Delhi Development Authority vs Harbans Lal Narang
1996 Latest Caselaw 95 Del

JUDGMENT

Usha Mehra, J.

1. Delhi Development Authority (in short DDA) is aggrieved by the order of the Additional District Judge, Delhi whereby the dismissed the application of the DDA for recalling his order and for condoning the delay in filing the objection to the award.

2. Briefly stated the facts are that after the dispute arose between the parties, the Engineer Member, DDA on the request of the contractor appointed the arbitrator and referred the disputes to him. The said arbitrator made and published his award and filed the same in the court. On filing of the award, the court issued notice to the respondents. Engineer Member of the DDA and the Executive Engineer, DDA were served. The said notice was received by the Engineer Member of 8th October, 1993, but the Executive Engineer received the same on 22nd October, 1993. It is the case of the appellant that after the receipt of the notice by the Engineer Member of the DDA on 8th October, 1993, the case was entrusted to the Panel Lawyer of DDA who inspected the court file on 22nd October, 1993. He informed the DDA on 26th October, 1993, about the award and its particulars. It is further averred that the concerned Executive Engineer in turn was asked to contact the Panel Lawyer with relevant record. As the Executive Engineer received the notice of filing of the award on 22nd October, 1993, therefore, he started preparing grounds for challenging the award. He contracted the panel lawyer on 17th November, 1993. Since, on the court record, notice of filing of award was served through the Engineer Member on 8th October, 1993, therefore, the court processed to make the award rule of the court as the period of filing the objection and since expired on 8th November, 1993 and till then no objection had been filed. Case was taken upon 10th November, 1993, in the presence of the counsel for the DDA. Award was made rule of the court on 10th November, 1993. According to petitioner the Executive Engineer after preparing the objections contracted the panel lawyer. He in turn informed the Executive Engineer that the award had already been made a rule of the court on 10th October, 1993. This created a confusion in the DDA hence the matter was entrusted to the senior counsel for opinion on 24th December, 1993. He opined on 4th January, 1994 that application for recalling the order may be filed. The decision to consult the senior counsel and/or preferring an application for filing objections and condensation of delay could not be filed earlier because of the post of Chief Engineer lying vacant. In the absence of Chief Engineer (WZ) no decision could be taken. Besides giving these facts, the petitioner has also taken legal plea to the effect that there was no proper service of notice on the DDA. The Engineer Member or for that matter Executive Engineer was not competent to receive notice on behalf of the DDA. DDA ought to have been served. DDA alone can sue and be sued. The trial court rejected this legal objection as well as the application under Section 5 of the Limitation Act on merits. Court concluded that the service was proper and that no ground was made out for condoning there delay.

3. It is against this order that the present petition has been preferred, inter alia, on the ground that the delay was neither intention nor wilful. It was due to the shuffling of the file in the office of the DDA and on account of confusion created by the court by serving two notice on two different authorities, namely, the Engineer Member on 8th October, 1993 and the Executive Engineer on 22nd October, 1993. From the service of notice on 22nd October, 1993 there was still time to file the objection whereas award was made a rule of the court on 10th November, 1993. In fact neither service on Engineer Member nor on the Executive Engineer could be called a proper service. The trial court ought to have held that the notice was nor properly served on the competent authority. Moreover, the post of the Chief Engineer was lying vacant at the relevant time hence decision for filing objections was not taken in time. Delay had in fact been sufficiently explained, and therefore, the application for condensation of delay ought to have been allowed. The objections against the award should have been entertained. Award was a nullity. It was liable to be set aside because the arbitrator granted compensation for escalation in the price of material and wage rate under Clauses 10(C) and 10(CC) of the agreement which he could not do because Clause 10(CC) was to apply only when the time stipulated for the completion of the work exceeded six months. Moreover, the award on account of site expenses and overheads could not be passed. The work was delayed by the contractor, therefore, the award of compensation was against the contract.

4. Mr. Bakshish Singh appearing for the respondent not only refuted the averments on merits with regard to the delay in filing the objections, but also refuted the legal submissions raised by Mr. Ravinder Sethi, senior Advocate and contended that there was proper service of notice of filing of the award on the DDA. According to Mr. Bakshish Singh, no appeal against the dismissal of the applications under Section 5 of the Limitation Act is maintainable.

5. After hearing Mr. Ravinder Sethi, senior Advocate for the appellant and Mr. Bakshish Singh for the respondent, I am of the view the appellant has failed to satisfactorily explain the delay. For arriving at this conclusion, mention can be made to few of the glaring facts which would prove negligence and carelessness on the part of appellant. There is clear admission of service on DDA by the appellant. Reference can be made to para 2(a) of this appeal wherein appellant has admitted that DDA was served on 8th October, 1993 of the notice of filing of award. The same was entrusted to its panel lawyer. But when it was entrusted nothing has been stated. Panel lawyer, however, inspected the file on 22nd October, 1993 and informed the DDA about the particulars of the award on 26th October, 1993. Nothing has been stated as to when the post of the Chief Engineer (WZ) fell vacant. In fact there is not a whisper about the fact as to when this post was filled and whether in the absence of Chief Engineer (WZ) no one else could take this decision. The averments of falling vacant of the post of Chief Engineer (WZ) and non-taking of decision by him are very vague. If the matter was examined by Finance Officer-II of the office of Chief Engineer what decision was taken not a whisper of that except saying that it fell in the competence of the Chief Engineer (West Zone) alone to take decision. No policy decision was placed on the record to show that in the absence of Chief Engineer (West Zone) no one else could take a decision. Even after the decision having been taken on 16th November, 1993 to file the objections yet till 20th January, 1994 no objections were filed. The plea of confusion on account of service of notice on Executive Engineer on 22nd October, 1993 does not inspire any credence. As pointed out earlier the Executive Engineer after receipt of notice on 22nd October, 1993 started preparing objections and contracted the panel lawyer. Panel lawyer's report dated 26th October, 1993 had infact already available on the file which he submitted after inspection. Therefore, there was no question of any confusion. Again opinion of senior lawyer was available as on 4th January, 1994, but neither any application was filed nor action taken till 14th February, 1994. This is nothing but an act of carelessness and sheer negligence on the part of the appellant.

6. Once the counsel took inspection on 22nd October, 1993, DDA ought to have taken steps to file objections within time. Moreover, the panel lawyer was in court on 10th November, 1993 still he did not bring to the notice of the court that there was another notice served on the Executive Engineer on 22nd October, 1993, therefore, award could not be made a rule of the court on the basis of notice received by the Engineer Member on 8th October, 1993. Having not done so the theory of confusion does not appeal to reasons. Moreover, as per appellant's own showing in para 2(a) of this appeal the notice of filing of the award was duly served on DDA on 8th October, 1993. Hence, objections ought to have been filed within 30 days from 8th October, 1993.

7. Mr. Ravinder Sethi's contention that the delay had been sufficiently explained, to my mind, this submission is without substance. Since the case was fixed for 10th November, 1993 and the objections had not been filed hence the court rightly made the award rule of the court. According to appellant's own showing file of this case was sent to the Legal Department for examination. The Deputy Chief Legal Advisor contacted the senior Standing Counsel on 3rd January, 1994 for filing appeal in the High Court. On 4th January, 1994, the counsel opined to move an application for recalling the order and for condensation of delay along with objections against the award. File with opinion was sent to the legal department. According to appellant, objections and the application for condensation of delay was prepared as per counsel's opinion. It was sent to the department but application was filed in court only on 14th February, 1994. No explanation regarding the delay from 4th January, 1994 to 14th February, 1994, i.e., from the date opinion was given by the counsel till the date of filing the application. Hence the explanation given, to my mind, leads to only one conclusion that the appellant took everything casual hence negligent. Mr. Sethi's contention that these circumstances show vigilance on the part of DDA to pursue the case has no force.

8. Mr. Sethi to support his contention placed reliance on the decisions in the cases of M/s. D. Khosla & Co. v. Sh. Y. N. Rao and another (1994 III AD (Delhi) 1429), Union of India v. R.P. Builders , and in the case of Collector, Land Acquisition, Ananthing and another v. Mst. Matiji and others . I am afraid none of these cases cited by Mr. Sethi are of any help to him. So far as the case of M/s. D. Khosla & Co. (supra) is concerned, there the counsel after having entered appearance. Stopped appearing in the court subsequently. Thereafter, there was intervening summer vacations. No objections were filed nor the counsel intimated to the Department anything inspite of a letter to him. Court found fault in the counsel and concluded that the delay was due to the fault of the counsel so the respondent department should not be made to suffer because the Ministry did all that was within its power to defend. It was in this background that the court condoned the delay. But that is not the case in hand. In the present case there was no fault of the counsel for the DDA. What action was taken after 26th October, 1993 i.e., when panel lawyer submitted his report after inspection nothing has been stated. Executive Engineer became aware about the filing of the award as on 22nd October, 1993 and yet he sat over the matter. Chief Engineer's post was lying vacant since when nothing stated. Suppose the post of the Chief Engineer could not be filed for one year then the authority would sit tight without taking any decision ? No statutory authority can be allowed to urge such a flimsy objection. Functioning of the DDA could not have stopped for want of decision by the Chief Engineer (WZ). It does not lie in the mouth of the appellant to state that since the post of Chief Engineer was lying vacant hence decision to file objection could not be taken in time. Engineer Member admittedly is the head and the Executive Engineer is the contracting party. If they took decisions to file objections then what prevented the DDA to do so nothing has been stated. Thus, the stand taken now is contrary to appellant's assertion that Executive Engineer after receipt of notice took the decision to file objection. This is so pleaded in para 2(a) of this appeal. To my mind, the factum of the post of the Chief Engineer lying vacant is an after thought. Decision as per appellant was taken to file objections on 16th November, 1993. Panel lawyer was contacted on 17th November, 1993, yet the objections was not filed till 14th February, 1994. Hence the Trial Court rightly concluded that there was neither sufficient nor bona fide ground made out for condoning the delay, facts stated not constitute sufficient ground. Reliance on other decisions is also of no help to the appellant. Facts of this case show clear negligence and inaction on the part of appellant.

9. In fact on the facts of this case, reliance can be placed on the decision of Supreme Court in the case of M/s. Bharat Cooking Coal Ltd. v. M/s. C. K. Ahuja and another . The observations of the Apex Court squarely apply to the facts of this case. Their Lordships while dealing with almost similar circumstances opined that when the objections are not filed after the service of the notice of the filing of the award or even within 30 days from the date of inspection of Court file by the lawyer then the award was rightly made a rule of the court. In that case Supreme Court Registry issued notice to the counsel for the parties in April, 1994. It was nobody's case that the counsel lacked an authority to take such a notice on behalf of either of the parties. Objections were neither filed within 30 days from the date of the service of the notice in April, 1994 nor from the date the counsel inspected the court file i.e., on 3rd October, 1994. Objections in fact were filed on 20th November, 1994. It was in this background, Supreme Court while upholding the contention of respondent opined that when no objections were filed either from the date of notice or from the date of inspection, the award had to be made a rule of the court. In this case also admittedly the appellant was served on 8th October, 1993 as admitted in para 2(a) of this appeal. Case was entrusted to its panel lawyer. He inspected the court record on 22nd October, 1993 and submitted his report on 26th October, 1993. Still neither the objections were filed within 30 days from 8th October, 1993 nor within 30 days from 22nd October, 1993. Objections in fact had been filed on 14th February, 1994. Hence, application for recalling the order and condoning the delay apparently had been filed beyond the period of limitation. No application had been filed for setting aside the decree.

10. So far as the legal plea taken by Mr. Sethi that DDA was not properly served, this argument has also no force. This plea is not substantial in view of appellant's own assertion in para 2(a) of this appeal, where the appellant itself has admitted that the DDA received the notice on 8th October, 1993. In its own words "the appellant immediately on receipt of the notice dated 8th October, 1993 sent the same to the panel lawyer". The appellant herein is the DDA. Therefore, it does not lie in its mouth to contend the notice was not property served on the DDA. Inspite service of the notice on 8th October, 1993, no action was taken till 22nd October, 1993 when panel lawyer inspected the file and in turn informed the DDA on 26th October, 1993 the details of the award. Therefore, it is a clear cases of inaction and negligence on the part of the DDA. Even as per its own showing inspite of having taken the decision on 18th November, 1993 to file objections yet no objections were filed till 14th February, 1994. Therefore, for the reasons stated above I find to infirmity in the order of the Trial Court.

11. So far as Mr. Bakshish Singh's objection that appeal does not lie against the order of dismissal of an application under Section 5 of the Limitation Act, the submission is also without substance. In order to appreciate his contention. Section 39 of the Arbitration Act is reproduced as under

"39. Appealable orders :

(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the court authorised by law to hear appeals from original decrees of the court passing the order :

An order -

(i) superseding an arbitration;

(ii) on an award stated in the form of a special case;

(iii) modifying or correcting an award;

(iv) filing or refusing to file an arbitration agreement;

(v) staying or refusing to stay legal proceedings where there is an arbitration agreement;

(vi) setting aside or refusing to set aside an award.

Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.

(2) No second appeal shall life from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

12. Bare reading of the provision of Section 39(1), sub-sections (i) to (vi) shows that the appeal would be preferred only in the eventualities mentioned therein. Dismissal of the application of the DDA by the Trial Court for recalling the order thereby making the award rule of the court and for condensation of delay is covered by the provisions of sub-section VI of Section 39(1) of the Act. Such an order though not on merits is still appealable because it amounts to refusing to set aside the award and hence covered under sub-section VI.

13. For the reasons stated above I find no merit in the appeal dismissed.

14. Appeal dismissed.