Delhi High Court
Municipal Corporation Of Delhi vs Yugal Constructions on 20 September, 2007
Author: S K Kaul
Bench: S K Kaul
JUDGMENT
Sanjay Kishan Kaul, J.
1. The respondent was awarded contract by the petitioner for construction of Health Centre-cum-Maternity Home at Ayurvedic Hospital at Haiderpur. The agreement contained the standard arbitration clause. The disputes arose between the parties and in view of the failure of the petitioner to appoint an arbitrator, the respondent filed arbitration petition AA No. 76/2002 for appointment of an arbitrator by the Court. Sh. B.B.Nanda was appointed as the sole arbitrator vide Order dated 15.01.2003. The arbitrator has made and published the award dated 09.08.2006 to which the petitioner has filed the present objections under Section 34(2) of the Arbitration and Conciliation Act, 1996 (hereafter referred to as the said Act).
2. A perusal of the award shows that before dealing with the claims, the arbitrator has set out as to what transpired in the proceedings. It was the case of the respondent that neither plans were supplied with tender documents nor during execution of the project. The respondent continued to carry out the work on a day to day instructions of the field staff. Respondent pleaded that not only the working drawings were not supplied but even design decisions regarding finishing etc. were not supplied. Despite opportunity, the petitioner did not bring any drawings. The payments were also said not to have been made.
3. The arbitrator in order to resolve the controversy asked the respondent to give the date of submitting of each bill and the date of release of payment by the petitioner. The stipulated date of completion was 10.11.2007 while the work was actually completed on 18.01.2007. The petitioner finally produced the original copy of the tender documents stated to be sealed and on being opened, the arbitrator found that there were no plans forming part of the contract agreement. On enquiry, no drawings signed by the respondent were produced by the petitioner. The parties were heard at length and during the course of arguments before the arbitrator, the petitioner confirmed that there were no counter claims. It was thereafter that the arbitrator has proceeded to deal with each of the claims.
4. The first claim is on account of interest on delayed payment. Leraned Counsel for the petitioner contends that this claim could not have been entertained on account of the fact that the respondent had accepted the final bill subject to price adjustment which was in process and receipt of work tax/sales tax. It was the case of the respondent that the acceptance had been only about measurement of the work executed.
5. Leraned Counsel for the respondent points out that the acceptance itself showed that it was conditional being subject to what is stated as aforesaid and the payments were not made. On consideration of the matter, I find the only issue to be examined is whether the payments which were to be made as per the final bill were made in time or not. If the payment is not made, even if it is settled, interest would be liable to be paid under the contract or otherwise on delayed payment. This principle cannot be faulted and thus I do not find force in the submission of the leraned Counsel for the petitioner that there are no reasons available for awarding this claim.
6. Claim No. 2 is for Rs. 2,50,000/- on account of losses on staff overheads, establishment etc. due to delay. The arbitrator reached a finding that no working drawings and detailed drawings were supplied and the decisions regarding finishing items and water tank were delayed. This has been mentioned as aforesaid. The arbitrator has found compensation of Rs. 1,25,000/- sufficient to be so paid within one month of the date of the award failing which interest at the rate of 12 per cent per annum payable on the amount up to the date of payment.
7. Claim No. 3 was rejected while claim No. 4 was in respect of tax deducted. The arbitrator has examined the agreement and Clause 45 which dealt with the taxing provisions. In terms of the clauses, the taxes on material were to be paid by the respondent and the taxes levied on completed items of the works were to be reimbursed by the petitioner to the respondent on proof of payment. The work contract tax was promulgated after the award of the work and was leviable at 4 per cent. The petitioner continued to deduct this tax from the bills of the respondent which was found re-imbursible to the respondent and it is on the basis of the calculations worked out that the amount of Rs. 3,27,541/- has been found due.
8. Claim No. 5 relating to price adjustment/escalation as per the contract was accepted by both the parties at Rs. 1,25,000/- which has been awarded with interest at the rate of 12 per cent per annum from the date it is payable up to the date of payment.
9. Claim Nos. 6, 7 and 8 are stated to have been withdrawn before the arbitrator and those do not form part of the award.
10. Claim No. 9 for Rs. 20,000/- shown as withheld in the final bill has been awarded since no ground was found for not releasing the amount.
11. Claim No. 10 was for interest at the rate of 18 per cent per annum and it is recorded that interest payable has been awarded against each individual claim as per merits.
12. The last claim 11 is towards costs which have been rightly awarded but leraned Counsel for the petitioner sought to contend that the interest has been awarded twice over. There is no force in this contention since against each claim 12 per cent interest wherever payable has been awarded and only that be leviable in respect of those awarded amounts.
13. This Court does not sit as a Court of appeal and the objections have to be scrutinized only within the parameters of Section 34(2) of the said Act.
14. In view of the aforesaid there is no merits in the objections.
15. Dismissed.
