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2001 DIGILAW 280 (DEL)

FRONTIER BRICK KILN v. DELHI DEVELOPMENT AUTHORITY

2001-03-08

MADAN B.LOKUR

body2001
MADAN B. LOKUR ( 1 ) THE Respondent Delhi Development Authority (DDA) has filed objections to the Award dated 6/06/1992 in respect of agreement No. B/hd/ix/dda/81-82. ( 2 ) THE Petitioner was awarded a contract by a letter dated 4/11/1981 for the supply of bricks. For the period from 1/08/1981 to 30/09/1982, the petitioner was required to supply 40 lakhs bricks and for the period 1/10/1982 to 30th september, 1983, he was again required to supply 40 lakhs bricks. In other words, the contract was for a little over two years and the requirement was for supply of 80 lakhs bricks in all. The DDA was entitled to payment of royalty at Rs. 14. 00 per thousand bricks manufactured by the Petitioner. ( 3 ) SPECIAL Condition No. 20 to the contract is of some importance and this reads as follows:- "slack COAL: dda shall provide assistance in getting priority allotment for slack coal through the commissioner, Food and Supplies, Delhi. However, no compensation or claim shall be accepted of short supply of coal by DDA or civil supplies. The production of bricks shall not be linked with the allotment of coal. " ( 4 ) THE rest of the special condition is not of any consequence. ( 5 ) BEFORE considering the merits of the case, it would be necessary to understand, as explained by learned counsel for the Petitioner, that the manufacture of bricks is done in two stages. First kachcha bricks are manufactured with earth. Thereafter, these kachcha bricks are put in a brick kiln and with the use of slack coal the kachcha bricks are converted into pucca bricks. It is, therefore, theoretically possible for the Petitioner to manufacture a large quantity of kachcha bricks and convert only a part of them into pucca bricks with the use of slack coal. ( 6 ) IT is on this basis that the Petitioner raised Claim No. 1 which is for the destruction of about 25 lakhs kachcha bricks said to have been prepared by the Petitioner. . The admitted position is that the land on which the Petitioner was carrying on manufacturing activities was allotted for some group housing scheme. There was no supply of slack coal to the Petitioner for the period 1982-83 and it appears that the DDA was keen on handing over the land for the group housing scheme. . The admitted position is that the land on which the Petitioner was carrying on manufacturing activities was allotted for some group housing scheme. There was no supply of slack coal to the Petitioner for the period 1982-83 and it appears that the DDA was keen on handing over the land for the group housing scheme. ( 7 ) ACCORDINGLY, sometime in April, 1983, they bulldozed the area and thereafter handed over the land for the group housing scheme. ( 8 ) ACCORDING to the Petitioner, he had manufactured 25 lakhs kachcha bricks which were destroyed in the bulldozing operation. The manufacture of the bricks has been proved by exh. C-33. ( 9 ) LEARNED counsel for the DDA submitted that the learned Arbitrator has repeatedly stated that no bricks were manufactured by the Petitioner in the year 1982-83 because of non-availability of slack coal. Therefore, the claim made by the Petitioner in this regard is factually baseless. ( 10 ) AS mentioned above, kachcha bricks are first manufactured and then converted into pucca bricks. The fact that no bricks were manufactured by the Petitioner during the year 1982-83 does not lead to an inference that even kachcha bricks were not manufactured by the Petitioner. Therefore, I see no justification in this objection and the same is rejected. ( 11 ) LEARNED counsel for the DDA, quite fairly, did not press the objections with regard to claim No. 2 in view of the fact that the amount involved is very little. ( 12 ) WITH regard to Claim No. 3, the claim was made by the Petitioner for advances paid by him to the labour employed for the manufacture of bricks. It was submitted by learned counsel for the DDA that her client was not liable to pay any amount to the Petitioner in view of Special Condition No. 20 which states that no claim will be admissible for short supply of slack coal. It is on this basis that she contends that if the labour was lying idle and the petitioner paid for the labour, the liability cannot be fastened on the DDA. ( 13 ) UNFORTUNATELY, learned counsel for the DDA overlooks the fact that the sole-Arbitrator was a retired and experienced engineer from the Railways. It is on this basis that she contends that if the labour was lying idle and the petitioner paid for the labour, the liability cannot be fastened on the DDA. ( 13 ) UNFORTUNATELY, learned counsel for the DDA overlooks the fact that the sole-Arbitrator was a retired and experienced engineer from the Railways. He has mentioned, quite clearly, in his Award that "it is a well known fact that labour working on brick-kilns have to be paid advances. " I see no reason to doubt this statement which has been made by the learned arbitrator. ( 14 ) THE learned Arbitrator has taken into consideration the fact that the Petitioner had been supplying bricks to the DDA since sometime in 1971. In the year 1981-82, the Petitioner had manufactured and supplied 42. 5 lakhs bricks to the DDA. This being the position, it could not have been reasonably foreseen by him that for the year 1982-83, he would not get any coal at all and, therefore, would not be able to carry out any brick manufacturing activity. Since this was not foreseen by him and could not reasonably have been foreseen by him, he had no option but to engage labour and was obliged to pay them an advance. Consequently, the learned Arbitrator held that this liability cannot be entirely of the Petitioner and must be placed on the DDA. I see no error in the reasoning adopted by the learned Arbitrator because he has considered the documentary evidence to conclude that advances were paid to the labour. The objections raised by the DDA in this regard are, therefore, rejected. ( 15 ) SPECIAL Condition No. 20 is not at all applicable in this case because the claim has not been made nor is it based upon non-supply of slack coal. The claim is completely independent of this. ( 16 ) WITH regard to Claim No. 4, the Petitioner has demanded an amount from the DDA for not making land and coal available in the second year of the contract. I see no basis for awarding the amount as has been done by the learned Arbitrator. The reason for this is that special Condition No. 20 makes it quite clear that no claim will be made against the DDA for short supply of slack coal. I see no basis for awarding the amount as has been done by the learned Arbitrator. The reason for this is that special Condition No. 20 makes it quite clear that no claim will be made against the DDA for short supply of slack coal. The learned Arbitrator has based his conclusions entirely upon the fact that the DDA did not supply slack coal to the Petitioner with the result that no bricks could be manufactured by the Petitioner. The learned Arbitrator has already awarded advances made to the labour under Claim No. 3. The claim made under Claim No. 4 is in addition to the amount already awarded under Claim No. 3. ( 17 ) THE Supreme Court has held time and again, more particularly in Steel Authority of india Limited Vs. J. C. Budharaja, Government and Mining Contractor, 1999 (3) Arb. LR 335 (SC) and Rajasthan State Mines and Minerals Ltd. Vs. Eastern Engineering enterprises and another, 1999 (3) Art. LR 350 (SC) that if there is a specific prohibition in the contract, the learned Arbitrator cannot ignore that prohibition. ( 18 ) IN the present case, there was a specific prohibition that no claim can be made due to non-supply of slack coal. Consequently, by awarding an amount to the Petitioner under claim No. 4, the learned Arbitrator has violated this prohibition which he could not do. The objections raised by the DDA in this regard have to be sustained. ( 19 ) WITH regard to Claim No. 8, this is a rather odd claim made by the Petitioner. According to him, the DDA purchased bricks from him at, a particular rate and sold those bricks to building contractors at a higher rate. The claim was for the difference. I do not see how the petitioner is in any manner concerned with the rate at which the DDA sells the bricks that it purchases from the Petitioner. It is entirely a matter between the DDA and the building contractors to whom it sells the bricks. The Petitioner has got nothing to do with this whatsoever. The claim awarded by the learned Arbitrator in this regard is clearly unsustainable and is beyond the terms of the agreement between the parties. The objections raised by the dda in this regard have, therefore, to be sustained. The Petitioner has got nothing to do with this whatsoever. The claim awarded by the learned Arbitrator in this regard is clearly unsustainable and is beyond the terms of the agreement between the parties. The objections raised by the dda in this regard have, therefore, to be sustained. ( 20 ) WITH regard to counter-claim No. 1, the DDA has claimed royalty for the manufacture of bricks during the year 1982-83. Since no bricks were manufactured by the Petitioner during this period, the learned Arbitrator rightly rejected the counter-claim. ( 21 ) SIMILARLY, counter-claim No. 2 was also rejected because there was no supply of coal during the year 1982-83 and it was impossible for the Petitioner to manufacture bricks. In the absence of supply of slack coal, the counter-claim for short supply made by the DDA was, therefore, rightly rejected since the contract could not be performed for reasons beyond the control of the Petitioner. ( 22 ) UNDER the circumstances, the Award is made a rule of the Court except with regard to claim No. 4 and Claim No. 8 which are set aside. ( 23 ) THE DDA is granted eight weeks time to make the payment to the Petitioner under the terms of the Award. In case the payment is not made within a period of eight weeks, the DDA will be liable to pay interest at the rate of 15% per annum from today till the date of payment.