M/S. National Projects ... vs M/S Simplex Concrete Piles ...
2009 Latest Caselaw 1387 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       FAO(OS) 311/2000

                                        Date of decision : April 15, 2009

        M/s. National Projects Construction
        Corporation Ltd.                               ..... Appellant
                           Through Mr. Paritosh Buddhiraja, Adv.

                    versus

        M/s Simplex Concrete Piles (India) Ltd.  ..... Respondent
                         Through Mr. V.P.Chaudhary, Sr. Adv. with
                         Mr. N.Chaudhary, Adv.

        CORAM:
        HON'BLE MR. JUSTICE MUKUL MUDGAL
        HON'BLE MR. JUSTICE VALMIKI J.MEHTA


     1. Whether the Reporters of local papers may be allowed to see
        the judgment?                                           No


     2. To be referred to the Reporter or not?                  Yes


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

    %                        JUDGMENT (ORAL)

MUKUL MUDGAL, J.

1. This appeal challenges the judgment of the learned Single Judge dated

10.3.2000 affirming the award of the Arbitrator dated 15.9.1992 and

directing the payment of interest @ 15% on Rs.21,08,468/-.

FAO (OS) 311/2000 Page 1

2. Before the learned Single Judge the only objections pressed were with

respect to Claim Nos.1, 3, 4 (d) and 7. Before us also the challenge is to the

same claims.

3. In so far as Claim 4 (d) is concerned, the counsel for the appellant has

contended that clause 3.5.2 did not permit any calculation of a distance

beyond the radial distance irrespective of route taken. The said clause 3.5.2

reads as follows :

"3.5.2 Measurement for Carriage

i) The disposal and lead payable shall be intimated by the Engineer- in-Charge. Payment for carriage shall be made per cubic metre of excavated material to be carried to any location.

a) From the initial lead of 50 metres upto a distance of 500 metres.

b) 500 metres to 1 kilometer

c) 1 kilometer to 2 kilometers The lead in every case shall, however, be measured from the point of excavation to the centre of the actual disposal area and shall be exclusive of the initial lead of 50 m which is deemed to be included in the item of excavation. All distance for the purpose of payment of lead shall be measured along the radial distance irrespective of the route actually taken and the decision of the Engineer-in-Charge in this regard shall be final. For this purpose of measurement of lead, the area excavated shall be divided into suitable blocks and for each block the distance from the centre of the block to centre of placed earth pertaining to this block shall be taken as the lead.

ii) The quantity indicated under the schedule of items indicates the total quantity to be transported under this item assuming an average of 50% as item (a), 30% as item (b), 20% as item (c). However, depending on the actual requirements, the lead will vary. The Contractor, while quoting for this item, may take his own assumption, if necessary, to quote a suitable rate.

(Emphasis supplied)"

FAO (OS) 311/2000 Page 2 The counsel for the appellant has contended that since the contract

provided for the measurements of radial distance irrespective of the route

actually taken in the present case, the Arbitrator has erred and the learned

Single Judge has wrongly affirmed the award in respect of the route actually

taken. Au Contraire Mr. Chaudhary, learned senior counsel appears on

behalf of the respondent has submitted that the contract only provided for

payment as per the radial distance only upto 2 kms. and for a distance

beyond that the payment was not forbidden by the contract as per clause

3.5.2 Mr. Chaudhary has also relied upon the letter dated 3.11.1987 written

by the appellant itself wherein the following statement was made.

"(iii) Claim of M/s. Simplex towards extra lead for disposal beyond 5 kms. And upto 7 kms.

Security as per the contract, the distance had to be measured only radially. Payments had already been released according to this. However, as a special concession, it was decided subsequently that the measurements of lead radially will be restricted to 2 kms. And the rest shall be measured as per the actual route taken. The payment shall be released according to this decision.

(Emphasis supplied)"

The appellant's stand that beyond the distance of 2 kms. the distance

would be radial distance and not the actual distance is, therefore, not correct

in terms of the language of clause 3.5.2 and the letter dated 3.11.1987 (both

extracted above). Therefore, the bar contemplated by clause 3.5.2 does not

FAO (OS) 311/2000 Page 3 come in the way of payment and thus so awarded by the Arbitrator. We thus

find substance in the plea of Mr. Chaudhary and while the plea advanced by

Mr. Buddhiraja at first blush appears to be a plausible, but on a detailed

examination of the clause we are of the view that clause 3.5.2 forbids

payment for actual distance as opposed to radial distance only upto the

distance of 2 kms and not for a distance beyond that. This is also evident

from the letter of the appellant dated 3.11.1987 extracted above.

Accordingly, we are satisfied that there is no merit in the plea advanced by

the counsel for the respondent and the plea has to be rejected in view of the

terms of clause 3.5.2 and the letter of the appellant dated 3.11.1987.

4. Mr. Buddhiraja has further submitted that clause 12.0 relating to

security deposit clearly forbids payment of any interest as awarded by the

Arbitrator and which clause reads as under :

"12.0 SECURITY DEPOSIT

Security Deposit shall be deducted @ 5% of the value of contract. The initial earnest money shall be adjusted towards the security deposit and the balance amount shall be recovered @ 5% of the value of work from the running bills. 50% of the security deposit will be released after six (6) months of successful completion of works, and the balance shall be refunded after preparation of the final bill by NPCC Limited or at the end of the defect liability period (12 months) whichever is later. Security deposit will not bear any interest."

We are of view that this clause does not entitle returning of the

security deposit without interest beyond the period of six months of

FAO (OS) 311/2000 Page 4 successful completion of the work or the preparation of the final bill or at the

end of the defect liability period, whichever of the three is later. Since the

period for which the security deposit is not refunded was indisputably

beyond the period of clause 12.0 we are satisfied that there is no merit in this

plea also.

5. As regards the challenge to the finding of fact with respect to claim

No.1 we are unable to interfere in our limited jurisdiction sitting as an

appellate court, moreso as even in the original jurisdiction for challenge to

the Award under Section 30 of the Arbitration Act, 1940 the scope of

challenge to a finding of fact is well limited.

6. The appeal is accordingly dismissed. We are informed that the

payment under the impugned judgment has already been released in favour

of the respondent. Accordingly, we are not saying anything on the quantum

of interest aspect under the award. The appeal is, therefore, dismissed.

                                                  MUKUL MUDGAL, J



                                                  VALMIKI J.MEHTA, J
APRIL 15, 2009
mm

FAO (OS) 311/2000                                                          Page 5