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1994 DIGILAW 859 (DEL)

MOKHA LIGHT HOUSE v. CENTRAL POLLUTION CONTROL BOARD

1994-12-20

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R. C. Lahoti ( 1 ) THIS order shall govern the disposal of Suit Nos. 2959/90 and 2964/90. ( 2 ). Suit No. 2959/90 has been registered on a petition under Section 14 of thearbitration Act filed by M/s. Mokha Light House seeking filing of the award andmaking the same a rule of the Court. ( 3 ) S. NO. 2964/90 has been registered on a petition under Sections 14,30 and33 of the Arbitration Act seeking filing of the award and also setting aside of thesame. ( 4 ). There was a contract entered into between M/s. Mokha Light House, Newdelhi (hereinafter REFERRED TO to as the Contractor ) and Central Pollution Controlboard (hereinafter REFERRED TO to as the Employer ) relating to construction of Centralboards Building Complex at Shahdara Delhi (sub-head Electrical installation ). Theagreement No. was EE/bp/87. 88. 2. Disputes arose between the parties. Therewere claims and counter claims preferred TO. The Arbitrators have given an awarddated 17/08/1990 whereby they have rejected the claims and the counterclaims both. The award is Nil. ( 5 ). The employer has preferred TO objections. At the time of hearing, the awardgiven by the Arbitrator on counter Claim No. 1 has been seriously challenged andthat only deserves to be examined. ( 6 ). To appreciate the contention raised before the Court, the counter claim andthe award thereon are reproduced hereunder:- "counter-CLAIM No. 1 : The respondent claims an amount of Rs. 1,96,228. 00 asexcess cost incurred due to purchase of transformer through other agency atthe cost of the claimant. Award:-The claim is not justified. Reason: Though the respondent has been able to establish delay on the partof claimant for supply of the transformer in terms of the Agreement, thepurchase has been made without serving proper notice as required under thecontract. While no formal Show Cause Notice was produced to have beenserved under Clause 22 of the Contract for the purchase of the transformer atthe cost of the claimant, notices have been served under Clause 33 fortermination of the contract without taking any action under the same and theclaimant has been allowed to continue with the execution of the balance work. ( 7 ). ( 7 ). It is submitted by the learned Counsel for the employer that the award isdemonstrably false as the Arbitrators have either over looked the documents orhave misconstrued the same, which amounts to an error apparent on the face of theaward, also legal misconduct. ( 8 ). It is not disputed that the relevant clause governing this counter daim is Clause 22 of the Contract. It reads as under:- "22. FAILURE by conctractor to comply with Employer s instructions:-If contractor after receipt of written notice from the employer requiring compli-ance, with such further drawings and / or Employer s instructions fails withinseven days to comply with the same, the employer may employ and pay otherpersons to execute any such work whatsoever may be necessary to give effectthereto and all costs incurred in connection therewith shall be recoverablefrom the contractor by the employer as a debt or may be deducted by himfrom any moneys due to the contractor. " ( 9 ). There is yet another Clause-Clause 33 of the Contract which speaks of termination of contract in given contingencies subject to 7 days notice. ( 10 ). Ex. C-37 (Vol. II page 114) is a letter dated 27. 2. 89 written byemployer sentto the contractor through Regd. A. D. post. It is clearly mentioned therein that therewas a default on the part of the contractor in placing orders for H. T. penal andtransformers. The urgency of placing the orders is impressed. At the end, it ismentioned - "therefore please show cause within 7 days from the date of thisletter as to why the transformers and H. T. Penals should be not purchased by theboard at your costs in terms of Clause 33 of the Act". The Clause No. should havebeen 22 but inadvertantly it has been mentioned as 33. This was clarified throughits letter dated 21. 9. 89 Ex. C-43 (Vol. ll page 127 ). It is mentioned therein that theletter dated 27. 2. 89 was under Clause 22 of the Agreement and in any case the letterdated 21. 4. 89 was to be treated as notice under Clause 22 of the Agreement. Thereafter the employer purchased the transformers as evidenced by the Bill No. 533, dated 15. 5. 89 from Bhaskar Power Projects (Vol. ll page 223 ). This was doneunder the risk purchase clause. ( 11 ). 4. 89 was to be treated as notice under Clause 22 of the Agreement. Thereafter the employer purchased the transformers as evidenced by the Bill No. 533, dated 15. 5. 89 from Bhaskar Power Projects (Vol. ll page 223 ). This was doneunder the risk purchase clause. ( 11 ). The Arbitrators have held against the employer solely on the ground thatregd. A. D. letter dated 27. 2. 89 Ex. C-35 mentioned clause 33 and not Clause 22 ofthe Agreement. This is an error apparent on the part of the Arbitrators. It is thesubstance of the notice and not the clause number that should have prevailed withthe Arbitrators. Moreover if only they would have taken into consideration theletter dated 21. 4. 89 (Ex. C-43), their finding would not have been what it is. ( 12 ). It is not disputed that the claim under this head being for an amountexceeding Rs. 300. 00, the award had to be a reasoned award. Reason is vitiated, ifthe reasons given are not proper or adequate (see Raipur Development Authorityv. Chokha Lal, 1991 Arb. L. R. 430 SC ). Failure to take into consideration materialdocument available on record apparent vitiates the award. ( 13 ). However, this Court cannot substitute its own finding in place of thearbitrators . There are other contentions raised by the contractor which shall haveto be taken into consideration by the Arbitrators while giving their award on thiscourt claim. ( 14 ). However, this claim is seperable from other claims. ( 15 ). For the foregoing reasons, the employer s objection is partly allowed. Theaward given by the Arbitrators on the counter claim No. 1 REFERRED TO to hereinaboveis set-aside and the same is remitted back to the Arbitrators. The rest of the awardis maintained and made a rule of the Court. ( 16 ). Let a decree be drawn in terms of the award excluding the award on counter Claim No. 1 which has been remitted to the Arbitrator. Both the suits stands disposed of.