Bedi Construction Co. vs Delhi Development Authority And ...
1996 Latest Caselaw 243 Del

JUDGMENT

N.G. Nandi, J.

(1) The petitioner prays for the direction to respondent No. 4 (the sole Arbitrator), to file the original award dated 28.12.1992, rendered by the said Arbitrator between the petitioner (contractor) and the respondents, under Sections 14 and 17 of the Arbitration Act and making the same rule-decree of the Court.

(2) Vide order dated 8.1.1993, notice was issued to respondent No. 4, the Sole Arbitrator, directing him to file the award along with the arbitration proceedings. Consequent upon respondent No. 4 filing the award along with the arbitration proceedings, vide order dated 14.5.93, the notice of filing of the award was issued to the respondents. The petitioner accepted the notice. Respondent No. vide Ia 9860/93, filed objections to the award on 9.7.1993. Respondents 2 and 3 did not file any separate objections. Thereafter the issues have been framed by my learned Predecessor vide order dated 21.9.1994 and the Counsel for the parties stated that there is no need to file affidavit by way of evidence and that the arbitration record be read at the time of final arguments.

(3) It may be noted that the petitioner has not filed any objections to the award rendered by respondent No. 4 and the objections have been filed by DDA- respondent No. 1. It is contended by Ms. Salwan, Counsel for respondent No. that for claim No. 1, undertaking has not been considered by the Arbitrator; that the claim has to be within 90 days of the receipt of the intimation of the final bill by the respondent; that in view of Clause 42 of the agreement with regard to steel over-weight Claim No. 2, could not have been awarded by the Arbitrator; that as regards Claim No. 4, payment had to be made to other contractors for this work; for Claim No. 12, it is contended that no oral evidence was allowed to be led by the Arbitrator; that additional condition No. 1 of agreement disentitles the contractor to claim damages; that the claim of damages is prohibited; that delay is on the part of the petitioner and that there is a bar to claim enhancement under the agreement; that the contractor is not entitled to the compensation. As against this, it is submitted by Mr. Rohtagi, Counsel for the petitioner that the Arbitrator is an expert on the subject; that there is no objection on the ground of misconduct on double damages alleged against the Arbitrator and there is no allegation of travelling beyond the agreement; that the submissions advanced on behalf of the respondent are beyond the objections raised on record and that the submissions are dehors the objections; that Claim No. 14 awarded by the Arbitrator, has nothing to do with the power of the Arbitrator and the same has been awarded on merits; that the Arbitrator has not awarded any forbidden item; that Claims A to D do not relate to any forbidden item; that the delay is on account of the respondent, which is suggested by the hinderence register; that there is a delay of 31 months which has occasioned because of the respondents.

(4) It has been held in the case of Continental Construction Company Limited v. State of Madhya Pradesh, that "if no specific question of law is referred, the decision of the Arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. The Arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The Arbitrator is a Tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not he can be set right by the Court provided his error appears on the face of the award". It is further observed that "the Arbitrator can not be said to have misconducted himself in not deciding the specific question raised by the State regarding the legality of extra claim of the contractor". In the case of M/s. Metro Electric Co. New Delhi v. Delhi Development Authority, New Delhi reported in Air 1980 Delhi 266 (DB), while considering Section 30 of the Arbitration Act in case of contract for Electrification of a building and considering the payment of enhanced rate in case of rise in the prices of material and wages during progress of work, it has been held that the failure to complete work by prescribed date due to non-completion of construction of building by stipulated date, the clause providing for payment of enhanced rate was not attracted and the award of damages by the Arbitrator was held proper.

(5) As regards Claim No. 1, the objection is that the award suffers from the error apparent on the face of it as the Arbitrator has proceeded on wrong basis by allowing the claim which was totally barred and which actually called for rejection. Thus, the objection to Claim No. 1 is that Arbitrator instead of rejecting this claim, has allowed the same on wrong basis. Claim awarded on this score is under Clause 10-C of the Agreement on account of rise in material and rise in wages of labour. It is suggested from page 4 of the award, para 3.3, that the contractor gave an undertaking on the application for extension of time, which undertaking has been reproduced and it is found in para 3.4 that the extension of time and final bill was cleared only after obtaining the undertaking to the effect that the contractor shall not claim any compensation/damages on account of delay in the work due to reasons attributed to the department and for this reason it has been observed by the Arbitrator that the said undertaking was obtained from the claimants under pressure and without free consent and therefore, the claim was found to be justified.

(6) As regards Claim No. 2, the objection raised is that the Arbitrator has awarded this claim in full, ignoring Clause 42 of the agreement between the parties. It is suggested from the reasoning for Claim No. 2 that the steel bars were issued to the contractor on the basis of the actual weight and recovery made accordingly. The payment was made on the basis of the theoretical sanctioned weight for which reliance was placed on the letters dated 20.8.1983, 13.10.83,28.8.94, 4.3.85 and 5.12.83. It is indicated that the details of weight were intimated to the respondents from time to time, which fact is not denied, except vide letter dated 25.3.86 in reply to the claimant's letter dated 4.3.85 after the completion of the item. The claim has been granted observing that the objection was raised by the respondent on this score after the completion of the work and at no time prior to completion of the work. In view of no objection having been raised by the respondent, at the appropriate stage, the award on this score can not be said to be contrary to the evidence or illegal on the face of the record.

(7) As regards claim No. 3, it will be seen that the rebate of 0.32% and 0.30% of estimated cost were subject to conditions of monthly payment of Ra bills and payment of final bill within six months of completion of work respectively. It is found that a number of bills were not paid regularly every month and the final bill was also paid much after the period of six months. The grant of Claim No. 3 can not be said to be contrary to the evidence on record, or settled legal proposition.

(8) The grant of Claim Nos. 4 to 11 also suggests reasons in support there of and each of these claims is on the basis of the evidence on record. It is not suggested by the Counsel for the respondent as to how any of these claims are without the basis of evidence or otherwise not permissible under the law. As regards Claim No. 11 it may be seen that the work, as it is suggested from the arbitration record, was certified as complete except a few minor deficiencies on 1.11.86. It was the responsibility of the respondents to hand over the flats to the allottees. If there were deficiencies, then the same could have been got rectified or made good and the expenses incurred for the same, could have been recovered from the claimants. The with-holding of Rs. 1.00 lakh on ad hoc basis by the respondent, after 15 months of completion of the work, rightly held to be not justified by the Arbitrator, and can not be regarded as, in any manner, an error apparant on the face of the record or the Arbitrator having misconducted himself in any other manner in awarding this claim.

(9) I also do not find the objections raised with regard to Claims 12 and 13, reading the award and considering the arbitration record and proceedings, deserving any credence as the award on these claims by the Arbitrator does not appear, in any manner, to be contrary to the record.

(10) As far as Claim No. 14 is concerned, the objection is that the said claim for damages has been wrongly allowed as the additional condition No. 1 of the agreement disentitles the contractor to claim damages. In this regard, reliance has been placed on behalf of the respondent on the decision in the case of Union of India v. Jain Associates & Another reported in 1994 (1 ) Arbitration Law Reporter, page 494, wherein it is held by the Supreme Court that "the two Claims No. 11 & 12 for damages and loss of profit are founded on breach of contract but under Section 73 both the claims are encompassed as damages. ........The Umpire also failed to consider the counter claims. Although a bad portion of the award may be set aside if it is severable from the rest of the award, it is clear that the Umpire did not act in a judicious manner objectively and dispassionately which would go to the root of the competence of the Umpire to decide the disputes. The whole award must be declared invalid and would be set aside on ground of misconduct". This principle would not be attracted to the present case. The grant of claim for damages cannot be said to be beyond the authority of the Arbitrator.

(11) IT. is found from the award that the date of start and completion, as stipulated in the contract was 22.12.82 and 19.12.83 respectively. The work was actually completed on 1.11.1986 as per completion certificate recorded by the respondents. The hinderance register maintained by the respondent itself suggests the delay of 1208 days against the actual delay of 1042 days. As the undertaking referred to above was found to have been obtained from the claimants without free consent, as the same was made a pre-condition before the sanction of extension of time and the payment of final bill and the respondent having failed to fulfill the initial part of their contractual obligation amounting to breach of contract and held liable under the law to compensate the claimant for the extra expenditure arising out of the breach. The grant of damages by the Arbitrator on this score can not be regarded as a legal misconduct as the award on this score can not be said to be for the reason of error apparent on the face of the record.

(12) Thus, it will be seen from the above that it is not suggested from the objections filed to the award under Sections 30 and 33 of the Arbitration Act that the award rendered by the Arbitrator (respondent No. 4) is liable to be set aside on account of any error apparent on the face of the record or the same is contrary to the evidence on record. It need hardly be said that the Arbitrator is the sole judge for adjudicating the disputes raised between the parties and this Court is not sitting in appeal reappreciating the evidence and reviewing the reasoning given by the Arbitrator in support of the award. It is not suggested that the Arbitrator, in any manner, misconduct himself in awarding the claims to the petitioner and the objections filed by the respondent do not call for any interference with the award as the inclination of the Court has to be to preserve the award unless the same is vitiated by an error apparent on the face of the record or Arbitrator having legally misconducted himself in any manner in giving the award.

(13) In view of the above, the objections filed by the respondent, vide Ia No. 9860/93, being devoid of merits, are rejected.

(14) In the result, the objections to the award filed by the respondent/objector, vide Ia No. 9860/93 are dismissed and the petition is granted. The award dated 28.12.1992, rendered by Shri R.J. Bakhru, the sole Arbitrator (respondent No. 4) is made rule of the Court and the decree granted in terms of the said award. The award shall from part of the decree. Petitioner shall be entitled to 12% interest on the award amount from the date of the decree till realisation of the amount. Ordered accordingly.