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2000 DIGILAW 183 (DEL)

V. K. MITTAL v. DELHI DEVELOPMENT AUTHORITY

2000-02-17

MUKUL MUDGAL

body2000
MUKUL MUKGAL, J. (ORAL) ( 1 ) THE brief facts of the case are that the petitioner is a Contractor and is carryingon the business of construction works for the Delhi Development Authority. Thepetitioner was awarded Contract No. 58/ee/hdxiii/81-82 by respondent No. 1/ddafor the construction of 32 Category-11, 16 Category-1 Flats, 32 Scooter Garages unders. F. S. Scheme at Naraina S. H. ; and construction of 16 Category-II, 8 Category-IPlats and 16 Scooter Garages i/c Internal Development of Block G, Pocket I. Thatcertain differencesand disputes had arisen between the parties and as per theagreement Clause, Mr. Banarasi Dass (respondent No. 2 herein), Superintendingengineer of respondent No. 1/dda was appointed as an Arbitrator, who made andannounced his award granting a sum of Rs 1,64,620. 76. 00 to the petitioner on 5/01/1990 after giving full opportunity to both the parties. ( 2 ) THE present suit is filed by the petitioner for making the said Award a Rule of thecourt. Thereafter the Objections were filed respectively both by the petitioner anddelhi Development Authority/respondent No. 1 by IA. 3814/90 and IA. 3813/90 to theaward dated 5/01/1990. ( 3 ) INSOFAR as the challenge to an arbitration award is concerned, in Union of Indiavs. Rallia Ram reported as reported in AIR 1963 SC 1685 (3j) it was held: "the award is the decision of a domestic tribunal chosen by the parties, andthe Civil Courts, which are entrusted with the power to facilitate arbitrationand to effectuate the awards, cannot exercise appellate powers over thedecision. Wrong or right the decision is binding if it be reached fairly aftergiving adequate opportunity to the parties to place their grievances in themanner provided by the arbitration agreement. ( 4 ) IT has been observed by the Hon ble Supreme Court that if there is error of fact,the court cannot go into it. In Coimbatore District Podu Thozillar Vs. Balasubramania Foundary, 1987 (3) SCC 723 the Court observed: "it is an error of law and not mistake of fact committed by the arbitrator whichis justiciable in the application before the Court. In Coimbatore District Podu Thozillar Vs. Balasubramania Foundary, 1987 (3) SCC 723 the Court observed: "it is an error of law and not mistake of fact committed by the arbitrator whichis justiciable in the application before the Court. If there is no legal propositioneither in the award or in any document annexed with the award which iserroneous and the alleged mistakes or alleged errors, are only mistakes offact and if the award is made fairly after giving adequate opportunity to theparties to place their grievances in the manner provided by the arbitrationagreement, the award is not amenable to corrections by the Court. ( 5 ) IN M/s. Sudarshan Trading Co. Vs. Government of Kerala, 1989 (2) SCC at pages 38,56 and 58, it has been observed that: "this is our opinion, the Court had no jurisdiction to do, namely, substitutionof its own evaluation of the conclusion of law or fact to come to the conclusionthat the arbitrator had acted contrary to the bargain between the parties. It may be stated that if on a view taken of a contract, the decision of thearbitrator on certain amounts awarded, is a possible view though perhaps notthe only correct view, the award cannot be examined by the court in themanner done by the High Court in the instant case. " ( 6 ) A similar view has been taken by the Supreme Court in Food Corporation ofindia Vs. Joginder pal Mohinderpal, 1989 (2) SCC 347 while holding that: "it cannot be said that such a construction is a construction which is notconceivable or possible. If that is the position assuming even for the sake ofargument that there was some mistake in the construction, such a mistake isnot amenable to be corrected in respect of the award by the Court. This wasa fair order after considering alt the records. The construction arrived at bythe arbitrator is a plausible conclusion. " ( 7 ) IT has further been held in Hind Builders Vs. Union of India, 1990 (3) SCC 338 that: "in a matter on which the contract is open to two equally plausibleinterpretations, it is legitimate for the arbitrators to accept one or the other ofthe available interpretations and, if the Court may think that the other view ispreferable, the Court will not and should not interfere. " ( 8 ) IN Jawahar Lal Wadhwa Vs. " ( 8 ) IN Jawahar Lal Wadhwa Vs. Haripada Chakrobety, 1991 (1 ) SCC 76, it hasbeen observed: THE Court reiterated that it was now firmly established that an award was badon the ground of error of law on the face of it only when in the award itself or in a document actually incorporated in it, there was found some legalproposition which was the basis of the award and which was erroneous. ( 9 ) IN Bijendra Nath Srivastava Vs. Mayank Srivastava, 1994 (6) SCC 117 (2j),it has been held that: ". . . . . . MERELY because the arbitrator has mentioned the municipal annualrental value of the property before indicating the market value of the propertybefore indicating the market value of the same does not mean that the valueis fixed on the basis of the rental value and the award is a reasoned awardjustifying the Court to examine whether the award suffers from an error. It issettled law that it is not open to the court to deduce reasons in the award or inthe record accompanying the award and proceed to examine whether thosereasons were right or erroneous; This is what appears to have been done bythe High Court in the present case. This was impermissible. We are therefore,of the opinion that the High Court was in error in going into the question ofvaluation of immovable properties by the arbitrator in the award. " ( 10 ) IT has further been held by the Hon ble Supreme Court in Hindustanconstruction Co. Vs. Governor of Orissa, 1995 (3) SCC 8 . "it is well known that the court while considering the question whether theaward should be set aside, does not examine that question as an appellatecourt. While exercising the said power, the court cannot reappreciate all thematerials on the record for the purpose of recording a finding whether in thefacts and circumstances of a particular case the award in question couldhave been made. Such award can be set aside on any of the grounds specified in Section 30 of the Act. According to us, no ground has been madeout on behalf of respondents to set aside the award holding it to be invalid. " ( 11 ) IN a recent judgment of the Hon ble Supreme Court reported as B. V. Radhakrishna Vs. Such award can be set aside on any of the grounds specified in Section 30 of the Act. According to us, no ground has been madeout on behalf of respondents to set aside the award holding it to be invalid. " ( 11 ) IN a recent judgment of the Hon ble Supreme Court reported as B. V. Radhakrishna Vs. Sponge Iron India Ltd. , 1997 (4) SCC 693 it has been held thatthe court cannot sit in appeal and cannot re-appraise or re-assess the evidence inrespect of an award. ( 12 ) THE same view is taken in State of Orissa Vs. Kalinga Construction, 1970 (2)SCC 861 (3j); Municipal Corporation of Delhi Vs. Jangannath Ashok Kumar, 1987 (4) SCC 497 (23): Indian Oil Corporation Vs. Indian Carbon Ltd. , 1988 (3)SCC 36 : Puri Construction Pvt. Ltd. Vs. Union of India, 1989 (1) SCC 411 :food Corporation of India Vs. Joginderpaln Mohinder pall, 1989 (2) SCC 347 . ( 13 ) THE Hon ble Supreme Court in Army Welfare Housing Organisation Vs. M/s. Gautam Construction and Fisheries Ltd. , 1998 (5) Scale 296 has held that: ". . . . . . . it is not possible for the Court to reappreciate the evidence producedbefore the Arbitrator and thus come to a conclusion whether a certainamount claimed was towards one head or the other. "in Trustees of the Port of Madras Vs. Engineering Construction Corporationltd. , 1995 (5) SCC 531 , it has been held as follows: "the above decisions make it clear that the error apparent on the face of theaward contemplated by Section 16 (1) (c) as well as Section 30 (c) Of thearbitration Act is an error of law apparent on the face of the award and not anerror of fact. " ( 14 ) THIS position of law has also been applied in a recent judgment of this Court insuit No. 1993 of 1992 entitled M/s. Ultra Builders Vs. MCD, (DWS and SDU ). ( 15 ) THESE Objections (las. 3813-14/90) filed respectively by the petitioner anddda/respondent fall within the ambit of law laid down by the Hon ble Supreme Courtin the foregoing paragraphs restricting the challenge to the award of the arbitrator asper the position of law laid down in the judgments mentioned hereinafter. ( 16 ) INSOFAR as the petitioner s Objections raised in IA. 3814/90 qua Claim Nos. ( 16 ) INSOFAR as the petitioner s Objections raised in IA. 3814/90 qua Claim Nos. 4-5in respect of the sum of Rs. 21. 000. 00 and Rs. 1,00,000. 00 are concerned, thearbitrator concluded that the petitioner s Claim No. 4 in respect of Rs. 21. 000. 00,made against the item of preparation of subgrade is actually refuted by the respondentsby stating that the same is based on DSR 77 and the Unit for payment is per 100 sq. m. whereas in the agreement, unit has been shown as sq. m. instead of 100 sq. m. due to oversight and the said mistake was corrected and the bill was accordinglymodified. The Arbitrator further concluded, that the claimant (petitioner herein), hasaccepted that very modified bill and has not disputed it earlier. Thus the Arbitratorwhile rejecting the petitioner s aforesaid claim has rightly held that the claim is notjustified. ( 17 ) INSOFAR as the petitioner s Objection qua Claim No. 5 for Rs. 1 Lacs towardsdamages is concerned, the learned Arbitrator after due consideration of the evidence and arguments advance by both the parties rightly concluded that the said claim isnot justified as no cogent evidence has been placed by the claimant to prove thequantum of loss, if any, suffered by him. ( 18 ) THE respondent No. 1/dda has also raised its Objections in la. 3813/90,seeking for setting aside the Award dated 5. 1. 1990 with respect to petitioner sclaims alongwith DDA Counter-Claims 1 and 2 and also for making the said Award arule of the Court with respect to the remaining claims. ( 19 ) AS far as the DDA s Counter-Claim No. 1 is concerned, it is submitted by Ms. Anusuiya Salwan, the learned counsel for the respondent/objector- DDA that thesaid counter-claim is duly covered by a judgment of the Hon ble Division Bench ofthis Court reported as Delhi Developrnent Authority Vs. M/s. Sudhir Brothers,1995 (2) ALR 306 which has held that the Arbitrator should not have gone into themerits of the levy of compensation by the concerned Superintending Engineer. Accordingly, the Award dated 5/01/1990 is set aside insofar as Counter-Claim No. 1, made on behalf of the respondent-DDA is concerned. ( 20 ) IN view of the above position of law, I am therefore, satisfied that the Objections (IA. 3814/90 ), filed on behalf of the petitioner have no merits and are accordinglydismissed. Accordingly, the Award dated 5/01/1990 is set aside insofar as Counter-Claim No. 1, made on behalf of the respondent-DDA is concerned. ( 20 ) IN view of the above position of law, I am therefore, satisfied that the Objections (IA. 3814/90 ), filed on behalf of the petitioner have no merits and are accordinglydismissed. The remaining Objections filed, on behalf of the respondent-DDA in IA. 3813/90 except that pertaining to the respondent No. 1 s counter-claim No. 1 arealso dismissed. The Award dated 5/01/1990 is upheld interms thereof. It isopen to the respondent-DDA to adopt such proceedings in law in respect of thecounter claim No. 1 as may be available to DDA in light of this judgment. ( 21 ) ACCORDINGLY the Award dated 5/01/1990 is made a Rule of the Court anddecree in terms thereof be drawn. If the amount due under the award is paid within 3months from today, the award shall not carry any future interest. However, if thepayment is not made within 3 months from today the awarded amount shall carryinterest at the rate of 12 per cent per annum from the date of the decree tilt realization. There shall be no orders as to costs. Decree sheet be drawn up accordingly. ( 22 ) SUIT and las are accordingly disposed of.