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2006 DIGILAW 221 (DEL)

MCD v. S. N. MALHOTRA

2006-02-02

A.K.SIKRI

body2006
( 1 ) THIS petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (in short the act ) challenging the award dated 8th April 2005 passed by Sh. C. M. Vij, Sole arbitrator-cum-Engineer in Chief, Municipal corporation of Delhi. Two objections are pressed. ( 2 ) THE first objection is to the award in respect of claim NO. 3. Under this claim the respondent had claimed payment of RS. 1 ,28,100/- on account of deployment of watch and ward staff for the period 1st April 2002 to 15th July 2002. The learned Arbitrator has awarded a sum of Rs:l,02,680/ -. The claim was founded on the averments that although work was completed on 30th March 2002, possession was not taken by the petitioner- mcd and possession of four sites in respect of which work was awarded to the respondent was taken much after the date of completion of work. In respect of thrte sites, possession was taken on 2nd July 2002 and possession of fourth site was taken on 251h July 2002. Because of delayed possession the respondent had to keep watch and ward staff for the period 1st April 2002 to 151h July 2002. Submission of learned counsel for the petitioner is that even if the work was completed on 30th March 2002, no intimation thereof was given to the petitioner and, therefore, the petitioner could not take the possession and because of the aforesaid lapse on the part of the respondent, the petitioner cannot be made to suffer. Perusal of the award would show that while awarding the aforesaid sum, the learned Arbitrator has relied upon final bill prepared by the petitioners themselves which recorded that the work was completed on 30th March 2002 and from this the learned Arbitrator inferred that it was within the knowledge of the petitioner herein that the work had been completed on 30th March 2002 and they should have taken possession of the sites immediately thereafter. The aforesaid view taken by the learned arbitrator is plausible one and this Court is not to sit in appeal over the said finding arrived at by the learned Arbitrator, as it would not come within the sweep of Section 34 of the Act. ( 3 ) THE second objection is to the award of interest on the refund of security. The respondent herein had deposited security of rs. 1,25,000/ -. ( 3 ) THE second objection is to the award of interest on the refund of security. The respondent herein had deposited security of rs. 1,25,000/ -. Since this security was not refunded, the respondent preferred a claim for refund of the security as well as interest on this security deposit. The Arbitrator has awarded interest on this security amount with effect from 1st October 2002. Submission of the learned counsel for the petitioner is that the contractor was under obligation to give clearance certificate from the Labour officer before he could become entitled to refund of this security as per clause 45 of the general Conditions of Contract. This clause reads as under:"clause 45 release of security deposit after labour clearance security Deposit of the work shall not be refunded till the contractor produces a clearance certificate from the Labour officer. As soon as the work is virtually complete the contractor shall apply for the clearance certificate to the Labour officer under intimation to the engineer-in-Charge. The Engineer-in-Charge, on receipt of the said communication, shall write to the Labour Officer to intimate if any complaint is pending against the contractor in respect of the work. If no complaint is pending, on record till after 3 months after completion of the work and/or no communication is received from the Labour Officer to this effect till six months after the date of completion, it will be deemed to have received the clearance certificate and the Security Deposit will be released if otherwise due. " ( 4 ) NO doubt, as per this clause, security deposit can be withheld till the clearance certificate is produced by the contractor from the Labour Officer. However, same clause also stipulates that if no complaint is pending on record till after three months after the completion of the work and no communication is received from the Labour officer till six months after the date of completion, it will be deemed to have received the clearance certificate and the security deposit will be released if otherwise due. It is not the case of the petitioner herein that any complaint was pending or any communication was received from the Labour Office in this behalf. It is not the case of the petitioner herein that any complaint was pending or any communication was received from the Labour Office in this behalf. Thus, after the expiry of six months, it would be deemed that clearance certificate is given and, therefore, at that point of time security deposit became refundable and since it was not refunded even thereafter, the contractor could claim interest. It may be noted that while discussing the claim on refund of the security deposit, it is observed by the learned Arbitrator that at the fag end of the arbitration proceedings on 20th January 2005 the petitioner-MCD certified that an amount of Rs. 1,25,000/- is payable to the contractor. Thus, it is not the case of the petitioner that security was otherwise not payable. Perusal of the award shows that interest is awarded with effect from 1st october 2002, i. e. after the expiry of six months. Therefore, the approach of the learned Arbitrator in this behalf cannot be faulted with. This petition is accordingly disposed of .