Delhi High Court
Jagat Ram Trehan & Sons vs Dda And Anr. on 14 May, 2002
Equivalent citations: 99 (2002) DLT 689, 2002 (64) DRJ 92
Author: J Kapoor
Bench: J Kapoor
JUDGMENT
J.D. Kapoor, J.
1. Pursuant to the application under Section 14 & 17 of the Arbitration Act moved by the petitioner the award was filed. On being noticed the respondent DDA has assailed it by way of IA 9723/95. The main thrust of the objections appears to be in respect of claim No. 31 though as a ritual, each and every item of the award has been challenged.
2. Any award on factual matrix and based upon evidence and material produced by the parties does not admit interference unless the Arbitrator has completely ignored a document which is material for the just and fair decision. Similarly if the Arbitrator has tied himself down to an unsound legal proposition it amounts to legal misconduct and award on this count is liable to be set aside.
3. As regards item No. 2 of the claim which is on account of non-payment of work done of cutting and straightening reinforcement steel bars, Ms. Ansuyya Salwan, learned counsel for the respondent has contended that the work of cutting and straightening was not extra work and included in item 3.9 pertaining to "re-inforcement of steel bars". I have already dealt with this matter and judgments cited and relied upon by her viz. S.K. Mangla v. DDA (Suit No. 181/92 decided on 22nd May, 1995) and (ii) Wee Aar constructive Builder v. DDA and Anr. (Suit No. 2456-A/96) in Constructive Builder v. Delhi Development Authority and Anr. 2001 VI AD (Delhi) 482 and taken the view that the work of cutting and straightening and re-inforcement of steel bars was an extra work done and did not form component of item 3.9. I deem it needless to repeat the reasons provided by me for arriving at this conclusion and uphold the award in this regard. The objections of the DDA therefore with regard to this claim are hereby repelled. Moreover Justice Vijender Jain in 2001 (V) Ad Delhi 194 has also subscribed to my view.
4. Except award No. 30, 31 & 32 all other awards fall within the arena of findings of fact. The courts have been advised to refrain from re-appreciating or reevaluating the evidence and the material produced before the Arbitrator as the Court does not sit in Appeal while examining the award. As a consequence the award in respect of claims other than those referred above are hereby accepted and maintained.
5. As regards claim No. 31 there were two sub-heads. The first sub-head pertains to compensation on account of escalation in respect of material and labour and second sub-head related to the expenditure on account of prolongation of the contract. The consistent view of this Court is that Clause 10cc of the agreement prohibits grant of further escalation in view of the provisions contained in Clause 10cc i.e. escalation on account of labour and material. The award of identical nature was set aside by Division Bench of this Court in DDA v. KC Goel and Ors. 2001 (2) AD 116 and in 1998(7) Ad Delhi 300.
6. Apart from this another relevant fact which renders the award with regard to sub-head one liable to be set aside is that the entire payment for escalation of material and labour have since been paid up to actual date of completion and the Arbitration has also awarded balance payment under Clause 10cc while rendering the award in respect of claim No. 11 & 28.
7. In the result the award of Rs. 16,75,810.55 in respect of sub-head of claim No. 31 is set aside. However as regards claim No. 30 & 32 which pertain to the interest the Arbitrator has committed an apparent error by awarding 18% interest for the pre-reference period. It is a settled law that for the pre-reference period the rate of interest is to be governed by the Interest Act, 1978. Section 3 of the Interest Act, 1978 empowers the Court to allow interest at a rate not exceeding the current rate of interest. The 'current rate of interest' has been defined in Section 2 as the highest of the maximum rates at which interest may be paid on different classes of deposits by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949.
8. In view of this provision of law the award of interest @ 18% for the pre-reference period is modified to 12%. This rate of interest applicable for the post reference period from 12.8.92 onwards shall be @ 15%. The award is made a rule of the Court in the aforesaid terms. Decree sheet be prepared accordingly.
