M/S. Parkash Brothers vs Union Of India And Another
1991 Latest Caselaw 71 Del

ORDER

1. These are proceedings under Sections 14 and 17 of the Arbitration Act for making the award dated 29th January 1986 of Mr. S. P. Singh Ahuja, sole Arbitrator, respondent No. 2, as "Rule of the Court". On notice being issued, the Arbitrator filed his award and the proceedings in the Court. Then, notice of filing of the award was given to the parties, Respondent No. 1, Union of India, filed objections to the award and these were listed as I. A. No. 4131 of 1986. After the pleadings were complete, the following issues were framed:

" 1. Whether the arbitrator has misdirected himself or the proceedings?

2. Whether the award is liable to be set aside on any of the objections taken up by the objector?

3. Relief."

Thereafter, parties led evidence by means of affidavits.

2. A contract was awarded to the petitioner on 21-4-1980 for construction of certain residential accommodation at CPOs at Chanakyapuri, New Delhi, the value of the contract being Rs. 43,77,374.44. The contract was completed on 20-2-1982 The petitioner signed the final bill under protest. The contract contained a clause which constituted arbitration agreement between the parties. Disputes were raised by the petitioner, and the same were referred to the sole arbitration of respondent No. 2, who, as noted above, gave his award on 29th January 1986. It is a non-speaking award.

3. The petitioner had raised 14 claims. Claims Nos. 3 and 14 respectively pertain to interest and costs of arbitration proceedings. The Union of India, in their claims, ask for costs of arbitration proceedings and traveling allowance and daily allowance as may have been incurred by the Arbitrator.

4. It is not necessary to set out all the claims except to note that claims Nos. 1 and 3 to 7 of the petitioner were held to be established, claims Nos. 8, 11 and 13 partly established and claims Nos. 2, 9 and 10 not established. The Arbitrator did not adjudicate claim No. 12 on the ground that it was not referred to him by the Engineer in Chief who was to refer the disputes under the agreement between the parties. The Arbitrator did not award any interest against claim No. 11, but he awarded interest at the rate of 10% per annum from 10-12-1984 on awards on claims 4, 5 and 6 from the date of the award. It was also ordered that Union of India will pay to the petitioner the amount awarded on or before 31-3-1986, failing which simple interest at the rate of 10% per annum on the amount of the award against claims 1 to 10 only will be payable by the Union of India to the petitioner till the date of payment or the date of decree of the court, whichever was earlier.

5. The respondent No. 1, Union of India, has objected to the claim regarding award of interest and to claims Nos. 4, 5, 6, 8 and 11 of the petitioner. I find, there cannot be any challenge to claims Nos. 4, 5, 6 and 8. These were within the jurisdiction of the Arbitrator. There is no error apparent on the face of the award regarding these claims. As regards claim No. 11, it pertained to compensation for damages caused by various breaches of contract by Union of India by way of increase in cost of construction and infructuous expenditure on overheads and establishment, and the Arbitrator gave an award of Rs.34,045.00 against the claim of Rupees 1,09,658.00. It is submitted with reference to condition No. 11 of the General Conditions of the Contract between the parties, that under cl. (C) no claim in respect of compensation or otherwise howsoever arising as a result of extension granted under cls. (A) and (B) of Condition 11 could be admitted. C1s.(A) and (B) of Condition 11 specify the circumstances under which extension could be granted if there was delay in execution of the contract. From the award, which is non-speaking one, it is difficult to say if the award under claim No. 11 was given in contravention or in breach thereof as aforesaid. Again, I do not find any error apparent on the face of the award for me to interfere in the matter. The objection of respondent No. 1 regarding award of interest is correct to the extent that the Arbitrator could not award interest pendente lite. To this extent, the award is set aside and is modified. As a matter of fact. Arbitrator has also no jurisdiction to award interest from the date of the award as well, but the court has jurisdiction to award such an interest. The award of interest, therefore, is set aside.

6. Accordingly, the award dated 29th January 1986, as modified above, is made Rule of the Court, and a decree in terms thereof is passed. The petitioner will be entitled to interest on the amount of the award as modified at the rate of 10% per annum from the date of the award till payment. If, however, payment of the award with interest up to the date of decree is made within two months from today, no further interest from the date of the decree shall be payable. There will be no order as to costs.

7. Order accordingly.