Sanyukt Nirmata vs Delhi Development Authority
1998 Latest Caselaw 957 Del

JUDGMENT

S.K. Mahajan, J.

1. Certain disputes having arisen between the parties under Agreement No. 19/EE/HDX/80-81 the same were referred for adjudication to Shri K.S. Gangadharan, Chief Engineer, CPWD, the Sole Arbitrator. The Arbitrator after hearing the parties and going into the claims, counter claims and documents on record made and published his award on 29.1.1992 which was filed in this Court and notice of the filing of the same was accordingly sent to the parties. Both, the petitioner as well as the respondent challenged the said award and filed their respective objections under Sections 30 and 33 of the Arbitration Act. By this order 1 propose to dispose of both these objections filed by the petitioner as well as by the Delhi Development Authority.

2. The petitioner's objections to the award are confined only to the rejection of his additional Claim No. 3 whereby a sum of Rs. 5 lacs towards infructuous expenses and damages allegedly incurred in the execution of the work was claimed by the petitioer.

3. The challenge to the award by the Delhi Development Authority is on the ground that no reasons as required by Clause 25 of the agreement have been given by the Arbitrator for giving his award in respect of Claims Nos. 1 and 4 and Additional Claims No. 7 and Counter-Claims No. 3 and 4. Award on Additional Claim No. 1 and 2 and Counter-Claim No. 1 has been challenged on the ground that the same were covered by Clause 2 of the agreement and in view of the judgment of this Court in Sudhir Brothers v. Delhi Development Authority, the disputes could not be decided by the Arbitrator. Under Counter-claim No. 6 the Delhi Development Authority had claimed interest alleged to have been paid by it to the allottees due to delay in handing over the flats by the petitioner due to delay in the completion of work. The award of the Arbitrator on this counter-claim is also challenged by the Delhi Development Authority.

4. Mr. V.K. Sharma appearing on behalf of Delhi Development Authority has contended that the award of the Arbitrator in so far as it relates to Claim Nos. I and 4 and additional Claim No. 7 and Counter-Claim Nos. 3 and 4 is bad as no reasons whatsoever have been given by the Arbitrator for arriving at the amount awarded by the Arbitrator in favour of the petitioner. It is contended that the Arbitrator ought to have given reasons as to why a particular amount has been arrived at for payment to the contractor and no reasons whatsoever having been given for assessing the amount allegedly payable to the contractor under the aforesaid claims, the award was liable to be set aside. According to Mr. Sharma, the Arbitrator was required to justify how the amount of Rs. 2,26,644.08 p. was payable to the petitioner under Claim No. 1 and Counter-Claim Nos. 3 and 4 and Rs. 71,944.50 was payable under Claim No. 4. The award of Rs. 30,859/- for additional Claim No. 7 has also been challenged on the ground that no reasons as to how this figure had been arrived at have been given in the award.

5. While awarding a sum of Rs. 1,36,348.74 under Claim No. 1(C) the Arbitrator has held that the Delhi Development Authority having made payment under Clause 10(c) of the agreement during the progress of the work proves that it had satisfied itself that the claimant had actually incurred expenditure on labour escalation and that he was eligible to claim the same under the contract. According to the Arbitrator, further payment claimed by the petitioner under Clause 10(c) was only reimbursement of the extra cost of labour incurred by the claimant as per statutory obligations. Hence, it is clear that the claimant was eligible for payment under Clause 10(c). The Arbitrator, therefore, awarded a sum of Rs. 1,36,348.74 as the payment due plus a sum of Rs. 3,502/- as the amount for items not included earlier. A total sum of Rs. 1,39,850.74 was thus allowed under this item. Similarly, a sum of Rs. 2482.20 was allowed under Claim No. 1 (D) after the Delhi Development Authority had admitted that the claimant had actually provided M.S. Flat of 50 x 6 mm. in place of 50 x 4 mm. A sum of Rs. 25,000/- was awarded under Claim No, 1(G) as the amount was wrongfully withheld in the 32nd R.A. Bill for allotment of flats. This amount was admittedly not released by the Delhi Development Authority till the making of the award and the petitioner was held entitled to refund of the same. A sum of Rs. 10,000/- was awarded under Claim No. 1(F) for providing concealed stop cocks and true hold fasteners. The Arbitrator held that the Delhi Development Authority was not justified in making payment at the rates made by it and the same required revision and an amount of Rs. 10,000/- was found payable under this head by the Arbitrator. A sum of Rs. 5,000/- was found due to the claimant for providing grooves in the ceiling as admitted by the respondents. Besides this, deduction of Rs. 40,311.14 made by the Department from the bills of the claimant on account of using poor mortar in Brick work and on account of using less Bhusa in Mudphuska was held not to be justified. The Arbitrator held that the respondent had failed to prove the allegation that poor molar was used in Brick work nor it was proved that less Bhusa was used. A total sum of Rs. 2,26,644.08 was thus awarded under Claim No. 1.

6. Under Claim No. 4 the claimant had claimed a sum of Rs. 1,30,715/- for execution of certain works beyond deviation limits which included agreement Items 3.8, 6.9 and 7.2. This amount was claimed at the rates submitted by the petitioner under Clause 12A of the agreement. The Department did not refute the rates quoted by the contractor within a reasonable time but after getting the work done, after a period of eight years, it came out with an analysis allegedly on the market rates which were very much on the lower than the rates quoted by the petitioner and was not acceptable to him. After going through the material on record the Arbitrator assessed the extra amount as Rs. 71,944.50 for which reasons were given in the award.

7. Under additional Claim No. 7 the claimant claimed a sum of Rs. 42,750/-towards watch and ward expenses from 1.2.1984 to 10.9.1985 the period required for handing over the quarters after completion to the respondent Delhi Development Authority and Rs. 15,859/- on account of cost of welding of adjustable lugs to pressed steel Chaukhats. The Arbitrator while awarded a sum of Rs. 15,000/- as reasonable compensation for ward and watch during the handing over period, a sum of Rs. 15,859/- was assessed on account of welding of lugs.

8. In my view the objections of the D.D.A. in so far as the aforesaid claims are concerned on the ground that no reasons have been given are without any basis. A perusal of Award shows that the Arbitrator has given reasons for arriving at his decision. In my view the Arbitrator is not required to write a detailed judgment as the Judges do in Court. Short reasons indicating as to how the Arbitrator has arrived at his decision is sufficient compliance of the requirement to give reasons. This Court cannot go into sufficiency or reasonableness of reasons nor it can say whether reasons are good or bad unless on the face of the award it appears that the Arbitrator has tied himself down to some special legal proposition which is unsound. A Division Bench of this Court while dealing with a similar matter in Delhi Development Authority v. Alkarant, has held that the Arbitrator is the final judge of fact. The Court is bound by the Arbitrator's finding of fact and cannot review them unless they are unsupported by evidence and unless it appears from the award itself that there was no evidence to support the decision. It is not open to the Court to examine the adequacy of evidence which led the Arbitrator to his findings of fact. His findings are final. In this case the contractor had claimed certain amount for executing extra items of work and after detailed hearing the Arbitrator held that the contractor was entitled to extra payment for extra items. The Court in these circumstances held as under:

"There was material before him to establish that the price had risen substantially. He was justified in not accepting the calculations of either party and arriving at his own figure in accordance with the facts ascertained by him. He has not based his decision only on the claim of the contractor, as contended by learned Counsel for the appellant.

In these circumstances I feel that the Arbitrator was well within his jurisdiction to come to this conclusion. The question whether I would have come to the same conclusion or arrived at the same figures is not material. Once there is evidence, there is no apparent error and/or misconduct. I cannot go into the sufficiency of the evidence; nor is it necessary for the Arbitrator to set out the actual calculation figures as worked out by him; his reasons, as mentioned, are adequate and clear; it is not essential for him to give a detailed reasoned decision indicating each minute step of his mental meanderings."

It is, therefore, clear that the Court cannot go into the sufficiency of evidence nor it is necessary for the Arbitrator to set out the actual calculation figures as worked out by him, his reasons being adequate and clear. It is also not essential for him to give a detailed reasoned decision indicating each minute step of his mental meanderings. Sufficiency or quality of evidence is a matter for the Arbitrator and the Court will not sit as a Court of Appeal over the Arbitrator's decision. Though the Arbitrator was required to give reasons for the award but he is not required to write a detailed judgment as the Judges do in Court. The requirement of reasons meets the elementary demand of parties to be told "the reasons why" for a particular conclusion arrived at by the Arbitrator. For the Arbitrator it is an act of self-discipline. To say that the Court will be entitled to examine the reasonableness of reasons is to allow the concept of reasons to run wild. The theory is a disguised attempt to turn questions of fact into questions of law with a view to having them retried by the Court, with the result that all the objects sought to be attained by means of arbitration would be defeated by protracted proceedings in the Court. There is a danger of attempts being made to reopen issues on fact which are concluded by the Arbitrator's findings.

9. It is not even the case of the respondent that there was no evidence before the Arbitrator to arrive at the decision arrived at by him nor the respondent has argued that there is an error apparent on the face of the award. It is also not the case of the respondent that from the face of the award itself the decision of the Arbitrator is not supported by any evidence. I have gone through the award and I find that the Arbitrator has arrived at his decision in respect of each claim after thoroughly examining every piece of evidence on record.

10. In view of the above, the award of the Arbitrator in so far as the aforesaid claims are concerned, cannot be set aside.

11. The reasons for not accepting the objections of the DD A in respect of Claim Nos. 1 & 4, additional Claim No. 7 and Counter-Claim Nos. 3 and 4 equally apply to the objections of the claimant in respect of additional Claim No. 3 which has been rejected by the Arbitrator. For the reasons mentioned above, I do not see any merits in the objections of the claimant as well in so far as they relate to the award in respect of additional Claim No. 3.

12. The only other objection raised by the DDA is in respect of additional Claim Nos. 1 and 2 and Counter Claim No. 1. It is contended by Mr. V.K. Sharma that in view of the Division Bench judgment of this Court in Sudhir Brothers v. Delhi Development Authority, (supra) the Arbitrator did not have jurisdiction to adjudicate these claims. Admittedly these claims were based upon the decision of the Superintend ing Engineer under Clause 2 of the agreement and the claimant wanted the refund of Rs. 64,876/- which had been recovered on account of compensation levied under Clause 2 by the Superintending Engineer. The Arbitrator held the decision of the Superintending Engineer levying compensation as unjustified and awarded the aforesaid amount of Rs. 64,876/- in favour of the claimant. In my opinion, in view of the judgment of this Court in Sudhir Brothers v. Delhi Development Authority, (supra) it was not open for the Arbitrator to adjudicate the aforesaid claim as the decision of the Superintending Engineer as per agreement was final and such a decision could not be a subject matter of arbitration before the Arbitrator. The Arbitrator had, therefore, no jurisdiction to adjudicate upon this claim. The award of the Arbitrator in so far as it relates to additional Claim Nos. 1 and 2 and Counterclaim No. 1 is set aside.

13. With the above observations both the objections stand disposed of. Suit No. 575/92 :

The objections having been disposed of for the reasons stated above, the award of the Arbitrator in so far as it relates to additional Claim Nos. 1 and 2 and Counter Claim No. 1 is set aside and the remaining modified award is made a rule of the Court and a decree in terms thereof is passed. The petitioner will be entitled to interest @ 12% per annum from the date of decree till the date of payment.

In the facts and circumstances of the case, the parties are left to bear their own costs.