Ram Lal Hans & Sons vs Union Of India
2001 Latest Caselaw 1682 Del

JUDGMENT

V.S. Aggarwal, J.

1. Agreement No. 15/EE/CD-1/86-87 was executed between M/s Ram Lal Hans & Sons, petitioner and Union of India for construction of 104 number of quarters at NCERT Campus, New Delhi. The agreement was executed by Executive Engineer (Construction) on behalf of the Union of India. The work was awarded to the petitioner. Clause 25 of the agreement provided for an arbitration of the disputes arising between the parties. Certain disputes had arisen and Shri S S Juneja was appointed as the sole arbitrator. Shri Juneja had made his award on 14th June, 1996. He had awarded a total sum of Rs. 2,55,893/- in favor of the petitioner.

2. Notice had been issued to both the petitioner as well as to Union of India and both the Union of India as well as petitioner have filed objections against the award.

3. So far as Union of India is concerned it had asserted that estimated cost of contract was Rs. 56,17,000/-, the date of commencement was envisaged as 4th November, 1986. It was to be completed by 3rd November, 1987. It is not in dispute that there was an arbitration clause but since the work was of urgent nature and the contractor firm had invoked the arbitration clause, the matter was referred to the arbitrator. To complete the construction the respondent Union of India had to rescind the contract by inviting tenders. Consequently, it was proposed to impose levy against the petitioner under Clause 2 of the contract. The arbitrator is stated to have wrongly awarded Rs. 1,05,993/- for the value of the work done but not paid and in that process has misconducted himself because the said amount cannot be due to the petitioner. It is further assailed on the ground that arbitrator had calculated a lumpsum amount of Rs. 5000/- per day for delay of seven months. Even to that extent it is stated that he has misconducted himself.

4. 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 has been pleaded that delay for filing of the objection is due to seeking legal opinion from various departments. The objectors were not negligent and consequently it was prayed that delay as such may be condoned.

5. In the reply filed the applications IA 187/98 and IA 188/98 had been opposed. It was denied that the arbitrator has misconducted himself with respect to the pleas of the objectors or that there is any ground for condensation of delay.

6. Before objections of the Objector/Union of India can be gone into it must be adjudicated as to if there is a good ground for condensation of delay or not. Before a person can state that there is a sufficient cause of condensation of delay it must explain the said cause. But expression "sufficient cause" by itself is pregnant with meaning. It has to be examined in light of facts and circumstances of each case. Therefore, it would be a folly to give a precise definition of a meaningful word. Ordinarily the person must show that there was some good cause which prevented them from filing the application within time. But the sufficient cause muse be stated in so many words. A vague assertion would hardly even amount to an averment of sufficient cause.

7. Reverting back to the facts of the present case, as has been noted above the Union of India was served on 20th September, 1996 and application had been filed after an year seeking condensation of delay. In that view of the matter the Union of India necessarily had to show as to what prevented it from filing the objections within time. The application by itself is delightfully vague. It simply states that delay occurred due to seeking legal opinion from various departments. The normal principle of law is that a party seeking condensation of delay must explain each days delay. Herein what to talk of each days delay, the delay of months is not at all being explained. Stating that there was delay in various departments would not improve the version of the objector. It is not known as to which department delayed and why and how the delay occurred. Consequently there is no hesitation in concluding that there is no specific averment as to why delay has occurred. Merely because it happens to be the Union of India/State necessarily does not imply that period of limitation will have no say in the matter or they can approach the court at any time. Delay occurs because of the vast administrative expense of the State but still it must be explained as to how the delay has occurred. It is not done. Therefore, there is no ground to condone the delay and as a necessary corollary the objections filed along with the application seeking condensation of delay fails and are dismissed.

8. So far as objections filed by M/s Ram Lal Hans & Sons are concerned they are confined to claim No. 1, 4, 5, 7 and 12 besides claim No. 8.

9. As regards claim No. 1, the petitioner sought recovery of Rs. 3.5 lakhs on account of work done but not purported to have been paid by the objector. Petitioner contends that there were overwhelming evidence adduced by the petitioner before the arbitrator but the arbitrator has only awarded Rs. 1,05,993/-. No reasons have been recorded for rejecting the evidence of the petitioner and thus there is error apparent on the face of the record. Perusal of the award reveals that the arbitrator had allowed the claim but not what was in fact demanded by the petitioner/applicant. The arbitrator had gone into the facts and looked into the material placed before him. It was thereafter that the above said part of the claim had been allowed. It is within the domain of the arbitrator to look into the facts and appreciate the same. The court had a limited jurisdiction in this regard. The evidence will not be reviewed unless on basis of the evidence no other view points is available. When such is the situation in the facts of the present case it cannot be termed that the arbitrator had gone astray or that there was no other view point that was possible. When two views are possible even therein the court will not interfere. As a necessary corollary it must follow that there is no ground to set aside the award with respect to the said claim No. 1.

10. Claim No. 4 : The applicant/contractor had laid a claim of Rs. 4 lakhs on account of increased price of material and labour for the work done beyond the stipulated date of completion. In the objections that have been filed it had been alleged that the applicant/petitioner established various breaches of the objector on many counts. The applicants had substantiated its claim of 35% extra amount on the aforesaid count with reference to the trend of tenders. The arbitrator had worked and paid to the applicant under Clause 10 CC only up to the stipulated contract period of 3.10.87 and not up to the extended period of 1.6.88. Thus, there was no factual or legal reason for arbitrator not to award the amount claimed by the petitioner/claimant.

11. Perusal of the award shows that the claimant had submitted that cause of delay in the work has been explained in detail. The arbitrator found that the claimants have not been able to give any details with evidence to support the demand of 35% extra increase on their quoted rate beyond the payment of Clause 10CC. This indeed is a finding of fact. It appears that before the arbitrator there was no such claim laid that the objectors have worked out and paid to the petitioner only for the period 3.11.87 and not beyond that. This gets support from the statement of claim that was furnished before the arbitrator therein with respect to claim No. 4 for Rs. 4 lakhs, it had been asserted:

"Claim No. 4: Rs. 4.0 Lacs: Escalation in respect of work beyond stipulated date of completion.

9.1 The stipulated date of completion was 3rd Nov., 1987. The contract over-ran this period due to continued breaches of the respondents in fulfillling reciprocal promises and discharging contractual obligations.

9.2 The breaches of the respondents were on account of delays in making hindrance free sites available, supply of drawings and designs, non issuing timely decisions, not honouring the contractual obligations regarding supply of stipulated materials, not paying adequately and timely etc.

9.3 Though there were breaches on the part of the respondents, the claimants treated them as partial breaches and continued to work reserving their right to claim escalation in respect of the work to be carried out beyond the stipulated date of completion.

9.4 The value of the said escalation considering the market trend and the building cost indices etc. comes to the tune of Rs. 4.0 lacs which is prayed to be awarded in favor of the claimants.

12. In other words once again specifically it was never held that payment has not been made up to 1.6.88. In the objections altogether a new plea is being challenged which cannot be so raised for the first time. The arbitrator rightly therefore did not allow what is alleged by the applicant.

13. Claim No. 5 : The objection with respect to claim No. 5 is that the applicant claimed an amount of Rs. 1 lakhs from the objector under Clause 10CC of the agreement. The applicant was entitled for payment not only up to the date of stipulated contract but was entitled to payment uptill 1.6.88. The arbitrator has not noted that there is no material on the record to come to such a conclusion. Once such a finding of fact has been recorded which is not otherwise shown to be erroneous, therefore, the payment was rightly refused.

14. Claim No. 7 and 12 : The applicant had sought an award of Rs. 3,30,900/- on account of loss of profitability and Rs. 1,63,700/- on account of loss of profit on withdrawal of work alleging that objectors were guilty of delay but were also grossly guilty of serious contractual breaches. The arbitrator has dealt with the said claim and concluded that no such loss as such is established and once no such loss is established there is little scope for re-appreciating the evidence for recording a finding of fact. The claim must be held to have rightly been refused.

15. Lastly with respect to claim No. 8 the claimant claimed an amount of Rs. 8,50,000/- on account of value of material, tools and balance left at the site. It was argued that there was no factual reason in not awarding the amount claimed. Once again the findings recorded are that there was a denial by the objector. These materials had been taken over by the claimants and confirmed in R-29 (document proved before the arbitrator). The arbitrator therefore recorded that claim is frivolous and mischievous. The findings so recorded having been shown once again to be based on no material on the record to prompt the court to come to a conclusion to the contrary. Therefore, there is no scope for interference.

16. As a result of these reasons the objections of the applicant as well as Union of India must fail and are dismissed. Award is made a rule of the court and decree in terms of the award is passed.