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2001 DIGILAW 80 (DEL)

J. S. CONSTRUCTION v. DELHI DEVELOPMENT AUTHORITY

2001-01-23

J.D.KAPOOR

body2001
( 1 ) PURSUANT to the disputes raised by the petitioner, Mr. A. L. Garg, superintending Engineer (Civil)was appointed by the Engineer Member, DDA as a sole arbitrator to decide the disputes and make the award. ( 2 ) THE arbitrator filed the award alongwith the proceedings on 21/04/1993. The same was taken on record and registered as Suit No. 888/93. Notice of the filing of the award was served upon both the parties. The respondent was served on 25/06/1993. The petitioner accepted the award and did not file objections against making the award rule of the Court. However the respondents filed objections against the award mainly challenging the findings of the facts in respect of various claims and against the conduct of the Arbitrator for acting contrary to the terms and conditions of the contract. ( 3 ) IN Puri Construction Pvt. Ltd. Vs. Union of India reported as JT 1989 (1) sc 132 it was specifically held that while upholding an award the Court need not examine the merits of the award with reference to the materials produced before the arbitrator. The court cannot sit in appeal over the views of the arbitrator byre- examining and re-assessing the materials. The scope for setting aside an award is limited to the grounds available under the Arbitration Act. ( 4 ) IN Associated Engineering Company Vs. Government of Andhra Pradesh 1991 (2) SCR 924 it was held that the arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless the reasons for the award disclose an error apparent on the face of it. ( 5 ) RELIANCE was placed upon Bunge and Company Vs. Dewar and Webb. [1921] 8 L. I. LRep. 436 (K. B.) wherein the scope of the arbitrator was enunciated as under;- "if the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. ( 5 ) RELIANCE was placed upon Bunge and Company Vs. Dewar and Webb. [1921] 8 L. I. LRep. 436 (K. B.) wherein the scope of the arbitrator was enunciated as under;- "if the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But it he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Such error going to his jurisdiction can be established by looking into material outside the award. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved. by evidence extrinsic to the award. " ( 6 ) IN another casestate of U. P. Vs. M/s Ram Nath International Construction pvt. Ltd. AIR 1996 SC 782 wherein during the course of execution of the contract, drawings and designs were changed as a result of which there was abnormal increase in the quantity of work and for such increase of work, the contractor claimed a higher rate and gave the analysis and the arbitrator having considered all the relevant material accepted the rate, it was held that no interference of the Court is required. ( 7 ) LET us examine the objections of the respondent in the light of the above settled position of law. ( 8 ) CLAUSE 25 of the agreement is the arbitration clause. As per this clause the arbitrator was required to record the reasons for awarding claim of any of the parties. It is contended that since the Arbitrator has failed to record the reasons for awarding the amount in favour of the petitioner, he has committed a legal misconduct and on this ground alone the award is liable to be set aside. ( 9 ) I have perused the award. It is contended that since the Arbitrator has failed to record the reasons for awarding the amount in favour of the petitioner, he has committed a legal misconduct and on this ground alone the award is liable to be set aside. ( 9 ) I have perused the award. I am afraid the above contention of the respondent is completely devoid of merit as the finding of the arbitrator in respect of each and every claim is not only well reasoned but well founded also. The objections are as to the following claims: claims N0. 1 and 2: ( 10 ) IT is contended that in respect of claim No. 1 the petitioner claimed Rs. 27,393. 00 on account of refund of rebate deducted for regular payment of monthly bills without fulfilling the contingent condition and as regards claim No. 2 the claimants claimed Rs. 27,393. 00 on account of refund, of rebates deducted without fulfilling the condition for payment of final bill within six months of the completion of the work. The arbitrator has allowed only Rs. 10,052. 00 in respect of claim No. 1 whereas the claim No. 2 was allowed in full. ( 11 ) THE perusal of the award shows that the Arbitrator has considered all the contentions of the respondent in detail in respect of these claims and did not find any merit. The plea of the respondent that the bills were delayed due to the non- submission of the bills by the claimants as required under clause 8 of the agreement was not accepted for the reason that since no date was fixed by the respondent for the submission of the bills by the petitioner, it implied that the respondent preferred to prepare the bills themselves and as such the rebate availed by the respondents on the belated payments was found to be not justified. ( 12 ) SIMILARLY the plea of the respondents that the final bill was delayed due to the non-rectification of the defects did not find favour with the Arbitrator in view of the agreement for a rebate of 0. ( 12 ) SIMILARLY the plea of the respondents that the final bill was delayed due to the non-rectification of the defects did not find favour with the Arbitrator in view of the agreement for a rebate of 0. 2% on the estimated cost for the payment of final bill within six months of the recorded date of completion of work and the records showed that the work was completed on 19/09/1989 and, therefore, to avail the rebate the final bill was to be paid on or before 18th March but it was paid on 29/08/1991. Thus to find faults with such findings is not only to re- examine and re-evaluate the evidence but also is to challenge the findings of facts. Both the claims are confirmed. CLAIM N0. 3: ( 13 ) THIS claim was on account of refund of illegal deductions made at penal rates towards excessive use of departmental material. After considering the records and the submissions the arbitrator found that the penal rate recovery at double the issue rate was not justified for major items i. e. cement, mild steel, tor steel and SCI fittings. So much so the respondents did not take into consideration extra consumption of the cement for rendering the exposed surfaces of the shelves and rather considered wrong co-efficient of cement for hollow joints of brick masonary and due to wrong deductions in rendering of RCC surface for mild steel and tor steel, variations have been worked out separately for each dia bar. The Arbitrator has also dealt with the quantum of excess variation in the SCI fittings. It again shows that the claim No. 3 was awarded on the basis of the material as well as as per terms of the agreement. To challenge such findings of the arbitrator is not open to the respondent. Objection in this regard has no force and this claim is also confirmed. . CLAIM NO. 5and 8: ( 14 ) WITH regard to claim No. 5 the respondent has averred that the arbitrator has ignored the fact that the date of completion recorded was provisional and subject to rectification of defects and similarly claim No. 8 is also not based upon evidence as the arbitrator has dis-allowed payment of Rs. 50,566. 00 for not finishing the exposed surface of rcc under item No. 3. 10. 50,566. 00 for not finishing the exposed surface of rcc under item No. 3. 10. The arbitrator has relied upon CPWD specifications to state that any surface of RCC which remains permanently exposed to view in the completed structure shall be considered exposed surface for the purpose of the specifications. Thus this objection is per se groundless. These claims are also confirmed. REMAINING CLAIMS: ( 15 ) AS regards claim No. 9 it is contended that the arbitrator has not taken into account lapse on the part of the petitioner who was required to finish the exposed surface of the walls and the weight included the cost of the material and labour that was involved in all such operations. Again claim No. 11 has been challenged because of dis-allowing recovery rate for the lengths of pipes having length of more than 2 metres each. Similar is the nature of objection as to claim No. 12 that the refund of deduction for sanction has been incorrectly granted. ( 16 ) SIMILAR objections have been raised by the respondent in respect of claim no. 8,11,14,16,17,20,23,29 and 30. It appears that these objections have been raised only for the sake of objections. The arbitrator has given sound and sufficient reasons for his findings in respect of these claims. These are findings of facts based on the material and evidence on the record. None of these claims has been considered and awarded beyond the purview and terms of the contract. ( 17 ) IT has nowhere been pointed out as to how the Arbitrator had travelled beyond the terms of the agreement or how has he acted arbitrarily, irrationally, capriciously or independently of the contract. It has also not been pointed out as to what were the matters which were not allotted to him but he ventured to deal with them. He has rather recorded his findings on the basis of the material and the evidence,and has not even admitted or dealt with extrinsic evidence. The award does not suffer from any ambiguity or infirmity. ( 18 ) THE nature of the objections in respect of almost each and every claim shows that the respondent has raised those very pleas and objections which it raised before the Arbitrator and the Arbitrator had dealt with in extenso and not in a casual or cavalier manner. The award does not suffer from any ambiguity or infirmity. ( 18 ) THE nature of the objections in respect of almost each and every claim shows that the respondent has raised those very pleas and objections which it raised before the Arbitrator and the Arbitrator had dealt with in extenso and not in a casual or cavalier manner. ( 19 ) AS regards the objection as to the award of interest there was no specific bar provided in the agreement for awarding the interest. In case Secretary, irrigation Department, Govt. of Orissa Vs. G. C. Roy reported as (1992) 1 SCC 508 the Supreme Court has upheld the powers of arbitrator to award interest even if there is no such contract between the parties. ( 20 ) IN view of the foregoing reasons, the objections being groundless are hereby dismissed. The award is accepted and made a rule of the Court. As a consequence the suit is decreed in terms of the award with pendente lite and future interest @ 16% till realisation of the decretal amount. ( 21 ) THE decree sheet be prepared accordingly.