MUNICIPAL CORPORATION OF GREATER BOMBAY v. KULKARNI & CO.
1998-02-11
S.S.NIJJAR
body1998
DigiLaw.ai
ORDER (ORAL) S.S. Nijjar, J. (Oral) - The prayer in this petition filed under Section 30 of the Arbitration Act, 1940 is for setting aside the award No. 31 of the 1995, made by the sole Arbitrator on 17th January, 1995. 2. The petitioner is the Municipal Corporation of Greater Bombay. The Respondents are engineers and contractors who has carried out the work of construction of a school building at D.N. Nagar. Andheri (West). The respondents submitted their tender for the contract work on 30th March, 1982. The tender was accepted and the work order was issued on 23rd November, 1982, in favour of the respondents. The work was to be commenced on 29th November, 1982 and was to be completed within 17 months i.e., on or before 28th April, 1984. The work, in fact was completed on 1st June, 1986. Necessary extensions were sanctioned to the respondents by the competent authority of the petitions. The school building was handed over to the petitioners on 5th September, 1986. According to the petitioners, after completion of the contract work and after the school building was handed over to the petitioner, the respondents requested payment for their outstanding by their letter dated 11th October, 1986. In this letter, the respondents stated that the amount due and payable was approximately Rs. 10 lacs. The petitioners repeatedly requested the respondents to submit the rate analysis in respect of extra and other items in the contract work. Despite repeated requests by the petitioners, the respondents failed and neglected to submit the rate analysis in respect of the said items. The terms and conditions of the contract are governed by "the General Conditions of Contract for Civil Works" (hereinafter referred to as "the General Conditions". According to the petitioners, under Clause 88 of the General Conditions, it was incumbent upon the respondents to prepare and submit the final bill within a period of three months from the date of completion of the contract. This condition was not complied by the respondents. It is the admitted case of the parties that the contract was completed on 1st June, 1986 and that the school building was handed over on 5th September, 1986.
This condition was not complied by the respondents. It is the admitted case of the parties that the contract was completed on 1st June, 1986 and that the school building was handed over on 5th September, 1986. In view of the above facts, it is stated in the petition that it was incumbent upon the respondent to submit their final bill on or before 1st September, 1986 or in any event, on or before 5th December, 1986. The respondents submitted the final bill on 1st September, 1992 i.e., after about six years after the completion of the contract. Under the said final bill a sum of Rs. 71,23,268.80 and interest has been claimed. In the letter dated 11th October, 1986, the respondent had themselves stated that claim is approximately Rs. 10 lacs. The respondents are claiming the enhanced/increased amount by seeking to claim interest for a period of six years (from 1986 to 1992). It was the respondents, who have delayed the submission of the final till. By their letter dated 28th October, 1992, the respondent claimed payment on the basis of the said final bill. In this letter, for the first time, it is stated by the respondent that the final bill ought to have been prepared by the petitioners. This plea according to the petitioners is false and in any event, totally contrary to the provisions of condition 88 of the General Conditions. Disputes and differences arose between the parties. The respondents, therefore, sought to refer the dispute to the Municipal Commissioner under Condition 96 of the General Conditions, by their letter dated 13th November, 1992. Again contrary to the provisions of condition 96, no details or particulars were furnished to the Municipal Commissioner to apply his mind effectively to the claim made by the respondents. The Municipal Commissioner rejected the claims put forward by the respondents. Therefore, invoking the provisions of condition 97 of the General Conditions, the respondent claim to refer the matter to the arbitration. The respondents by their letter dated 8th June, 1993 requested the Institution of Engineer (India) Maharashtra State to appoint an arbitrator. The Chairman of the Institution of Engineers (India), Maharashtra State Centre, appointed Mr. D. B. Sapre as the arbitrator by letter dated June, 1993. The reference to Arbitration was made on 12th July, 1993.
The respondents by their letter dated 8th June, 1993 requested the Institution of Engineer (India) Maharashtra State to appoint an arbitrator. The Chairman of the Institution of Engineers (India), Maharashtra State Centre, appointed Mr. D. B. Sapre as the arbitrator by letter dated June, 1993. The reference to Arbitration was made on 12th July, 1993. It is stated that the petitioners have objected to the appointment of the learned Arbitrator and have participated in the arbitration proceedings under protest. On this date, the learned Arbitrator gave certain directions with regard to the filling of statement of claim, reply of the respondents, rejoinder of the claimants, through the documents and other evidence in support of their claims. After completing the arbitration proceedings, the impugned award has been made on 17th January, 1995. It is this award which is challenged in the present petition. 3. An affidavit in reply has been filed. It is award that the petition deserves to be dismissed as the Petitioner have suppressed the material facts from this court. The grounds raised by the petitioner for setting aside the award invite the court to sit in appeal over the award, which is not permissible. With regard to the letter dated 11th October, 1986, it is stated that the respondents had demanded the Amount of 7 Running account bills, which had been checked on site by the Executive Engineer. Building Construction on 18th September 1986, This Bill No. 7 pertain to some extra items which were urgently executed on the basis of the sanction given by the Deputy City Engineers (WS). This was not the total amount due and payable by the petitioners to the respondents as alleged. The rates were also sanctioned by the Deputy City Engineer of the petitioners which was communicated to the respondents by letter dated 7th June, 1986, based upon the sanctioned rate analysis of compound wall. In view of this, there was no question of submitting any separate analysis. It is denied that as per condition 18 of the General Conditions it was for the respondents to prepare the final bill. In fact, it is long standing practice of the petitioners that the measurements are recorded in the measurement books maintained by the respondents. The running bills and final bills are prepared on the record of measurement maintained by the petitioners.
In fact, it is long standing practice of the petitioners that the measurements are recorded in the measurement books maintained by the respondents. The running bills and final bills are prepared on the record of measurement maintained by the petitioners. Even the costs of stationary are recovered from the contractors for preparation of the bills. This stationary is quite often not made available by the petitioners to the contractors. According to the said practice, the petitioners themselves prepared all the 7 running bills, and made the payments to the respondents. It is, therefore, denied that the respondents were required to prepare ad interim bill or the final bill. With regard to the delay of six years, it is stated that the respondent was not to prepare the final bill as per the practice prevailing with the petitioners. The petitioners always prepares the running bills and final bills as per the measurement book maintained by the petitioners. It is reiterated that by letter dated 11th October, 1986, a sum of approximately Rs. 10 lacs was demanded by R.A. Bill No. 7 and not for the other claims. The respondents could not have prepared the final bill. Even otherwise, the completion certificate has not been issued by the petitioners. The respondents continuously requested the petitioners to record all the measurements, so that the final bills could be prepared. Thus, there was no default on the part of the respondents is not submitting the final bill. In their letter dated 28th October, 1992, the respondents informed the petitioners that in accordance with the instructions issued by the Executive Engineers, the respondents have checked and tallyed the measurement abstract regarding the work and they thereafter prepared the final bill in detail. These claims had been submitted to the Executive Engineer on 1st September, 1992. Since no action was taken upto two months, the letter dated 28th October, 1992 was written. In these circumstances, it was pointed out to the petitioners that it was the practice of the petitioners that all bills including the final bills are prepared and certified by the department itself. The respondents cannot prepare the final bills unless the inspection of the measurement book has been given. These books are maintained and are in the custody of the petitioners.
The respondents cannot prepare the final bills unless the inspection of the measurement book has been given. These books are maintained and are in the custody of the petitioners. In view of the above, it was stated that the payment should be made within a period of 15 days from the receipt of the letter dated 28th October, 1992, failing which the respondents will invoke the arbitration clause. The final bill was submitted by the respondents on 1st September, 1992 on the basis of the directions given by the petitioners on 24th January, 1992. The inspection of the measurement books was not completed until 19th August 1992. Thereafter immediately on 1st September, 1992, the final bill was submitted. With regard to the interpretation of condition 88, it is denied that the final bill was to be submitted within three months of the physical completion of the work. It is stated that the final bill was to be prepared by the petitioners depending upon the measurement body maintained by the petitioners to which the respondents have no access. Thus, it would not be possible for the respondents to prepare the final bill within a period of three months, in case the measurement are not taken by the petitioners within the permissible time. It is stated that the petitioners have themselves not are to act in accordance with the strict interpretation of condition 88. They have always acted in the spiritual of condition 88. This according to the respondents is that the final bill should be submitted within three months of the measurement finally taken by the petitioners. This according to the respondents has been done. This in actual is the factual position. 4. Mr. Dhanuka submits that the dispute could not have been referred to arbitration, as the claims made by the respondents had not been made within the time stipulated. He submitted that the work was completed on 1st June, 1986. The school building handed over on 5th September, 1986. Therefore, in accordance with condition 88, the final bill should have been given on 6th December, 1986 or at the outset by 5th December, 1986. The final bill as already noticed was, in fact, given on 1st September, 1986. In terms of condition No. 88 it is categorically laid down that the final bill shall be submitted by the contractor within three months of physical completion of the works.
The final bill as already noticed was, in fact, given on 1st September, 1986. In terms of condition No. 88 it is categorically laid down that the final bill shall be submitted by the contractor within three months of physical completion of the works. No further claim shall be made by the contractor after submission of the final bill. If there is a dispute in respect of any of the claims the same has to be made within reasonable period as may be necessary for the purpose of verification. Any disputed claims had to be referred to the competent authority within 90 days. The respondents wholly failed to refer any such dispute to the Municipal Commissioner until the year 1993. It is submitted that the respondents cannot take shelter behind the plea that the inspection of the measurement books was not given by the petitioners. The application for inspection of the measurement books was made for the first time on 3rd June, 1993. Within 4 days thereof, the inspection was offered. Thus, there is no delay on the part of the petitioners. In view of the above, Mr. Dhanuka submits that the award is liable to be set aside. No award could have been made in favour of the respondents in view of the fact that their claims were barred by limitation. In support of this proposition, the learned counsel relies on a Division Bench Judgment of this court reported in Maharashtra State Electricity Board v. M.S. Bharat Condensers Pvt. Ltd. and others (1996(2) Mh. L.J. 971.), and judgment of the Supreme Court in State of Orissa and another v. Damodar Das ( (1996) 2 SCC 216 = 1996(1) Arb. LR 221.), and P. Gopal Bose v. Board of Trustees for Port of Calcutta ( (1993) 4 SCC 338 = 1993(2) Arb. LR 97.), Therefore, the counsel submits that the award is also liable to be set aside on the ground that the learned Arbitrator has wrongly awarded interest on items 1(a), 1(b), 1(d), and 9(a). It is submitted that the learned Arbitrator could not have awarded interest on price variation nor could any interest have been granted for the pre-reference period. The Arbitrator, in fact, has granted interest pendente lite and future interest also. This, according to the counsel is against the law settled by this court as also the Supreme Court.
It is submitted that the learned Arbitrator could not have awarded interest on price variation nor could any interest have been granted for the pre-reference period. The Arbitrator, in fact, has granted interest pendente lite and future interest also. This, according to the counsel is against the law settled by this court as also the Supreme Court. The counsel relies on a Division Bench Judgment of this Court in the Maharashtra State Electricity Board (supra) and the judgment of the Supreme Court in the case of Ms. Chahal Engineering & Construction Co. v. Irrigation Department, Punjab Sirsa ( (1993) 4 SCC 186 = 1993(2) Arb. LR 436.). With regard to claim (c), it is submitted that the learned Arbitrator has granted price variation on the basis of FMP rates of the year 1983. The actual rates which should have been applied were those of 1981. In any event, event if there is a price variation, this could not be more than the formula, which has been given in Condition 74 read with Conditions 72(b) and 73. For this proposition, the counsel relies on the judgment of the Supreme Court in Ms. Chahal Engineering & Construction Co.'s case (supra). He further relies on D.C.M. Ltd. v. Municipal Corporation of Delhi and another ( (1997) 7 SCC 123 = 1997(2) Arb. LR 314.), Factually, the counsel refers to the statement of claim filed by the respondents before the learned Arbitrator to show that the amount mentioned in the letter dated 11th October, 1986 was paid in part on 28th April, 1987. Thus, he submits that no payments have been received by the respondents after 28th April, 1987. If the claims of the respondents were genuine, they would have made some protest before the year 1992. With regard to Claim No. 2 the counsel submits that the work was completed on 1st June, 1986. It was the responsibility of the respondents to prepare the final bill. Inspite of this, the Arbitrator has awarded interest from 1st June, 1986 till the date of reference. Thus, the award is liable to be set aside. The counsel further submits that a perusal Conditions 96 and 97 of the General Conditions would show that any dispute between the parties have to be referred to the Commissioner with a reasonable period of time, who has to give his decision within a period of 90 days.
Thus, the award is liable to be set aside. The counsel further submits that a perusal Conditions 96 and 97 of the General Conditions would show that any dispute between the parties have to be referred to the Commissioner with a reasonable period of time, who has to give his decision within a period of 90 days. In the event the contractor is not satisfied with the decision of the Commissioner or the Commissioner fails to give the decision within a period of 90 days, such dispute may be referred to arbitration as per Condition 97. The measurement of the work has to be done in terms of Conditions 78 and 78A perusal of Condition 78 shows, according to the counsel, that the measurement are to be done by both the engineer and the contractor jointly. Thus, it is not plausible for the respondents to claim that the measurements not having been done, they were unable to prepare the final bill. The counsel further submits that the provision similar to the final bill also exists with regard to interim bill in Condition No. 83. In the present case, there were 8 interim bills. Upto R.A. Bill No. 6 were paid in full R.A. No. 7 was paid in part on 28th April, 1986. There are no disputes raised with regard to the bills. Thus, it is submitted that the final bill would hardly amount to anything, since it is merely a summary of the interim bills. With regard to Item No. 1(c) of the Award, the counsel refers to letter dated 11th January, 1983, on the basis of which, it is submitted that the parties had agreed to lump-sum payment for the escalation of the prices in the steel. A formula had been suggested by the petitioners to the respondents. The respondents, however, suggested a different method by their letter dated 13th May, 1983. This method was accepted. Inspite of this agreement, the respondents claimed compensation for 335.95 MT of steel. The amount of steel actually used was 97.527 MT. The respondents had, however, made their claims on prorata basis, which has been allowed by the Arbitrator. In further support of the submission with regard to interest the counsel has relied upon AIR 1974 SC 1265 . 5. Mr.
The amount of steel actually used was 97.527 MT. The respondents had, however, made their claims on prorata basis, which has been allowed by the Arbitrator. In further support of the submission with regard to interest the counsel has relied upon AIR 1974 SC 1265 . 5. Mr. Thakkar appearing for the respondents submits that the Award given by the learned Arbitrator cannot be faulted on the issue of limitation. It is submitted that the issue with regard to limitation is a mixed question of fact and law. The Award is not a speaking award. Therefore, it would not be possible for this court to delve into the mind of the learned Arbitrator to discover the reasons which weighed, whilst giving the finding that the claim of the respondents is within time. Apart from this purely legal objection Mr. Thakkar submits that even on facts, it can be demonstrated that the view taken by the learned Arbitrator could reasonably have been taken by any reasonably informed person. For this purpose, the counsel has referred to the rejoinder filed by the respondents before the Arbitrator. In paragraph 5 of the said rejoinder, it is categorically stated that the claims in dispute were under consideration of the petitioners throughout this period. It was submitted that since the completion of the work, the petitioners were continuously attempting to complete their internal formalities of recording of measurement, sanctioning of extra excess statement, making budged provisions etc. and continuously acknowledging and assuring the claimants regarding the payment of all the outstanding dues arising out of this contract. In the meeting held on 1st March, 1988 the petitioners stated that since the opinion of an independent outside Engineer Shri M. P. Gajapati Rao was being sought in the case of School building at Malwani, Malad (West), the respondents demand for payment would be decided after the said opinion was received. It is further stated in the rejoinder that the petitioners had been recording the measurements for the school work till the year 1992. It is further stated that the petitioners have not prepared and finalised the respondents final bill and submitted the same along with the reply filed by the petitioners before the Arbitrator. The rejoinder further goes on to say that the petitioners have been making yearly budgetory provisions for the payment of the bills of the respondents.
It is further stated that the petitioners have not prepared and finalised the respondents final bill and submitted the same along with the reply filed by the petitioners before the Arbitrator. The rejoinder further goes on to say that the petitioners have been making yearly budgetory provisions for the payment of the bills of the respondents. The petitioners had in effect acknowledged and promised to pay the final bill as finalised by the petitioners. These categoric statements made by the respondents before the Arbitrator were not controverted by filling any further affidavits. To support the averments made in the rejoinder, Mr. Thakkar has than made reference to the record which was made available before the learned Arbitrator. From the record, it transpires that on 25th November, 1986, the respondents have written to the petitioners with reference to his letter dated 21st November, 1986. In that letter, it is mentioned that the matter was discussed personally also with the City Engineer. The letter mentions that for avoiding further in ordinary delay in the payment of the dues, the respondents had also agreed to the second alternative to delete for the present the payment of two extra items. It was, therefore, requested that the Executive Engineer, Building Construction (W.S.) be directed to process the bill for payment immediately. Mr. Thakkar thereafter refers to a letter dated 9th December, 1988, which had been written in response to a letter dated 5th December, 1988 by the Deputy City Engineer. In this letter also, the respondents are protesting that the petitioners are completely silent as regard to the payments extra items, which are mentioned in the said letter. It is categorically mentioned that the final bill of the respondents is not processed even though two and a half years have elapsed since the work was completed and handed over. It is stated that the building was handed over in June, 1986, six months ahead of the completion date. Therefore, the petitioners are requested to refund the security deposit and the retention money of 8%. The Respondents again wrote to the petitioners on 18th January, 1989 in response to the letter of the petitioners dated 11th January, 1989. It is pointed out that as regards the extra items, the same had already been sanctioned by the competent authorities at the relevant time.
The Respondents again wrote to the petitioners on 18th January, 1989 in response to the letter of the petitioners dated 11th January, 1989. It is pointed out that as regards the extra items, the same had already been sanctioned by the competent authorities at the relevant time. It is categorically stated that the claim put forward by the petitioners to the effect that the respondents have failed to submit the rate analysis is entirely contrary to the facts. It is reiterated that the extra items are excluded as per the orders of the authorities, which were duly sanctioned and the items were also billed as per the sanction. It is stated that the suggestion put forward by the petitioners of paying for the extra items as per FMB schedule of rates is contrary to ethics and will be opposed tooth and nail. The petitioners are requested to take note of this. Again on 17th September, 1991, the respondents wrote to the petitioners. It was pointed out that the construction of the school building was completed and handed over of the petitioners in Junde, 1986. The school building was only one of the three works which had been completed by the respondent of the petitioners. Therein it is stated that since completion of these works, the respondents have been requesting the petitioners for settling the final bills. The respondents had personally contracted the concerned officers of the petitioners. It is stated that to the knowledge of the respondents, all the sanctions to the revised estimates, extra excesses etc. are obtained and entries of the items noted in the measurement book and there should not be any difficulty in settling the final bills. Copies of the correspondence in this respect were attached to this letter. This letter also puts the petitioners to notice that the respondents are being harassed by the neglectful attitude shown by the officers of the petitioners in settling the final bills, and that they are entitled to charge interest on the amounts due at the rate of 24% from the date of completion of the respective works. A reply is given by the petitioners to the aforesaid letter. This letter deals with all the three works which were completed by the respondents.
A reply is given by the petitioners to the aforesaid letter. This letter deals with all the three works which were completed by the respondents. With regard to the work which is the subject matter of this Arbitration Petition, the same objection is again raised to the effect that the respondents have failed to submit the rate analysis for extra items as stated in the letters of the petitioner dated 6th January, 1989 and 7th September, 1988. Therefore, the bill could not be processed further. For the first time it is also stated that it has been observed by the petitioners that the respondents have been overpaid on account of reinforcement steel in both of works of school building at Gandhi Gram Road and D.N. Nagar. It is in these circumstances that the respondents were compelled to write the letter dated 3rd June, 1992. In this letter, it is stated that after the receipt of the letter under reply the respondents have personally contacted the Executive Engineer, Building Construction (W.S.) on three occasions and requested to grant to the respondents the inspection of the measurement book, which are in possession of the petitioners. It is noted that no inspection has been granted. Therefore, it was not possible for the respondents to submit the final bills. In this letter, it is also mentioned that the measurement are already recorded by the petitioners and the respondents should be permitted to check the same. With regard to the objection to the rate analysis, it is stated that the same was already scrutinised and sanctioned by the competent authorities at the relevant time. Necessary extra signed by the respondents and were approved by the authorities concerned. Thereafter the said extra items were included in R.A. Bill No. 7 for payment. Therefore, it is reiterated that the question of submission of the rate analysis against does not arise. On the basis of the above it is submitted by Mr. Thakkar that it cannot be plausibly argued by the petitioners that the claim of the respondents is barred by limitation. Nor can it be argued that the Award of the Arbitrator suffers from any error apparent on the face of the Award. With regard to interest, it is submitted that a perusal of the Award would show that the interest has not been granted on damages, nor has interest been granted for any pre-reference period.
Nor can it be argued that the Award of the Arbitrator suffers from any error apparent on the face of the Award. With regard to interest, it is submitted that a perusal of the Award would show that the interest has not been granted on damages, nor has interest been granted for any pre-reference period. In view of the above, it is submitted that the petition be dismissed as the Award does not suffer from any error apparent on the face of it. 6. I have given my anxious thought to the rival submissions made by the counsel for the parties. Having considered the matter, I am of the opinion that there is much force in the submissions made by Mr. Thakkar. With regard to the question of limitation it has to be seen that all relevant material was before the learned Arbitrator. Mr. Thakkar has referred only to part of the correspondence. This court has, however, perused the whole record to satisfy itself as to whether the finding recorded by the learned Arbitrator is based on no evidence. It deserves to be noticed here that the Award under challenge is a non-speaking award. It also deserves to be noticed that if the award is upheld, the money is to be paid by a public authority. In such circumstances, the courts examine the award anxiously. But having regard to the facts and circumstances of this case, it cannot be held that the award is based on no evidence. Nor can it be held that the award suffers from an error apparent on the face of the award. The judgments cited by the learned counsel for the petitioners with regard to the point of limitation may now be noticed. A perusal of the judgment given by the Division Bench in the Maharashtra State Electricity Board case (supra), shows that the court was dealing with an admitted position that no dispute was raised with regard to the payment made by the Board from the year 1984 till 1992. The company had never demanded any money from the board as claimed by them before the Arbitrator. The claim put forward by the Company therein was only in the nature of a counter blast to the claim which was put forward by the Board on account of excess duty drawback recovered by the Company.
The company had never demanded any money from the board as claimed by them before the Arbitrator. The claim put forward by the Company therein was only in the nature of a counter blast to the claim which was put forward by the Board on account of excess duty drawback recovered by the Company. It was in these circumstances that the Division Bench held that the claim was time barred. As noticed above in the present case, it cannot be said that the respondents had slept over their rights. What transpires from the record is that the petitioners made it impossible for the respondents to submit the final bill. Thus, it cannot be said that there was no material before the Arbitrator to hold that the claim is within time. In the case of State of Orissa (supra), the facts were that the respondent had entered into three contracts by agreement dated 21st September, 1967, 19th July, 1976 and 6th October, 1977. With regard to the second and third agreement, the contractor abandoned the contract and accepted the measurements and payment of the fourth running bill without any objection as 19th July, 1976 and 6th October, 1977 respectively. With regard to the first, he accepted the measurement and payment of the bill without raising any objection. These facts are noticed in paragraphs 1 and 2 of the Judgment. Inspite of this, on 15th September, 1980, the contractor wrote a letter to the Chief Engineer alleging that disputes had arisen out of and relating to the three agreements. The contractor called upon the Chief Engineer to nominate an Arbitrator. The Chief Engineer replied that there is no arbitration clause in any of the agreement. Therefore, the question of reference to arbitration did not arise. The respondents thereon filed an application under Sections 8 and 20 of the Arbitration Act in the court of Subordinate Judge, Bhubaneshwar appointment for of an Arbitrator. The Subordinate Judge allowed the application and directed the parties to file the agreement in the court and to nominate panel of names for appointment of an Arbitrator. Thus, revisions and the appeal filed in the High Court were also dismissed. The appeals were filed before the Supreme Court. One of the submissions made before the Supreme Court was that the works having been executed as early as 1967 and 1976, the dispute is barred by limitation.
Thus, revisions and the appeal filed in the High Court were also dismissed. The appeals were filed before the Supreme Court. One of the submissions made before the Supreme Court was that the works having been executed as early as 1967 and 1976, the dispute is barred by limitation. Examining the facts of this case, it is observed by the Supreme Court that the first contract was of the year 1967-68 and was executed in 1967 itself. The amount was stated to have been received in September, 1967 itself. The notice admittedly was issued on 15th September, 1980, which was hopelessly barred by limitation. Therefore, the Supreme Court noticed the submissions made by the counsel for the respondents that the appellant had extended the time for execution of the work till 1979. He admittedly completed the execution of work on 30th December, 1977. The Supreme Court also noticed that in the third case, the work was abandoned by the respondents. Having, noticed as above, it is held that "However, in view of the dispute that the respondent had the benefit of extension of the execution of the work, it cannot be said that there would be no dispute as to whether the claims are barred by limitation. Under those circumstances, it would be difficult to decide whether the two claims are barred by limitation. That would be a matter of decision by an arbitrator." Thus, the ratio of the said judgment would appear to be that whether the claim was clearly barred by limitation and there was absolutely no explanation on behalf of the respondents, the same was held to be barred by limitation. On the other hand, without regard to the other two agreements, the Supreme Court came to the conclusion that those were matters which ought to be decided by the Arbitrator. In the present case, it has been noticed that the petitioner had made it virtually impossible for the respondents to furnish the final bill. The correspondence which has been perused by this court makes the position amply clear. In any event, as submitted by Mr. Thakkar, the limitation is a mixed question of fact and law. This court on the material which has been produced, would not be in a position to hold that the finding arrived at by the Arbitrator is based on no evidence.
In any event, as submitted by Mr. Thakkar, the limitation is a mixed question of fact and law. This court on the material which has been produced, would not be in a position to hold that the finding arrived at by the Arbitrator is based on no evidence. Thus, in my view, the ratio of the aforesaid Judgment does not apply to the facts of this case. 7. Mr. Dhanuka has also relied on the judgment of Panchu Gopal Bose (supra). The Supreme Court was dealing with the case which was hopelessly barred by time. In paragraph 6 of the judgment, it is noticed that even assuming that the petitioner had put forward his claim in July, 1979 and the respondent has not acted thereon till November 28, 1989 for long ten years he did not move his fingers to approach the Engineer and later the court of the first time on November 28, 1989 issued notice to the respondent to refer the case for arbitration. The cause of arbitration had arisen in July 1979. The petitioner did not take any action from then. The notice was only issued in November, 1989. At this stage itself the respondents have challenged the claim put forward by the petitioner therein. The claims successfully upheld to the Supreme Court on the ground that the claim was barred by limitation. In view of the voluminous record which was produced before the Arbitrator, which has also been perused by this court, it cannot be held that the Arbitrator has acted without jurisdiction in giving the finding that the claim is within time. This authority will also therefore, be of no assistance to the claim put forward by the petitioners. Mr. Dhanuka has laid a great deal of stress upon Condition 88 of the General Conditions to submit that it was for the respondents to submit the final bill. According to him, the final bill ought to have been submitted within three months of either 1st June, 1986 or 30th September, 1986 when the building was handed over. I find it difficult to accept the aforesaid submission of Mr. Dhanuka. The final bilo under Conditions 88 can only be furnished if the contractor is permitted to take appropriate measurements of the works. The records and measurements is provided in Condition 78 and the method of measurement is provided in Condition No. 79.
I find it difficult to accept the aforesaid submission of Mr. Dhanuka. The final bilo under Conditions 88 can only be furnished if the contractor is permitted to take appropriate measurements of the works. The records and measurements is provided in Condition 78 and the method of measurement is provided in Condition No. 79. Under Condition 78 it is provided that the Engineer shall ascertain and determine by measurement the value in accordance with the contract of work. All items having financial value shall be entered in a measurement book, level book etc. as prescribed by the Municipal Corporation so that a complete record is obtained of all work performed under the contract. This condition also provides that the measurement shall be taken jointly by the Engineer with the contractor. But if the contractor fails to attend at the time of measurement, in such event, the measurement shall be taken by the Engineer and it shall be taken to the correct measurement of the work and shall be binding on the contractor. The Condition No. 79 provides the method of measurement. The same conditions are applicable for measurements with regard to interim bills. From a bare perusal of the aforesaid provisions, it becomes evident that a final bill cannot be submitted unless the measurements are made by the petitioners. In the fact of this case, on the basis of the material, it would not be possible to hold that the respondents were in any way remis in not co-operating with the petitioners for the measurements. Even if it is assumed that they did not co-operate then Condition 78 clearly provides that the petitioners had the power to determine the measurements in the absence of the respondents. This would have been final and binding on the respondents. The tenor of the correspondence, however, shows that the respondents have been repeatedly asking for the determination of the measurements and the same have not been finalised by the petitioners till the year 1992. In the face of the aforesaid circumstances, it would be difficult to accept the submission of Mr. Dhanuka that the final bill should have been submitted by the respondents by 30th December, 1989, I, therefore, find no substance in the submissions made by Mr. Dhanuka. 8. With regard to the claim of interest Mr.
In the face of the aforesaid circumstances, it would be difficult to accept the submission of Mr. Dhanuka that the final bill should have been submitted by the respondents by 30th December, 1989, I, therefore, find no substance in the submissions made by Mr. Dhanuka. 8. With regard to the claim of interest Mr. Dhanuka has relied upon the Division Bench Judgment of this court in the case of Maharashtra State Electricity Board (supra). In para 14 of the said judgment the facts are noticed by the Division Bench, which may be reproduced as under: "14. From the facts narrated above is apparent that quotations were invited in the month of May, 1979 for supply of conductors to the Board. On the basis of the contract, admittedly, the goods were supplied prior to April 1983. Payment in respect of the said supplies were made by the Board to the Company prior to April 1984. Some Officers of the Board woke up from their slumber in 1988 and demanded that according to the terms of the contract, the Company was bound to refund the excess drawback of excise duty. Correspondence went on between the Board and the Company. The company by its letters dated 9th June, 1992 and 24th July, 1992 (Exhibits B-10 and B-11 to the Petition) agreed to refund some amount. As per letter dated 24th July, 1992, the Company agreed to pay Rs. 2,57 lacs. In that letter, it is specifically mentioned that on verification of receivable during the years 1980 and 1981, the Company's claims due from the Board was about Rs. 4.93 lacs and similarly in subsequent years of 1982 and 1983 the Board's claim was about Rs. 7,49 lacs. As a result, the net amount payable remains to the extent of about Rs. 2.57 lacs. Therefore, the Deputy Chief Engineer of the Board wrote a letter on 30th September, 1993 stating that the Company was bound to return Rs. 7,49,571.04 with interest thereon at the rate of 18% per annum from the date of receipt of additional duty drawback which works out to Rs. 4,59,476.77 aggregating to Rs. 12,09,047.81 within 10 days from the date of receipt of the said letter.
7,49,571.04 with interest thereon at the rate of 18% per annum from the date of receipt of additional duty drawback which works out to Rs. 4,59,476.77 aggregating to Rs. 12,09,047.81 within 10 days from the date of receipt of the said letter. In response to that letter, the Company by its letter dated 26th, 28th December, 1992 contended that the Board has kept silence on the issue of payments to the Board and has now embarked upon claiming amounts from the Company which is not actually due and that too after a period of over 9 years and that the claim of the Board was one sided. Therefore, the Company by the said letter invoked the arbitration clause and nominated its arbitrator and requested the Board to appoint its arbitrator. The arbitrator passed the Award as stated above and arrived at the conclusion that the claims filed by the Board and the Company were within time. No reasons are as signed by the Arbitrators while deciding the issues framed by them. It is held that the claims made up by the Company and the Board were within time. It is true that the court would not normally interfere with an Award passed by the Arbitrators. But in the present case, it is to be borne in mind that the Board is a statutory public body the Company has not claimed any amount from the Board until the year 1992 i.e., for a period of 8 to 9 years from the date of completion of the contract and when it received notice for recovering same amount, the counter claim was raised and the award is passed in its favour for a large amount. For claim, of Rs. 13 lacs, which was not claimed at the relevant time and for a period of 9 years also more, disproportionately a high amount of interest amounting to Rs. 25 lacs is awarded. This award is per se unjustified as the claim made by the Company is beyond time and the award of interest of disproportionately high so as to hurt the conscience of the court and that too in a case where the Company was prepared to pay Rs. 2.57 lacs to the Board in July 1992 towards the claim of the Board." 9.
2.57 lacs to the Board in July 1992 towards the claim of the Board." 9. A perusal of the facts narrated by the Division Bench above would show that it was case where interest had been allowed on a claim of Rs. 1 lacs which was made after 9 years in the amount of Rs. 2.5 lacs. Thus, the interest was more than the initial amount claimed. It was held by the Division Bench that the award is per se unjustified as the claim made by the Company is beyond time and the award of interest is disproportionately high so as to hurt the conscience of the court. The facts in the per cent case are not the parimateria nor can they be said to be similar. Firstly, this is not a claim which is beyond limitation. In my view, the Arbitrator has not committed any error apparent on the face of the award in holding that the claim is not time barred. Secondly, the amount of interest awarded is neither excessive nor unconscionable. Where necessary the Arbitrator has actually refused to award interest to the respondent's company. The Arbitrator refused the interest on account of delayed interim bills. The interest has also been declined on the claim for compensation for price rise beyond the original contract period based on FMP 1988. The interest on compensation for infructuous overheads on account of delay has also been rejected. Some of the claims have been rejected altogether. Thus, the question of awarding interest therein did not arise. The interest has only been allowed on the claim for balance value of work done under tender, extra fair and electrical items. Under Clause 1(b) the claim was for balance payment under the price variation. The interest has been granted on a small amount. Clause 1(c) was on account of balance payment of price difference in steel. Interest has been allowed on this item also interest at the rate of 12% p.a. has been awarded against Items No. 1(a), 1(b), 1(c), 1(d) and 8(a) pendente lite. No interest had been granted for the pre-reference period under the contract. No future interest has also been awarded. The Division Bench was not, however, dealing with such a situation.
Interest has been allowed on this item also interest at the rate of 12% p.a. has been awarded against Items No. 1(a), 1(b), 1(c), 1(d) and 8(a) pendente lite. No interest had been granted for the pre-reference period under the contract. No future interest has also been awarded. The Division Bench was not, however, dealing with such a situation. Reading of paragraph 27 of the Judgment of the Division Bench would show that the Award therein had granted interest at the rate of 21% per annum as per banking norms and as per trade and commence practice at quarterly rests on all the amounts for the period 1st August, 1983 till 30th July, 1993. Future interest was also granted till the date of payment by the Board in these circumstances, it was held that the award suffers from non-application of mind. The Division Bench took note of the fact that admittedly prior to 1992, the Company never demanded any amount from the Board. No notice of demand was issued by the Company demanding the said amount. These facts are wholly distinguished from the facts in the present case. As noticed in the narration of the facts, the respondents have been demanding the finalisation of the bill and the payment. In the letter dated 17th September, 1991, a specific notice was given to the petitioners that the respondents would be claiming interest on the unpaid amount at the rate of 24% from the date of completion of the respective works. Therefore, it is my considered opinion that the ratio of the Division Bench would not be applicable to the facts and circumstances of this case. 10. Mr. Dhanuka has also relied upon the Supreme Court Judgment in the case of Chahal Engineering (supra). That was a case where the Arbitrator had awarded interest on the amount of escalation also. It is noticed by the Supreme Court that although under the contract, the interest on dues of the contractor is payable with effect from April, 1988 since the escalation is to be paid during the currency of the execution of the works i.e., upto March 1986, the arbitrator has awarded both as escalation and interest from August 14, 1987 to March 31, 1992. It is, therefore, observed that the interest payable on the amount on escalation calculated on the wrong indices itself into an amount of Rs. 35,36,129/-.
It is, therefore, observed that the interest payable on the amount on escalation calculated on the wrong indices itself into an amount of Rs. 35,36,129/-. In the present case, no such amount has been awarded on account of escalation. As noticed above Claim 1(b) related to the balance payment under price variation clause. This was specifically provided for. Thereafter interest has been granted on the price difference in steel. It is to be noticed that the work order was issued on 28th November, 1982. The work order was to start on 29th November, 1982. It was to be completed on 24th April, 1984. The work was actually completed on 5th September, 1986. The Arbitrator has accepted the claim put forward by the respondents that it was the 1983 FMP which was applicable. Unless and until it can be shown that the said finding is based on no evidence, this court would not be inclined to interfere with the said finding. Thus, it cannot be said that the interest has been given on escalation in the prices which would be in the nature of the compensation and thus, to be equated with the damages. Present is not such a situation. Similarly, Clause 1(c) related to the difference on price of steel. The controversy with regard to the difference in the price of steel was settled between the parties by negotiations. The expert whose opinion has been sought had categorically stated that the formula worked out between the parties framed a part of the contract. It was on this basis that the Arbitrator had given a finding of fact. The finding of fact having been arrived at one some evidence, it is not possible for this court to reexamine the same. Similar is the position with regard to the award of interest on Claim 1(c) & 1(d). With regard to Claim No. 1(a), Mr. Dhanuka submits that the Arbitrator was wholly wrong in awarding interest for a period of six years i.e., from the date of completion of the work till the final bill was submitted in 1993 and thereafter to give interest pendente lite also. The Judgment Chahal Engineering's case (supra) would be of no assistance for this proposition. Therein the Arbitrator has awarded interest beyond the agreed dates in the contract.
The Judgment Chahal Engineering's case (supra) would be of no assistance for this proposition. Therein the Arbitrator has awarded interest beyond the agreed dates in the contract. In the present case, the petitioners have been singularly remis in not making the payment to the respondents for the work which has been completed way back in 1986 on one pretext or the other. In my view the Arbitrator has not acted without application of mind and therefore, the award cannot be said to suffer from an error apparent on the face of the award. 11. Apart from this, there is another reason why this court may refuse to grant any relief to the petitioners. It is a settled preposition of law that any party which approaches the court for relief must come to the court with clean hands. All the correspondence which has been adverted to in this judgment was not disclosed at all by the petitioners in the petition. All this correspondence was on the record of the Arbitrator on the basis of which the said Arbitrator has given findings of facts to the effect that the award is barred by limitation. The non-disclosure of such vital documents in the petition would in itself be sufficient to disentitle the petitioners from obtaining any relief. However, since the matter has been discussed on merits, it is not necessary to pronounce on the conduct of the respondents. 12. In view of the above, I find no substance in the petition and the same is hereby dismissed with costs. 13. In terms of Rule 787 of the High Court Rules, Original Side, there shall be a decree in terms of the award with interest at the rate of 18% from the date of the decree till payment/realisation. Petition dismissed costs-decree in terms of award with interest @ 18% Petition dismissed.