Architects Bureau vs Delhi Agricultural Marketing ...
2001 Latest Caselaw 1902 Del

JUDGMENT

J.D. Kapoor, J.

1. The award dated 18.10.1995 is sought to be made rule of the court.

2. Vide order dated 4.7.1995, this court has set aside the award dated 8.5.1992 and directed the Arbitrator to give a reasoned award. Accordingly, the learned Arbitrator has given a reasoned award dated 18.10.1995 which is under challenge.

3. The solitary question which is to be determined in these proceedings in whether the learned Arbitrator has travelled beyond the agreed terms of the agreement as the claims awarded by the Arbitrator are inter related and inter dependent.

4. The respondent-objector has assailed the award by resorting to the following terms of the agreement:

"1.8 That the owner shall pay a sum of Rs. 5,70,000/- (Rs. Five lakhs Seventy thousand only) to the Architect as fees for preparing the drawings and obtaining sanction/approval of the project/drawings from the authorities as mentioned in Clause 1.5 of the agreement and that the fees shall be payable to the Architect at the following stages.

a) 25% payment shall be released by the owner when plans as given in Sub-clause 1 of the tender documents are finalised and approved by the competent authorities viz DDA/MCD & Delhi Urban Arts Commission.

b) That further 30% payment shall be released after plans as given in Sub-clause No. 2 of the tender documents, are finalised and approved by the competent authorities.

c) That 35% shall be released after plans as given in Sub-clause No. 3 of tender documents are finalised and approved by the competent authorities and on furnishing of detailed drawings and Architectural control.

d) That the remaining 10% payment shall be released by the owner on Pro-rate basis, as the work progresses on site."

5. Apart from this, learned counsel for the respondent/objector has also referred to tender notice dated 21.5.1982 wherein it was provided that there would be tender of lump sum amount. According to the learned counsel, Letter of intent dated 21.6.1982 specifically gave details of the work which was required to be done by the petitioner/claimant and that the contractor did not execute any extra work which did not figure in the aforesaid letter of intent.

6. As regards claim No. 1, the claimant claimed an amount of Rs. 11,50,052/- for designing, preparing and supplying building plans, architectural and structural drawings and details for individual buildings in the grain market, Najafgarh. The learned Arbitrator has observed that the agreement covers area planning indicating the location and spatial expanse of the various functional buildings, services, linkages and road etc. with a concept of architectural control of any one typical building. But on the insistence of the respondents, claimants carried out detailed architectural planning and structural design of the component buildings in the complex for which claimant asked appropriate fees.

7. Thus, according to the learned Arbitrator these drawings are beyond those covered in Sub-clause 4. The additional drawings made are for architectural and engineering details necessary for construction which are different from site (urban) layout, development concept, services and circulation. An Architect's professional fee of 2% of the estimated cost is reasonable and adequate for the design work of layout and development planning with infrastructure services and also architectural and engg design. It was on this premise, the learned Arbitrator awarded Rs. 4,18,083/- after deducting the lump sum professional fees of Rs. 5,70,000/- agreed between the parties.

8. Similarly claim No. 2 was awarded because Community Centre building was not covered in the requirements as listed in the agreement under the heading 'Requirement of Complex'. On the same premise, claim No. 3 was awarded since the drawings prepared by the claimant for 'Dormitory building was outside the grain market complex, the drawings prepared for that building were in addition to requirement of the complex. Claim No. 4 was towards the balance fee due to the petitioner against the total lumpsum fee mentioned in the agreement.

9. Mr. M.L. Bhargava, learned counsel for the objector/respondent has contended that since the Community Centre as well as Dormitory building were part of grain market complex, it was not competence of the Arbitrator to award lumpsum professional fees. Had it been so, there was no question of having agreed to lumpsum professional fees. Admittedly, there was no letter sent by the respondent to the petitioner asking him to carry out the extra work in respect of Community Centre and Dormitory building.

10. While canvassing the proposition that the Arbitrator is prohibited from traveling beyond the terms of the agreement and from acting capriciously or arbitrarily, learned counsel for the respondent-objector has relied upon Associated Engineering Co. v. Government of Andhra Pradesh and Anr. wherein it was held that "The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it."

11. On the contrary, Mr. Harish Malhotra, learned counsel for the petitioner-claimant has contended that the disputes between the Arbitrator was that the items for which the petitioner claimed additional fees were covered within the scope of agreement itself and not as additional item. Therefore, it was not disputed by the respondent that the work in question for which the petitioner claimed additional fees was done by the petitioner. The Arbitrator after looking into the scope of the agreement categorically observed that the work in question was beyond the scope of these terms and was additional to items as provided under the agreement and therefore rightly awarded the amount claimed therein after considering the terms and conditions of the agreement and factual element.

12. While countering the plea that the respondent at no point of time insisted that same could have been done only by way of communication or letter sent by the Chairman of the Board, Mr. Malhotra has contended that the Arbitrator has recorded that respondent asked the claimant to prepare and furnish certain architectural drawings with details for certain individual buildings and these were made and furnished to the respondent by the claimant. Mr. Malhotra contends that the respondents has categorically admitted before the Arbitrator that the claimant has done extra work for grain market, Najafgarh. Similarly, the respondent has not disputed about the extra work done by the petitioner-claimant. What has been contended by the respondent is that this extra work formed part of the work which was originally agreed between the parties. Clause 1.3 of the agreement clearly stipulates that the petitioner-claimant was required to prepare and submit the drawings of the buildings as mentioned in items (i) to (x) i.e. only in respect of 10 items whereas drawings submitted by the petitioner-claimant were beyond these 10 items. The Arbitrator has recorded the reasons for awarding remuneration for extra work by categorically observing that these drawings are beyond those covered in Sub-clause 4.

13. There is no gainsaying the fact that the Arbitrator who is the creature of the agreement cannot travel beyond its arena and any award given by the Arbitrator which is beyond the terms or scope or limits of agreement is unlawful and is liable to be set aside. However, at the same time, it is also settled law that the court does not sit in appeal while examining the award. Nor is it required to reappreciate or re-evaluate the evidence and material nor is ti expected to interfere with the findings of fact or even law even if construction of the terms of the agreement is erroneous unless he ties himself to such a proposition which when examined is found to be most unsound.

14. Again the Arbitrator is the sole judge of quality and quantity of evidence. Unless the until, perversity or illegality is writ large on the face of the award, the sanctity of the award should be preserved. These principles stem from the cardinal and salutary object of adjudication of disputes by way of alternative mechanism of arbitration as the parties choose their own forum after reposing faith in the integrity and competence of the Arbitrator.

15. Since in the instant case, the Arbitrator has provided sufficient reasons and has also clearly stipulated that the work done by the petitioner-claimant was beyond the agreed work specified in items 1 to 10, Clause 1.3 of the agreement and since this is finding of fact, I feel reluctant to interfere.

16. Merely because to Chairman did not give communication in writing to the petitioner-claimant for doing extra work, did not mean that the petitioner-claimant did not do extra work. Rather the respondent-objector before the Arbitrator in categorical terms that the petitioner-claimant has done extra work agreed in either letter of intent or tender or Clause 1.3 of the agreement. If the court indulges in interfering such findings, the very object of arbitration would stand defeated and frustrated.

17. In view of the above, the objections (I.A. 429/96) by the respondent-objector are hereby dismissed.

18. As a consequence, award is made rule of the court. Suit is decreed for the amount awarded against each claim with pendente lite and future simple interest @ 15% per annum from 18.10.1995 till its realisation.