Shri Ram Singh vs Delhi Development Authority
1996 Latest Caselaw 31 Del

JUDGMENT

K. Ramamoorthy, J.

1. The Arbitrator published the Award on 1.5.1992. In all there were 10 claims.

2. The Claimant has claimed Rs. 39,000/- towards refund of 3% rebate for monthly regular payment, timely finalisation of final bill and release of security deposit, as the Department did not fulfill the terms of the agreement. The Arbitrator has allowed the claim to the extent of Rs. 35,637.87.

3. On Claim No. 2, the Claimant has claimed Rs. 2,000/- towards refund of penalty imposed by the Respondent even though the delay in execution of work is attributed to the Respondent. The Arbitrator has allowed Rs. 2,000/- towards refund of penalty.

4. On claim No. 3, the Claimant has claimed Rs. 40,000/- towards increase in wages of labour during the progress of work under clause 10C of the Agreement. This claim has been rejected by the Arbitrator.

5. On Claim No. 4, the Claimant has claimed Rs. 35,421.84 towards road cutting carried out for laying sewerage lines and initially amount paid and later on recovered by the Department without solid or convincing reason. This claim has also been rejected by the Arbitrator.

6. On Claim No. 5, the Claimant has claimed Rs. 500/- on account of amount incurred to carry out testing of lead through Sri Ram Testing Laboratory, but the amount not paid back by the Department. This claim has been rejected by the Arbitrator.

7. On Claim No. 6, the Claimant has claimed Rs. 2,482.15 towards carrying out disinfection's of water lines and in the process bleaching powder etc. was used. This claim has been rejected by the Arbitrator.

8. On Claim No. 7, the Claimant has claimed Rs. 20,000/- towards laying of 6" dia Pipes instead of 4" disputes to be laid as per terms of the Agreement, this claim has been rejected by the Arbitrator.

9. On Claim No. 8, the Claimant has claimed Rs. 1,24,727.40 on account of excessive recovery made for the different dia pipes issued by the Department. The Arbitrator has awarded Rs. 1,24,727.40.

10. On claim No. 9, the Claimant has claimed Rs. 25,000/- on account of rates not determined under Clause 12 of the agreement for substitution of 150 mm. dia pipe in place of 100 mm. dia pipes stipulate to be laid. This claim has been rejected by the Arbitrator.

11. On Claim No. 10, the Claimant has claimed pendente lite interest. The Arbitrator has allowed interest @ 12% per annum, from 11.5.1989 i.e., the date on which he has entered on the reference into 1.5.1992 i.e., the date of award.

12. The Respondent (DDA) in IA No. 2690/94 has filed objection. The main contention is that under Clause 25 of the agreement the Claimant should have preferred the claim within 90 days of receiving the intimation from the Engineer in Charge that the bill is ready for payment.

13. The point taken in the objection petitioner is as follows :

"(a) One of the preliminary objections raised by the respondent before the learned Arbitrator was that all the claims were barred under clause 25 of the Agreement between the parties. The learned Arbitrator has dealt with the said plea at page 2 of the award and has reproduced the relevant portion of the Clause 25 of the Agreement also. The payment of the final bill was released on 12th November, 1986 admittedly. Thus on the said date the petitioner had the intimation with regard to the final bill being ready for payment. As a matter of fact the release of the security deposit after adjusting the amount against the final bill, which was in minus was a step more than intimation that the final bill was ready for payment. The petitioner applied for the appointment of the Arbitrator/invoked the arbitration clause admittedly on 12th March, 1987. Thus the invocation of the arbitration clause beyond 90 days as prescribed in Clause 25 of the Agreement. The learned Arbitrator has completely overlooked these facts and found that the claims are not barred by time, there is an error apparent on the face of the award and the entire award is liable to be set aside and the claims of the Petitioner are bound to be barred by time.

(b) Under Claim No. 1, the petitioner Claimed Rs. 39,000/- towards the refund on rebate on account of running account bills, final bill and release of security. The learned Arbitrator has dealt with this part at pages 4 and 5 of the Award. In sub-para (2) of Claim No. 1 at page 4, the learned Arbitrator has dealt with the question of refund on rebate on account of extra and substituted items. This part of the claim was never referred to the learned Arbitrator nor any claim in this behalf was specifically preferred by the petitioner. The learned Arbitrator has ordered the refund of rebate on this account also. The learned Arbitrator has thus dealt with the matter, which was not referred to him and thus exceeded his jurisdiction in this behalf. Amount of Rs. 2,741.38 was deducted on account of rebate against extra and substituted items. Thus part to the award to this extent is, therefore, liable to be modified/set aside so far as it relates to the refund of rebate against extra/substituted items.

(c) Under claims No. 2, the petitioner had claimed refund of Rs. 2,000/- which was a levy under Clause 2 of the agreement between the parties. The learned Arbitrator has misconducted himself and the proceedings by awarding this amount in favour of the petitioner as the matter was not arbitrable in terms of Clause 2 of the Agreement. The Hon'ble court held so in numerous cases in the decisions rendered in the year 1993.

(d) Under claim No. 8, a sum of Rs. 1,24,727.40 was claimed by the petitioner as excess recovery on account of C.I. pipes. The basis for the claim was that the recovery rate had been changed in the Agreement and according to the petitioner, his was without the knowledge. This was also on account of the fact that correction was made only in figures and not in words and the corrections did not bear the signature of the petitioner. In the hearing held on 25th June, 1991, the learned Arbitrator called for list of issue raised and the relevant period issued by the Stores Division of D.D.A. and the same was produced for the consideration for the learned Arbitrator. However, the learned Arbitrator has not taken said list into consideration and has rather omitted to take the same into consideration. The rates are also justified by the totality of circumstances, if one makes a calculation of total amount of tendered cost. However, this aspect has also been overlooked by the learned Arbitrator. The learned Arbitrator has thus ignored and failed to take into consideration these two important pieces of evidence and has thus misconducted himself as also the proceedings. The award is, therefore, liable to be set aside.

(e) Under claim No. 9, the petitioner had claimed pendente lite interest. The learned Arbitrator has awarded pendente lite interest at the rate of 12% per annum from 11th May, 1989 to 1st May, 1992 (the date of award). No doubt, the learned Arbitrator was competent to award pendente lite interest, but the grant of pendente lite interest should not have been as a matter of course. The learned Arbitrator ought to have exercised its discretion judiciously as held in the case of Government of Orissa v. G. C. Roy by the Hon'ble High Court. The salient features of this case are that the learned Arbitrator was appointed vide letter dated 25th May, 1988 of the Engineer Member of D.D.A. The first Arbitrator appointed was Shri Om Prakash, who resigned as per his letter dated 23rd February, 1989 on the ground. The Claimant was directed to submit the Statement of Facts vide letter No. F. 2(80) 88/SE-Arbn.II/Arb./1129-30 dated 7th July, 1988, but the same has not been submitted by him uptil now. It seems that the claimant is not interested in pursuing his claim. I, therefore, resign as Arbitrator in respect of the above case. The relevant file in respect of the case is sent herewith". Thereafter, Shri J. K. Varshney was appointed vide letter dated 27th March, 1989 of the Engineer Member. The learned Arbitrator vide letter dated 11th May, 1989 called upon the parties to file Statement of Facts and Counter-Statement of Facts and Rejoinder with advance copies to each other. The learned Arbitrator has assumed that this is the date from which he entered upon the reference or the lists commenced. The statement of facts was filed by the petitioner on 24th April, 1990. Counter-statement of facts by the respondent was filed on 23rd July, 1990 and thereafter rejoinder by the petitioner was filed on 1st November, 1990. The first effective hearing was held on 23rd February, 1991 (first hearing was fixed for 28th December, 1990, but the notice did not reach the respondent) and thereafter 21st January, 1991 was the date of hearing which was adjourned due to the Respondent. Subsequently the following dates were fixed and the parties as indicated above attended the hearing.

   DATE OF                       PRESENCE OF THE REASONS PARTIES. HEARING 
                               FOR ADJOURNMENT 
 8.2.1991                      None for the parties 
 23.2.1991                     None for the parties 
 29.3.1991                     This date was preponed by the learned 
                               Arbitrator to 27.3.1991 and on that date
                               none of the parties appeared 
 20.4.1991                     Both the parties present 
 10.5.1991                     Petitioner absent 
 29.5.1991                     Petitioner absent 
 10.6.1991                     Petitioner absent 
 12.6.1991                     Petitioner absent 
 25.6.1991                     Both the parties present 
 24.9.1991                     Adjourned on the request of the Respondent 
 8.10.1991                     Petitioner absent 
 19.10.1991                    Petitioner absent 
 25.11.1991                    Adjourned because the Arbitrator was out of   
                               town 
 7.2.1992                      Both the parties present 
 13.3.1992                     Adjourned due to respondent 
 4.4.1992                      Both the parties present  
 
 

 14. What has happened in this case is the final bill of the claimant was passed on 30.9.1986 and the payment of the amount was released on 12.11.1986.  
 

 15. The Arbitrator having quoted the relevant portion of Clause 25 has rejected the contention of the DDA in the following terms :  
  

"It will be seen that the period of 90 days starts from the date of receipt of intimation from the Engineer-in-charge that the bill is ready for payment. The respondent was asked to show on what date he had sent the intimation to the claimant. He replied in the negative and could not produce any documentary evidence that any intimation was ever sent to the claimant. If there is no intimation, the clock of limitation does not tick. Thus, the claims are not barred by limitation.

On 31.10.1986 (C-9), the claimant requested the respondent to release his security deposit. The final bill of the claimant was in the minus. The security deposit was released on 12.11.1986 by adjusting the minus final bill. Thus, the payment of minus final bill was not as a result of intimation from the respondent but by adjustment while released the security deposit.

In the light of the above facts, I hold that the claim of claimant are not barred by limitation."

Under Clause 25 of the Agreement the claimant must make his claim within 90 days from the receipt of intimation from the Engineer-in-charge that the bill is ready for payment. Therefore, the fact that the claimant was informed in September, 1986 and on 31.10.1986 the claimant requested the DDA to release the security deposited because no amount was payable on the final bill because all amounts apparently had been adjusted. What remained was the refund of the security deposited that has also done by the Delhi Development Authority on 12.11.1986. The claim was made by the claimant on 12.3.1987.

16. The Contractor applied by the appointment of an Arbitrator on 12.3.1987 is not in dispute.

17. The reasoning given by the Arbitrator that the payment of minus bill was not as a result of the intimation from the Respondent but by way of adjustment of releasing the security amount is absolutely perversive, therefore, the provision in Clause 25 would apply and the Contractor is deemed to have waived his claims against the Delhi Development Authority and the claim is absolutely barred and the DDA stands discharged in respect of all the liabilities on the contract on the sole ground that the award made by the Arbitrator is set aside.

18. Learned counsel Mr. V. K. Sharma for the DDA has brought to my notice the judgment of this court reported in DDA v. Sudhir Bros. , for the proposition when a particular matter is not arbitrable the Arbitrator would have no jurisdiction to adjudicate upon the matter. In the light of the specific provision under Clause 25 of the Agreement, the award at all cannot be sustained. There shall be no orders as to cost.