Delhi High Court
Manohar Lal Sethi vs Dda on 26 September, 2008
Author: Manmohan
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) 356/2006
Reserved on: September 2nd, 2008
% Date of Decision: September 26th, 2008
MANOHAR LAL SETHI .... Appellant
Through: Mr. Adarsh B. Dial, Senior
Advocate with Ms. Sumati
Anand, Advocate
Versus
DDA ..... Respondent
Through: Mr. Bhupesh Narula,
Advocate.
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE MANMOHAN
1. Whether Reporters of local papers may be allowed to see the judgment? No
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported in the digest? No
JUDGMENT
MANMOHAN, J :
1. The present appeal has been filed under Section 37(1)(b)
of the Arbitration and Conciliation Act, 1996 seeking to set aside
the judgment and order dated 12th January, 2006 in OMP
No. 110/2002 whereby learned Single Judge has dismissed the
objections filed to the Arbitrator's Award dated 8th January, 2002.
2. The facts of this case are that DDA awarded to the
Appellant the work for development of land for construction of
storm water drain in Mangolpuri Industrial Area in pursuance to
an Agreement dated 28th June, 1985 being No. 28/EE/HD-
25/DDA/85-86. Some disputes arose between the parties which
resulted in rescission of contract by DDA on 23rd January, 1990.
In view of clause 25 of the terms and conditions agreed between
the parties, the Engineer Member of DDA referred the matter to
sole Arbitrator. The learned sole Arbitrator after hearing the
parties, published his Award dated 8th January, 2002. After the
publication of the Award, both the parties filed objections under
Section 34 of the Arbitration and Conciliation Act, 1996.
3. The primary submission of Mr. Adarsh B. Dial, learned
Senior Counsel for Appellant is that the Arbitrator having held
that the rescission of contract by DDA was unjustified, it
obviously meant that DDA was responsible for delay of 839 days
and consequently the Arbitrator could not have rejected the
Appellant's claim for loss of profit due to prolongation of contract.
Mr. Dial stated that even though 31st December 1985 was the
scheduled date of completion, the site was not handed over by
DDA till the year 1989 and on 23rd January, 1990 the contract
was rescinded by DDA.
4. Mr. Bhupesh Narula, learned Counsel for Respondent has
drawn our attention to the fact that the Arbitrator had rejected the
Appellant's claim for loss of profit as Appellant had not filed any
documentary proof to show that he had suffered any
loss/damage. Mr. Narula also drew our attention to the
Arbitrator's finding that the cost index issued by the CPWD was
not applicable to this work as it did not involve either timber or
steel or carpentry work. Mr. Narula further pointed out that
cement was issued by the Respondent at fixed rate and the
Arbitrator had separately awarded to the Appellant compensation
for statutory increase in wages of labour under Clause 10(c).
5. Before we deal with the aforesaid submission of learned
Senior Counsel for the Appellant, it would be useful to refer to
the findings of the Arbitrator in his Award dated 8th January,
2002. The relevant portions of the Award are reproduced
hereinbelow:-
"CLAIM No. 8: Claimants claim Rs. 28,04337/- on
a/c of damages.........
Respondent argument is accepted that cost index
issued by C.P.W.D. is applicable for building work and
not applicable for this work. Item of timber, steel and
carpenter are not there in this work. Cement is also
being issued at fixed rate. Claimant has been awarded
compensation under Clause 10( c) for statutory increase
in wages of labour, mason. So claimant claim is not
justified.
CLAIM No.9: Claimants claim Rs. 10 lacs on a/c of
damages towards establishment.
........Respondent argument is accepted that claimant
has never employed staff as claimed by him e.g.
claimant has claimed for employment of two Engineers
when on inspection of respondent executive, no
engineer was found at site engaging of eight
chowkidars, eight supervisors are not reasonable and
further no documents have been filed to prove the
expenditure done to claim damages. So claimant claim
is not justified.
COUNTER CLAIM No. 2: Respondents claim a sum
of Rs. 19,79,263/- on a/c
of work done at risk and
cost by M/s Vishal
Engineering & Builders.
...........Thus there have been delay on both sides. It
appears a mistrust came in the mind of claimant which
lead the claimant to abandon the work.
........ As recission of the contract has been held not
justified, accordingly respondent counter claim No. 2 is
not justified.
CLAIMANTS CLAIM NO. 2:
........As while deciding the respondent counter claim
No. 2 it has been held that there has been delay on the
part of both the parties resulting in prolongation of
contract, so claimant claim is not justified."
6. In our opinion, in view of Arbitrator's finding that both the
parties are responsible for prolongation of contract as well as the
fact that the Appellant had been compensated for statutory
increase in the wages and further as the Appellant had not filed
any documentary proof in support of its claim for loss of profit,
the Appellant's claim for loss of profit due to prolongation of
contract cannot be granted.
7. Lastly, Mr. Dial contended that the nature of reasons given
by the Arbitrator for rejection of Appellant's loss of profit did not
satisfy the parameter of a reasoned award. However, we find
that learned Senior Counsel for Appellant, on the instructions of
the Sole Proprietor of the Appellant, had stated before learned
Single Judge that he would not press the plea of sufficiency of
reasons as he did not want the entire Award to be set aside.
Consequently the Appellant is estopped from raising such a plea.
8. Since no other submission was raised before us, the
present appeal being devoid of merits is dismissed but with no
order as to costs.
[MANMOHAN]
JUDGE
[MUKUL MUDGAL]
JUDGE
September 26th, 2008
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