V.K. Dewan & Co. vs Municipal Corporation Of Delhi ...
1999 Latest Caselaw 544 Del

ORDER

Manmohan Sarin, J.

1. By this order, I would be disposing of IA. 1115/97 being objections filed by the petitioner under Sections 30 and 33 of the Arbitration Act and IA. 1495/98, being an application under Order XII Rule 6 CPC.

2. Petitioner filed a petition under Sections 14 and 17 of the Arbitration Act, 1940, which was registered as a suit, for filing of the award dated 26.4.1996 made and published by Sh. S.M.Hasnain, respondent No. 2, the sole Arbitrator. Notice of the filing of the award was issued to the parties. Petitioner accepted the notice of the filing of the award on 13.1.1997. Respondent No. 1 was served with the notice of the filing of the award on 21.1.1997.

3. The petitioner filed objections in respect of claim No. 3 and claim No. 6 of the award. In claim No. 3, the Arbitrator had rejected the claim of the petitioner for Rs 70,650/- on account of cost of stores, machinery, tools/plants and temporary structures, which were alleged to have been taken over by the Delhi Vidyut Board. The learned Arbitrator held that the contractor/petitioner had not been able to establish the claim based on the evidence produced before him and, accordingly, he rejected the same. Counsel for the petitioner contended that the Arbitrator had ignored material documents in reaching this conclusion and had also not taken cognizance of admissions by the respondent. Mr. Sharma has not been able to bring to my notice any such admission. The objection really amounts to seeking reappraisal of evidence and the conclusions reached thereon. This is not the province of this court in the exercise of jurisdiction under sections 30 and 33 of the Arbitration Act, 1940. The objection to the award on claim No.3 has no merit and is, accordingly, dismissed.

4. Coming to the objection in respect of award on claim No.6, petitioner claimed interest on the claim amounts @ 12% p.a. from 7.7.1980 the date he had invoked arbitration. The learned Arbitrator, however, awarded simple interest @ 12% p.a on the sums awarded under claim Nos. 1,2,4, and 5 from the date of award till the date of payment or decree, whichever is earlier on the ground that the same would meet the ends of justice. Mr, Sharma contends that the Arbitrator has committed legal mis-conduct in not awarding the interest from the date of invocation of arbitration to the date of award.

5. From the perusal of the arbitral record, it is seen that the arbitration in the instant, case was invoked on 7.7.1980. A petition under Section 20 of the Arbitration Act bearing No. 391-A/80 was filed, which was disposed of on 19.12.1980 and one Mr. Rajnikanth was appointed the sole Arbitrator. The appointment was challenged by the respondent in FAO (OS). No.36/81. The appointment was stayed by the Division Bench. It was only on 26. 3. 1993 that the Division Bench decided the FAO (OS) and directions were issued for appointment of new Arbitrator. The Arbitrator was appointed on 7.6.1993. The Arbitrator entered upon reference on 19.7.1993 and made and published the award on 26.4.1996.

6. Mr. Sharma. after seeking instructions from Mr, Vinod Kumar Dewan, partner of the petitioner company, submits that the petitioner does not press his claim for interest being awarded from the date of invocation i.e. 7.7.1980 or 19.12.1980 i.e. the date from which the first arbitrator was appointed. On the other hand, he confines his claim to the grant of pendente lite interest from 19.7.1993 i.e. the date on which the present Arbitrator entered upon reference. The sole surviving question is therefore. whether the Arbitrator could have declined pendente lite interest by simply holding that it would meet the ends of justice, if interest was awarded from 26.4.1996 i.e. the date of award?

7. Mr. Ajay Jha. counsel for the respondent, justifies the award of the Arbitrator by holding that he has given sufficient indication of his thought process by holding that the ends of justice would be met by grant of interest from the date of award, which implicitly rejects claim of grant of pendente lite interest from the date of reference. Counsel for the respondent , wherein the Apex Court observed that. "This does not mean that in any case the Arbitrator should necessarily award interest pendente lite. It is a matter within the discretion to be exercised in the light of the facts and circumstances of the case keeping the ends of justice in view. "He contends that this was a matter entirely within the discretion of the Arbitrator, who has the authority and could have rejected and has rejected the claim for pendente lite interest.

8. Let us recapitulate the relevant facts. Petitioner invoked arbitration as far back as on 7.7.1980 and was constrained to file a petition under Section 20 of the Arbitration Act 1940 for the appointment of an Arbitrator. This eventually materialised on 19.12.1980. The contract work in question had already been executed even perior to 1980. The Arbitrator has found the awarded amounts to be due and payable to the contractor. The petitioner cannot be faulted with or made to suffer due to the delay en-

tailed in the respondent challenging the appointment of the Arbitrator and the subsequent proceedings which consumed nearly 13 years before the new Arbitrator was appointed and could enter upon reference on 19.7.1993. Furthermore, the petitioner has given up the claim for interest for the period prior to 17.6.1993. Nothing on record has been brought to my attention from which any reason for nor-grant of pendente lite interest can be discerned. In these facts and circumstances, the petitioner was definitely entitled to the grant of pendente lite interest in the exercise of judicial discretion by the Arbitrator. Non exercise of discretion in awarding pendente lite interest and that too without any reason or ustification is failure to exercise jurisdiction amounting to legal misconduct. Accordingly, the award in respect of claim No.6 is modified to the extent that the petitioner is held entitled to interest from the date of reference i.e. 19.6.1993 till 26.4.1996 on the sums awarded under claim Nos. 1, 2,4 and 5 @ 12% p.a. The petitioner shall also be entitled to interest @ 12% p.a. on the sums awarded from the date of decree till realisation.

9. Counsel for the respondent contends that the earnest money of Rs. 19,000/- which is the subject matter of claim No. 5 was duly refunded, vide letter dated 12.11.1997. The respondent would be entitled to adjustment of the same in computation of the amount payable.

10. With the aforesaid modifications in claim No. 6, the award is made rule of the Court and decree in terms thereof be drawn.

11. This order would also dispose of all the pending applications.

12. The petition stands disposed of.