V.K. Mittal vs Dda & Anr.
2000 Latest Caselaw 196 Del

ORDER

Mukul Mukgal, J.

1. The brief facts of the case are that the petitioner is a Contractor and is carrying on the business of construction works for the Delhi Development Authority. The petitioner was awarded Contract No. 58/EE/HDXIII/81-82 by respondent No. 1/DDA for the construction of 32 Category-II, 16 Category-I Flats, 32 Scooter Garages under S.F.S. Scheme at Naraina S.H.; and construction of 16 Category-II, 8 Category-I Flats and 16 Scooter Garages i/c Internal Development of Block G, Pocket I. That certain differences and disputes had arisen between the parties and as per the Agreement Clause, Mr. Banarasi Dass (respondent No. 2 herein), Superintending Engineer of respondent No. 1/DDA was appointed as an Arbitrator, who made and announced his award granting a sum of Rs. 1,64,620.76/- to the petitioner on 5th January, 1990 after giving full opportunity to both the parties.

2.The present suit is filed by the petitioner for making the said Award a Rule of the Court. Thereafter the Objections were filed respectively both by the petitioner and Delhi Development Authority/respondent No. 1 by IA. 3814/90 & IA. 3813/90 to the Award dated 5th January, 1990.

3.Insofar as the challenge to an arbitration award is concerned, in Union of India Vs. Rallia Ram reported as reported in AIR 1963 SC 1685 (3J) it was held :

"The award is the decision of a domestic tribunal chosen by theparties, and the Civil Courts, which are entrusted with the powerto facilitate arbitration and to effectuate the awards, cannotexercise appellate powers over the decision. Wrong or right thedecision is binding if it be reached fairly after giving adequateopportunity to the parties to place their grievances in the manner provided by the arbitration agreement.

4.It has been observed by the Hon'ble Supreme Court that if there is error of fact, the court cannot go into it. In Coimbatore District Podu Thozillar Vs. Balasubramania Foundary, the Court observed :

"It is an error of law and not mistake of fact committed by thearbitrator which is justiciable in the application before theCourt. If there is no legal proposition either in the award or inany document annexed with the award which is erroneous and thealleged mistakes or alleged errors, are only mistakes of fact andif the award is made fairly after giving adequate opportunity tothe parties to place their grievances in the manner provided bythe arbitration agreement, the award is not amenable to corrections by the Court.

5.In M/s. Sudarshan Trading Co. Vs. Government of Kerala, , it has been observed that :

"This is our opinion, the Court had no jurisdiction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties.

It may be stated that if on a view taken of a contract, thedecision of the arbitrator on certain amounts awarded, is apossible view though perhaps not the only correct view, the awardcannot be examined by the court in the manner done by the HighCourt in the instant case."

6.A similar view has been taken by the Supreme Court in Food Corporation of India Vs. Joginderpal Mohinderpal, while holding that :

"It cannot be said that such a construction is a construction which is not conceivable or possible. If that is the positionassuming even for the sake of argument that there was some mistake in the construction, such a mistake is not amenable to becorrected in respect of the award by the Court. This was a fairorder after considering all the records. The construction arrivedat by the arbitrator is a plausible conclusion."

7.It has further been held in Hind Builders Vs. Union of India, :

"In a matter on which the contract is open to two equally plausible interpretations, it is legitimate for the arbitrators toaccept one or the other of the available interpretations and, If the Court may think that the other view is preferable, the Court will not and should not interfere."

8.In Jawahar Lal Wadhwa Vs. Haripada Chakrobety, , it has been observed :

The Court reiterated that it was now firmly established that an award was bad on the ground of error of law on the face of it only when in the award itself or in a document actually incorporated in it, there was found some legal proposition which was the basis of the award and which was erroneous.

9.In Bijendra Nath Srivastava Vs. Mayank Srivastava, , it has been held that :

"......Merely because the arbitrator has mentioned the municipal annual rental value of the property before indicating the marketvalue of the property before indicating the market value of thesame does not mean that the value is fixed on the basis of therental value and the award is a reasoned award justifying theCourt to examine whether the award suffers from an error. It issettled law that it is not open to the court to deduce reasons inthe award or in the record accompanying the award and proceed toexamine whether those reasons were right or erroneous. This iswhat appears to have been done by the High Court in the presentcase. This was impermissible. We are therefore, of the opinionthat the High Court was in error in going into the question ofvaluation of immovable properties by the arbitrator in theaward."

10. It has further been held by the Hon'ble Supreme Court in Hindustan Construction Co. Vs. Governor of Orissa, .

"It is well known that the court while considering the questionwhether the award should be set aside, does not examine thatquestion as an appellate court. While exercising the said power,the court cannot reappreciate all the materials on the record forthe purpose of recording a finding whether in the facts andcircumstances of a particular case the award in question couldhave been made. Such award can be set aside on any of the groundsspecified in Section 30 of the Act. According to us, no groundhas been made out on behalf of respondents to set aside the award holding it to be invalid.

11. In a recent judgment of the Hon'ble Supreme Court reported as B.V. Radhakrishna Vs. Sponge Iron India Ltd., it has been held that the court cannot sit in appeal and cannot re-appraise or re-assess the evidence in respect of an award.

12. The same view is taken in State of Orissa Vs. Kalinga Construction, ; Municipal Corporation of Delhi Vs. Jangannath Ashok Kumar, ; Indian Oil Corporation Vs. Indian Carbon Ltd., ; Puri Construction Pvt. Ltd. Vs. Union of India, ; Food Corporation of IndiaVs.Joginderplan Mohinderpall, .

13. The Hon'ble Supreme Court in Army Welfare Housing Organisation Vs. M/s. Gautam Construction & Fisheries Ltd., 1998 (5) Scale 296 has held that :

"....... it is not possible for the Court to reappreciate the evidence produced before the Arbitrator and thus come to a conclusion whether a certain amount claimed was towards one head or the other."

In Trustees of the Port of Madras Vs. Engineering Construction Corporation Ltd., , it has been held as follows :

"The above decisions make it clear that the error apparent on the face of the award contemplated by Section 16(1)(c) as well as Section 30(c) of the Arbitration Act is an error of law apparenton the face of the award and not an error of fact."

14. This position of law has also been applied in a recent judgment of this Court in Suit No. 1993 of 1992 entitled M/s. Ultra Builders Vs. MCD, (DWS & SDU).

15. These Objections (IAs. 3813-14/90) filed respectively by the petitioner and DDA/respondent fall within the ambit of law laid down by the Hon'ble Supreme Court in the foregoing paragraphs restricting the challenge to the award of the arbitrator as per the position of law laid down in the judgments mentioned hereinafter.

16. Insofar as the petitioner's Objections raised in IA. 3814/90 qua Claim Nos. 4-5 in respect of the sum of Rs. 21,000/- and Rs. 1,00,000/- are concerned, the Arbitrator concluded that the petitioner's Claim No. 4 in respect of Rs. 21,000/-, made against the item of preparation of subgrade is actually refuted by the respondents by stating that the same is based on DSR 77 and the Unit for payment is per 100 sq. m. whereas in the agreement, unit has been shown as sq. m. instead of 100 sq. m. due to oversight and the said mistake was corrected and the bill was accordingly modified. The Arbitrator further concluded, that the claimant (petitioner herein), has accepted that very modified bill and has not disputed it earlier. Thus the Arbitrator while rejecting the petitioner's aforesaid claim has rightly held that the claim is not justified.

17. Insofar as the petitioner's Objection qua Claim No. 5 for Rs. 1 Lacs towards damages is concerned, the learned Arbitrator after due consideration of the evidence and arguments advance by both the parties rightly concluded that the said claim is not justified as no cogent evidence has been placed by the claimant to prove the quantum of loss, if any, suffered by him.

18. The respondent No. 1/DDA has also raised its Objections in IA. 3813/90, seeking for setting aside the Award dated 5.1.1990 with respect to petitioner's claims alongwith DDA Counter-Claims 1 & 2 and also for making the said Award a Rule of the Court with respect to the remaining claims.

19. As far as the DDA's Counter-Claim No. 1 is concerned, it is submitted by Ms. Anusuiya Salwan, the learned counsel for the respondent/Objector-DDA that the said counter-claim is duly covered by a judgment of the Hon'ble Division Bench of this Court reported as Delhi Development Authority Vs. M/s. Sudhir Brothers, 1995 (2) ALR 306 which has held that the Arbitrator should not have gone into the merits of the levy of compensation by the concerned Superintending Engineer. Accordingly, the Award dated 5th January, 1990 is set aside insofar as Counter-Claim No. 1, made on behalf of the respondent-DDA is concerned.

20. In view of the above position of law, I am therefore, satisfied that the Objections (IA. 3814/90 ), filed on behalf of the petitioner have no merits and are accordingly dismissed. The remaining Objections filed, on behalf of the respondent-DDA in IA. 3813/90 except that pertaining to the respondent No. 1's counter-claim No. 1 are also dismissed. The Award dated 5th January, 1990 is upheld in terms thereof. It is open to the respondent-DDA to adopt such proceedings in law in respect of the counter claim No. 1 as may be available to DDA in light of this judgment.

21. Accordingly the Award dated 5th January, 1990 is made a Rule of the Court and decree in terms thereof be drawn. If the amount due under the award is paid within 3 months from today, the award shall not carry any future interest. However, if the payment is not made within 3 months from today the awarded amount shall carry interest at the rate of 12 per cent per annum from the date of the decree till realization. There shall be no orders as to costs. Decree sheet be drawn up accordingly.

22. Suit & IAs are accordingly disposed of.