J. S. CONSTRUCTIONS v. DELHI DEVELOPMENT AUTHORITY
2006-01-17
A.K.SIKRI
body2006
DigiLaw.ai
A. K. SIKRI, J. ( 1 ) IT seems that the arbitration proceedings between the parties are becoming an endless game. The petitioner herein was awarded the work of construction of CSC at mansarover Park, Shahadra, Delhi vide agreement No. 12/ee/ed-12/1/88-89. As it happens invariably in such contracts, disputes arose between the parties. The petitioner had certain claims against the respondent-DDA which DDA was disputing. Accordingly, arbitrator was appointed and disputes were referred to him, The learned arbitrator gave his award. DDA challenged the said award in cs (OS) No. 2434-A/94. Those objections were decided by this Court vide judgment dated 1st November 1996. Award relating to claims No. 2 and 3 was set aside and directions were issued to the arbitrator to give his decision afresh in respect of these claims within four months, as the arbitrator had failed to give reasoned award on these claims. After hearing the parties the learned arbitrator rendered fresh award dated 27th November 1997 in respect of these two claims. DDA again filed objections, i. e. IA No. 2648/98 in this suit. These objections were decided vide order dated April 16, 2004 and this award on the aforesaid two claims was again set aside. It was found that after the remission of the case back to the arbitrator, fresh award was passed without affording any opportunity to the parties, including the DDA and the arbitrator had proceeded in absentia. The whole purpose of remitting the award to the arbitrator was, therefore, frustrated. It was also found that the award was not even given within four months which was the time fixed by the court in order dated 1st november 1996, while remitting the matter back to the arbitrator. The matter was, therefore, again remitted back to the arbitrator with direction to give hearing to both the parties and make his decision afresh on claims no. 2 and 3 and returned the findings on the said two claims. Time frame of four months was again stipulated. ( 2 ) PURSUANT to the aforesaid direction the learned arbitrator held the hearing by summoning both the parties and has now given his award dated 20th August 2004. Once again the DDA has raised objection to this award vide IA No. 521/2005.
Time frame of four months was again stipulated. ( 2 ) PURSUANT to the aforesaid direction the learned arbitrator held the hearing by summoning both the parties and has now given his award dated 20th August 2004. Once again the DDA has raised objection to this award vide IA No. 521/2005. Since these objections are not filed within stipulated period, along with the objection, the DDA has also filed IA No. 5950/2005 seeking condonation of delay in filing the objections. ( 3 ) IN so far as application for condonation of delay is concerned, it is stated in this application that notice of the filing of the said award was issued on 18th September 2004 and was served on the respondent on 21st october 2004. The last date for filing the objection was 20th November 2004. However, the objections were filed on 3rd january 2005. It is stated that the respondent held bona fide view that provisions of Arbitration and Conciliation Act, 1996 were applicable as per which, objections could be filed within 90 days. The DDA was not aware that provisions of Arbitration Act, 1940 were applicable and, therefore, objections were to be filed within 30 days. The respondent was also not able to contact its Advocate who was entrusted with the matter earlier when earlier awards were challenged as he was suffering from serious illness. ( 4 ) THOUGH the petitioner has filed reply to the objections, no reply is filed to this application seeking condonation of delay. At the time of arguments, counsel for the petitioner argued on the merits of the objection and submitted that he had no objection if the delay in filing the objection is condoned due to the reasons stated in the application. This application (IA No. 5950/2005) is accordingly allowed and delay in filing IA No. 521/2005 is condoned. ( 5 ) COMING to the objections of the DDA, the award dated 20th August 2004 is challenged firstly on the ground that the award is not given within four months. He submitted that although in the order dated 16th April 2004 it was categorically mentioned that fresh award was to be given within four months, award has been made by the learned arbitrator only on 20th August 2005 and he relied upon the judgment of the Supreme court in the case of The State of Punjab Vs.
He submitted that although in the order dated 16th April 2004 it was categorically mentioned that fresh award was to be given within four months, award has been made by the learned arbitrator only on 20th August 2005 and he relied upon the judgment of the Supreme court in the case of The State of Punjab Vs. Sri Hardyal, AIR 1985 SC 297 . No doubt, if one counts the period of four months from the date of the order, the award is not given within four months from the said date and there is delay of four days. However, four months period cannot be counted from the date when the order is made. In equity as well as in the interest of justice, this period is to be counted from the date when copy of the said order was received by the learned arbitrator. Intention is to give four months to the arbitrator. Such a period has to be counted from the date when the arbitrator enters upon reference. Therefore, taking analogy therefrom, in the instant case where the matter was to be remitted back, it can safely be said that period of four months is to be counted from the date when the learned arbitrator received the copy of the order dated 16th April 2004. In a different context the Supreme Court in the case of D. Saibaba vs. Bar Council of India, 2003 V AD (S. C.) 154 = AIR 2003 SC 2502 considered the meaning of expression "date of that order" appearing in Section 48 (a) of the Advocates act which provides for period of 60 days "of the date of that order" to seek review of an order. If one literally construes the expression, it would mean the date on which order is passed. However, that was not the manner in which the said expression was interpreted by the Apex Court and the Court held that the period of 60 days would be computed from the date of communication or knowledge of the order. The reasons which influenced the Supreme Court for coming to this conclusion can be found out from paras 9, 14, 18 and 19 of the said judgment:-"9.
The reasons which influenced the Supreme Court for coming to this conclusion can be found out from paras 9, 14, 18 and 19 of the said judgment:-"9. So far as the commencement of period of limitation for filing the review petition is concerned we are clearly of the opinion that the expression the date of that order as occurring in section 48aa has to be construed as meaning the date of communication or knowledge of the order to the review-petitioner. Where the law provides a remedy to a person, the provision has to be so construed in case of ambiguity as to make the availing of the remedy practical and the exercise of power conferred on the authority meaningful and effective. A construction which would render the provision nugatory ought to be avoided. True, the process of interpretation cannot be utilized for implanting a heart into a dead provision; however, the power to construe a provision of law can always be so exercised as to give throb to a sinking heart. 14. How can a person concerned or a person aggrieved by expected to exercise the right of review conferred by the provison unless the order is communicated to or is known to him either actually or constructively? The words the date of that order therefore, mean and must be construed as meaning the date of communication or knowledge, actual or constructive, of the order sought to be reviewed. 18. Reading word for word and assigning a literal meaning to Section 48aa would lead to absurdity, futility and to such consequences as the Parliament could have never intended. The provision has an ambiguity and is capable of being read in more ways than one. We must, therefore, assign the provision a meaning-and so read it-as would give life to an otherwise lifeless letter and enable the power of review conferred thereby being meaningfully availed and effectively exercised. 19. On the same principle the provision has to be interpreted from the point of view of exercise of the power by the bar Council. The interpretation ought to be directed towards giving the expression a meaning which will carry out the purpose of the provision and make the remedy of review conferred by the provision meaningful, practical and effective. How can the Bar Council of India or any of its Committees exercise their power to review unless the matter is before them?
The interpretation ought to be directed towards giving the expression a meaning which will carry out the purpose of the provision and make the remedy of review conferred by the provision meaningful, practical and effective. How can the Bar Council of India or any of its Committees exercise their power to review unless the matter is before them? The jurisdiction to exercise power of review does not come to an end merely by lapse of sixty days from the date of the order sought to be reviewed. In view of the construction which we have placed hereinabove, in our opinion, the expression sixty days from the date of that order prescribes the period of limitation for invoking the power of review. It has nothing to do with the actual exercise of power by the Bar council. In other words, merely by lapse of sixty days from the date of the order sought to be reviewed, the Bar council of India or any of its Committees is not divested of its power to exercise review jurisdiction. That is the only reasonable construction which can be placed on the provisions as framed, though we cannot resist observing that the provision is not happily drafted. " ( 6 ) FOR arriving at the aforesaid conclusion the Court relied upon its earlier judgments in the cases of (i) Raja Harish Chandra Raj singh Vs. Dy. Land Acquisition Officer, (1962) 1 SCR 676 = air 1961 SC 1500 ; (ii) state of Punjab Vs. Mst. Qaisar Jehan begum, AIR 1963 SC 1604 ; (iii) O. N. Mahindroo Vs. District Judge, Delhi, AIR 1971 SC 107 ; and (iv) Asstt. Transport commissioner, Lucknow Vs. Nand Singh, air 1980 SC 15 . These cases were concerned with the interpretation of similar provisions contained in Land Acquisition Act, UP Motor vehicles Taxation Act and Section 44 of the advocates Act. The Court also quoted with approval the following passage from Justice g. P. Singh s book on Principles of Statutory interpretation, 8th Edn. , 2001:-"it may look somewhat paradoxical that plain meaning rule is not plain and requires some explanation. The rule, that plain words require no construction, starts with the premise that the words are plain, which is itself a conclusion reached after construing the words.
, 2001:-"it may look somewhat paradoxical that plain meaning rule is not plain and requires some explanation. The rule, that plain words require no construction, starts with the premise that the words are plain, which is itself a conclusion reached after construing the words. It is not possible to decide whether certain words are plain or ambiguous unless they are studied in their context and construed. "after quoting the above passage the court observed "the rule of literal interpretation is also not to be read literally. Such flexibility to the rule has to be attributed as is attributable to the English language itself. " ( 7 ) LEARNED counsel for the DDA could not dispute that if four months period is to be counted from the date when the arbitrator received copy of the order, it would be within four months as the copy was received on 23rd April 2004, as stated in the award by the arbitrator himself. Even otherwise this court also has power to enlarge time under section 28 of the Act. It is obvious that the arbitrator acted under the bona fide belief that he was given four months time from the date of receipt of the copy of the order dated 16th April 2004. That is why he has specifically mentioned the date on which he received the copy of the order. Therefore, it is a fit case for extension of time to make the award till 23rd April 2004. ( 8 ) ANOTHER submission of the learned counsel was that no hearing was given and only on the basis of written submission filed by the parties, award is rendered. This is factually incorrect. The impugned award itself mentions that case was fixed for hearing on 16th April 2004 and 11th August 2004. The dda gave written submission during the hearing on llth August 2004 which were replied by the claimants vide their letter dated 16th August 2004. It is mentioned in the award that "no oral submission was made by either party. " It is, therefore, clear that as far as the arbitrator is concerned, he fixed the dates of hearing and two dates were given for this purpose. However, if the parties chose to give written submissions rather making oral submissions, it cannot be said that hearing was not given to the parties.
" It is, therefore, clear that as far as the arbitrator is concerned, he fixed the dates of hearing and two dates were given for this purpose. However, if the parties chose to give written submissions rather making oral submissions, it cannot be said that hearing was not given to the parties. The obligation of the arbitrator, in consonance with the principles of natural justice, was to give an opportunity of hearing. It was for the parties to avail the said opportunity. If they did not wan to make oral submissions and instead chose to file the written submissions, the learned arbitrator cannot be blamed. As far as arbitrator is concerned, the principles of natural justice have been complied with. ( 9 ) NEXT submission was that the present award is again a non-speaking award and no reasons are given in support. Let me examine this objection now. Claim No. 2 preferred by the petitioner was for Rs. 1,51,892/- on account of final bill and claim No. 3 was for rs. 2,31,088/- due to higher rates of work beyond stipulated date of completion. Against both the claims the learned arbitrator awarded a sum of Rs. 3,00,267/ -. The operative part of the award reads as under:-"3. Claim No. 2: Claimants claim rs. 1,51,892 on account of final bill 3. 1 As per the abstract of cost filed by respondents gross value of work done after last R. A. Bill (10th, paid on 24. 10. 1991) is Rs. 72,368. 68 after deduction of Rs. 8357. 63 for reduction items and Rs. 19,382. 00 for conditional rebates. Claimants stated recovery of rs. 60,729. 00 on account of materials issued to them, had already been effected in 10th R. A. Bill. This could not be refuted by respondents on basis of any evidence. 3. 2 Extra item of stone veneering:- respondents have again accepted the claimed quantity of work done as 519. 19 sqm. as per the measurements verified by them earlier before making the Award. As against the rate analysis for rate of Rs. 269. 91 sqm. filed by respondents earlier (page 34 to 37 file arb/rjb/93/r/1) they have now filed the same rate analysis for Rs. 269. 01 accepting the rate of Rs. 272. 00. Claimant had filed earlier their rate analysis for rate of Rs. 324. 00 pr sqm. (ext. C/23) and clarified the position vide their letters dt. 19.
269. 91 sqm. filed by respondents earlier (page 34 to 37 file arb/rjb/93/r/1) they have now filed the same rate analysis for Rs. 269. 01 accepting the rate of Rs. 272. 00. Claimant had filed earlier their rate analysis for rate of Rs. 324. 00 pr sqm. (ext. C/23) and clarified the position vide their letters dt. 19. 09. 94 and dt. 26. 08. 1994 (page 131 and 118 of file arb/rjb/93 ). I find that rate analysis by respondents is not strictly as per clause 12 (v) of the contract. The rate of Rs. 324. 00 based on analysis is as per clause 12 (v) and is considered reasonable and justified. The extra cost works out of Rs. 97796. 00 as per the Award. 3. 3 As regards other items no. 8. 6, 8. 10, 8. 9, 9. 4, 9. 5, 9. 10, Respondents have now accepted the extra cost of rs. 2997. 00 as against Award of rs. 8224. 00. Even if contention of respondents is accepted the extra amount works out to Rs. 1,73,161. 68 (Rs. 72368. 68+rs. 97796+rs. 2997) as against the restricted amount of Award of Rs. 1,51,892. 00. I award rs. 1,51,892. 00 in favour of claimants. 3. 4 Respondents have now again raised the recovery of materials for rs. 52,632. 00. This had already been examined by me under counter Claim no. 3 and rejected. The same claim has been revised from Rs. 42,632. 00 to 52,632. 00 without any adequate evidence. Hence rejected. 3. 5 As regards claims of recovery under clause 2 and 14, the same have already been decided vide Counter Claim No. 2 and 4 of the Award. Claim No. 3 Claim of Rs. 2,31,088. 00 due to higher rates for work beyond stipulated date of completion the contention of respondents that there is no provision in the contract for payment of higher rates, is not valid. The claim relates to the breach of the contract on part of Respondents as explained under para 2 of the Award. Claimants are entitled to compensation under sec. 73 of the Indian Contract act. As stated in the Award the same has been assessed by me as rs. 1,48,375. 00. I award Rs. 1,48,375. 00 in favour of the Claimants. " ( 10 ) IT is abundantly clear from the reading of the aforesaid award that the award is supported by reasons.
73 of the Indian Contract act. As stated in the Award the same has been assessed by me as rs. 1,48,375. 00. I award Rs. 1,48,375. 00 in favour of the Claimants. " ( 10 ) IT is abundantly clear from the reading of the aforesaid award that the award is supported by reasons. It is trite law that arbitrator is not under any obligation to give the award like a judgment of the Court and is not to give very detailed and exhaustive reasons in support of the award. Reasons should be sufficient to reflect the amount of the award whereby some justification is given for arriving at the decision and awarding/rejecting a particular claim. Therefore, I am unable to accept this submission of the learned counsel for the DDA. ( 11 ) IT was next contended that the interest of 16% awarded is on higher side. The learned arbitrator has awarded simple interest @ 16% per annum on Rs. 1,51,892/- with effect from 28th April 1993 to the date of payment or decree, whichever is earlier. Submission is that the rate of interest is higher and further that matter was earlier remanded by the Court and, therefore, DDA is not liable to pay any interest for the period from 28th april 1993 to 20th August 2004. In so far as pendency of the matter before the arbitration and remitting of the case twice by the Court after setting aside the award on claims No. 2 and 3 is concerned, it may be that this delay is not because of the respondent, at the same time this delay also cannot be attributed to the petitioner. Instead it is well known maxim Actus Curiae Neminem Gravabit, which means no one should be prejudiced because of the act of the Court, shall come into play. As far as the petitioner is concerned, he is deprived of the money on account of the final bill legitimately due to it as is found ultimately, petitioner would be entitled to the interest for the entire period. However, grant of interest @ 16% per annum, in the circumstances, is excessive, particularly having regard to the prevailing market rates and the pronouncements of the Supreme Court.
However, grant of interest @ 16% per annum, in the circumstances, is excessive, particularly having regard to the prevailing market rates and the pronouncements of the Supreme Court. I, therefore, deem it proper that while maintaining the period for which the interest is to be awarded, the rate of interest should be @ 9% per annum and the petitioner consented for the same. Future interest at the said rate from the date of decree till the date of payment is also granted. Decree be drawn accordingly. IA 521/2005 is disposed of and award is modified to this extent. The suit also stands disposed of in these terms. .