Delhi High Court
Anant Raj Agencies vs Delhi Development Authority And ... on 6 March, 2006
Author: S K Kaul
Bench: S K Kaul
JUDGMENT
Sanjay Kishan Kaul, J.
IA No. 7958/1998 (Under section 30 and 33 of the Arbitration Act, 1940)
1. The petitioner was awarded the work of construction of MIG Houses in various pockets of Rohini in pursuance to Agreement No. 25/EE/HD-17/DDA/82-83. The Agreement contained an arbitration clause being clause No. 25. Disputes arose between the parties and the Engineer-Member, DDA as the appointing authority vide letter dated 08.08.1984 appointed Shri C. Banerjee as the Sole Arbitrator. The Arbitrator made and published his Award dated 16.09.1997. The respondent / DDA aggrieved by the same has filed the present objections under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter to be referred to as, 'the Arbitration Act').
2. Learned counsel for the respondent/DDA initially attempted to take this Court through the objections and the grounds with reference to each claim, but on a query being posed, could not seriously dispute the proposition that this would not be the jurisdiction of this Court. This Court does not sit as a court of appeal and the claims based on appreciation of evidence cannot be rescrutinised by this Court. It is not for this Court to interfere with an award merely on the basis that the Court would come to a different conclusion on the material available before the Arbitrator and in the absence of the award being absurd, reasonableness is not a matter to be considered by the Court. In this behalf, judgment of the Apex Court in Food Corporation of India v. Joginderpal Mohinderpal and Anr. may be referred to. In State of UP v. Allied Constructions , it was once again reiterated that Section 30 of the Act of the Arbitration Act providing for setting aside an award is restrictive in its operation and unless one of the conditions specified therein is satisfied, the award cannot be set aside. The Arbitrator is a Judge chosen by the parties and his decision is final.
3. In view of the aforesaid legal position, learned counsel for the respondent / DDA confines his submissions only to claims No. 3, 5, 7 and the question of interest.
4. Insofar as the issue of claim No. 5, learned senior counsel for the petitioner concedes that the claim awarded is contrary to the legal view taken by this Court in numerous judgments including Nav Bharat Construction Co. v. Delhi Development Authority and Narain Das R. Israni v. Delhi Development Authority 2005 VIII AD (Delhi) 556 and, thus, submits that the said claim may be set aside. Similarly in respect of claim No. 7, after some hearing, learned senior counsel for the petitioner concedes that this claim may be set aside in view of clause 3.19 of the contract and as the Arbitrator has taken into consideration the elements including work, labour, etc. and not only the cost of additional shuttering. This, claim is also set aside.
5. Claim No. 3 is founded on the plea of escalation charges for the extended period of contract. In the present case, the date of commencement of the contract is 23.01.1983 and the stipulated date of completion is 22.10.1984. The contract was completed on 31.03.1988. The Arbitrator has found the reason for the delay wholly attributable to the respondent. It is not in dispute that the only clause applicable in the present case is clause 10C of the contract and payments have been made to the petitioner under the said clause. However, during the period when such contracts were being awarded, clause 10CC had not come to be included in the General Conditions of the Contract. The question, thus, arises is whether an amount can be awarded for increase in the cost arisen during this extended period of contract and in the absence of clause 10CC.
6. Learned senior counsel for the petitioner in this behalf has referred to the judgment of this Court in Anurodh Constructions v. Delhi Development Authority and Anr. , which is wrongly reported as the Division Bench judgment of this Court, to contend that this very question has been considered in the said judgment and relying on the earlier judgment of the Division Bench in M.L. Mahajan v. DDA and Anr. (DB), this Court has taken the view that in the absence of clause 10CC, the amount of damages can be awarded under Section 73 of the Contract Act.
7. In the award of such damages under Section 73 of the Contract Act applying the principle of clause 10CC would be reasonable since the respondent itself finds those parameters as reasonable having included the same in the subsequent contracts.
8. In view of the aforesaid legal position, it cannot be said that the award of damages by the Arbitrator applying principles analogous to clause 10CC for the extended period can be said to be illegal. Naturally, the amounts already awarded to the petitioner for the same period on principles of clause 10C would be adjusted.
9. The last question is of interest. Learned senior counsel for the petitioner concedes that the interest be confined to 12% p.a. simple interest up to the date of decree and that too on the principal amount against the interest of 17.5% p.a. awarded. This is also the interest rate being awarded by this Court in numerous matters for the same period.
10. The objections stand disposed of.
CS (OS) No. 2149 of 1997
11. In view of the objections having been disposed of, the Award dated 16.09.1997 of the Sole Arbitrator, Shri C. Banerjee is made Rule of the Court with the modification that claims No. 5 and 7 stand set aside and the petitioner is held entitled to interest up to the date of decree @ 12% p.a. instead of 17.5% p.a. as awarded in the Award and that too on the principal amount. The petitioner shall also be entitled to future interest from the date of decree till the date of realisation @ 9% p.a. on the principal amount.
12. Parties are left to bear their own costs.
13. In case the decretal amount is paid within 60 days from today, the respondent shall be exempted from future interest.
14. Decree-sheet be drawn up accordingly.
