Babu Lal Sharma vs Union Of India
2001 Latest Caselaw 1765 Del

JUDGMENT

V.S. Aggarwal, J.

1. Petitioner, Babu Lal Sharma, proprietor of M/s. Rajasthan Decorators had entered into a contract with the Union of India for execution of the work of provision of Porta Cabin at Mandi House. An agreement in this regard had been executed. The said agreement contained an arbitration clause according to which all matters of dispute were required to be adjudicated upon by an arbitrator to be appointed by the Chief Engineer (Civil). Disputes had arisen between the parties and the arbitrator in terms of the arbitration agreement had been appointed. The arbitrator had submitted the award and the petitioner claims that the award should be made a rule of the court and for a decree to be passed in terms of the award.

2. Objections have been filed by the Union of India for setting aside of the award and also with respect to the fact that the counter claim filed by the Union of India should be allowed.

3. Along with the objections, an application under Section 5 of the Limitation Act has been preferred seeking condensation of delay in filing of the objections. It had been asserted that the notice had been received by the Ministry of Information and Broadcasting. The notice had been issued to the Secretary, Ministry of Information and Broadcasting. The name of the department was not known. It had been received on 2nd December, 1997. It was rotated between different departments and as soon as opinion by the Central Government was received the objections have been filed. In this process it was claimed that delay of 93 days that occurred may be condoned.

4. Reply has been filed to the objections filed under Section 30 and 33 of the Arbitration Act, 1940 and assertions of the objector in this regard have been controverter.

5. So far as the application filed under Section 5 of the Limitation Act is concerned there was little controversy that had been raised at the bar. The assertions made in terms that the notice was received on 2nd December, 1997 and thereafter with due diligence it was being processed and only on receipt of the opinion of the Government counsel objections were filed. The details in this regard borne from the application as to how the delay occurred have been given in the application itself. It was received in the Ministry of Information and Broadcasting thereafter it was sent to so (BD) Ministry of Information and Broadcasting, Chief Engineer, All India Radio (Civil) CCW. On 27th December, 1997 opinion was sought from the Law Ministry. It was received on 18th February, 1998. On 6th March, 1998 a request was made for appointment of counsel who was appointed on 10th March, 1998 and thereupon the objections were filed.

6. The period of imitation are prescribed so that a party is not allowing the time to lapse and no action is taken. However, if thee are sufficient grounds in that event in the facts of a particular case the court indeed can condone the delay. In the present case as referred to above the above it is patent that the Union of India with due diligence has been prosecuting the matter and in the first instance took the opinion of the Law Ministry and thereupon when the counsel was provided the objections were filed. In these circumstances referred to above it cannot be stated that there is inordinate delay to prompt this court to reject the application seeking condensation of delay. There are just and sufficient grounds and accordingly the delay is condoned.

7. So far as counter claim No. 2 is concerned in the first instance on behalf of the objector it was pointed that the petitioner agency M/s. Rajasthan Decorators had to complete the work by 21st April, 1991 as per terms and conditions of the agreement. The agency had delay ed the work and the department was compelled to rescind the contract. As per Clause 2 of the agreement the petitioner had made himself liable to pay the compensation. The competent authority had issued a show cause notice and considering the entire facts imposed compensation of Rs. 77,440/- due to breach and delay on the part of the petitioner. It was argued that this decision of the competent authority was not subject to arbitration. During the course of submissions learned counsel for the petitioner conceded that it could not be subject to the arbitration proceedings or the award of the arbitrator. Therefore, it was agreed between the parties that the said decision of the arbitrator should be deleted from the award as if it did not exist. Keeping in view the aforesaid it is directed that the award of the arbitrator with respect to claim No. 2 should be set aside and it be taken that it did not exist. The Union of India would be at liberty to take appropriate legal steps for recovery of the amount if any.

8. Reverting back to the different claims, learned counsel for the objector stated that with respect to Claim No. 1 the petitioner had claimed Rs. 5 lakhs on account of balance payment of the work done while the arbitrator has allowed a sum of Rs. 3,63,351/-. According to the objector the petitioner had been made payment for the entire work done and therefore the amount claimed was not due. The award of the arbitrator in this regard is being assailed on the ground that the arbitrator has not given any reason for coming to the conclusion that the site was not available on 22nd March, 1991 to work. The total contract related to Porta Cabin which as per the tender and specification and was having wheels under it. The contractor could have started the work and cabins can be shifted to the site subsequently. The conclusions of the arbitrator in this regard are therefore stated to the incorrect. Besides the objection raised that there was no delay on the part of the petitioner.

9. The finding of the arbitrator in this regard show that after perusal of the record he has recorded that the site was not available for the claimant on 22nd March, 1991. The work at the site with RCC slab was done later by somebody. He recorded that non-payment of the work of Rs. 2,58,366/- by the objector is wrong and only 5% over the overlaps can be avoided. This indeed is a finding of fact. It is based on whatever material was on the record.

10. The settled principle of law is that the court will not sit as a court of appeal to re-appraise the evidence even if for sake of argument it be taken that the court would have arrived at a conclusion different from that of the arbitrator still when two views were possible the award of the arbitrator would not be set aside. As a corollary it follows therefore that the award with respect to claim No. 1 cannot be brushed aside or set aside as claimed by the objector.

11. Claim No. 2 : With respect to this claim the petitioner had prayed for Rs. 1 lakh for the refund of the security deposit. The objectors assertion are that as per Clause 3C of the agreement the objector is entitled to take action for forfeiting the security deposit within 30 days. The arbitrator had wrongly come to conclusion that notice dated 14th August, 1991 which was given after 140 days is bad in law and therefore the action of the objector would also be taken to be bad in law. It is further asserted that the arbitrator had wrongly come to conclusion that time was not the essence of the contract.

12. Once again on this count the arbitrator has gone into the facts he has recorded that as per Clause 3C the first notice had to be given for measuring and secondly to take out the work of such part and given it to another contractor. The notice as per the contract had to be given within 30 days but herein the notice is stated to have been given after 145 days. The notice was held to be not valid. It was further concluded after going into the material on the record that time was not the essence of the contract.

13. This finding that time was not the essence of the contract indeed cannot be held to be erroneous. The first bill had been passed on 30rd May, 1991. The gross work value was taken note of and it was found that in double the time only 64% of the work was done which was allowed and in this view of the matter it was rightly concluded that time was not the essence of the contract. There is no ground in this regard to interfere in the said finding.

14. Claim No. 3: With respect to this claim the petitioner had claimed Rs. 2,20,000/- being damage due to idle labour and T&P. The arbitrator had awarded Rs. 1,03,346/-. As already referred to above the objection is that the porta cabins are portable structure to be provided on 150 mm wheels and the progress in this regard could not be delay ed due to construction of the platform. Objections have also been raised that the conclusion that site was not available also in not correct. The petitioner had deployed huge establishment and consequently the claim as such could not have been allowed. As referred to above, these finding are once again a finding primary on facts regarding which when material is on the record this court would restrain itself from interfering. The arbitrator had appreciated the facts in proper perspective and therefore the objections qua the said claim must also fail.

15. The petitioner claimed Rs. 1,32,000/- being damage against T&P. Rs. 1,03,346/- had been awarded. It is alleged that the arbitrator has wrongly come to conclusion that chowkidars, two guards had to sit outside the premises. According to the Union of India/objector there is no reasoning for employing the persons if they were to sit outside the premises. The arbitrator in this regard had recorded that the area is to be guarded by the objector but the objector had not allowed any chowkidar to guard the claimants T&P. This is due to the fact that they were not given passes and had to sit outside the premises. In that view of the matter the claim was rightly allowed and there is little scope for interference.

16. The only other claim of the petitioner which was assailed was claim No. 8. The petitioner had claimed Rs. 24,16,000/- being loss of earnings. The objectors assertions are that the formula adopted is not correct and that petitioner had been deprived of any earnings. The arbitrator in this regard had only allowed Rs. 33,592/- for the loss of the earnings. For the reasons already recorded above once such is the finding recorded of fact on appreciation of material on the record the court indeed will not interfere and the objection in this regard therefore necessarily must fail.

17. As regards counter claims the disputes on behalf of the objector have been raised with respect to claim No. 1 and 3. The Union of India asserts that arbitrator should have awarded the counter claim No. 1. It has been alleged that the above noted work had been awarded to the petitioner with a stipulated date for completion i.e. 21st April, 1991. The objector have failed to complete the work within the stipulated time. The defects had also been recorded in the site order. The petitioner's representative had refused to sign and thereupon remarks were sent to the petitioner. The damage as such had been suffered and the view of the arbitrator is assailed that the objector should have stopped the work. It is alleged that in fact the objector has been extending the time.

18. The arbitrator on appreciation of the material has found that this counter claim was not as per the agreement. The petitioner was stated to have done the work and had been paid 2nd RA bill. The petitioner was allowed to work up to 28th January, 1991 and therefore what is being assailed is contrary to the record. The counter claim in that regard had been disallowed.

19. The findings of the arbitrator can conveniently be stated to be borne from the record leaving little scope for interference. According to the arbitrator the petitioner had done the work to the tune of Rs. 4,73,774/-. He had brought all the material for the work to be done. Payments even were released and it is too late in the day now to assail that is being projected in the counter claim. There is no ground thus to interfere.

20. The other counter claim related to the damages due to non occupation of the accommodation by the government amounting to Rs. 11,64,267/-. It was asserted that due to the delayed performance of the work and consequent rescission of the contract the objector has suffered the loss.

21. The arbitrator has rightly found that there was no such clause in the agreement for action in this regard to be taken and therefore the counter claim had rightly been disallowed.

22. The only other controversy raised at the bar was pertaining to the award of interest. The arbitrator has allowed interest at 12% p.a. from the date of the award till the decree or actual payment, whichever is earlier.

23. We know from the decision of the Supreme Court in the case State of Orissa v. B.N. Agarwalla that the arbitrator indeed can award interest for pendente lite and post award period. Once that is the position indeed there is no ground to probe further in this controversy. The objections as such therefore must fail and are dismissed. Award is made a rule of the court and a decree in terms of the award is passed. The petitioner would be entitled to interest from the date of the decree i.e. today on the principal amount at 12% p.a. till the payment is made.