Kundan Lal And Bros. vs Union Of India (Uoi) And Anr.
2002 Latest Caselaw 676 Del

JUDGMENT

Mukundakar Sharma, J.

1. This judgment and order shall dispose of Suit Nos.275OA/1996 and 42A/1997.

2. The petitioner was awarded a work contract by the respondent No.1 for providing and fixing EI and fans, power wiring, supplying and fixing wireways channel. In respect of the same, an agreement was also executed between the parties. The aforesaid contract admittedly contained an arbitration clause being Clause 25 of the Agreement. While executing the aforesaid work, certain disputes arose between the parties consequent to which the petitioner invoked the arbitration clause.

3. The Chief Engineer, C.P.W.D., New Delhi, who was the appointing authority under Clause 25 of the Agreement appointed the respondent No.2 as the sole Arbitrator by his order dated 29th February, 1996 and the disputes were referred to the said sole Arbitrator for his adjudication and decision. The Arbitrator entered into the reference on 15th March, 1996. He received the evidence adduced by the parties and also heard oral submission. After enlargement of time for making and publishing the award, the same was made and published by the Arbitrator on 27th September, 1996.

4. After the award was made and published by the Arbitrator, the petitioner filed a petition in this Court under Section 14 of the Arbitrator and Act, praying for a direction to the Arbitrator to file the original arbitrator award in this Court so as to enable the petitioner to file the objection against the said award. The same was registered as Suit No.2750A/1996 on which notice was issued to the Arbitrator to file his award and proceedings. The Arbitrator filed his award and the proceedings in this Court on receipt of which, Suit No.42A/1997 was registered in this Court. After filing of the said award in this Court, notice was issued to the parties pursuant to which, an objection was filed by the petitioner under Sections 30 and 33 of the Arbitration Act as against the aforesaid award. The said objection was registered as I.A. No. 1632/1997.

5. I have heard Mr. Harish Malhotra, counsel for the petitioner, who during the course of his submissions vehemently challenged the award passed by the Arbitrator in respect of Claim No.1(a). The aforesaid claim of the petitioner, namely Claim No.1(a), was for payment of damages due to prolongation of the contract on account of Clause 10 (CC). Counsel for the petitioner submitted that although in the reference to the Chief Engineer, the petitioner had claimed an amount of Rs.3 lacs, the same was restricted during the course of hearing before the Arbitrator, to an amount of Rs.1,92,943/- in terms of the statement of facts of the petitioner dated 4th April, 1996, as per the details given in (Annexure 'X') of his statement of facts, The respondent No.1 denied the aforesaid claim of the petitioner in its counter-statement of facts submitted by it.

6. The Arbitrator considered the aforesaid claim and held that the claim of the petitioner under Clause 10 (CC) is not tenable as the said Clause is not applicable to the facts and circumstances of the present case. While coming to the aforesaid conclusion, the Arbitrator perused the provisions of Clause 10 (CC) and on an interpretation thereof held that the claim of the petitioner under claim 1(a) does not come within the purview of the aforesaid Clause 10(CC) of the Agreement. The Arbitrator also held that the provision of Clause 10 C is also not applicable to the facts of the present case nor any claim was referred under the aforesaid Clause to the Arbitrator.

7. Therefore, in the light of the submissions of the counsel appearing for the parties, the only issue that arises for my consideration in the present case is whether or not the claim of the petitioner under Clause 10 (CC) is maintainable and whether or not he is entitled to receive payment against such a claim in the facts and circumstances of the present case.

8. Answer to the aforesaid question revolves around interpretation of Clause 10 (CC) of the Agreement. The Arbitrator has looked into the records and on the basis thereof and on an interpretation of Clause 10 (CC) has held that the said Clause is not applicable and is not attracted to the facts and circumstances of the present case. If such an interpretation is plausible, the same has to be accepted by this Court for the Court cannot sit as appellate authority over the decision of the Arbitrator. However, in order to appreciate to contention of the counsel for the petitioner, I have looked into the provisions of Clause 10 (CC) of the Agreement. The said Clause specifically provides that no compensation as provided for under

Clause 10 (CC) would be payable for a work for which the stipulated time of completion is six months or less. A claim under Clause 10 (CC) could be entertained if the price of materials and/or wages of labour required for execution of the work increases and in that event the contractor would be compensated for such increase as per the provisions detailed in the said Clause. However, such compensation at an increased rate if payable only for the work for which the stipulated period of completion is six months or less.

9. The present contract which was awarded to the petitioner by the respondent No.1 was admittedly for a period of found and a half months. It is specifically mentioned in the contract that the stipulated period of completion is four and a half months.

10. Mr. Harish Malhotra, counsel for the petitioner, during his course of submission sought to submit that although the stipulated period of completion in the contract was envisaged to be four and a half months but, the work was started on 14th September, 1990 with the stipulated date of completion being 29th January, 1991 but, the work could be actually completed only on 31st December, 1993 and the time for completion of the work was extended by the competent authority without levy of compensation. It was submitted by him that, therefore, as the period of completion of the work was extended by the competent authority without levy of compensation the stipulated period of completion shall have to be reckoned as up to 31st December, 1993. It was submitted by him that when it is computed thus, the stipulated date of completion is more than six months and, therefore, Clause 10 (CC) is applicable. In support of the contention, counsel also relied upon a decision of this Court in Narain Das R. Israni v.

Delhi Development Authority; reported in Arbitration Law Reporter 1996 (1) 602.

11. I am, however, unable to accept the aforesaid contention of the counsel for the petitioner. Clause 10 (CC) of the Agreement specifically provides that the contractor would be compensated for any increase in the prices of materials and/or wages of labour required for execution of the work only when the stipulated period of completion is six months or less. However, the present was a work for which the stipulated period of completion was four and a half months and, therefore, in terms of the aforesaid Clause, no such compensation was payable to the petitioner, even if there was any such increase in the prices of materials and/or wages of labour required for execution of the work. Same interpretation is given by the Arbitrator which is a plausible interpretation and, in my considered opinion, a correct interpretation and, therefore, the same does not call for any interference.

12. Reliance on the decision of this Court in Narain Das R. Israni (supra), is also misplaced as the said decision was rendered in respect of a case where the stipulated period of completion of the contract was six months. Besides, a careful perusal of the said decision would indicate that such compensation was directed to be paid to the claimant therein under the provisions of Section 73 of the Contract Act, holding that since the claimant had also made a claim under Section 73 of the Contract Act, the claimant is entitled to payment of the same. The facts of the said case are, therefore, clearly distinguishable from the facts of the present case and the said decision has no application to the facts and circumstances of the present case.

13. If the period of completion of the contract is more than six months, to such a case Clause 10C is applicable. No reference was made to the Arbitrator under Clause 10C and it was not even submitted by the counsel for the petitioner that Clause 10C would be applicable in the facts of the present case.

14. No other point or issue was urged by the counsel for the petitioner. Therefore, I find no merit in the objection and the same is dismissed. The award of the Arbitrator is made a Rule of the Court. Parties shall, however, bear their own costs.