M.S.J. Consultants Ltd. vs Delhi Development Authority
2001 Latest Caselaw 1074 Del

ORDER

V.S. Aggarwal, J.

1. In pursuance of the award having been filed notices were issued to the petitioner (MSJ Consultants Ltd.) and to the Delhi Development Authority (for short he respondent). Both the petitioner as well as the respondent have preferred objections to the award referred to above.

2. The petitioner contends that he had made all the arrangement for entire work in anticipation of the award for the full site But only part thereof was permitted to be executed. The contract bond was executed on 9.6.80 by the parties. The respondent illegally permitted the plaintiff to execute the work on inferior and more cumbersome part of the site. The award in any case is being assailed alleging that arbitrator has misconducted himself. He basically misconceived the proceedings. It is further alleged that the arbitrator totally ignored the fact that no person was produced to testify the version of the respondent in rebuttal to the claim of the petitioner. In particular reference has been mae to claim no. 4. It is alleged that the arbitrator did not care to look into the relevant IS Code for such type of works and decided merely on surmises that design submitted by the petitioner were found incomplete. There was total miscarriage of justice with respect to claim nos. 1, 2, 4, 5 and 7.

3. Respondent too preferred objections to the award. The respondent authority did not dispute the findings of the arbitrator with respect to claims that were found in their favor but confined themselves to claims 2, 6 and 15. As regards these particular claims, the respondent Delhi Development Authority pleaded that with respect toe claim no. 2, the award of Rs. 2,89,037/- is not legal and valid. The quoted rate of Rs. 212/p per sq. mtr was not only for one item but for execution of all the 10 numbers. The rates were also inclusive of cost of design, drawings, borings and costings. The full items as per agreement were not executed by the petitioner i.e. RCC pile caps, grade beams and as such a part of the rate of Rs. 140/- per sq. mtr was allowed. The claim of the claimant for Rs. 5,38,713/- was stated to the totally unjustified. Similarly with respect to claim no. 6, it is claimed by the respondent that award of Rs. 8,880/- is illegal. It is contrary to the terms of the contract. Lastly, the award is assailed alleging that interest of 18% per annum should not have been awarded.

4. Reply was filed to both the objections and the assertions of each other were controverter.

5. From the pleadings of the parties, on 2nd November, 1988, the following issue was framed:-

Whether the Award or any part of the Award is liable to be set aside on the objections filed by the parties?

6. The short question that comes up for consideration is as to if the award is liable to be set aside or not on basis of the assertions made.

7. It is well settled that award is a decision or arbitrator whether he is a layman, lawyer or any other expert. He is chosen by the parties and is entrusted with power to decide a dispute submitted to him. Therefore, ordinarily, the award is not liable to be challenged on the ground that it is erroneous. On facts the award ordinarily would be conclusive unless a contrary intention appeared from the agreement. Since award is a decision of domestic tribunal chosen by the parties, civil court ordinarily would stay his hands off it. Wrong or right decisions would be binding if it is reached fairly after giving adequate opportunity to the parties to place their grievances. It is a different matter that if the award is suffering from error of law or on the face of it incorrect or there is any misconduct, the court would not hesitate to interfere.

8. To the same effect is decision of the Supreme Court in the case of Union of India vs. A L Rallia Ram AIR 63 SC 1685. Similar findings have been recorded by the Supreme Court in the case of The Upper Ganges Valley Electricity Supply Co. Ltd. Vs. The UP Electricity Board . In paragraph 10 the Supreme Court summarised the findings in these words:-

It is well settled that if parties constitute an arbitrator as the sold and final judge of the disputes arising between them, they bind themselves as a rule to accept the award as final and conclusive. An award is ordinarily not liable to be set aside on the ground that either on facts or in law, it is erroneous. In Hodgkinson vs. Fernie, (1857) 3 CB (NS) 189 the true principle was stated thus:

"Where a cause or matters in difference are referred to an arbitrator .... he is constituted the sole and final judge of all questions both of the law and fact .... The only exceptions to that rule are, cases where the award is the result of corruption or fraud and one other, which though it is to be regretted, is now. I think firmly established, viz., where the question of law necessarily arises on the fact of the award, or upon some paper accompanying and forming part of the award."

9. More recently the Apex Court in the decision rendered in the case of B V Radha Krishna vs. Sponge Iron India Ltd., held that the High Court ordinarily will not substitute its own decision that of the arbitrator. In other words, the findings were that ordinarily the court would not act as a court of appeal. In paragraph 15 the conclusions from the Supreme Court are:-

Bearing in mind the principles laid down by this Court in the above said cases, if we look into disposal of the matter by the High Court, it would be evident that the High Court has substituted its own view in place of the Arbitrator's view as if it was dealing with an appeal. That is exactly what is forbidden by the decisions of this court. Therefore, we have no hesitation to set aside the judgment of the High Court on this issue.

In other words, ordinarily on findings of fact this court would not set aside an award unless it is shown that the arbitrator has misconducted himself.

10. In the present case both the petitioner as well as the respondent assailed the award particularly on findings of fact. They claimed that particular claim should have been allowed or disallowed and finding should have been otherwise. But it has to be remembered that it is not the case of either party that they were not given proper opportunity of being heard. The arbitrator permitted them the said opportunity. They were given a chance of hearing and findings of fact with respect to particular claims have been recorded. When such is the position, this court will refrain itself from interfering.

11. Confronted with this position, it was urged that the awarding of interest as such is erroneous and could not have been so granted.

12. At the outset, one can well refer to the decision of the Supreme Court in the case of Executive Engineer AIR, Dhenkanal Minor Irrigation Division, Orissa etc. vs. N C Budharaj, 2001 SC 626, while setting aside the earlier decision of the Apex Court it was held that the arbitrator has jurisdiction to award interest on the sums found due and payable for pre-reference period particularly if there is absence of any specific stipulation or prohibition in the contract. No such specific stipulation or prohibition is forthcoming. Therefore, to that effect there cannot be an error in the award that can prompt this court to interfere.

13. regards the awarding of interest at the rate of 18% PA once again the same is not shown to be excessive. There is precious little to conclude that the arbitrator exceeded the jurisdiction or that the discretion so exercised is arbitrary. In the absence of any such finding being arrived at it must follow that objections filed by the petitioner as well as the respondent are liable to fail.

14. For these reasons the issue is decided accordingly and the award is made a rule of the court. A decree in terms of the award is passed. The petitioner would be entitled to interest at the rate of 12% from the date of the judgment on the principal amount till final payment.