Anant Raj Agencies vs Delhi Development Authority And ...
2007 Latest Caselaw 292 Del

JUDGMENT

Sanjay Kishan Kaul, J.

IA No. 6044 of 1998

1. The respondent had awarded a contract to the petitioner for construction of MIG houses in various sectors of Rohini. Disputes arose between the parties and in view of the arbitration clause, the Engineer Member, DDA, being the designated authority, was appointed the arbitrator. There were certain changes in the arbitrator and finally Mr. C. Banerjee, Chief Engineer, was appointed the Arbitrator who made and published his award dated 22.09.1997.

2. The respondent aggrieved by the same filed the present objections to the same.

3. It is necessary to note before embarking on consideration of the various pleas of the learned Counsel for the respondent that it can not be seriously disputed that the scope of scrutiny of this Court is not to re-appraise the evidence before the Arbitrator. In view thereof, to the extent the claims are based on appreciation of evidence, the same cannot be re-scrutinized by this Court as that would amount to this Court sitting as a Court of appeal. This is not permissible. 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. It is only in the eventuality of the award being perverse that such interference is called for as observed by a Division Bench of this Court in DDA v. Bhagat Construction Co. Pvt. Ltd. and Anr. 2004 (3) Arb. LR 481. In fact the Apex Court has observed that in the absence of an award being absurd, reasonableness is not a matter to be considered by the Court. The judgment in Food Corporation of India v. Joginderpal Mohinderpal and Anr. can be usefully referred to for this purpose. The Supreme Court has in fact observed in Sudarsan Trading Co. v. Govt of Kerala that so long as the view taken by the arbitrator is plausible though perhaps not the only correct view, the award cannot be examined by the Court.

4. It also cannot be lost sight of that in the matters of such construction contracts, more often than not, a technical person is appointed as an arbitrator. This is also the position in the present case where a Chief Engineer has been appointed as an Arbitrator. The object is that persons familiar with the technicalities of the job at hand and with the practice of the trade decide the matter. The mode of adjudication through the process of arbitration involves parties choosing a judge. Thus the parties chose a technical person as a judge who thereafter decided the dispute. Thus even while scrutinizing such an award and its reasoning, the same is not to be read as a judgment, but so long as the thought process of an arbitrator is available and the same is not absurd, the award cannot be questioned. A Division Bench of this Court has emphasized this aspect in DDA v. Bhagat Construction Co. (P) Ltd. and Anr. 2004 (3) Arb.LR 548, wherein it was observed that in view of such a technical member going into the matter of dispute, the court should not substitute its own view with that of an arbitrator even if the court comes to a different conclusion until and unless the decision of the arbitrator is manifestly perverse or has been arrived at on the basis of wrong application of law.

5. One of the submissions made by learned Counsel for the respondent is that the award suffers from absence of reasons and is thus a non-speaking award and there has been no application of mind by the arbitrator.

6. A perusal of the award, however, shows that such a conclusion cannot be drawn. Each of the claims has been dealt with separately and briefly reasons have been assigned for awarding each claim. Thus the plea of the learned Counsel for the respondent is fallacious on the face of it.

7. Learned Counsel for the respondent referred to claim 4 which was based on prolongation of contract beyond the stipulated date of completion. While considering the case the arbitrator has found that the delay is totally attributable to the respondent alone. In fact the respondent has been granting extensions of contract without levy of compensation. Not only that while working out extension of time, Engineer In Charge of the respondent had worked out the justification for delay of 2097 days against the requirement of 1340 days. The delay has thus been found totally attributable to the respondent.

8. The plea of the learned Counsel for the respondent is that the learned arbitrator had adopted two different standards in applying the principles while drawing adverse inference for non production of records inasmuch as no inference has been drawn against the petitioner for non production of books of accounts. In view of the reasons recorded in the award and the finding that delay was on the part of the respondent, this plea cannot be accepted. The arbitrator has in fact discussed the methodology of calculation of the amount due on account of prolongation of the contract and it is not for this Court to once again go into the said methodology. The objection is thus rejected.

9. Insofar as the claims No. 5 and 7 are concerned, the contention of the learned Counsel for the respondent is that there is absence of findings and the award is based on assumptions and presumptions. This is a mere bald allegation as reasons have been given in the award and the material considered.

10. Claim No. 6 is in respect of straightening of steel issued by the department in coils and bent jp bundles. This issue is no more res integra in view of the judgment of this Court in Narain Das R. Israni v. Delhi Development Authority 2005 VIII AD (Delhi) 556 where after considering the various judgments rendered in this behalf, a conclusion was reached that no extra amount can be recovered on this account unless the contractor has put the DDA to notice during the currency of the contract of such increase and the DDA does not raise any objection. This is not the position in the present case. Thus the award in respect of claim No. 6 is set aside.

11. Insofar as claim No. 8 is concerned, the plea raised is that the learned arbitrator ignored the condition referred to on page 55 of the agreement which has in fact been quoted while considering the claim. This plea again cannot be accepted for the reason that the matter is one of appreciation of the terms of the contract. The arbitrator found that the Clause in question did not include double height shuttering for columns and beams. The clause referred to double height shuttering only for slabs and thus the claim was held to be justified. The objection thus is rejected.

12. The objections raised in respect of other claims as contended by learned Counsel for the respondent are only general in nature to the extent that there is either not proper appreciation of evidence or the agreement did not provide for the same. Nothing has been pointed out from the records as to how the amount could not be awarded under the contract and the question of appreciation of evidence as discussed above does not fall within the ambit and scope of scrutiny while considering the objections to the award.

13. The only other issue pressed by the learned Counsel for the respondent is in respect of the award of pendente lite interest at the rate of 17.5 per cent per annum which is claimed to be on the higher side. Learned Counsel for the petitioner has himself agreed to scale down the claim of interest to 12 per cent per annum simple interest which, in my considered view, is a fair and reasonable rate of interest.

14. The objections accordingly stand disposed of.

CS (OS) No. 2148A/1997

1. Award dated 22.09.1997 of sole arbitrator Sh. C.Banerjee is made rule of the Court with the modification that the petitioner is not held entitled to claim No. 6 and the pendente lite interest is reduced to 12 per cent per annum simple interest instead of 17.5 per cent per annum.

2. The petitioner is also entitled to interest from the date of the award till the date of decree at the same rate. The petitioner will get interest at the rate of 9 per cent per annum simple interest from date of decree till date of realisation but in case the payment of the decretal amount is made within 90 days from the date of decree, no future interest will be payable. Parties are left to bear their own costs.

3. The suit stands disposed of accordingly.