M/S. R.S. Sharma & Co. vs Delhi Development Authority
1995 Latest Caselaw 785 Del

JUDGMENT

S.K. Mahajan, J.

1. The work of Development of land at Pappankalan (Dwarka Project) in South West Delhi, Phase-I was awarded under agreement No. 6/EE/WD 10-A/90-91/DDA was awarded to M/s. R. S. Sharma and Company. During the execution of the said work there arose certain disputes between the parties and the same were referred for adjudication to Shri A. P. Paracer. Additional Director General (Retd.), C.P.W.D. When the disputes were referred to the arbitration, the work was still being executed by the petitioner. The arbitrator on 29th July, 1992 made and published his award. The said award was filed in court and after notice of filling of the same had been given to the parties. Delhi Development Authority filed its objections under Sections 30 and 33 of the Arbitration Act.

2. Under claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3, the claimant had claimed extra rate of Rs. 30/- per cubic meter over and above the rate agreed in the agreement under item Nos. 2, 3 and 4 for extra cartage involved in bringing the stone aggregate from Nuh quarries to Delhi. The said claims are for different sizes of the aggregates. The case set up in the said claims by the claimant was that the claimant was required to use Delhi quartz stone conforming to CPWD specifications and as the claimant had obtained blue quartz stone from Nuh quarries in Haryana, after the respondent had failed to indicate the approved quarry at Delhi for obtaining supplies of Delhi quartz stone, the claimant was entitled to extra rates at the rate of Rs. 30/- per cubic meter for procurement of stone aggregate from the quarries at Nuh. The objections of Delhi Development Authority to these claims as well as additional claim No. 1, 2 and 3 is that the learned arbitrator has misconstrued and misunderstood the agreement between the parties particularly condition No. 3.16 according to which "Collection and stacking of materials shall include all leads. The rates quoted by the contractor shall hold good irrespective of the source from which the materials are brought so long as the same conform to the specifications. Closure of particular Quarry will not entitle the contractor of any revision in rates." The objection, therefore, is that in view of this condition appearing in the agreement, there was no reason for the arbitrator to hold that as the rate is being demanded for the extra lead on account of the claimant having brought the stone aggregate from Nuh, the claimant was entitled to be paid for the said extra lead at the rate of Rs. 30/- per cubic meter. Though in the objection petition, objections have also been raised in respect of the award on other claims, however, no arguments have been advanced in respect of other claims except additional claim Nos. 8 and 9.

3. To appreciate the arguments of Delhi Development Authority in respect of claim Nos. 1, 2 and 3, and additional claim Nos. 1, 2 and 3, it will be useful to refer to clause 3.16 of the agreement. Clause 3.16 of the agreement reads as under :

"Collection and stacking of materials shall include all leads. The rates quoted by the contractor shall hold good irrespective of the source from which the materials are brought so long as the conform of the specifications. Closure of particular Quarry will not entitle the contractor of any revision in rate."

4. The argument of Mr. V. K. Sharma, learned counsel appearing for Delhi Development Authority is that in view of this clause, collection and stacking of the said stone aggregate was the responsibility of the contractor and it included all leads. The submission, therefore, is that in case the contractor had to bring stone aggregate from a place other than Delhi. It was not the responsibility of the department and the rates were inclusive of all leads and consequently the contractor was not entitled to any extra lead. On the other hand, Mr. Rajesh Lakhanpal, learned counsel appearing for the contractor/claimant submits that in terms of the specifications in the agreement, the aggregate was to be obtained from an "approved Quarry" and in terms of letter dated 10th April, 1990 written by the contractor and agreed to by the department by its letter dated 12th April, 1990 the condition of "the use of Delhi quartz stone as per CPWD specifications, specifications mentioned in the tendered document" was also accepted.

The contention of Mr. Lakhanpal is that the respondent had stopped the petitioner from using Delhi stone aggregate and had not informed any approved Quarry from where the plaintiff could bring the same. It was in these circumstances that the claimant had to bring stone aggregate from Nuh so as to conform to specifications and consequently, the claimant was entitled to the extra lead for bringing stone aggregate from Nuh to Delhi.

5. In terms of clause 3.16 of the contract, it was the responsibility of the contractor to collect and stock the material and the rates quoted by him included all leads irrespective of the source from where the material was brought. No doubt, in case the department had refused to accept the stone aggregate brought to site by the contractor from a Quarry in Delhi and had "insisted upon bringing the material only from Nuh Quarry", the contractor will be entitled to the extra lead for bringing the said material from Nuh. However, increase there is nothing on record to show that the department had insisted upon bringing the stone aggregate only from Nuh, to my mind, the contractor will not be entitled to the rates for extra lead. The arbitrator while giving the award has stated that the department had "insisted" upon the use of the blue quartzite stone from Nuh in Haryana and supplies of Delhi quartz stone were stopped. The award of the arbitrator in respect of claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3 are based upon the assumption that the department had "insisted upon the use of stone aggregate to be brought from Nuh." If these findings are not based upon any evidence on record, in my opinion, there will be an error apparent on the face of the award and in that case the award will be liable to be set aside.

6. According to Mr. Lakhanpal, respondent had stopped the petitioner from using Delhi stone and insisted upon the use of stone aggregate from outside Delhi. Reliance for this has been placed upon letters dated 10th April, 1990 written by the contractor and 12th April, 1990 written by the department, which have been formed part of the agreement. According to letter dated 10th April, 1990 the contractor had undertaken to use Delhi quartz stone as per CPWD specifications and in its letter of 12th April, 1990 the department had agreed to the use of Delhi quartz stone as per CPWD specifications and specifications mentioned in the tender document. On 22nd April, 1990 a letter was written by the contractor to the Executive Engineer informing him that due to harvest season, they were not getting sufficient quantity of stone as per quality requirement by the department from Delhi and the department, therefore, was requested to find the source at Delhi of approved Quarry where the contractor could get sufficient quantity of stone. The contractor in the same letter had informed the department that sufficient quantity of good quality of stone was available in Nuh, Haryana which was at a distance of 40 Kms. and in case the department was willing to finish the work in time, they should be permitted to bring the material from that place. Again by letter dated 20th April, 1990 the contractor informed the department that they had brought 160 trucks loads of stone aggregate from Nuh and the department should intimate to them the approved Quarry at Delhi from where the material was acceptable. Again, a letter dated 15th May, 1990 was written to the department by the contractor that the stone aggregate which was being arranged by them from Nuh was costing them Rs. 30 p. cu.m. more than the aggregate collected from Delhi and the department was requested to give its decision about an approved Quarry at Delhi. In its letter dated 24.6.1990/16.8.1990 the contractor informed the department that they had been procuring stone aggregate from a quarry at Nuh which involved an extra lead of 40 Kms. and requested the department to sanction the extra item at an early date. In the same letter it was written that plea of the department that they were not entitled to extra payment on the ground that procurement from Haryana was not the departmental requirement and the contractor would be entitled to receive the payment against the actual work done was false. From the documents on record, I do not find that the department had at any time insisted upon the procumbent of stone aggregate from Quarry at Nuh. On the other hand, stand of the department was not entitled to extra payment on the alleged ground of procurement of stone from Haryana as it was not the departmental requirement. As per clause 3.16 it was the responsibility of the contractor to bring the material at site from whichever source it could bring and it was not entitled to any extra lead for bringing the material at site.

7. To find out as to whether there was any material before the arbitrator to come to the conclusion that the department had insisted upon the contractor to bring stone aggregate from Haryana, the court will have to look into the pleadings, the documents and the agreement. On a perusal of such documents and pleadings, I find that there was no material before the arbitrator to come to the findings that the arbitrator had insisted upon stone aggregate to be brought from Haryana. Mr. Lakhanpal has not been able to show to me even a single document where the department might have insisted or even had called upon the contractor to bring the stone aggregate from Haryana. The argument of Mr. Lakhanpal is that such insistence has to be impliedly gathered from the material on record. I am afraid. I have not been able to find any such material. The arbitrator, in my opinion, has ignored clause 3.16 of the contract and has made a departure from the contract to come to the aforesaid finding.

8. In the absence of any material on record, the arbitrator, therefore, was not justified in giving the finding that the department had insisted upon the use of Nuh stone aggregate. I am, therefore, of the opinion that there is an error apparent on the face of the award and the findings of the arbitrator in respect of claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3 cannot be sustained. I, therefore, set aside the award in so far as it relates to claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3.

9. The award of the arbitrator in respect of other claims has not been very seriously challenged by learned counsel for Delhi Development Authority. Even otherwise, I find that there is evidence on record for the arbitrator to come to the findings in respect of claim Nos. 4, 5, 6 and 7. The arbitrator is the final judge of the facts and the court is bound by the findings of fact and cannot review them unless they are not supported by evidence and unless it appears from the award itself that there was no evidence to support the findings. It is not open to the court to examine the adequacy of evidence which lead the arbitrator to his findings of fact. His findings are final. The court is also not permitted to reappraise the evidence and sit as a court of Appeal over the arbitrators award.

10. Where the arbitrator indicates his reasons for coming to a conclusion and the award is challenged on the basis of its not being supported by evidence, the party so doing must in the words of Lord Tomlin "Show that it is patent upon, the face of the award that there was no evidence at all on which the arbitrator could have come to his conclusion. Nana Kawaku Amab v. Nana Sir Oforiatta (AIR 1933 PC 469).

11. However, sufficiency and quality of evidence is a matter for the arbitrator. The court is not permitted to reappraise the evidence and sit as a court of Appeal over the arbitrators award." P. B. Mukherji, J. (as he then was) has expressed this very succinctly in Ebrahim Kassam Cochinwalla v. Northern Indian Oil Industries Ltd. as follows :

"In my opinion appraisement of evidence by the Arbitrator is ordinarily never a matter which this court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of evidence. It is not a question here in this case of any violation of natural principles of justice in refusing to give a hearing to any party or in refusing to have the evidence of a particular party. The arbitrator in my opinion is the only Judge of the quality or the quantity of evidence and it will not be for this court to take upon itself the task of being a Judge of the evidence before the arbitrator. It may be possible that on the same evidence the court might have arrived at a different conclusion than the arbitrator but that by itself is no ground in my view of setting aside an award of an arbitrator. It is familiar learning but requires emphasis that by Section 1, Evidence Act, the Evidence Act, in its regular is not intended to apply to proceedings before an arbitrator."

12. The court is also not permitted to review the reasons or to comb through the award as an appellate forum as this would amount to an impeachment of the award which is not permissible. The court can, no doubt, set aside the award if it is apparent thereupon that the reasons therein are based on no evidence and/or are based upon an erroneous preposition of law. I do not find any infirmity in the award so far as it relates to claim Nos. 4, 5, 6 and 7 nor I find any reason to set aside the findings of the arbitrator in respect of said claims.

13. As far as award in respect of claim No. 8 is concerned, the same will stand modified in terms of my findings against claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3.

14. The arbitrator has awarded simple interest at the rate of 18 per cent per annum on the amount which has been found payable to the contractor. The power of arbitrator to award interest has not been disputed before me. It is, however, submitted by Mr. Sharma that the rate of interest awarded by the arbitrator is highly excessive. I do not intend to interfere with the findings of the arbitrator and the award of interest on the amount awarded to the claimant is maintained.

15. I also do not think that there is any error in the award of cost by the arbitrator in favor of the claimant.

16. In view of my findings above, while I set aside the award so far as if relates to claim Nos. 1, 2 and 3 and additional claim Nos. 1, 2 and 3, the remaining part of the award is made a rule of the court and a decree in terms of the award, as modified by this order, is passed. The petitioner shall also be entitled to interest at the rate of 12 per cent per annum from the date of decree till the date of payment by the respondent.

19. In the circumstances of the case, leave the parties to bear their own costs.