M.M. Khanna vs D.D.A.
2005 Latest Caselaw 1277 Del

JUDGMENT

R.C. Jain, J.

1. Disputes/differences arose between the parties in relation to an Agreement No. 362/EE/HD-XIX/81-82 for construction of 471, Janta Houses at Pocket M at Dilshad Garden, Delhi. In terms of the Arbitration Agreement, disputes were referred to the sole arbitration of Mr. Shyam Narayan, who entered the reference and made and published an award dated 2.2.1994. The award having been filed in the Court, notices were issued to the parties inviting objections, if any, against the said award. Pursuant to the sainotice, DDA/respondent has filed objections under Sections 30 and 33 of the Arbitration Act, 1940 (in short the 'Act') assailing the said award, inter alia, on the ground that the Arbitrator has mis-conducted himself and the proceedings as claims which are barred by limitation have been accepted and that the Arbitrator had no jurisdiction to enter the reference and give award, at least, on the counter-claim nos.2 and 3 of the respondent/DDA, the same being excepted matters.

2. Heard the counsel for the parties. The award of the Arbitrator is a speaking one and gives out cogent reasons for allowing or not allowing certain claims and counter-claims. Learned counsel for the respondent/objector has assailed the award against claim nos.1, 2 and 3 as also about rejecting the counter-claims of the respondent. So far as claim no. 1 is concerned, it was for a sum of Rs. 5,00,000/- towards amount of final bill against which the Arbitrator has allowed a sum of Rs. 2,45,812/-, which according to him, is the difference between the final bill submitted by the contractor and the respondent and which amount had been unjustifiably withheld by the respondent. In the opinion of this Court, it is not permissible for this Court to examine the award of the said claim as a Court of Appeal would so. Therefore, the award made against claim no. 1 must be upheld and is not liable to be set aside.

3. As regards claim no. 2, it was argued that on the face of the respondent's claim for Rs. 3,77,525/- towards the compensation as levied by the Superintending Engineer, the respondent was within its rights to withheld the security amount of Rs. 1.00 lacs. In the opinion of this Court and for the reasons given by the Arbitrator, this submission has no merits because the claim, as put forth by the contractor, was for the refund of the security amount which the Arbitrator has found was unjustifiably retainedy the respondent/DDA despite the work being over long back. So, the award is not liable to be set aside even against this claim.

4. It may be noticed that the Arbitrator has rejected the claim of the contractor for Rs. 3.00 lacs towards damages on account of in fructuous expenditure establishment and rise in prices etc., due to alleged failure on the part of Department in fulfillling contractual obligations in handing over the complete site, required design, drawings and decision etc. While counter claim no. 3 raised by the respondent/DDA was for Rs. 25.00 lacs on account of the damages suffered by them due to the alleged non-performance or timely performance of the contract by the contractor. Both these claim and counter claim have been rejected by the Arbitrator. The contractor has not challenged this Award.

5. On the strength of a decision of the Division Bench of this Court in the case of Delhi Development Authority v. M/s Sudhir Brothers, Arbitration Law Reporter 1995 (2) 306, learned counsel for the respondent/DDA has argued that the Arbitrator had no jurisdiction to entertain and adjudicate upon the counter claims no. 2 and 3 because they fell within the expected matters viz. the decision of the Superintending Engineer being final in that behalf. Mr. Rajappan, counsel for the petitioner does not dispute the above legal proposition and states that the award of the Arbitrator so far as it has rejected the counter claim no. 2 for a sum of Rs. 3,77,525/- and claim no. 3 for a sum of Rs. 25,00,000/- on account of borrowing the amount from LIC/HUDCO may be set aide and the respondent be left to work out its remedies, if any, under the law in relation to those counter claims and no plea of limitation would be raised by the respondent in that behalf. Even otherwise what would be the position flowing from the above decision of the Division Bench.

6. Mr. Rajappan has, however, prayed that since the Arbitrator has not awarded any interest on the amount so awarded by him, and that the awarded amount remains unpaid for all these years, reasonable interest may be awarded to the petitioner, at least, from the date of the award till the payment is made. The grant of interest is, however, objected to on behalf of the respondent/ DDA.

7. Having considered the matter in its entirety, this Court is of the opinion that the objections filed by the respondent/DDA deserve to be partly allowed. Accordingly, the award of the Arbitrator-Mr. Shyam Narayan dated 2.2.1994 awarding a sum of Rs. 3,55,812 to the petitioner is hereby made a Rule of the Court and it is ordered that the petitioner shall be entitled to interest @9% per annum on the said amount from the date of award till the payment is made. The award of the Arbitrator so far it has rejected counter claim nos.2 and 3 of the respondent/DDA for Rs. 3,77,525/- and Rs. 25,00,000/- respectively is hereby set aside with liberty to the respondent to work out their remedy, if any, in accordance with law. However, if such a remedy is pursued, the petitioner shall not be entitled to raise any objection with regard to the claims being barred by limitation. Let a decree sheet be drawn accordingly.