Union Of India vs Badhwar & Co.
1995 Latest Caselaw 591 Del

JUDGMENT

Devinder Gupta, J.

(1) On disputes having arisen amongst the parties concerning the award of work through supply order dated 10th June, 1077 to M/s. Badhwar & Co., the same in terms of arbitration clause were referred for adjudication to the sole arbitration of Shri Vijay Kumar, Deputy Chief Engineer (T.P) who on 29th March, 1990 made and published his award. The respondent/objector filed objections on 7th May, 1992. Admittedly the objections are not within the period of limitation. Therefore, application under Section 5 of the Limitation Act, (IA 8397/93) has also been moved seeking condensation of delay in filing objections.

(2) The facts in brief are that after the award was made and published by the Arbitrator, the same was filed in this Court of which notice was directed to be issued to the parties. The claimant, namely. Union of India was duly served and did not choose to file objections. The respondent was not served and was ultimately directed to be served for 8th April, 1992 through publication in" The Statesman", Delhi edition. In addition it was directed that a notice be also affixed at the last known address of the respondent and also on the notice board of the Court. In pursuance to this order notice of the filing of award as against respondent was duly published in the Statesman on 28th January, 1992 and the record reveals that the publisher on the same day sent a copy Under Postal Certificate to Shri Tilak Raj, Proprietor, on the address of the respondent concern, namely, M/s. Badhwar & Co., Mukteshwar Ashram, Andheria Bagh, Mehrauli, New Delhi. Record further reveals that a copy of notice was also affixed on the given address on 28th January, 1992. Copy of the notice on the Court's notice board was also affixed on 16th January, 1992. In this background, the ground which has been urged in seeking condensation of delay has to be appreciated.

(3) It is alleged in the application that the respondent for the first time became aware of the pendency of the proceedings for making of the award a Rule of Court only on 8.4.1992, when the clerk of the Counsel for the respondent noticed the case in the cause list and accordingly informed the respondent. The respondent on receipt of information contacted his Counsel and moved an application for inspection of Court's record on 9.4.1992, which was carried out on 10th April, 1992 and thus the objections filed on 7th May, 1992 are within the period of limitation from the date of knowledge of the filing of award. The objections as well as the application seeking condensation of delay are supported only on the affidavit of Shri Tilak Raj, the proprietor of respondent. The facts according to him arc true to his knowledge.

(4) The application has been vehemently opposed by the claimant (Union of India), denying all allegations and staling that the respondent had knowledge of filing of the award since he was duly served in the case when notice was affixed on the given address and the same was published in the Statesman in January, 1992. Objections are highly belated and have been filed with malafide object to further delay the proceedings. It is alleged that not only there is delay in filing the objections but there is also considerable undue and unexplained delay in re-filing the objections after removal of objections. The objections filed on 7th May, 1992 were returned with objections on 31st July, 1992. The same under High Court Rules and Orders could be refiled within 7 days, but were re-filed on 25th August, 1992. It is alleged that in these circumstances, there is no ground for condensation. I have heard the learned Counsel for the parties and gone through the record.

(5) On the question raised by the Counsel for the claimant as regards delay in re-filing the objections, the same need not be decided since I find that otherwise also no sufficient ground has been made out for condoning the delay in filing the objections. Howsoever liberally the matter may be viewed, the objections are highly belated and there is no satisfactory explanation for the delay. The respondent has not supported the application with the affidavit of clerk of the Counsel or the Counsel. Whatever he has stated in the application, according to him, is true to his knowledge. It is nowhere explained in the application as to how his Counsel was concerned with the case or how the clerk of the Counsel was concerned with the case when the respondent had not instructed the Counsel in the matter. Obviously the clerk of the Counsel or the Counsel would be concerned with the case only if instructions are imparted by the respondent for conducting the proceedings in the case. It is the claimant's case that the case was duly shown in the cause list right from 1990, onwards after the award was filed in Court. This knowledge on the part of the clerk of the Counsel or the Counsel obviously must be on the basis of instructions of the respondent, after he had acquired knowledge of the filing of the award in Court which in the facts and circumstances, which are apparent on record relate back to 28th January, 1992 when one notice was affixed on the given address, since personal service was being avoided by the respondent. It is evident from the report of the process served on the back of the notice. On publication of notice in 'The Statesman', a copy of the newspaper was duly sent under certificate of postings to the respondent on the given address. The respondent has nowhere disputed that the given address is not the correct address or that letters posted on the given address are not received by him. Knowledge must be imputed to the respondent that at least if not earlier, in the month of January, 1992 he acquired knowledge of the filing of award in Court. Objections ought to have been filed within a period of thirty days from the date of acquiring knowledge of the filing of award in Court. Record further reveals that the respondent was duly apprised by the Arbitrator of the making and publishing of the award that it was made and signed by the Arbitrator on 29.3.1990. This information was given by the Arbitrator on the same day through registered A.D. post, which the respondent received and acknowledged on 10th April, 1990, as per acknowledgement receipt. In these circumstances, objections ought to have been filed on or before 28th February, 1992. The same were filed on 7th May, 1992. There is absolutely no explanation for the delayed period from 1st March, 1992 to 7th May, 1992. The allegations in the application are highly vague. There is no other ground made out for condoning the delay. The ground projected can hardly be considered as sufficient enough to condone the delay. The application seeking condensation of delay accordingly is dismissed and resultantly objections are also dismissed as not within the period of limitation.

(6) In view of the dismissal of the objections, the award made by the Arbitrator is liable to be made a Rule of the Court. However, there is a patent error of law committed by the Arbitrator due to which I am not inclined to direct the making of the award a Rule of the Court in the form in which it has been made. The award requires modification. The claim of Union of India was for return of Rs. 41,483.40 Along with interest at the rate of 12% p.a. from 28th June, 1977 till payment. The Arbitrator in his non-speaking award has held the claimant entitled to a sum of Rs. 1,40,000.00 and has held the claimant entitled to interest at the rate of 10% p.a. till payment beyond 31st March, 1990, to be compounded annually. It appears and is also obvious that the Arbitrator held claimant to be entitled to the principal amount claimed, namely, the sum of Rs. 41,483.40. Since interest had also been claimed on this amount from 28th June, 1977, at the rate of 12%, p.a. it appears that the Arbitrator accepted the .claim for interest also and proceeded to make his own calculations and arriving at a consolidated figure of Rs. 1,40,000.00. In case interest is correctly calculated on the principal amount of Rs. 41,483.40 from 28th June, 1977 to 31st March, 1990, the total amount of interest would be Rs. 63,469.60 thereby making total figure to Rs. 1,04,953.00. Instead of making an award of this amount, the Arbitrator appears to have made award of round figure of Rs. 1,40,000.00, which in fact ought to have been only for Rs. 1,04,000.00 and not Rs. 1,40,000.00. Award appears to have been made by compounding the interest. The Arbitrator misconducted himself and proceedings in awarding at compound rate of interest and that also on the consolidated figure at Rs. 1,40,000.00. He further acted with material irregularity in ordering the future interest to be compounded annually. In case Arbitrator had come to the conduction that post award interest is to be awarded, he could order payment of interest on the principal amount and that also from the date of award till the date of making the same a Rule of Court, namely, the date of decree. Interest could not have been awarded on interest. Principal amount was Rs. 41,483.40. The remaining amount is interest from 28th June, 1977 to 31st March, 1990. Interest is in the shape of damages, therefore, damages could not be allowed further damages. In these circumstances. Arbitrator ought to have made a provision of future interest also at the rate of 10% from the date of award till decree on the principal amount of Rs. 41,483.40 only. The award accordingly deserves to be modified to that extent.

(7) In view of the above, I proceed to make award of the Arbitrator a Rule of Court and accordingly proceed to pass a decree for Rs. 1,04,000.00 in favor of the claimant. Union of India, against the respondent. The claimant shall also be entitled to interest at the rate of 10% p.a. on the principal amount of Rs. 41,483.40 from the date of award till decree and at the same rate from the date of decree till payment.