Sh. Vinod Kumar vs Dda
2001 Latest Caselaw 863 Del

ORDER

A.K. Sikri, J

1. Slum and JJ Department was earlier under the DDA when contract for construction of 400 slums tenements and slum park was awarded to the petitioner vide Agreement dated 17th December, 1981. Disputes arose between the parties and the same were referred to be arbitrated upon by Sh.K.D.Bali, sole arbitrator. He entered upon reference, heard both the parties and made and published his award dated 19th January, 1991. The petitioner filed petition being Suit No.353 of 1991 under Section 14 of the Arbitration Act, 1940(for short 'Act') praying that arbitrator be directed to file the award along with the proceedings. On directions issued by the court to the arbitrator, the arbitrator filed the award, Notice of filing of the award was sent to the parties. The respondent DDA filed objections to the award by means of IA No. 9857/91. The Slum and JJ Wing Department having been transferred to the MCD, the MCD has appeared in the case to press these objections. The petitioner had filed reply to the objections. Following issues were framed:

1. Whether the impugned award dated 19th January, 1991 is liable to be set aside for the reasons stated in para 2 of the objections?

2. Relief, if any.

Parties were allowed to lead evidence by way of affidavits. Thereafter the matter was fixed for arguments. Both the parties chose to file their written submissions as well.

2. Objections are aimed at award of amount against claims 2, 5, 8, 11 and 13. In so far as claim No.2 is concerned, the learned arbitrator has awarded a sum of Rs.11,333/- in favor of the petitioner as cartage charges for disposal of additional earth to the tune of 929.16 cubic meters. The objection is that out of the total quantity of excavated earth of 3576.49 cubic meters, only the earth to the extent of 963.67 cubic meters was carted out from the side. The remaining earth was utilised in refilling the foundation at other places. It is submitted that the petitioner has not disputed the quantity of the earth carted out/removed from the site. So the question of any other additional cartage of earth does not arise. It is also submitted that the contractor has already been paid the cartage for 963.67 cubic meters and thus the award for giving extra cartage of earth to the tune of 929.16 cubic meter for Rs.11,333/- is not based on any evidence and the findings are perverse.

3. The aforesaid objection touches upon the merits of the claim. This Objection had been raised on facts which were before the learned arbitrator. The award shows that these facts were duly considered in detail by the learned arbitrator while deciding the claim. Following observations of the learned arbitrator would demonstrate the application of mind by the learned arbitrator to the points raised by the respondents during the arbitration proceedings:

"Respondents have admitted payment of Rs.21,062/-. Besides the said sum there is a dispute regarding payment of cartage of surplus excavated earth. It is an admitted case of the parties that the total quantity of earth excavated by the Claimant is of the order of 3576.49 cum. as per the agreement item No.1. The respondents had partly paid in the back filling and partly paid as cartage by the respondents as extra item. The disposal of the balance quantity of 929.16 cum. was not paid for the value of Rs.11,333/-. The respondents failed to establish the non-disposal of the said balance surplus earth and in the result, I accept the contention of the Claimant. The claimants are entitled for payment of Rs.11,333/- for disposal of the said earth".

The respondents have also sought an adjustment of secured advance of Rs.29,307.50 paisa. I admit the same and, therefore, in the net result the claimants are entitled to payment of a sum of Rs.3,087.50 paisa. I, therefore, award a sum of Rs.3,087.50 in favor of the claimants."

This objection is, therefore, without any merit and is rejected.

4. In respect of claims 5, 8 and 11 awarded by the arbitrator, the objection is that these claims are in fact made in duplicacy and triplicacy for the same/similar claim. Claim No. 5 was for prolongation of the work. Under claim No.8 the petitioner had claimed 10 per cent of the expected profit on the balance work and claim No.11 was for establishment charges. It is submitted by the respondents that the costs of the work or the tendered amount includes 10 per cent of the contractor's profit. The said 10 per cent is inclusive of the entire establishment charges, watch and ward expenses to be incurred by the contractor on the establishment, construction of Jhuggis for labour and all other overhead expenses as per prescribed analysis of rates. For the said quantity of 10 per cent for overhead expenses of establishment charges, the learned arbitrator has given separate award for establishment charges, watch and ward and also alleged loss of profit on unexecuted work. Clause 13 of the contract disentitle/bar any claim or any work which has not done. The Executive Engineer has absolute powers to get any part of the work not done or not executed. The cost of the material to be supplied by the Department is also to be deducted from the tendered amount. As such out of the tendered amount of Rs.36,30,952/- and the costs of the material to be supplied by the Department i.e. Rs.5,07,189/- is to be deducted for calculating 10 per cent for establishment charge or overhead expenses. The contractor/petitioner cannot in any circumstances be given any establishment charges or overhead charge on the said amount of the material supplied by the Department. As such the award of 10 per cent of alleged profit on the sum of Rs.36,30,953/- is totally perverse and contrary to the Clause 13 of the contract. The findings are thus not only perverse but also proves that the learned arbitrator has misconducted himself. The award of the sum of Rs.81,750/- which related to the claim for establishment charges could not be allowed as the said amount for establishment charges is bound to be inclusive in the said 10 per cent of the expected profit of the contractor under the terms of the contract. The contractor would not be given any award for prolongation of the contract when he was fully aware that the work has been stayed by the orders of the court, and the said fact has been noted in the Site Order Book(R). The petitioner/contractor has himself claimed that he was having an establishment bearing monthly expanses of Rs.4,350/- for the said period of 15 months for which the contract was awarded. Thus the total amount of the establishment would be Rs.65,250/- and it could not be worked out at Rs.81,750/- as was awarded.

5. I am not impressed by this argument also. The three claims preferred by the petitioner were different in nature and there was no duplicacy or triplicacy as alleged. Claim No.5 was preferred as the work was prolonged beyond the stipulated date of completion and it was the submission of the petitioner that prolongation was due to the faults of the respondents for which the petitioner had suffered extra expenditure. On the other hand, claim No.8 was preferred because the petitioner was not allowed to complete the work and as the balance work of Rs.36,30,952/- had not been done by the petitioner, he claimed the amount in the nature of expected profits at the rate of 10 per cent on this balance amount. Claim No.11 was for incurring expenditure on the establishment which the petitioner completed on stipulated date when the work remained suspended for 15 months in between. While dealing with claim No.5, the learned arbitrator recorded the finding that the work was prolonged beyond the stipulated date of completion by about 5 years and the petitioner was to deploy Chowkidars for this period and charges for these chowkidars were claimed. The petitioner had submitted proofs in the form of documents and vouchers. It is further observed by the learned arbitrator that the respondent did not dispute these documents and the vouchers and did not deny the deployment of chowkidars. The delay was also on the part of the respondents. On this basis, this amount was awarded. As far as claims No.8 and 11 are concerned, the justification given by the learned arbitrator runs as under:

"The contract period expired on 02.03.83. The value of the contract was Rs.44,80,700/-. A small amount of work could be done during the period of contract. The balance work remained un-executed for Rs.36,30,952/-. It was revealed from the evidence that the claimants had made all arrangements such as shuttering, mixers, tools and plants and had also deployed Engineer, Munshi, Mechanic and fabrication work and had constructed huts, godowns etc., for completion of the contracted work.

It is an admitted case of both the parties that the work got prolonged till 30.04.1988 which is nearly five years after the stipulated date of completion. From the evidence adduced by the claimants, it is clear that the claimants could not reap the benefit for the contract entered into with the respondents. It appears that the claimant was fully able to discharge the obligations under the contract but the respondents were in breach of the contract resulting in loss to the claimants. The expenditure incurred for deployment of the Engineer, supervisor etc., arrangement of tools and plants and construction of godowns, huts and other allied arrangement as well as work not done, collectively show that the claimant suffered damages at the hands of the respondents. The respondents entered into contract with the claimants on the disputed land, and failed to discharge their obligation to make the entire site available for execution of the work within contract time. In D.D.A. in such work contracts the contractor's profit is considered as 10 per cent which I consider very reasonable on the balance work in the present case. I, therefore, consider claims No.8 and 11 for grant of relief. I award a sum of Rs.3,63,095/- against claim No.8 and Rs.81,750/- against claim No.11 to meet the ends of justice."

There is also no force in the objection of the objector that the learned arbitrator has not given reasons in support of the award. The impugned award is well considered ad supported by detailed reasons. In fact justification in the form of reasons in respect of the aforesaid claims has already been reproduced above. Therefore, I do not find any merit in this objection either.

6. Against claim No.13, the learned arbitrator has awarded the interest and the objection is to the award of future interest on the ground that the learned arbitrator had no jurisdiction to award this interest which is the power of the court. However, a perusal of the award shows that the interest is awarded till the date of payment or decree, whichever is earlier. The learned arbitrator was fully empowered to award such interest. It is from the date of decree that the court has the power to award.

7. The perusal of the objections shows that these objections are raised on facts and merit. The respondents are simply trying to argue that the decision of the learned arbitrator was not correct on merit. Such an argument is not open and the arbitration award cannot be challenged on this ground inasmuch as the learned arbitrator is the final judge of these issues. It is only when the findings are based on no evidence or are perverse then the court can interfere. Otherwise the court is not to sit as an appellate authority over the award of the arbitrator. The respondents are not able to show any perversity or that the award is against nay specific provisions of the contract. The law in this respect now stands settled by catena of judgments and needs no elaboration. However, for record some of the judgments on this aspect can be referred to which are as under:

1. M/s R.S. Avtar Singh Vs. NPCC .

2. M/s Naraindas R.Israni Vs. U.O.I. .

3. Trustees, Port of Madras Vs. Engineering Constructions Corporation Ltd. .

4. M/s Vaish Brothers & Co. Vs. U.O.I. &. Anr. .

5. M/s Hindustan Tea Co. Vs. M/s K.Sashikant & Co. & Anr. .

6. Municipal Corporation of Delhi Vs. M/s Jagan Nath Ashok Kumar & Anr. .

7. M/s Sudarsan Trading Co. Vs. Govt. of Kerala & Anr. .

8. U.O.I. Vs. Ralia Ram reported as AIR 1963 SC 1985.

Thus, I do not find any merit in the objections preferred by the respondents which are hereby dismissed.

Suit No. 353/91

8. The judgment in terms of the award is hereby pronounced. The award is made rule of the court. The petitioner shall also be entitled to interest from the date of decree till the payment at the rate of 12 per cent per annum.

9. The suit stands disposed of.