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*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP No. 183/2014
% Judgement Reserved on: 15th July, 2014
Judgement pronounced on: 31st July, 2014
M/S SATISH BUILDERS ..... Petitioner
Through: Mr.Rajesh Pandey, Adv.
versus
THE CHAIRMAN, AIRPORT AUTHORITY
OF INDIA ..... Respondent
Through: Mr.Sunil Ahuja, Adv.
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA
JUDGMENT
1. Vide this petition, the petitioner has challenged the award dated 27th November, 2012 on several grounds.
2. The brief facts of the case, relevant for the purpose of disposal of the present petition are mentioned herein.
3. There is no dispute to the fact that the petitioner who is a OMP. 183/2014 Page 1 of 15 registered partnership firm had entered into a contract for execution of work of "construction of RCC Box Culverts across New Taxi Tracks at Jaipur Airport, Jaipur. The stipulated time for completion of the work was six months starting from 16th May, 2007 to 15th November, 2007. The petitioner, however, could not complete the work within the stipulated time. The contract was rescinded vide its letter dated 14th September, 2007. The petitioner raised an arbitration dispute and the matter was referred to the Sole Arbitrator. The petitioner had made following claims before the Sole Arbitrator which are as under:-
"Claim No. I Rs. 21,00,000/-for designing of the Box Culverts Claim No. II Rs. 3,90,760/- towards refund of forfeited earnest money.
Claim No. III Rs. 17,74,775/-
towards loss of profit due to non execution of the work.
Claim No. IV Interest @ 18% on the amount due till the date of actual payment. OMP. 183/2014 Page 2 of 15
Claim No. V Rs.2,00,000/- cost of arbitration proceedings".
4. The respondents also put up its counter claims which are as under:-
" Counter Claim No. 1
Expenses on publication of fresh notice inviting tender (NIT) Rs.62,946/-Counter Claim No. 2
Excess cost and expenses borne on fresh award to another qualified contractor/agency for Rs.18,93,450/-Counter Claim No. 3
Financial loss suffered by the
respondent because of non
availability of full operation of new taxi tracks for Rs.18,96, 480/-Counter Claim No. 4
For salary/emoluments of Engineers staff deputed for the project for Rs.1,46,250/-Counter Claim No. 5 OMP. 183/2014 Page 3 of 15
Performance guarantee amount of Rs.9,92,388/- plus interest p.a. Counter Claim No. 6 Cost of litigation/arbitration proceedings for Rs.2,00,000/- (revised to 4,87,555/-) Counter Claim No. 7 Interest at the rate of 18% per annum.
5. In the rejoinder filed before the Arbitrator, the petitioner controverted the counter claims of the respondents. Parties, thereafter, led their evidence and they had submitted documents in support of their claims which has been enumerated by the learned Tribunal in para 47 of its award.
6. Learned Tribunal, thereafter proceeded to give its finding on various claims of the petitioner as well as counter claims of the respondent.
7. The challenge to award by petitioner is under Section 34 of the Arbitration and Conciliation Act (hereinafter referred to as "the Act") It is the settled law that the petitioner can challenge the OMP. 183/2014 Page 4 of 15 award under Section 34 only on the grounds enumerated thereunder. Section 34 of the Act reads as under :-
"34 Application for setting aside arbitral award. --
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if--
(a) the party making the application furnishes proof that--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or OMP. 183/2014 Page 5 of 15
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless OMP. 183/2014 Page 6 of 15 such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India. Explanation. --Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.
8. It is also apparent that this court in exercise of its OMP. 183/2014 Page 7 of 15 jurisdiction under Section 34 cannot sit as an Appellate Court. The petitioner, while challenging the award is required to show that the award is against the public policy or is patently wrong or is not in accordance with the terms and conditions of the agreement or that there was any procedural violations of the terms and conditions of the contract by the Arbitrator.
9. The petitioner certainly cannot challenge an award on the ground that the opinion held by the arbitrator on the evidence produced before him, is illegal or wrong unless it is shown that it is against the established law of the land or shocks the conscience of the court or that there is an error apparent on the face of the award. As far as position of law on the subject is concerned, it is sufficient to refer to the well settled decision of the Supreme Court in The New India Civil Erectors (P) Ltd. v. Oil & Natural Gas Corporation, JT 1997 (2) SC 633, it has been observed as under:-
11. ..... if the parties set limits to OMP. 183/2014 Page 8 of 15 action by the arbitrator, then the arbitrator had to follow the limits set for him and the court can find that he exceeded his jurisdiction on proof of such excess.......Therefore, it appears to us that there are two different and distinct grounds involved in many of the cases. One is the error apparent on the face of the award, and the other is that the arbitrator exceeded his jurisdiction. In the latter case, the courts can look into the arbitration agreement but in the former, it cannot,............"
10. The petitioner has challenged this award on the grounds that the award is absolutely wrong and illegal and all the findings of the learned Tribunal are wrong and illegal. It is contended that findings on claim No. 1 is wrong and illegal and contrary to the facts. It is submitted that as per the agreement design of the box OMP. 183/2014 Page 9 of 15 culverts was required to be prepared by a structural consultant on the basis of design data to be supplied by the respondent and to avoid delay, it was necessary to supply design data along with other relevant parameters along with the award letter but the respondent failed to supply design data for design of culverts. The respondent could not supply the complete design data on 16th May, 2007 and structural designs only for two RCC Box of two type Culverts were supplied only after 15 days from the date of award of the work i.e. 22nd May, 2007 and it was deficient in many respects and the said deficiencies were reported vide letter dated 30th May, 2007, to the respondents. The respondents had admitted the deficiencies and supplied the necessary parameters only on 18th June, 2007. The lay out plan showing location of Type A and B Culverts were not supplied and the location of 5 Culverts were also not disclosed. It is submitted that because of the delay on the part of the respondents, the petitioner was prevented from completing the work. All these contentions were also raised by the petitioner before the learned Tribunal and the OMP. 183/2014 Page 10 of 15 learned Tribunal after going through all the records and correspondence exchanged between the parties, had given the finding which reads as follows:-
"61 As regards the actual practice to be adopted for preparation of the structural designs, the claimant was required to get the designs prepared from a qualified and registered structural consultant all complete as per particular specifications and thereafter it was required to be approved by the Engineer-in-Charge of the respondent and then it was to be vetted and approved by the IIT. But the designs of culverts available on record shows that the same were prepared on 26.7.2007 and were vetted by the IIT Delhi on 31.7.2007 and were sent to the respondent on 12.8.2012. It clearly shows that the claimant has by-passed the approval of the OMP. 183/2014 Page 11 of 15 structural designs by the Engineer-in- Charge of the respondent which was one of the pre-condition as per the Bill of Quantities available on record. It is apparent that the basic purpose behind approval of the structural designs by the Engineer-in-Charge of the respondent before getting the same vetted from IIT, Delhi, was to see that if any defects appeared or any rectifications were required in the designs considering all the connected aspects, the same could be done before getting the designs vetted from the IIT, Delhi.
62. In the present case the claimant, despite being specifically asked by the respondent, to depute its representative and to send the Structural Consultant to the site to inspect the same to enable them to prepare the designs correctly, none was sent by the claimant.
11. It, therefore, is clear that the learned Tribunal has duly OMP. 183/2014 Page 12 of 15 considered all the evidence produced by the petitioner and then gave its findings. The findings of the learned Arbitrator on the claims and counter claims are also challenged by the petitioner only on the ground that they are illegal and wrong. A general plea of challenge is taken by the petitioner. No reasons which make the finding of Ld. Tribunal illegal or wrong are shown. In this case non-performance of the contract within the stipulated time was the reason for termination of the contract and the learned Arbitrator, after elaborate discussion, had fixed the liabilities in terms of the contract and passed the award. Non performance of the contract within the stipulated time was the reason for permission of the contact and the learned Arbitrator has fixed the liabilities in view of the terms of the contract and passed the award.
12. From the reading of the award, it is apparent that the learned Arbitrator has considered all the contentions of the petitioner and had taken into consideration all the documents OMP. 183/2014 Page 13 of 15 produced by the petitioner. It is not the case of the petitioner that his contentions or documents were not considered by learned Arbitrator. The award is well reasoned award dealing with all the claims and counter claims discussing evidences supporting or against the claims and counter claims. It is also not the petitioner's claim that the arbitrator had exceeded his brief. No contention that the award is against any public policy. The petitioner has challenged the award on the ground that it is illegal and wrong. In the present case, from the facts pleaded by the petitioner in its petition, it is clear that the petitioner has challenged the finding only on the ground that the findings are illegal and contrary to the facts. However, from a careful perusal of the award, it is apparent that all the contentions raised by the parties during the arbitral proceedings and all the evidence produced by the parties during the arbitral proceedings have been considered and discussed by the Arbitrator and it is only after elaborate consideration of all the evidence on record and discussing the law and the procedure, the Arbitrator has reached OMP. 183/2014 Page 14 of 15 to the conclusion and had passed its award.
13. In case of The New India Civil Erectors (P) Ltd. v. Oil & Natural Gas Corporation, JT 1997 (2) SC 633, the Supreme Court has held that "the attempt of the court should always be to support the award within the letter of law". The petitioner as such has failed to establish any reason for this court to set aside the arbitration award. The petition has no merits. The same is dismissed.
14. The petition is disposed of in the above terms.
15. No order as to costs.
(DEEPA SHARMA) JUDGE JULY 31, 2014 j OMP. 183/2014 Page 15 of 15