Delhi High Court
Jagat Ram Trehan And Sons vs Delhi Development Authority And ... on 1 December, 2005
Author: S K Kaul
Bench: S K Kaul
JUDGMENT
Sanjay Kishan Kaul, J.
IA No. 6269/1994 IN CS (OS) No. 2123/1993
1. The petitioner awarded the contract for construction of houses for Category II under SFS Scheme at Rohini in terms of Agreement No. 12/EE/HD/XVII/DDA/86-87 dated 12.03.1987. Disputes arose between the parties and, thus, the Engineer- Member, DDA appointed Shri V.M. Bajaj as the Sole Arbitrator. The Arbitrator entered upon a reference and made and published his Award dated 03.09.1993. The respondent DDA aggrieved by the same filed the present objections.
2. Learned counsel for the respondent DDA initially sought to press all the objections, but could not seriously dispute that objections to the extent they require only reappraisement of material and evidence on record could not be sustainable as the same is not the jurisdiction of this Court under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter to be referred to as, 'the said Act'). This view has repeatedly been reiterated by the Apex Court including in the judgment of State of U.P. v. Allied Constructions, and by Division Bench of this Court in DDA v. Bhagat Constructions Co. (P) Ltd., 2003 (3) Arb.LR 481.
3. Learned counsel for the respondent DDA, however, submitted that insofar as claim No. 16 being awarded for straightening and cutting of steel is concerned, since no notice was given by the contractor to DDA, the same is covered against the petitioner in view of judgment of this Court in Narain Dass R. Israni v. Delhi Development Authority, 2005 VIII Delhi 5. This position is not disputed by learned senior counsel for the petitioner and, thus, the amount awarded under claim No. 16 is set aside.
4. The next plea urged is in respect of claim No. 21 dealing with reduction and deduction for which in clause No. 25B, the Superintendent Engineer is stated to be the final authority. It is not disputed that in the present case notice has not been given by the respondent DDA for rectification to the contractor and, thus, this issue is covered against the respondent DDA in view of the aforesaid judgment in Narain Dass R. Israni's case (supra) where it was held that clause 25B provides for such final authority only if a notice is issued by the respondent for rectification as per clause 14 and, thus, objection to the same is rejected.
5. Learned counsel for the respondent DDA has referred to the claim awarded under claim No. 30. A part of this claim has been awarded for escalations calculated in addition to what has been awarded under clause 10CC. It has been now repeatedly held that escalation cannot be awarded by any other methodology if clause 10CC is provided for in the contract and this issue is also discussed in the aforesaid judgment of Narain Dass R. Israni's case (supra). Learned senior counsel for the petitioner on instructions, thus, agrees that award to the extent of Rs. 10,12,721/- on this account under claim No. 30 be set aside. However, the remaining part of claim No. 30 is maintained. Ordered accordingly.
6. The last aspect urged is the issue of interest considered under claims No. 29 and 31. Interest has been awarded for pre-suit, pendente lite and future interest till the date of decree @ 18% p.a. Learned senior counsel for the petitioner on instructions states that he confines his claim of interest to 12% p.a. This, in my considered view, is the reasonable rate of interest taking into consideration the prevailing rates of interest at the relevant time.
7. The application is accordingly allowed to the aforesaid extent.
CS (OS) No. 2123/1993
8. The Award dated 03.09.1993 of the Sole Arbitrator, Shri V.M. Bajaj is made Rule of the Court with the modification that award under claim No. 16 in to and under claim No. 30 to the extent of Rs. 10,12,721/- is set aside and the rate of interest pre-suite, pendente lite and till the date of decree is reduced from 18% p.a. to 12% p.a. simple interest. The petitioner shall also be entitled to future interest from the date of decree till the date of realisation at 9% p.a. simple interest.
9. In case the respondent pays the decretal amount within 60 days from today, the respondent will not be liable to pay future interest.
10. The petitioner shall also be entitled to costs.
11. Decree-sheet be drawn up accordingly.
