Anant Raj Agencies vs D.D.A.
2006 Latest Caselaw 1596 Del

JUDGMENT

Pradeep Nandrajog, J.

1. DDA has filed objections to the award dated 29.08.92 published by Sh. S. Nagrajan, sole arbitrator appointed to decide the claims of the petitioner arising out of and relating to agreement no. 556/8D XIX/82-83.

2. Work of constructing 304 MIG flats in pocket J and K, Dilshad Garden, Delhi was awarded by DDA to the petitioner. Date of start of work was 20.12.82. Date of completion was 19.12.83.

3. Admittedly, there was delay. Works were completed on 29.10.86.

4. I propose to deal with each objection as I deal with the same, I would be noting the relevant facts.

5. On account of delay in completion of the work, alleging delay attributable to DDA, petitioner raised claim no. 1 in sum of Rs.5.32 lacs stating that during contract prolonged period, labour tools and tackles as also equipment used for construction and stationed at site was lying idle.

6. Noting on facts that after work commenced, it had to be suspended due to revision in foundation design and drawings, learned arbitrator has held that work was held up from 22.01.83 to end of May, 1983.

7. Claim raised by the contractor was towards idle labour and idle tools, tackles, plant and machinery for 6 months.

8. Learned arbitrator has restricted the same for a period of 4 months.

9. Even in respect of amounts claimed per engineer, mason, store keeper, beldars and head mistry as also mixers, learned arbitrator has allowed a lesser sum.

10. Total amount awarded is Rs. 38,184/-.

11. Learned Counsel for DDA states that quantification is nothing but surmises.

12. While quantifying the sum, in para 1.3.3, learned arbitrator has held that he was assessing the amount based on his long experience in the field.

13. Objection has to be rejected for the reason arbitrator is a retired engineer. Surely, his experience in the construction field would be wide.

14. As observed in the report published in MCD v. Ms. Jagan Nath Ashok Kumar and Anr., which decision noted with approval observations of Lord Goddard C.J. in the report published as (1948) to ALL ER 186 Mediterranean and Eastern Export Company Ltd. v. Fortress Fabrics Ltd. that a man in the trade who is selected for his experience would be likely to know and indeed to be selected to know the fluctuations of the market and would have plenty of means of informing himself on any point on which he might find it necessary to do so.

15. Modern tendency, especially in commercial arbitration is to make an endeavor to uphold awards of skilled persons whom parties have themselves selected to decide the disputes inter se the parties.

16. I, therefore, find no merit in objection to the award pertaining to claim No. 1.

17. Claim no. 2 has been rejected by the learned arbitrator. Contractor has filed no objections. I need write no more.

18. Claim no. 3 in sum of Rs. 25,000/- has been allowed in sum of Rs. 24,316/-.

19. While submitting the offer, contractor had offered rebate, but subject to timely payment of the bills.

20. Claim was on account of bills not paid on time.

21. Learned arbitrator has noted that certain payments were not made on time and in respect thereof has held the contractor entitled to the sum awarded holding that the deduction by DDA was not justified.

22. Learned Counsel for DDA urges that contractor was not submitting monthly bills and this resulted in payments being released belatedly.

23. I am not impressed with the arguments of learned Counsel for DDA for the reason learned arbitrator has held that DDA was entitled to rebate only if payments were released under the bills within time. Learned arbitrator has noted the date when bills were submitted. Time within which payment had to be madec has been determined by the learned arbitrator with reference to the date when bill was submitted.

24. Objection to the award pertaining to claim no. 3 is accordingly repelled.

25. Claim no. 4 in sum of Rs.1,04,900/- has been allowed in sum of Rs.43,539/-.

26. Claim was on account of contractor's allegation that the steel supplied was not of standard size. D.D.A released different bars of steel of same length having different weight. Noting that steel had to be supplied by DDA and in respect thereof recovery had to be made from the running bills at the specified rate, learned arbitrator has noted the quantity of steel which was consumed. Referring to wastage and probable variation in the weight of steel rods issued, learned arbitrator has held that in respect of 7.847 M.T. of steel, excess recovery was made by DDA.

27. Perusal of the award shows that the learned arbitrator has, with meticulous care, worked out the consumptions evidence by the fact that as against claim in sum of Rs.1,04,900/-, sum allow is Rs. 43,539/-.

28. Learned Counsel for DDA states that learned arbitrator was a creature of the contract. His mandate was limited to the contract. He owed a duty to decide in terms of the contract.

29. Relying upon Clause 42 (III) counsel urges that theoretical quantities had to be worked out as per structural drawings and wastage up to 5% was permissible.

30. The clause relied upon reads as under:

The provisions of the foregoing sub-clause shall also apply in the case of steel reinforcement or structural steel sections except that the theoretical quantity of steel shall be taken as the quantity required as per design or as authorized by Engineer-In-Charge, including authorised lappages plus 5% wastages due to cutting into pieces. Over this theoretical quantity, plus 5% and minus 4% shall be allowed as variation due to wastage being more or less.

31. At first blush, what is urged seems attractive, but a closer look shows that the objection has not legs to stand on.

32. While working out the quantities, in Para 4.3 of the award, learned arbitrator has noted that wastage is normally between 3% to 4%. 1% has been attributed to variation on account of weight of steel.

33. Adopting 4% as wastage and 1% variation in weight of steel, amount to be deducted form steel has been worked out.

34. Learned arbitrator, though on a different process of reasoning, has come to the same 5% figure which is permissible under the clause of the contract.

35. Every error committed by an arbitrator is no ground to interfere with an award. An error which results in manifest injustice or is of a kind which goes to the jurisdiction of the arbitrator would call for judicial interference.

36. In the instant case, the alternative methodology adopted by the learned arbitrator has resulted in same effect being arrived at. Had learned arbitrator analyzed the claim under Clause 42(III), end would have been the same. Objection is repelled.

37. Under claim no. 5 sum claimed was Rs.3.4 lacs. Learned arbitrator has allowed Rs. 2.59 lacs.

38. Clause 10 C of the contract provided for partial recompense on account of increase in labour rates. Learned Counsel for DDA urges that to be applicable, Clause 10 C required contractor to not only establish price rise, payment made to the labour engaged as a matter of fact had to be established.

39. I have perused the statement of claims. While laying the claim, contractor has referred to the wages increased as per notifications issued by Govt. of NCT of Delhi. In relation thereto, bills submitted and letters written showing the calculations adopted have been pleaded in detail by the contractor.

40. Response of DDA in its pleadings is as under:

It was pointed out vide EE's letters (Q-3) and (Q-4) that before payment under Clause 10 C was considered by the deptt., there were certain formalities to be completed as per terms and conditions of the agreement. These formalities were never completed by the claimant so that payment under Clause 10 C could not be considered.

41. Learned Counsel for DDA concedes that there could be no better instance of a vague pleading. What were the certain formalities to be completed? No clue!

42. DDA has pleded that payment under Clause 10 C was denied as certain formalities had not been completed.

43. What those formalities were never pleaded before the learned arbitrator.

44. Who knows, what was argued? 45. A perusal of the contract shows that a structure formula has been provided to determine increase towards escalation payable to the contractor.

46. No errors in the calculation has been shown to the learned arbitrator. None has been shown to me.

47. Learned Counsel for DDA sought to urge that contractor had to produce his books to show that he had paid increased wages to the labour.

48. I am afraid, in absence of pleading before the arbitrator and in any case since contract clause contains a structure formula, I find no merit in the objections raised.

49. I may additionally note that the learned arbitrator has referred to value of work done during different periods. He has referred to the labour rates notified under the Minimum Wages Act from time to time and has independently satisfied himself regarding the statutory increase.

50. Claim no. 6 has been rejected.

51. On Claim no. 7, noting that there was delay in completion of the work and delay was attributable to DDA compensation in sum of Rs. 12,72,184.40/- has been assessed towards price escalation. Noting that labour escalation has been granted in sum of Rs.2.59 lacs under claim no. 5, Rs.10 lacs have been awarded to the contractor due to increase in price of material consumed in execution of the works.

52. Learned Counsel for DDA does not dispute that there is no Clause 10 CC under the contract.

53. Clause 10 C gives partial recompense as noted above.

54. In the decision reported as AIR 1980 Delhi 266 Metro Electric Company v. DDA, it was held that if there is no clause in the contract to recompense contractor on account of price escalation, an award which recompenses the contractor on account of price rise with reference to percentage of work done and cost indexes would be a valid award.

55. Objection to claim no. 7 is accordingly rejected.

56. Claim no. 8 has recompense the contractor on account of establishment charges due to contract being prolonged. Claim has been rejected. Claim no. 9 has also been rejected. So also claims 10 and 11.

57. Additional claims have been dealt with thereafter.

58. Additional claim no. 1 had the same facet as claim no. 3. It related to rebate. For the reasons repelling challenge to claim no. 3, challenge to sum award under additional claim has to be repelled. Additional claim no. 2 relates to extra and substituted items. Learned arbitrator has held that there was no reasons why DDA should not have finalize for extra and substituted items. Holding so, sum claimed has been awarded.

59. I find nothing objectionable in awarding additional claim no. 2.

60. Additional claim no. 3 was on account of fact that contractor alleged payment at lesser rates and certain works being under measured.

61. Learned arbitrator has gone into factual matrix and has allowed the claim, not in full, but only one third of the amount claimed.

62. Interest has been allowed by the learned arbitrator relying upon decision of the Supreme Court reported as JT 1991 (6) SC 349.

63. I find no merits in the objections raised by DDA. I.A No. 2269/93 is dismissed.

CS (OS) No. 3436/92

1. Award dated 29.08.92 published by Sh. S.Nagarajan is made a rule of court. Decree shall follow.

2. Post decretal interest with effect from date of decree till date of realisation is awarded @ 9% per annum.

3. Costs awarded to the petitioner and against DDA is sum of Rs.10,000/-

CS (OS) No. 1722/2000

Statement of Madalsa Singh, counsel for the plaintiff without oath.

I close evidence on behalf of the plaintiff.