Delhi High Court
M/S Shah Construction Company ... vs Municipal Corporation Of Delhi on 14 August, 2001
Author: A Sikri
Bench: A Sikri
ORDER
A.K. Sikri, J.
1. Disputes having arisen between the parties in respect of contract awarded by the respondent to the petitioner, an arbitrator was appointed. He adjudicated upon the claims of the petitioner as well as counter-claims of the respondent and made and published his award dated 30th March, 1996. By means of this IA, the respondent had filed objections to this award. At the time of arguments, learned counsel for the respondent confined his submissions to the award against Claims No.1 to 3 and 6.
2. The relevant portion of the award awarding these claims is reproduced below for better appreciation:
I CLAIMS OF CLAIMANTS (SCCL)
Claim Description Claim Award Remarks
No. Amount
1. Payment due 17,28,700 The exact details not
against work supplied by the claimants
done including and not verifiable. The
escalation and amount may therefore be
interest. worked out by the respondent
and up to-date work done to
be paid for as recorded and
accepted in the measurement
books at the contract rates
including escalation and
18% interest for the delayed
period.
2.
Payment due 9,26,446 1,67,152 50% of the
against change vouchers
in site and strata submitted for
this claim
3.
Payment against 15,98,100 4,18,157 50% of the
unproductive vouchers
turnover, idling submitted for
of equipment, men this claim.
resources, etc.
from 3.3.87 to 1.12.90.
6.
Payment for wrong- 6,17,750 20,000 Amount assessed
ful custody of by respondent
machinery tools and of the equipment
tackles etc. at site.
3. Learned counsel for the petitioner submitted that in so far as claim No.1 is concerned, no definite amount is awarded and it is only stated that the respondent should work out the amount to be paid for as recorded and as accepted in the measurement books at the Contract rates including escalation and pay interest at the rate of 18 per cent per annum thereof. He pointed out that as per the case of the respondent put up before the arbitrator, the submission of the respondent was that the amount payable to the petitioner as per the measurement books had already been paid and nothing was due. In these circumstances, what is awarded is totally vague claim without any definite sum and such an award is liable to be set aside. I agree with the submission of learned counsel for the petitioner. When there was a dispute as to whether any amount is due against work done or in respect of escalation, it was for the arbitrator to find out the precise amount due or the amount of escalation. Having not done so, the arbitrator has failed in his duty. In fact the award in respect of claim No.1 is not at all discernible.
4. In so far as claims No.2 and 3 are concerned, while discussing justification for allowing the claims, in para 4.ii it is also remarked by the arbitrator that the petitioner has not given the detailed breakup or rate analysis for deciding upon additional cost incurred by the petitioner. Genuineness of the copies of the vouchers supplied by the petitioner for claims 2 and 3 was also questioned and it is also argued by the respondent that many of these vouchers did not relate to the work in question. Thereafter it is observed that for these reasons, it is difficult to justify large sum claimed by the petitioner, and therefore, reasonable assessment is called for. However, while awarding the amount ,the arbitrator has allowed 50 per cent of the vouchers submitted against these claims. In view of the objections taken by the respondent, it was incumbent upon the arbitrator to deal with the genuineness of the vouchers and also how many these vouchers related to the work in question and what was the amount to those vouchers. He was also supposed to decide as to whether breakup or rate analysis given by the petitioner was correct. Without going into these aspects, the arbitrator adopted the rule of thumb by awarding 50 per cent of the vouchers submitted by the petitioner. There appears to be no justification for adopting such an approach. The arbitrator should have examined as to which vouchers are relatable to the work in question and awarded the amount in respect of those vouchers only which could be either more or even less than 50 per cent of the vouchers submitted.
5. As far as claim No.6 is concerned, it is submitted by learned counsel for the petitioner that the claim of Rs.20,000/- is awarded on the ground that it was the amount assessed by the respondent of the petitioner's equipment at site. There was no such assessment given by the respondent and on the contrary the respondent had objected to this claim by stating that petitioner had removed its equipment from the site and nothing was payable against this claim. Learned counsel for the petitioner has not been able to point out in such assessment by the respondent submitted before the arbitrator. He, however, submits that he has no objection if award in respect of this claim is also set aside and can be examined afresh by the arbitrator.
6. The award in respect of claims 1 to 3 and 6 is accordingly set aside. The consequence of that would be that interest which is awarded in respect of aforesaid claims against claim No.7 also stands set aside.
7. Counsel for the parties agree that Mr. Justice K.Ramamoorthy, a retired Judge of this court be appointed as an arbitrator to go into the aforesaid claims which are set aside by this order. Mr. Justice K. Ramamoorthy is hereby appointed as an arbitrator. The arbitration record be sent to him. He shall be free to fix his own fee.
8. Suit and IA stand disposed of.
