C.R. Gulati vs Union Of India
1995 Latest Caselaw 884 Del

JUDGMENT

S.K. Mahajan, J.

(1) Under an agreement for the construction of staff quarters for Lal Bahadur Shastri Kendriya Sanskrit Vidyapeeth, awarded to the petitioner, certain disputes had arisen and the same were, referred for adjudication to the arbitration of Mr.S.S.Juneja. The arbitrator after hearing the parties, made and published his award on 12th March, 1993. The said award was filed in Court and after notice of filing of the award was given to the parties, Union of India has filed these objections for setting aside the award on the grounds as contained in the objection petition.

(2) The challenge to the award is only in respect of claim No.6 and 7. Under claim No.6, a claim of Rs.8,00,000.00 was made on account of infructuous expenditure and damages alleged to have been sustained by the petitioner due to various breaches committed by the Department. This amount of Rs.8,00,000.00 included a sum of Rs.6,50,000.00 being the difference of reasonable price and the price allegedly paid after the stipulated period and a sum of Rs.1,50,000.00 being the infructuous expenditure. The arbitrator has awarded a sum of Rs.27,000.00 only under this claim to the petitioner. Under claim No.7, the contractor had claimed interest at the rate of 18% p.a. from the date of notice till the date of payment. The arbitrator under this head has awarded simple interest at the rate of 12% p.a. from 10th January, 1986 to the date of publishing of the award and simple interest at the rate of 14% p.a. from the date of award till the date of payment.

(3) Objection to the award under claim No.6 by the Government is that the contractor had not produced any paid vouchers in support of the claims and in the absence of any evidence in support of the losses suffered by the petitioner, the arbitrator did not have the jurisdiction to award a sum of Rs.27,000.00 . The right of the arbitrator to award interest has also been challenged.

(4) I have gone through the award. While deciding claim No.6, the arbitrator has held that the stipulated date of completion of the work was 14th January, 1983. During the progress of the work, the claimant had complained of the hindrances on account of which the work was held up and the work continued beyond the stipulated date of completion. The claimant had vide his letter dated 12th June, 1982 asked for increase in rates. There is other correspondence as well on record whereby while the claimant had been demanding increase in rates, the respondent was denying the same on account of the reason that there was no delay on the part of the respondent in completion of the work. On consideration of the documents filed by the parties, the arbitrator held that the claimant was entitled to be reasonably compensated for idle establishments due to prolongation of contract. According to him for proper execution of work and watch and ward of materials, it was necessary for the contractor to employ at least two supervisors and two chowkidars and the contractor was also required to employ an engineer. The arbitrator was, therefore, of the opinion that award of compensation of Rs.27,000.00 to the claimant would be just and fair.

(5) In my opinion, there is no infirmity in the award of the aforesaid amount. Finality attaches to the decision of the arbitrator who is the Judge of both the questions of fact and law referred to him. It is not shown that the decision of the arbitrator is erroneous on the face of the award nor it is argued that there was no material before the arbitrator to come to a finding that the contractor was not entitled to compensation. In my opinion, the arbitrator has come to a finding that there was a delay in execution of the work and on account of no penalty having been imposed by the Government upon the contractor for such delay, the petitioner was entitled to some compensation and he has, accordingly, awarded a sum of Rs.27,000.00 in favor of the petitioner. The Court cannot sit as a Court of Appeal over the conclusions of the arbitrator by reappraising and re-examining the material considered by him. In my opinion, therefore, there is no case made out for setting aside the findings of the arbitrator as far as claim No.6 is concerned.

(6) Similarly in respect of award of interest, the arbitrator had the jurisdiction to award interest and, in my opinion, no case has been made out for setting aside the findings of the arbitrator on claim No.7.

(7) For the reasons stated above, in my opinion, there is no case made out for setting aside the award and, accordingly, I dismiss the objections of the Government under Section 30 and 33 of the Arbitration Act and make the award a rule of Court. A decree in terms of the award is, accordingly, passed. The petitioner shall also be entitled to interest at the rate of 12% p.a. from the date of decree till the date of payment.

(8) I, however, leave the parties to bear their own costs.