Subhash Chander Gupta And Co. vs Delhi Development Authority And ...
1999 Latest Caselaw 388 Del

ORDER

Anil Dev Singh, J.

1. The petitioner and respondent No. 1 entered into a contract on October 11, 1989 whereby the petitioner was required to carry out the work of development of parks and RSP at Paschim Puri, Pocket GH-14, Zone G-17. It is not disputed on both sides that the work was executed by the petitioner and the payment on account of the same under the final bill prepared by the respondent was made to the petitioner. The payment was received by the petitioner without demur. Subsequently, the petitioner claimed a sum of Rs. 1,191,169.28 from the respondent along with interest, etc. The respondent, however, disputed the claim of the petitioner. The dispute with regard to the above said sum of money and interest was referred to the arbitration of respondent No.2, Shri R.J. Bakhru, in terms of clause 25 of the agreement. The arbitrator entered upon the reference on April 9, 1991 and made his award on August 28, 1992. The arbitrator awarded a sum of Rs. 1,91,169/- in favour of the petitioner. The claim was based upon rate and unit provided in item No. 9 of the Schedule of Quantities. This item reads as follows :-

S. Description Qty. Unit Rate Amount No.9. Grassing with doob 3275.73 Sqm. Rs.37.65 Rs.1233/-

grass i/c watering sqm. (Rs.thirty and maintenance of seven & the lawn for 30 days P.sixty or more till the five only) grass forms a thick lawn free from weeds and fit for moving i/c supplying good earth if needed in rows 5 cm apart in earlier direction.

2. According to the petitioner, he was entitled to payment at the rate of Rs. 37.65 per square metre of the work executed by him.

3. The case of the respondent was that the quantity of work done was mentioned as "3275.73 sqm." against item No. 9 and the unit applicable to the same was inadvertently typed as "Sqm" instead of 'as per 100 sq. metres'. It was the further case of the respondent that the agreement specifically provided that in case of discrepancy regarding the unit rate and nominal rates of items, the same shall be settled as per the Delhi Schedule of Rates, 1985(for short, `the DSR 1985') and nothing extra was required to be paid. Therefore, in accordance with the DSR 1985 the petitioner was paid for execution of the work at the rate of 37.65 per 100 square metres. The arbitrator, however, came to the conclusion that rate as printed against item No. 9, which was Rs. 37.65 per square metre, would apply. Accordingly, the arbitrator awarded a sum of Rs. 1,91,169/- against a sum of Rs. 5,077.64 paid by the respondent.

4. The respondent not being satisfied with the award of the Arbitrator, filed its objections under sections 30 and 33 of the Arbitration Act, being I.A. No. 7240 of 1993. Learned counsel for the respondent submitted that the award of the arbitrator is vitiated on account of the obvious mistake apparent on the face of the record. She also invited my attention to the award of shri N. Lakshmiah between the same parties, namely the petitioner and the respondent in another identical matter in which the same item (Item No. 9) was the subject-matter of interpretation. In that case the arbitrator came to the conclusion that the rate mentioned in item No. 9 suffered from clerical error and the actual rate on the basis of which the parties entered into the agreement was Rs. 37.65 per 100 square metres. Learned counsel also pointed out that this award has already been made a rule of the court. He invited my attention to the following observations of Shri N. Lakshmiah :-

During the hearing, when it was brought to the notice of the claimant that the amount shown against the concerned item corresponded to the unit of 100 square metres and that the earnest money was also based on the estimated cost of work put to tender with the said amount against item No. 9, the claimant submitted that his quoted rate was based on the unit mentioned against item No. 9 and that he did not look at the amount mentioned against this item or the amounts shown against other items. He submitted that he was entitled for payment with the unit as 'Square metre' for item No. 9.

It is a fact that the schedule rate for the item under consideration is Rs. 37.65 per hundred square metres. It is also a fact that the unit mentioned against this item in the Schedule of Quantities in the tender papers is 'Square Metre'. However, the amount shown against this item in the Schedule of quantities, the estimated cost put to tender and the earnest money all correspond to the unit 'Hundred Square Metres' against this item. In the letter of award of work to the claimant, the accepted tender amount is shown as Rs. 74,347.00 (Rs. 49,302.00 plus enhancement of 50.80%). It is obvious that the unit against item No. 9 which should have been 'One hundred square metres' has been wrongly mentioned as 'Square metres'. The claimant is trying to take advantage of this mistake. The rate demanded by the Claimant is Rs. 37.65 plus enhancement of 50.80% per Square metre or Rs. 376.50 plus the enhancement of 50.80% per one hundred metres, against the Schedule rate of Rs.37.65 plus enhancement of 50.80% per one hundred square metre.

Had the Claimant based his offer on the unit of 'Square Metre' against item No. 9, he would have realized the mistake in the estimated cost put to tender and the tendered amount given in the letter of award of work and taken up the matter with the Respondent, but the Claimant took no such action; he took action only after receiving payment of the final bill. From this it can be inferred that the Claimant either took the estimated cost put to tender as correct or he was aware of the mistake in the unit against item No. 9, but did not bring it to the notice of the Respondent before executing this item of work apprehending that the Respondent might delete this item of work if he insisted on payment with the unit as one square metre.

The Rates given in the Delhi Schedule of Rates 1985 are based on the market rates of materials and the labour rates approved by the Delhi Administration prevailing at the time of preparation of the Schedule of Rates. The contractor's tendered percentage takes care of the increase in the prices of materials and wages of labour since the preparation of the Schedule of Rates. The Schedule rate for the item under consideration is Rs. 37.65 per one hundred square metres and payment has been made by the respondent on this basis. As such,I see no justification for payment at a rate which is one hundred times the schedule rate.

Taking into account the schedule rate, there is no obvious loss caused to the Claimant by adopting the unit as 'one hundred square metres'. While the estimated cost put to tender is Rs. 49,302,00 the Claimant is demanding Rs. 3,90,701.00 against item No. 9 alone. It is obvious that the claimant is trying to make capital out of the mistake in the unit and the claim is not related to any loss incurred in executing this item of work. I find no justification for the claim and, accordingly make a 'NIL AWARD' under the revised claim of the claimant.

5. On the other hand, learned counsel for the petitioner submitted that there is no clerical or typographical error in the rates mentioned in item No. 9 of the Schedule of Quantities (SOQ) and the petitioner was entitled to the rate as mentioned in item No. 9. He also contended that the view of the arbitrator was a plausible one, and, therefore, no interference with the same was called for. He also canvassed that the award cannot be set aside even on the ground that the arbitrator reached a wrong conclusion as it is for the arbitrator to appreciate the facts and arrive at his own conclusions. In support of his submission he relied upon the decision of this court in M/s. Gujral Construction Company Vs. Central Warehousing Corporation and another, .

6. I have considered the submissions of the learned counsel for the parties. It is noteworthy that the estimated cost of the work was Rs. 43,544/- and the tendered amount was Rs. 62,595/-. The claim of the petitioner before the Arbitrator was for a sum of Rs.2,72,053, far exceeding both the estimated cost and the tendered amount. The grievance of the petitioner before the Arbitrator was that the payment for item No. 9 was made not keeping in view the unit and rate printed in SOQ. It is noteworthy that while the quantity of work mentioned against this item is 3275.73 square metres, the rate mentioned therefor is Rs. 37.65 per square metre. In the event of the application of the unit and rate as mentioned in item No. 9 the estimated cost of the work would have been over Rs. 4 lakhs instead of Rs. 43,544/-. The arbitrator has obviously committed a mistake in not giving any consideration to this aspect of the matter. The arbitrator has also not considered that the petitioner has clearly agreed by virtue of clause 4 of the said conditions of contract that discrepancy regarding the unit rate and nominal rates of items were to be settled as per the DSR 1985 . As per DSR 1985 the rate of Rs. 37.65 is for 100 square metres and not for one square metre. It is also noteworthy that the petitioner had accepted the payment made to him under the final bill on the basis of rate of Rs. 37.65 per 100 square metres. The claim of the petitioner after accepting the final bill without demur or protest is clearly an after thought. In an identical dispute between the same parties, where exactly same issue was raised as is being raised in the instant case, the Arbitrator appointed in that case Shri N. Lakshmiah, had clearly come to the conclusion that unit mentioned in item No. 9 of the Schedule of Quantities suffered from a clerical error and in fact the rate of Rs. 37.65 was for 100 square metres and not for one square metre. He had also applied the rates mentioned in the DSR to resolve the controversy. This award has already been made a rule of the court in suit No. 161/92 by the Additional District Judge, Delhi, by his order dated January 27,1995. The decision cited by the learned counsel for the petitioner is of no avail to him as the award in the instant case suffers from an error apparent on the face of the record.

7. Accordingly, the award of the arbitrator is set aside. I.A. No. 7240/93 is allowed but without any order as to costs.