A.R. Khanna & Ors vs Dtc & Ors
2008 Latest Caselaw 1675 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      CS (OS) No.2765/1993

                           Date of decision : 18.9.2008
IN THE MATTER OF
A.R. KHANNA & SONS        ..... Petitioners
                 Through Mr.Raman Kapur with
                 Mr.Honey Taenja, Adv.

                           Versus

D.T.C. & ORS.                  ..... Respondents
                           Through Mr.Jyotinder Kumar, Adv.

       CORAM

*      HON'BLE MS.JUSTICE HIMA KOHLI

              1. Whether Reporters of Local papers        may be
              allowed to see the Judgment?

              2. To be referred to the Reporter or not?

              3. Whether the judgment should be reported in
              the Digest?


HIMA KOHLI, J. (ORAL)

I.A. No. 4917/1994 (by respondents objections u/S 30 & 33 of the Arbitration Act, 1940 and CS (OS) No.2765/1993

1. By way of the present order, this Court proposes

to dispose of the objections filed by the respondent DTC to

the award dated 30.11.1993, passed by Sh.Swami Dial,

Sole Arbitrator, Chief Engineer, CPWD (Retd.).

2. Briefly stated, the facts of the case are that an

agreement was entered into between the petitioner

contractor and the respondent DTC on 10.8.1983, for

construction of Wazirpur Depot-II, Delhi at an estimated

cost of Rs.11,51,333/- plus 93.90% above DSR 1977 i.e.

at a total cost of Rs.22,32,434.69paise. The stipulated

date for the start of the work was 29.7.1983 and the

stipulated date for completion of the contract was

28.1.1984. The time for completion was extended upto

30.9.1984 and the work was actually completed on

16.10.1984. Thereafter, as disputes and differences arose

between the parties at the time of submission of final bill,

the petitioner contractor invoked the arbitration clause

governing the parties and raised certain claims. The

respondent DTC appointed Dr.P.S. Rana as a sole

Arbitrator to adjudicate the claims and counter claims of

the parties and complete the arbitration proceedings with

a direction that the award should be a speaking award. As

the petitioner contractor raised an objection to the

appointment of the aforesaid Arbitrator, he approached

this Court by filing a petition for appointment of any other

Arbitrator, which was disposed of vide order dated

16.5.1989, and Sh.Swami Dial was appointed as a sole

Arbitrator to adjudicate the disputes between the parties

with the direction that the said Arbitrator shall give a

speaking award.

3. Counsels for the parties state that prior to the

passing of the impugned award dated 30.11.1993, an

interim award dated 12.12.1990 was also passed by the

sole Arbitrator whereunder it was directed that the

respondent DTC shall pay a sum of Rs.79,337.75paise to

the petitioner contractor on account of the fact that the

said amounts were accepted by the respondent DTC in the

final bill prepared by them and admitted before the

Arbitrator. This was followed by passing of the impugned

award dated 30.11.1993.

4. Counsel for the respondent DTC assails the

findings given by the learned Arbitrator in respect of

claims no.1, 3 and 5. Under claim no.1, the petitioner

contractor claimed a sum of Rs.14 lakhs on account of

balance payment which was still recoverable by it from the

respondent DTC. Claim no.3 was raised on account of

increase in rates as damages for the work executed after

the expiry of the stipulated date of completion of work and

claim no.5 was on account of reimbursement of statutory

hike under clause 10 (c) of the contract.

5. Counsel for the respondent DTC submits that the

learned Arbitrator erred in awarding an amount of

Rs.3,62,470/- collectively against the aforesaid claims

raised by the petitioner contractor and that he failed to

furnish any details thereof. He states that the learned

Arbitrator did not care to justify the increase beyond the

stipulated date of completion from the agreed

enhancement of 93.91% to 125% and that the learned

Arbitrator failed to take into consideration the actual

measurements of work taken jointly and duly signed and

accepted by the parties. He further submits that the Local

Commissioner appointed by the learned Arbitrator visited

the site but did not take any measurement himself and

that there were many errors in the Local Commissioner's

report which the respondent DTC had raised, but which

were not considered by the learned Arbitrator while

passing the impugned award. It is lastly submitted that

the learned Arbitrator misconducted the proceedings by

directing payment of statutory increase in labour and

material under Clause 10(c) for the reason that for

claiming an amount under Clause 10(c), the petitioner had

to present the records such as muster roll, paid vouchers

etc.,and show them either to the respondent or the

learned Arbitrator, which was not done.

6. Counsel for the petitioner contractor, however,

supports the impugned award and states that it must be

kept in mind that the impugned award was given by an

expert in the field being a Chief Engineer (CPWD) and that

he was well conversant with the kind of disputes which

were being adjudicated by him. He relies on the

judgments rendered in the cases of DDA vs. Bhagat

Construction Co. (P) Ltd. and Anr. reported at 2004 (3)

ALR 548 (Delhi) and DDA vs. Bhagat Construction Co.

Pvt. Ltd. reported at 2004 (3) ALR 481 (Delhi) DB to

state that the Arbitrator need not disclose the

mathematical calculations in the award and if the award

shows application of mind and a view taken by the learned

Arbitrator, which is a plausible view, the same can be

taken to be correct. Counsel for the petitioner contractor

states that the learned Arbitrator has given his decision on

the basis of the evidence of the parties and the decision is

based on questions of facts, which this Court ought not to

interfere with while exercising its powers under Sections

30 and 33 of the Arbitration Act, 1940 (in short, `the

Act').

7. Insofar as the objections raised by the counsel

for the respondent DTC in respect of claims no.1, 3 and 5

are concerned, counsel for the petitioner states that the

learned Arbitrator made his award with regard to the

measurements only after visiting the site and even the

Local Commissioner appointed by him was a retired Chief

Engineer, NDMC and thus an expert in the field. He

further submits that measurements were partly recorded

in the Measurement Book by the respondent DTC at the

relevant time when the work was still going on.

8. A perusal of the impugned award shows that

after referring to the brief facts of the case, the learned

Arbitrator rendered an award wherein he took notice of

the objections of the respondent to the effect that there

was no discrepancy in the record of measurements in the

Measurement Book and whatsoever was due and payable

to the petitioner contractor, had been paid by the

respondent DTC under the interim award. Thereafter, it

was observed that efforts were made to reconcile the

measurements and a Local Commissioner was appointed

who submitted his report. It was also observed that the

representatives of the respondent DTC did not co-operate

fully with the Local Commissioner and opposed his

appointment. Later on, they raised objections to his

findings. As a result, the learned Arbitrator visited the site

personally with the parties. It is noted in the award that

the Arbitrator visited the site of the work and inspected

the various points on the spot by holding an inspection on

10.4.1993. The learned Arbitrator thereafter arrived at

certain conclusions after considering the various disputed

measurements and rendered the award in respect of

claims no.1, 3 and 5.

9. As regards the claim for payment of Rs.14 lakhs

on account of balance payment under claim no. 1, the

award shows that the learned Arbitrator sifted through the

claims prepared by the claimants and identified five sub

heads on the basis of the claims. He assessed the claims

put forward by the petitioner contractor and finally

awarded Rs.3,62,470/- against the claim made for Rs.14

lakhs. The contention of the counsel for the petitioner

contractor to the effect that the Arbitrator was not to

disclose the basis of the mental process for arriving at a

figure and when called upon to give a reasoned award, is

still not required to give a detailed award like Judges do, is

well founded. It is reiterated that as long the Arbitrator

has indicated his trend of mind and indicated the basis on

which he has arrived at such figure, the same is sufficient

for the purposes of giving a reasoned award. The said

trend of mind can be deciphered from a perusal of the

award. (Refer:Kochhar Construction Works Vs. DDA & Anr.

74 (1998) DLT 118. It is also settled law that giving a

collective award by clubbing different claims, cannot be a

ground for assailing an award. [Refer:Firm Madanlal

Roshanlal Mahajan Vs. Hukumchand Mills Ltd, Indore AIR

1967 1030). Hence the objections taken by the

respondent DTC in that regard are rejected being devoid

of merit.

10. Insofar as payment of amounts @ 125%

above the scheduled rate of the respondent DTC is

concerned, the learned Arbitrator while dealing with claim

no.3 took note of the submissions of the petitioner

contractor that the said amount was claimed for the value

of the work done beyond the date of completion, but

observed that the petitioner contractor was not able to

fully justify the said claim and thus the said claim was only

partly accepted, as included in claim no.1. Claim no.1

included subhead (d), whereunder the petitioner

contractor claimed that payment should be made for the

work actually executed beyond the reasonable deviation

limit and that the said work should be paid at a reasonable

market rate or on actual basis. In view of the above, the

petitioner contractor claimed that the value of the work

done after the completion date was for more than Rs.9

lakhs and hence an extra amount of Rs.2,79,900/- was

claimed. However, as noted above, the learned Arbitrator

collectively awarded a sum of Rs.3,62,470/- against claims

no.1, 3 and 5 to the petitioner contractor. In other words,

as against claims no. 1 and 3 for a sum of Rs.14 lakhs and

Rs.2,79,900/- respectively, the petitioner contractor was

paid only a sum of Rs.3,62,470/- in respect of claims

no.1, 3 and 5. There is no reason to interfere in the

impugned award insofar as the aforesaid claims are

concerned, as there appears no error apparent on the face

of the award for the purposes of interference.

11. Counsel for the respondent DTC has also

challenged the findings of the learned Arbitrator in respect

of claim no.4, which pertains to the claim made by the

petitioner contractor for refund of Rs.4,034.50paise, on

account of excess recovery effected by the respondent

DTC against water charges. Counsel for the respondent

DTC states that the petitioner contractor was provided

water by the respondent against 1% charges and that

excess recoveries had already been made from the

petitioner for Rs.4,992.83paise and that the award of

Rs.4,034.50paise against the said claim was wrong.

Counsel for the petitioner contractor denies the same and

states that on the contrary, his clients had made their own

arrangements for water at the site both for construction

and labour and that the respondent DTC had supplied

water only after 26.3.1984, as negotiated, for the work of

cement plaster and for second and third coats of WMB and

therefore, a claim of Rs.9,000/- was made against water

charges. He submits that after payment of the 11th

running bill, the respondent DTC liquidated

Rs.4,965.50paise from the final bill thus leaving

Rs.4,034.50paise payable to the petitioner. A perusal of

the award shows that the learned Arbitrator has returned

a finding on the basis of the material placed on record

confirming the fact that the claimants had made their own

arrangements for water and hence he awarded the

balance amount of Rs.4,034.50paise. The aforesaid

decision is based on the appreciation of the evidence and

purely, a question of fact which, as is settled law, this

Court ought not to interfere with. Re-appreciation of

evidence is not within the scope of the interference by this

Court (Refer: MCD Vs. M/s Jagan Nath Ashok Kumar &

Anr. AIR 1987 SC 2316). The Arbitrator is the final

arbiter of the facts and the law and merely because this

Court may arrive at a different conclusion than the one

arrived at by the learned Arbitrator is not a ground for

interfering with the award. In the present case, even that

is not the case as this Court does not find any error

apparent on the face of the award in respect of findings

returned against claim no.4.

12. The next claim assailed by the counsel for the

respondent DTC is in respect of claim no.8 under which

the petitioner contractor claimed interest @ 24% p.a. on

the awarded sum from the date of the claim, till the date

of payment. As against the aforesaid claim, the learned

Arbitrator granted interest @ 15% p.a. for the awarded

amount payable from 16.5.1989 (the date on which the

sole Arbitrator was appointed by the Court) to 30.11.1993

(the date of passing of the impugned award).

13. Counsel for the respondent submits that the

interest awarded by the learned Arbitrator is erroneous as

no amount whatsoever was due and payable to the

petitioner and hence there was no question of paying any

interest by the respondent. There appears no error on the

face of the award on the issue of interest. It was well

within the power of the learned Arbitrator to award

interest in respect of amounts found due and payable by

the respondent DTC to the petitioner contractor which he

did. As against the interest claimed by the petitioner

contractor @ 24%, the learned Arbitrator granted interest

@ 15%. This Court does not find any reason to interfere

with the rate of interest awarded by the Arbitrator.

14. Lastly, counsel for the respondent DTC states

that the learned Arbitrator erred in overlooking the

counter claim raised for a sum of Rs.1,15,130/- on

account of deficiency and defects in the work done by the

petitioner contractor. He submits that the Arbitrator

wrongly and without any reasons disallowed the said

amount which was levied in accordance with the clause 14

of the contract.

15. It may be noted that in the impugned award,

the learned Arbitrator made a specific mention of the fact

that the respondent DTC had not raised any counter claim

against the petitioner contractor but he proceeded to take

note of the final bill passed by the respondent DTC during

the pendency of the arbitral proceedings, for an amount of

Rs.11,996.62paise as also the recovery statement

attached to the bill. The recoveries made by the

respondent DTC have been enumerated by the Arbitrator

at page 8 of the award, totaling to Rs.4,08,455.30paise.

The learned Arbitrator held that out of all recoveries made

against the petitioner contractor, only four recoveries were

not in order which included the recovery made under

Clause 14, for compensation.

16. In the aforesaid context, the observations made

by the learned Arbitrator at page 5 of the award are

relevant. He has observed that based on the

findings/results regarding deficiency in the road metal

recovered from two trial pits which were dug, the

respondent DTC applied the same yardstick to the entire

work done in the contract. The aforesaid process of

working out the deduction and deficiency was held by the

Arbitrator to be a highly controversial method of working

and not fair to the other party. Holding so, the claim

raised by the respondent DTC by invoking clause 14 of the

contract, was shot down as unjustified. There appears no

error apparent on the record in respect of the aforesaid

finding which in any case, is a finding of fact and as

observed above, this Court should restrain itself from

interfering with the findings of fact which fall within the

domain of the learned Arbitrator. Hence, the objections

raised on behalf of the respondent DTC with regard to the

rejection of the deduction made by the respondent DTC in

its final bill are found devoid of merits.

17. For the foregoing reasons, the objections filed

by the respondent DTC are rejected. The impugned award

dated 30.11.1993, passed by Sh.Swami Dial is made rule

of the Court. The suit is disposed of. Decree sheet be

drawn up accordingly. The parties are left to bear their

own costs.

HIMA KOHLI,J SEPTEMBER 18, 2008 `ns'/KA