Brij Gopal Construction Company vs Delhi Development Authority And ...
2006 Latest Caselaw 282 Del

JUDGMENT

Sanjay Kishan Kaul, J.

IA No. 2166/1997 (Under Sections 30 and 33 of the Arbitration Act, 1940) IN CS (OS) No. 2111A/1996

1. The petitioner contractor was awarded the work at Paschim Puri, Block A-1, New Delhi as per Agreement No. 14/EE/CDIII/85-86/DDA. Disputes arose between the parties and in view of the arbitration clause No. 25 of the General Terms and Conditions, the Engineer-Member, DDA appointed Shri Banarsi Dass as the Sole Arbitrator in terms of the letter dated 13.02.1992. The Arbitrator made and published his Award on 31.07.1996. The respondent aggrieved by the said Award has filed the present objections under Sections 30 and 33 of the Arbitration Act, 1940 ( hereinafter to be referred to as, 'the said Act').

2. Claims No. 1 and 2 of the petitioner have been disallowed and, thus, need no consideration.

3. Insofar as claim No. 3 is concerned, the petitioner claimed the amount on account of penal rate of recovery for steel from the final bill. The mild steel was supplied by the respondent and if it was not consumed and returned beyond the authorised waste of 5% due to cutting into pieces, such penal rate of recovery could be made. The Arbitrator has come to the conclusion that such recovery was not justified under clause 42(iii) as on the basis of the consumption, the variation was within 5% limit. The amount awarded is Rs. 4,172.55. This is a pure finding of fact which does not call for any interference by this Court.

4. Claim No. 4 again has not been accepted and, thus, needs no discussion.

5. Claim No. 5 is on account of 0.75% rebate availed of by the respondent from the final bill, which was alleged to be non-contractual and unjustified. There were two kinds of rebates permissible - rebate of half per cent on regular monthly payments being made and a rebate of 0.25% on the estimated cost for payment of the final bill within a period of six (6) months from the date of completion of the work. The Arbitrator found that regular monthly payments were not made for a large number of bills. Some of the running bills, which were paid regularly, rebate was held entitled. The final bill was also not fully paid and was paid in more than one installment. The rebate could have been availed of only if the payment was made within the time stipulated under the Agreement. It is a finding of fact arrived at by the Arbitrator awarding the amount of Rs.20,103/- which does not call for any interference.

6. It has to be kept in mind that this Court does not sit as a court of appeal in respect of an award and it is not the function of this Court to re-appreciate the evidence. Even if this Court was to come to a different conclusion on the same set of facts, it cannot be a ground to interfere with the award so long as the view taken by the Arbitrator is plausible one and not perverse. Reference in this behalf may be made to the judgment of Division Bench of this Court in DDA v. Bhagat Constructon Co. Pvt. Ltd. 2004 (3) Arb.LR 481 and the judgment of the Apex Court in Food Corporation of India v. Joginderpal Mohinderpal and Anr. .

7. Claim No. 6 is by the petitioner seeking reimbursement of losses and damages suffered due to breach of contract by the respondent including the delay in approval of design, delay in giving designs, etc. resulting in prolongation of the contract. As per the contract, the date of commencement of work was 20.12.1984 and the date of completion of work was 19.12.1985. The work was, however, completed on 02.09.1987 after a delay of about 20.5 months. The Arbitrator found that the delay was fully attributable to the respondent on the basis of the material placed before the Arbitrator. The respondent, had, in fact, granted extension of time without levy of compensation and had also paid escalations for material and labour on the basis of indices prevalent from time to time as per the provisions of clause 10CC of the Agreement. On a perusal of the evidence, a finding has been arrived at that the delay was attributable to the respondent and due to non-fulfilment of the promises under the contract by the respondent, the Arbitrator has awarded a sum of Rs.90,000/- on this account.

8. Learned counsel for the respondent submits that the Arbitrator has failed to appreciate the evidence placed before him. This, in my considered view, is not the scope of enquiry by this Court in view of the legal position explained above. Further, an arbitrator is not required to write a judgment like a court or to give detailed calculations in view of the judgment of Division Bench of this Court in DDA v. Bhagat Construction Co. (P) Ltd. and Anr. 2004 (3) Arb.LR 548. The Arbitrator in his wisdom has assessed the impact of the delay attributable to the respondent and come to a figure which would not call for any interference.

9. Claim No. 7 is on account of losses and damages suffered due to delay in payment of the final bill and escalation amount. The Arbitrator has found that there was delay in payments of the bill as well as the amount under clause 10CC.

If there is delay in payment of the bill, the compensation can be by interest on the said amount. Further for delays of the contract, amount has been separately awarded under claim No. 6. I fail to appreciate as to what can be the basis for award of damages for delay in payment of the amounts due when interest itself has been awarded. In view thereof, the award with respect to claim No. 7 is set aside.

10. Claims No. 8 and 9 have not been awarded and have been withdrawn respectively.

11. Claim No. 10 deals with the refund of deduction made for certain items from the final bill. The amount awarded is Rs.4,800/-. In this behalf, learned counsel for the respondent has drawn attention of this Court to Exhibit R-1. On Exhibit R-1, an endorsement has been made by the petitioner that the bill and measurements were accepted in full and final settlement of all the demands under the Agreement. Learned counsel for the respondent, thus, submits that it is neither open to the petitioner to claim nor for the Arbitrator to award any sum merely on the basis that the recovery made against MS rolling shutters was at a rate which was on the higher side.

12. In my considered view, the matter in issue relates to the excess recovery made and the rates to be applied for the same. The Arbitrator found that the rates of DSR (1981) which ought to have been applied were not applied and, thus, the amount of Rs.4,800/- was liable to be refunded. It does not call for any interference by this Court.

13. Claim No. 11 has not been accepted.

14. Claim No. 12 and Additional Claim No. 1 is on account of pendente lite and other interest. Interest has been awarded @ 15% p.a. on the awarded amount from 19.02.1992 till the date of the Award. Interest has also been awarded on the interest amount calculated for the period of pendency of the matter before the Arbitrator.

15. Insofar as the issue of interest is concerned, after some hearing, learned counsel for the petitioner himself confines the claim of interest to 12% p.a. in view of the prevailing rates of interest at that time and this is the rate of interest consistently awarded by this Court for this period of time. I am unable to agree with the reasoning of the Arbitrator that further 15% interest should be awarded on the interest amount. The interest, which would apply, would be on the principal amount and would be at 12% p.a. from 19.02.1992 till the date of decree.

16. Additional Claim No. 2 is of Rs.50,000/- on account of underpayment of escalation under clause 10CC. During the course of argument, this amount was confined to Rs.14,157.75 which has been awarded by the Arbitrator in view of the finding arrived at that as per the calculation under clause 10CC, the said amount was underpaid and this would not call for any interference.

17. The counter claims have been rejected for recoverables under clause 10CC and for pendente lite and future interest. Since no amount was recoverable from the petitioner, interest could not be granted. The counter claims have been rejected both in law and on facts. Since on facts, nothing was found recoverable and, in fact, further amount was liable to be paid to the petitioner, the findings are not required to be interfered with.

18. In view of the aforesaid, the objections stand disposed of.

CS (OS) Nos. 2111A/1996 and 2277A/1996

19. In view of the objections having been disposed of, the Award dated 31.07.1996 of the Sole Arbitrator, Shri Banarsi Dass is made Rule of the Court with the modification that the award made under claim No. 7 is set aside and the interest amount is confined to 12% p.a. simple interest on the principal amount. The petitioner is, thus, entitled to a sum of Rs.1,40,733/- along with simple interest @ 12% p.a. from 19.02.1992 till the date of decree. The petitioner shall also be entitled to future interest from the date of decree till the date of realisation @ 9% p.a. In case the decretal amount is paid within 60 days, the respondent will be exempted from payment of future interest.

20. The parties are left to bear their own costs.

21. Decree-sheet be drawn up accordingly.