be set aside. Against this claim, the arbitrator came to the conclusion thatthe rates paid by the respondents were short by Rs. 1. 57 per cum. and the claim was allowed for Rs. 315. The objection relates to the merits of the award and I see no force in this objection. Similar are the objections in respect of Claims No. 8 and 9, by which the arbitrator allowed a sum of Rs. 365 and Rs. 800 in respect of short payments. These objections are also dismissed, as these relate to the merits of the award.
Similar are the objections in respect of Claims No. 8 and 9, by which the arbitrator allowed a sum of Rs. 365 and Rs. 800 in respect of short payments. These objections are also dismissed, as these relate to the merits of the award. ( 18 ) IN view of my above discussion, the objection petition partly succeeds and the award against Claim No. 12 is modified to the extent that the interest would be payable by the D. D. A. for the period from 29th December, 1986 to 4th April, 1988 at the rate of 12% p. a. on the amount awarded. With this modification, the award is made rule of the court. Decree may be drawn in terms of the award. The petitioner shall be entitled to interest @ 12% from the date of the award till the date of the decree, on the amount awarded. In case the decretal amount is paid within 2 months from today, it will not carry any interest. In case the payment is not made within 2 months, the decretal amount will carry interest @ 12% from the date of the decree till the date of the payment. ( 19 ) IN the circumstances of the case, I leave the parties to bear their own costs.