Delhi High Court
Municipal Corporation Of Delhi vs Rakesh Brothers on 6 August, 2007
Author: S K Kaul
Bench: S K Kaul
JUDGMENT
Sanjay Kishan Kaul, J.
IA No. 8839/2007
Allowed subject to just exceptions.
IA No. 8840/2007
This is an application filed for condensation of delay in refiling the petition.
For the reasons stated in the application, the delay in refiling is condoned and the application is allowed.
OMP No. 433/2007
1. The petitioner Corporation has filed the present petition under Section 34(2) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act) seeking to challenge the award of the sole arbitrator, Shri O.P. Gupta dated 22.1.2007.
2. The dispute pertains to the work allotted to the respondent vide work order dated 13.11.1995. The agreement was entered into on 22.11.1995. The work was to be completed within 20 months. The work started as per the stipulated dated of 22.11.1995 but was completed on 27.9.2002 though the stipulated date for completion was 21.7.1997.
3. A perusal of the objections and submissions of the learned Counsel for the petitioner shows that the petitioner seeks to contend that the question of attributing of fault was not decided by the arbitrator, but the arbitrator has acted on the presumption that the extension of time was granted by the petitioner without levy of compensation and thus, the delay was on the part of the petitioner. It is not in dispute that such extension of time without compensation is granted where there is no delay attributable to the contractor. A perusal of the award shows that it is a reasoned award and clearly a finding has been arrived at attributing the fault to the petitioner. The petitioner cannot make a grievance in respect of the same.
4. A further grievance raised is about the absence of reasons. Once again, this plea cannot be accepted on a plain reading of the award since reasons have been given. It cannot be lost sight of that the arbitrator is a technical person in the present case being a retired Chief Engineer of the MCD. The arbitrator is not a legal person. It is not necessary that an award be written in the same manner as a judgment of the Court and as long as the basic direction of the mind of the arbitrator is available from the award, it is to be categorised as a reasoned award.
5. I am also unable to appreciate the contention of the learned Counsel for the petitioner that this Court should re-examine the findings arrived at by the arbitrator on appraisal of evidence. It is not the function of this Court to sit as a court of appeal over the findings of the arbitrator and reverse the findings merely because this Court would come to a different conclusion on the same set of facts. There has to be a patent illegality or some award, which is not envisaged in the contract at all for this Court to interfere. In fact, some of the grounds only state that amounts have been wrongly awarded by the arbitrator.
6. The last submission made by learned Counsel for the petitioner is that the amount of Rs. 20,000.00 could not have been awarded for loss of profit because contractor had completed the work and had been paid the amount accordingly. In this behalf, learned Counsel has drawn the attention of this Court to the judgment of this Court in OMP No. 296/2006 titled MCD v. Avtar Singh Chadha decided on 31.5.2007. The aspect of loss of profit has been considered in the said judgment by reference to the judgment of this Court in Delhi Jal Board v. Subhash Pipes Ltd. 2005 (2) Arb. L.R. 213 (Delhi). The learned single Judge of this Court has considered the distinction between the case where work awarded is illegally rescinded by the employer and a case where the work is completed. In the first case, the contractor would be entitled to loss of profits for unexecuted work. In the second case, normally loss of profit would not arise as profits which he would have earned by undertaking the contract are presumed to have been earned by his completing the work. Where there is spillage beyond the stipulated period, consequences also flow on account of increase of rates and claim for idle labour and machinery. However, the learned Judge notes that there can be no hard and fast rule. Thus, when a contractor is able to prove that he remained occupied on execution of the contract, his loss of profit earning capacity was affected, then he can claim the amount, provided he shows that he could earn elsewhere by employing his time and resources which he has been deprived by doing so.
7. A perusal of the award in the present case would show that claim No. 4 dealt with the aspect of prolongation of contract where the respondent had claimed a sum of Rs. 11,85,055.00. A detailed examination has been done by the arbitrator by reference to formulas adopted in "Law relating to Building and Engineering Contract" by G.T. Gajrai who in turn had adopted the formula from 'Hudson'. The respondent was held entitled only for damages. The arbitrator has taken note of the quantum of work done prior to the stipulated date and beyond the stipulated date and excluded elements for escalation. The loss of profit is, in fact, not allowed and it has been stated that the respondent failed to establish the claim with evidence. However, the respondent has been held entitled to amount under Section 73 of the Indian Contract Act and the claim awarded has been quantified at Rs. 20,000.00 against the claim of Rs. 11.85 lakh. No interest has been awarded on the said amount.
8. The aforesaid is, thus, in accordance with law and nothing has been awarded which may not be permissible in view of the judgment in MCD v. Avtar Singh Chadha (supra).
9. I find no merit in the petition.
10. Dismissed.
