Anant Raj Agencies vs Delhi Development Authority
1996 Latest Caselaw 907 Del

JUDGMENT

K. Ramamoorthy, J.

(1) The Claimant M/s Anant Raj Agencies was entrusted with the work by the Delhi Development Authority of providing additional facilities in resettlement colony, Mangolpuri Shahdara Internal water supply system for individual connection Group-IV. Disputes arose between the parties and Mr. K.D. Bali was appointed as Sole Arbitrator by the Engineer Member on 7.2.1994.

(2) On 9.1.1995 the Arbitrator passed the award. There were in all seven claims. The Arbitrator decided in favour of the Claimant claim Nos 1,3,4,5,6 and 7 and claim No. 2 was rejected by the Arbitrator.

(3) The Dda has filed its objection challenging the award. In claim No. 1 the Claimant made a claim of Rs. 5,72,300.00. The Arbitrator awarded a sum of Rs. 1,27,776.00.

(4) The objection filed by the Dda is that the claimant has not produced any evidence to substantiate the claim and the Arbitrator had awarded the amount on mere surmises and conjunctures and the award is unreasoned one contrary to Clause 25 of the agreement.

(5) The Arbitrator has referred to the documents filed by the claimant in particular C-22 which shows the increase in the rate of price and that has not been disputed by the DDA. The Arbitrator has given cogent reasons for his decision and I do not find any reason to interfere with this part of the award.

(6) In claim No. 3 the claimant has claimed a sum of Rs. 30,000.00 for loss suffered on account of the failure of department to make available the water mains for connection with newly laid line. Accordingly, the claimant claims Rs. 30,000.00 i.e. Rs. 1000.00 per day for 30 days. The Arbitrator after discussing the evidence on record said "according to me the loss suffered by the claimant in this account cannot be more than Rs. 664.00 per day being the wages of one Supervisor, ten fitters/ plumbers, ten Beldars and consequently, I award Rs. 19,920.00 to the Claimant under this claim".

(7) In the objection petition the Dda has said that no reasons have been given by the Arbitrator and the decision is contrary to the Clause 25 of the agreement between the parties. The Arbitrator has considered all the relevant facts to coming to the conclusion and I do not find any error in the award passed by the Arbitrator granting Rs. 19,920.00 to the claimant.

(8) In claim No. 4 the claimant claimed a sum of Rs. 5,19,500.00 due to site expenses and other overheads. The Arbitrator had awarded a sum of Rs. 1,29,895.58.

(9) The objection by the Dda is that the Arbitrator has not given any reasons but only given his conclusion and the Claimant was not entitled to make any claim on this head. The Arbitrator has given elaborate reasons for coming to the conclusion and referred to Exhibit R-20 wherein the Engineer in charge of the work has admitted that the delay was due to the respondents and the claimant was not any way responsible. The Arbitrator has come to the conclusion that the delay was attributable only to the respondents. The Arbitrator in arriving at the figures has given the following reasons : THE claimant has claimed the site expenses and overhead expenses while calculating @ 10% of the total value of the work to be done, whereas according to me for such type of work 5% of the total value of work is a reasonable amount to be spent upon the site and overhead expenses, that is to say on the tender amount of Rs. 36,67,640.00 the total site and overhead expenses in six months would be Rs. 1,83,382.00 i.e. Rs. 30,563.00 per month should be the expenses for the site and overhead expenses for the said work Since the work has been prolonged for 8 and half months, the claimant could have incurred an amount of Rs. 2,59,791.16 as additional expenses for the maintenance of site and overhead expenses keeping in view of the doctrine of mitigation in mind, according to me. Rs. 1,29,895.58 would provide adequate compensation to the claimant for the reimbursement of the infructuous expenditure incurred by the claimant during the prolonged period. Accordingly, I award a sum of Rs. 1,29,895.58 under this claim against the respondent.

I have no hesitation in coming to the conclusion that the award of the Arbitrator is in accordance with law and no case has been made out by the Dda under Section 30 of the Arbitration Act, 1940.

(10) In claim No. 5 the Claimant claimed a sum of Rs. 3,06,700.00 for refund on account of illegal deduction made by the department on account of their contention that Class 'A' pipe had not been provided as contemplated in the agreement and the Dda has illegally and wrongly recovered the said amount from the claimant's final bill in respect of 100 mm. dia pipe in item 5 A of the agreement and the Dda has paid a sum of Rs. 30,02,638. While the claimant was entitled to additional sum of Rs. 3,06,748.17.

(11) In the objection petition, the Dda would state that the Arbitrator had not acted in accordance with the terms of the agreement and he has exceeded his jurisdiction.

(12) The Arbitrator has considered all the facts in coming to the conclusion. The Arbitrator said: THE claimant also contended that this difference of Rs. 3,06,700.00 has come because of the wrong controversy raised by the respondent that the claimant was to lay Class 'A' pipe and not Class La pipes and thus the respondent illegally and wrongly reduced the rate thereby effecting a recovery of Rs. 3,06,748.17 for the entire quantity of 19388.12mtr. pipe. It was also contended by the claimant that in fact in the agreement item instead of Class La it was wrongly typed as Class-A and word L was missing in it, whereas the entire nomenclature of the item and its rate which is otherwise payable for Class La is exactly the same as in DSR. It was also contended by the claimant that the tender was based on the rates as mentioned in Dsr 1981 and the percentage over and above added thereto. The claimant produced Dsr 1981 and pointed out the nomenclature of item of Class La pipe and Class A pipe and their rates to prove that there was a vast difference in the nomenclature between these items and also their rates. The claimant also contended that when the Class La pipes were being laid at no point of time the respondent ever raised any objection as to why Class La pipes were being laid and in fact payments under the relevant item was made on the basis of the agreement rates provided for it in all the five bills and it v/as only in the last and final bill the said illegal recoveries were made. The claimant also contended that pointed out during the course of arbitration that even while preparing the abstract of the final bill in the measurement book the respondent itself recorded the said item as Class La pipe and applied rate as per agreement, but later on scored out the said item in the abstract of the measurement book and introduced a new substituted item reducing the rate keeping the nomenclature as in Dsr for Class La pipe. It was also contended that the respondent is unnecessarily trying to take advantage of a typographical mistake and that the respondent is not making the payment to the claimant as per the agreement rates. The claimant also contended that even if the item is taken to be a substituted item then also recourse has to be taken to Clause 12 and by taking recourse to Clause 12 then also one has to go to the rates provided in Dsr and add the necessary enhancement. The Dsr item itself provides the same rate as has been paid to the claimant, i.e. Rs. 120.63 per mtr. plus enhancement @ 41.5%. Therefore, the claimant urged that in whatever way the rate of said agreement item is calculated the claimant is entitled for a total payment of Rs. 33,09,386.00 and not Rs. 30,02,638.14 as has been contemplated by the respondent for payment against this item. On the other hand the respondent denied their liability for payment of Rs. 3,06,748.17 restricted to Rs. 3,06,700.00 on the ground that the respondent has rightly calculated the cost of the same. I have heard both the parties in detail and have perused the relevant agreement items and also the relevant Dsr item. The nomenclature for Class A and Class La are quite different and there is a substantial departure in the rates of two items. The tender invited was based on the rate provided in Dsr, 1981. The Dsr 1981 provides the rate for Class La pipes as used by the claimant in the present work as Rs. 120.63 per mtr. and as such the allegation that the rate in the agreement was for Class A of the respondent is absolutely wrong on the face of it as neither it tallies with the nomenclature nor the rates given in the DSR. It is a clear case of a typographical mistake which was even understood by the respondent at the time of making the payment of running bills. The respondent has not been able to explain as to why all of a sudden after they have been making the payment for the said Class La pipes at the agreement rates the respondent has departed from the said rates in the final bill. There is no dispute regarding the quantity claimed and thus the claim of the claimant in this regard is absolutely justified as I am fully convinced that the claimant is entitled to be paid @ 120.63 per mtr. 41.5% above as per the agreement between the parties and the respondent cannot take any advantage of the typographical mistake as even if it has to be taken as a substituted item then also recourse has to be taken to Dsr 1981 and Dsr 1981 provides the rates as claimed by the claimant and consequently the claim of the claimant is fully justified. I, accordingly award a sum of Rs. 3,06,700.00 to the claimant under this claim against the respondent".

I am not able to appreciate the objection filed on behalf of the Dda and it is not stated in the objection petition as to how the reason given by the Arbitrator is wrong. Therefore, the award on this claim is confirmed.

(13) In claim No. 6 the claimant has claimed pendente lite and future interest at the rate of 20% per annum with quarterly rests on the amount of Claim Nos. 1 to 5. But the Arbitrator has awarded interest only on two claims i.e. Claim No. 1 Rs. 1,27,776.00 and claim No. 5, Rs. 3,06,700.00 @ 18% per annum with effect from 11.02.1994 till the actual date of payment or till the award made rule of the Court whichever is earlier.

(14) I entirely agree with the award passed by the Arbitrator. The Arbitrator had acted in accordance with law and I am not able to say that the award in respect of interest @ 18% per annum is not normal. It is perfectly reasonable.

(15) In Claim No. 7 the claimant claimed interest @ 20% per annum with quarterly rests on the aforesaid amount of claims 1 to 5 with effect from 15.10.1985 the date of notice i.e. 11.2.1994. The Arbitrator had awarded interest @ 18% per annum on the two amounts i.e. Claim No.1 and claim No. 5 i.e. Rs. 1,27,776.00 and Rs. 3,06,700.00 from 1.10.1986 till 10.2.1994.

(16) The objection filed by the Dda on claims 6 and 7 are that the award of interest is against the provisions of Interest Act, 1978. I am not able to accept the contention of the DDA. The claim is only to interest on Rs. 1,27,776.00 and Rs. 3,06,700.00 as awarded by the Arbitrator is confirmed. Accordingly, the award is made rule of the Court. There shall be a decree directing the Delhi Development Authority : (A)to pay to the claimant a sum of Rs. 5,84,291.58; (b) to pay to the claimant the sum of Rs. 5,75,681.00 (interest @ 18% on a sum of Rs. 4,34,476.00 (claim No. 1 Rs. 1,27,776.00 and Claim No.5 Rs. 3,06,700.00) from 1.10.1986 upto 10.2.1994); (c) to pay to the claimant interest @ 18% per annum on a sum of Rs. 4,34,476.00 from 11.02.1994 upto the date of payment. (d) Directing the parties to bear their own costs.