Naresh Kumar Jhangi vs D.D.A. And Another
1999 Latest Caselaw 1163 Del

ORDER

Manmohan Sarin, J.

1. By this order I would be disposing of the objections filed by the respondent Delhi Development Authority by way of IA.12524/92, against the award made and published by Shri S. Rangarajan bearing No. ARB/SM/DDA/3/90 dated 23.11.1991. Petitioner had been awarded the work of construction of 256 MIG houses 1/c internal development at Ashok Vihar, Phase- IV, Delhi vide agreement No. 24/EE/AGV/2/85-86/DDA. Disputes had arisen between the parties which were referred to the sole arbitration of the arbitrator by the Engineer Member.

2. Learned counsel for the respondent has submitted that in making the award the learned arbitrator has ignored the agreement provisions and has acted contrary to them in respect of various claims. It is further submit- ted that the learned arbitrator has erred in ignoring accepted norms for computation and has erred in making the award in respect of claim for rebate. Besides, the arbitrator has grievously erred in appraising the evidence and ignoring the pleas raised by the respondent and in this proc- ess has committed errors apparent on the face of the record.

3. Learned counsel for the respondent strongly assailed the finding in respect of Claim No. 10. The arbitrator had awarded damages amounting to Rs. 2,13,000/-, (which has wrongly been given in the numerals as 2,01,3000/-). Counsel for the parties agree that the correct figure is Rs. 2,13,000/- (rupees two lakh thirteen thousand only). Learned counsel for the respondent submitted that the arbitrator has simply given the finding of the work having been prolonged by 22 months due to delays and breaches of the respondent. It is submitted that the arbitrator was required to give the reasons for reaching the said conclusion, which are missing. The argu- ment, on the first flush, appears to be plausible and attractive. However, on a careful reading of the award in respect of the claim, it is seen that in the pleadings the claimant had set out the details of breaches on the part of the respondent due to which the work was prolonged, resulting in extra expenditure. It was also pleaded that there was no delay on account of the claimants and that is why the respondent granted extension of time without levy of compensation. The respondents had pleaded in response that since extension of time was granted without levy of compensation, no fur- ther damages were payable by them. It would be noticed that the respondents did not question the factum of default or delays. The contention of the respondents, it appears, was that having granted extension of time without levy of compensation, the petitioner/claimants were not entitled to any further damages.

In the light of these pleadings and the inference that can be drawn from the admissions made there, it cannot be said that the arbitrator was required to give the reasoning in reaching the finding that there was breach on the part of the respondent. The arbitrator has dealt with the question of damages that were to be awarded to the claimants. The arbitra- tor has held that due to the prolongation of the period of contract, the petitioners were entitled to damages under the Indian Contract Act. The Award is a reasoned one. I find no error apparent on the fact of the award in respect of Claim No. 10 which calls for interference in the exercise of jurisdiction under Sections 30 & 33 of the Indian Arbitration Act, 1940.

4. Learned counsel for the respondents next contended that the award in respect of Claim No. 7 had been made without jurisdiction and deserves to be set aside. The precise submission of the counsel for the respondent relates to Clause 25-B of the Agreement, which reads as under : "The decision of the Superintending Engineer regarding the quan- tum of reduction as well as justification thereof in respect of rates for sub standard work which may be decided to be accepted will be final and would not be open to arbitration."

Learned counsel argues that Claim No. 7 relates to items for sub- standard work and the decision of the Superintending Engineer with regard to the same was final and the arbitrator had no jurisdiction to entertain the claim or make an award in respect thereof.

5. There can be no quarrel with the proposition that if, indeed, the items were relatable to sub-standard work, the decision of the Superintend- ing Engineer would have been final and the claims would not have been arbitrable. The question to be considered is whether the claim is in respect of sub-standard work or not. The arbitrator while dealing with this claim, on a perusal of the correspondence and the documents on record with regard to the execution of these documents, recorded his findings as under :- "....it may be stated that the items have not been treated as substandard by the respondents and proper Reduced Rate Item statements were not prepared and not approved by the competent authority. And no notice was issued that the items were substand- ard and demanding rectification. Even in the final bill, the items are incorporated in full as per specifications and paid at full agreement rates. But at the end, some casual "deduct for" items have been added and the disputed deductions in rates made. Such deductions are bad in law and not justified."

The arbitrator also dealt with on merits with each of the items and reached the conclusion that the deductions made in respect thereof were not justified. The arbitrator found that the material supplied was as per the ISI specifications and approved by the respondents. In respect of another item be reached the conclusion that no objection was ever taken by the respondents of the work being sub-standard and it was only from the final bill that a deduction was sought to be made. In other words, the arbitrator reached the conclusion that these were not deduction items for sub-standard work. Once there is a finding of fact that the items are not items of sub- standard work and are really in the nature of substituted items and it was not a case of sub-standard work, the objection with regard to lack of jurisdiction of the arbitrator under Clause 25-B does not survive.

6. On a perusal of the award, I find that the award is a reasoned one and does not suffer from any error on the face of the record or any infirmity. The objections of the respondents are without merit and are dismissed. The Award is made Rule of the Court. Decree in terms of the Award be drawn. Respondents are directed to pay the decretal amount within 60 days, failing which petitioners would also be entitled to post-decretal interest @12% on the amount awarded.