Suresh Kumar Jain vs Union Of India & Ors.
1998 Latest Caselaw 211 Del

JUDGMENT

K.S. Gupta, J.

1. Petitioner filed petition under Section 14 of the Arbitration Act, 1940 (for short the Act) alleging that he is a contractor and is the sole proprietor of M/s. Sewa Sons Builders. Respondents 1 & 2 awarded the work of construction of 16 nos. additional type-I quarters in Central Jail Complex to the petitioner and an agreement No. 100/EE/PWD-11/89-90 containing arbitration clause was expected between the parties. Certain disputes having arisen between the parties, by the letter dated 2.11.95 respondent No. 3 was appointed as arbitrator to adjudicate upon the disputes. Respondent No. 3 entered upon the reference and has made published the award on 29.2.96. It was prayed that respondent No. 3 be directed to file the original award alongwith arbitration proceedings in Court.

2. In response to the notice of the filing of the award, respondents 1 & 2 filed objection petition being IA No. 6712/97 against the award dated 29.2.96. Objection petition has been contested by the petitioner by filing reply.

3. Only objection taken in the objection petition (IA No. 6712/97) which is relevant reads thus:-

"That the counter claim No.5, the learned arbitrator has held that in view of the decisions the issue of levy of compensation under clause 2 of the agreement and recovery thereof is beyond the purview of the arbitrator.

It is submitted that there was a counter claim of the respondents for Rs. 63,583/- for the levy of compensation under clause 2 of the agreement. Therefore the respondent pray this Hon'ble court to direct the claimant to accept the awarded amount to Rs. 46, 817/- after the adjustment of Rs. 63,583/- against the counter claim Nos. 5 as the sum of above award works out to Rs. 1,10,400/- in favour of the claimant and are acceptable to the respondents. The respondents also agree to pay the above sum after adjusting the amount of counter claim No. 5 which is Rs. 63, 583/- and the net amount payable to the claimant works to Rs. 48,617."

4. An award can be set aside only on the grounds set out in Section 30 of the Act. It may be noticed that in the present objections the respondents have not challenged the award on any of the grounds enumerated in said Section 30 but have sought the adjustment of the amount of compensation levied under clause 2 of the agreement on the petitioner out of the amount awarded to him by the arbitrator. In my opinion such an adjustment cannot be permitted in these proceedings.

5. For the foregoing discussion, IA No. 6712/97 is dismissed and the award dated 29.2.96 is made the rule of the Court. Respondent No. 1 & 2 are allowed two months' time to pay the decretal' amount failing which the petitioner will be entitled to claim interest thereon @ 12% per annum. It is, however, made clear that it will be open to the respondents to seek to recover the amount of compensation levied under clause 2 in whatever manner it is open to them and in case any such proceedings are taken it will be open to the petitioner to raise all defenses that may be open to him in law to contend that the levy is bad. No order as to costs.