M/S Anant Raj Agencies vs Delhi Development Authority & ...
2009 Latest Caselaw 1765 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           CS(OS) 2669A/1998

%                  Date of Decision: 30th April, 2009


      M/S ANANT RAJ AGENCIES                  ..... Plaintiffs
                     Through:       Mr.  Harish      Malhotra,  Senior
                                    Advocate with Mr. Priyank Sharma,
                                    Advocate
                   versus

      DELHI DEVELOPMENT AUTHORITY & ANR. ..... Defendants
                    Through: Mr. D.S. Mahendru, Advocate


      CORAM:
      HON'BLE MR. JUSTICE VIPIN SANGHI

      1. Whether the Reporters of local papers may         No
         be allowed to see the judgment?
      2. To be referred to Reporter or not?                No
      3. Whether the judgment should be reported
         in the Digest?                                    No


VIPIN SANGHI, J. (Oral)

I.A. NO.4191/1999

1. The respondent DDA has filed these objections under

Sections 30 and 33 of the Indian Arbitration Act, 1940, against the

award dated 02.11.1998 made by the sole arbitrator, Mr. L.R. Pahwa.

He was appointed as the sole arbitrator to adjudicate the claims of the

petitioner against the respondent arising out of a contract for

construction of 704 EWS houses in Block-F, Pocket-8 to 13 vide

agreement No.5/EE/RPD-5/DDA/85-86.

2. Learned counsel for the objector DDA, at the time of hearing

has made his submissions only in respect of a few items awarded by

the learned arbitrator and has not questioned the remaining award.

Accordingly, I now proceed to deal with each of the objections actually

raised by the objector and argued by the parties.

3. Claim No.1 was made for recovery of Rs.1,95,06,866/- plus

interest on account of non-payment of the final bill prepared and

submitted by the claimant/ petitioner. While dealing with this claim,

the learned arbitrator has dealt with various recoveries made by the

respondent-objector, which were put to challenge in arbitration.

Learned counsel for the respondent has sought to challenge the award

made in respect of the recovery of Rs.55,322.10 on account of

recovery of stipulated material at penal rates.

4. The respondent had sought to make a recovery at penal rates

of the aforesaid amount, since there was a difference in the theoretical

consumption and cement was provided by the respondent from its

stores. The learned arbitrator while allowing the said claim for refund

of an amount of Rs.55,322/- has taken into account the following

considerations:

(a) The respondent was not in a position to contend that there was

any misuse or pilferage or that the material was not consumed in

the work nor the respondent has been able to give any evidence

for loss being suffered, particularly when the recovery on the

single rate basis i.e. as per agreement rate has already been

made by the respondent.

(b) No notice had been issued by the respondent for any wastage or

any material rendered surplus.

(c) There was bound to be variation in the theoretical calculations

and actual calculations as sometime the cement is utilized for

redoing in any particular item and sometime the cement was less

in the bags issued.

(d) Similarly, in respect of SCI pipe and CI pipe, measurements are

not taken for the pipes spigot portion which are going into

socket. This also makes a difference in measurements.

(e) The respondent also failed to give the details of the recovery

and is vague in its submission.

(f) No proof of loss suffered by the respondent was produced before

the arbitrator.

5. Submission of learned counsel for the DDA is that in the

contract there was no stipulation requiring the respondent to issue a

notice with regard to material becoming surplus and on that account

recovery being made. This position is not disputed by learned counsel

for the petitioner. The contractual terms do not even make the penal

rate recovery subject to misuse or pilferage. This position is also

conceded by learned counsel for the petitioner. Since the recovery is

in accordance with terms of the contract and is in the nature of

liquidated damages, there was no requirement for the evidence of loss

suffered being led before the arbitrator. The fact that single rate

recovery is not disputed by the contractor itself establishes that there

was surplus material, which was not returned by the petitioner

contractor to the respondent. Pertinently, there was no challenge to

the single rate recovery by the petitioner. The arbitrator could not

have acted contrary to the agreement by introducing factors such as

variation in theoretical calculations and actual calculations for certain

assumed reasons such as the cement being utilized for redoing in

particular item and it being less in the bags issued. Similarly, he could

not have introduced factors such as the measurements not being

taken for pipe spigot portion which are going into socket. It is not

disputed by learned counsel for the petitioner that the theoretical

calculations are worked out by providing for margins for all such

factors as had been noted by the arbitrator. The purpose of penal rate

recovery appears to be to check pilferage of materials supplied by

respondent from its stores and also to prevent wastage on account of

mismanagement and tardy work by the contractor. The said recovery

being contractual, it cannot be disputed in the absence of any cogent

and material evidence. From the award of the learned arbitrator, it is

evident that he has acted merely on the basis of assumed shortage of

supply in the cement bags and assumed consumed in redoing any

particular item of work. Similarly, he has assumed that portions of

pipe which goes into the socket have not been measured. In my view,

the award in this respect cannot be sustained, as it is contrary to the

contractual term and is also founded upon factors which are beyond

the terms of the contract and have no factual basis. By acting contrary

to the contractual terms the learned Arbitrator has committed

misconduct of the proceedings. Accordingly, the objection of the

respondent in respect of the award of Rs.55,322.10 for refund of

recovery of stipulated material at penal rates is sustainable.

6. Learned counsel for the respondent has next sought to

impugn the award allowing refund of the recovery of Rs.33,943/- on

account of difference in costs of fitting at market rate and agreement

rates. The learned arbitrator has accepted the claim of the petitioner

on the ground that there was no liability of the claimant to pay the

difference of the cost of the fittings, as all the fittings were provided at

the time of completion of work and the work was declared completed

by the respondent on 15.11.1991 and at the time of recording the

completion certificate, it was not pointed out that any fittings were

missing or were not provided for by the claimant. The learned

arbitrator also found that the respondent had not placed on record any

notice given to the claimant during the maintenance period or

thereafter to the effect that the fittings had not been provided by the

petitioner or that the respondent was itself providing the fittings at the

risk and cost of the claimant. Learned counsel for the objector has not

been able to point out any material placed before the arbitrator to

show that this recovery was made after putting the respondent to

notice that the fittings were being provided by the respondent at the

risk and cost of the petitioner claimant. Accordingly, I see no merit in

this objection of the respondent and the same is rejected.

7. Learned counsel for the objector then impugns the award

made on the claim pertaining to item Nos. 3.5(a) & 3.5(c) of the

contract. The submission of the petitioner was that the respondent

had paid for the centering and shuttering of beams, which support the

suspended floors under agreement items for centering and shuttering

of lintels and beams i.e. agreement item No.3.5(c) instead of paying

the same under item No. 3.5(a). The claimant had relied para

5.2.9.1(c) of the CPWD specification 1977 Vol. I, which provided that

suspended floors landings and their support are to be measured under

one head. The roof beams are support to the roof slab. The

submission of the claimant was that since the centering and shuttering

of beams forming part of the suspended floors has to be removed after

the removal of the shuttering for suspended floor, there was no reason

for it not being paid under the agreement item No.3.5(a) relating to

centering and shuttering for suspended floor i.e. agreement item

No.3.5(a).

8. The learned arbitrator gave the following reason in his award

for allowing this claim for Rs.52,129/-:

"I have heard both the parties in details and have considered their respective submissions. I have also examined the agreement item no. 3.5 (a) and 3.5 (c) and the CPWD specification. The contentions of the claimant is correct and justified. The beams which form part of the suspended floors are in fact supports to the suspended floors and are not independent beams and form part of the suspended shuttering. These cannot be removed before the removal of centring and shuttering of the suspended floors. The centring and shuttering for the beams which forms part of the suspended floors has to be paid under the agreement item relating to suspended floor. In the CPWD specifications the word „support‟ has also been mentioned. The supports are nothing but the beams which give support to the suspended floor."

9. Learned counsel for the objector DDA has raised only a

general objection to the aforesaid award and is not able to point out as

to what is the error in the reasoning of the learned arbitrator, as

extracted above. The award has been made on the basis of the

undisputed figures and the award also indicates the manner of

calculation of the amount. Accordingly, I find no justification in this

objection of the objector. The same is accordingly, rejected.

10. Learned counsel for the objector next objects to the award on

the claim founded upon Items 3.7(a) and 3.7(b). This claim was made

by the claimant on account of quantity of steel less paid due to issue of

overweight steel by the respondent. It was contended by the claimant

petitioner that though the steel was issued by weightment, the

measurement were recorded by the respondent on the basis of length

multiplied by the standard weight of steel per meter length. The

arbitrator takes note of the notices issued by the claimant in Exhibits

C-2 to C-6, raising its said claim before the respondent. The

respondent had refuted the liability towards payment for overweight of

steel and contended that the payment had been made as per

conditions of the agreement and that the claimant could not claim any

extra payment. The respondent also contended that if and when

overweight steel was received by the claimant, it was for the claimant

to have informed the respondent. The learned arbitrator allowed this

claim by recording his reason as follows:

"I have heard both the parties in detail and have considered their respective submissions made in this regard. It is an admitted fact that as per the practice in DDA the steel is issued by the weight and the payment is made by applying the standard weights and the lengths

measured. The respondents admitted that the weight of steel paid has been calculated on the basis of standard steel weights. The respondent has also not denied the total quantity of steel issued to the claimant. There is no dispute about the quantity of tor steel being issued as 272718 kg and mild steel issued as 5510 kg. There is also no dispute that respondent has paid only 265206.20 kg of tor steel and 5160.13 of mild steel against agreement item no. 3.7(a) and 3.7 (b) respectively. There is no allegation on the part of the respondent that there was any wastage of steel at site. The difference in quantity issued and quantity paid has come because of different method adopted by the respondent in issuing and measuring the steel. The steel issued was overweight as is clear from the quantity issued and paid. Thus, the claimant is entitled for payment of difference of quantities due to overweight of mild steel and tor steel issued by the respondent.

11. Since the learned arbitrator has referred to Exhibits C-2 to C-

6 in the award, the same have been perused by me. Exhibits C-2 & C-

3 are communications dated 19.10.1985 and 22.10.1985 issued by the

petitioner making reference to a circular issued by CPWD dated

15.07.1982 and stating that "steel which is issued by the department

is mostly overweight". The letter dated 19.10.1985 further records

that as per para 1 of the CPWD circular M.S. Rounds or Tor Steel bars

upto and including 10 mm dia which are billed by the suppliers on

actual weight basis, will be verified and accounted for in the stock

account on actual weight basis and will also be issued on actual weight

basis. As per para II of the circular M.S. Rounds or Tor Steel bars

above 10 mm will on receipt, be verified and accounted for in stock

accounts on standard section weight basis. These will also be issued

on standard sectional weight basis. The claimant requested the

respondent that M.S. Rounds and Tor Steels above 10 mm diameter on

receipts from the departmental store on actual weight basis may be

converted on standard section weight basis and issued on standard

sectional weight basis by debiting or crediting the difference to the

work. The communication dated 22.10.1985 reiterated the aforesaid

position. Exhibit C-4 is another communication issued by the claimant

dated 29.10.1985. This communication makes a reference to the

respondent‟s letter dated 26.10.1985, which does not appear to have

been placed before the arbitrator. However, the communication

Exhibit C-4 indicates not only the stand of the respondent, but also

clearly brings out the fact that there was actually no basis for the

claimant petitioner to claim that the steel issued to it was overweight.

It appears that the petitioner took a blind shot in the dark by claiming

that the MS Rounds and Tor Steel bars issued to it were overweight,

while that position was denied by the respondent. The letter dated

29.10.1985, insofar as it is relevant, reads as follows:

"In your above cited letter, you have written that you have instructed our site representative and Asstt Engineer-I in charge of the work to follow the circular, but so far no over weight steel has been received.

We think that it is not possible to find out whether a steel is over weight or not by naked eye. The overweight can only be determined by periodical checking of the weight of the steel received from the departmental store by cutting samples and weighing etc."

12. From the correspondence Exhibits C-2 to C-6, it appears that

the grievance of the petitioner was that M.S. Rounds and Tor Steel bars

above 10 mm diameter was being supplied on actual weight basis and

not on standard section weight basis. However, that itself does not

lead to the conclusion that the steel i.e. M.S. Rounds and Tor Steel

above 10 mm diameter actually supplied by the respondent to the

petitioner was overweight. As stated by the petitioner itself in Exhibit

C -4, it is not possible to find out whether the steel is overweight or not

by a naked eye. The overweight can only be determined by periodical

checking of the weight of the steel received from the departmental

store by cutting samples and weighing etc. It was not the petitioner‟s

claim that this exercise had been done in respect of the MS Rounds

and Tor Steel bar of above 10 mm diameter. It is clear that there was

no evidence led before the arbitrator, for him to conclude that the M.S.

Rounds and Tor Steel bars of 10 mm diameter or above supplied to the

petitioner by the respondents was actually overweight. The learned

arbitrator has observed that the steel issued was overweight "as is

clear from the quantity issued and paid". I am not able to appreciate

this reasoning of the learned arbitrator. Mr. Malhotra, learned senior

counsel for the petitioner, has argued that it is for the arbitrator to

appreciate and evaluate the facts and the Court cannot go into the

same. It is not for the Court to examine the sufficiency and

insufficiency of evidence so long as there is some evidence placed

before the arbitrator.

13. There can be no quarrel with the legal proposition advanced

by Mr. Malhotra. However, the present appears to be a case where

there was no evidence at all before the arbitrator to conclude that the

steel issued by the respondent, namely, M.S. Rounds and Tor Steel

bars of above 10 mm diameter was overweight. Pertinently, this

position has been denied by the respondent not only in the

correspondence, as is evident from Exhibit C-4, but also before the

arbitrator, as is evident from award itself. The award on Item Nos.

3.7(a) and 3.7(b) appears to have been made without any evidence

whatsoever. This constitutes misconduct on the part of the Arbitrator.

For the aforesaid reasons, the award made by the arbitrator in respect

of item Nos. 3.7(a) and 3.7(b) for Rs.79,712.26 cannot be sustained

and is, therefore, set aside.

14. The next objection raised by Mr. Mahendru is in respect of the

award made by the arbitrator on the claim founded upon item 6.1 of

the contract. This item pertains to providing and fixing T. iron for

doors and windows. The case of the claimant before the arbitrator was

that the respondent had not measured the weight of the M.S. Lugs,

M.S. Flat welded at the back of the frame for fixing hinges, and the

base tie welded to the door frame at the bottom. The claimant had

claimed that as per the item, the entire weight of door/window frames

including lugs, M.S. flats and base tie are to be measured for payment.

15. The respondent had contested this claim by stating that the

claimant had provided M.S. base tie, M.S. Lugs and M.S. flats welded at

the back of the frame as per the agreement item. The payment had

been made on the basis of T. iron section only. The items, namely,

M.S. lugs, M.S. flats and tie bar are included in the rate and hence, not

payable.

16. The learned arbitrator notes that the respondent had not

denied the fixing of M.S. flats at the back of the frame for fixing butt

hinges and M.S. lugs and M.S. base tie being welded at the bottom of

the door frames. The learned arbitrator rejected the defence of the

respondent founded upon the interpretation of CPWD specification and

para 4 of the additional specification. He notes that the specification

does not provide that the M.S. lugs, M.S. flats and base tie are not to

be measured for the purpose of calculating the total weight of the

frames for payment. I see no force in the objection raised by the

respondent to the award made by the arbitrator on the said claim. It is

not the case of either of the parties that the contractor was not obliged

to provide the M.S. lugs, M.S. flats welded at the back of the frame for

fixing hinges and the base tie welded to the door frame at the bottom

under the contract item. The claim of the claimant was not that he

was required to do any additional item of work by providing the M.S.

lugs, M.S. flat and base tie. The claimant‟s claim is only that the

weight of M.S. lugs, M.S. flat as welded at the back of the frame for

fixing hinges and the base tie welded at the door frame at the bottom

should be included while computing the work done by the claimant.

The learned arbitrator has observed that the specification relied upon

by the respondent does not provide that the M.S. lugs, M.S. flat and

base tie are not measured for the purpose of calculating the total

weight for payment to the contractor. In my view, this finding of the

learned arbitrator is unexceptionable. Accordingly, this objection of

the respondent is rejected.

17. The next objection raised by Mr. Mahendru is in respect of

item No.9.9(a). The claimant had made a claim for applying primer

coat on new wood work. The same was awarded by the learned

arbitrator for Rs.42,083/-. The defence of the respondent to the said

claim was that the wooden door and window shutters which were

supplied to the claimant for fixing were already finished with the

primer coat and as such no primer coat was required to be applied on

shutters. On the other hand, the stand of the petitioner was that the

petitioner had applied a primer coat on the wooden doors and windows

supplied to them for fixing.

18. The learned arbitrator allowed the said claim on the

reasoning that the item for applying primer coat on the wood work is

provided in the agreement. On that basis he has proceeded to make

his award.

19. The submission of Mr. Mahendru, counsel for the DDA is that

this claim of the petitioner was allowed though totally devoid of any

evidence. The petitioner had not produced any material to show that it

had procured and applied primer on wooden doors and windows

shutters.

20. The reasoning given by the learned arbitrator, in my view, is

patently fallacious and cannot be sustained. Merely because in the

rate contract one of the items was pertaining to providing primer

coating on wooden doors and windows, it does not necessarily follow

that the said item of work was actually required to be performed by

the contractor or that it was actually done by the contractor. The rate

contract contains rates for varied specified items of work. As and

when the eventuality arises, the contractor is required to carry out the

works for which rates are fixed. There may be works required to be

carried out, which are even beyond the items specified in the rate

contract. For such items rates are to be fixed in accordance with the

contract. However, it does not follow that each and every item

contained in the rate contract has necessarily to be performed by the

contractor. The claim for application of primer could have been

sustained by the contractor by leading evidence to establish the

purchase and procurement of primer and its application on the wooden

doors and windows. The claimant contractor has, however, not led any

evidence to substantiate the claim. The learned arbitrator has

proceeded on the fallacious assumption that merely because the said

claim pertains to an item contained in the rate contract, the same

would have been performed by the contractor. Such an approach

clearly tantamount to misconduct on the part of the learned Arbitrator.

For the aforesaid reasons, I am of the view that the award on item

No.9.9(a) for Rs.42,083/- cannot be sustained and is, accordingly, set

aside.

21. The next objection of Mr. Mahendru is in respect of award

made pertaining to item No.19 for cutting holes 15cm X 15cm in RCC

work. The submission of Mr. Mahendru is that the cutting of holes in

RCC work for laying GI pipes and SCI pipes is to be done by the

contractor without charging any extra payment therefor under the

terms of the contract. He refers to condition No.5.1 of the agreement

which reads as follows:

"5.1 Cutting of holes in walls, floors, chajjas, R.C. C. slabs etc:

The tendered rate shall include the cost of cutting holes where ever required and making good the same and nothing extra shall be paid for this."

22. Mr. Mahendru submits that the learned Arbitrator has acted

in ignorance of this contractual term and awarded the claim contrary

to the said clause.

23. The submission of Mr. Malhotra in response to the aforesaid

clause pointed out by the respondent-objector is that the claimant

contractor was required to carry out extra work of cutting such of RCC

slab since the drawing were given belatedly. Had the drawings been

given on time, the occasion for cutting the RCC slab would not have

been arisen.

24. A perusal of condition No.5.1 shows that the same specifically

provides for cutting of holes, inter alia, in RCC slabs. It does not carve

out any exceptions. In my view, the award made by the learned

arbitrator on item No. 19 cannot be sustained since the same had been

made without even taking note of condition No.5.1. The arbitrator has

obviously not applied his mind to the said condition. Accordingly, the

award made in item No.19 for Rs.52,809.74 is set aside.

25. The next objection of Mr. Mahendru is in respect of the award

made on item Nos. 20(a) & 20 (b). This claim had been made for

providing SCI collars to SCI pipe 100mm dia and 75mm dia,

respectively. The claimant had stated that they were required to

provide the SCI collars and SCI pipe as the location of WC P-trap and

floor traps were such that the full length of pipes issued by the

respondent could not be laid. The provision of collars was necessary

as small length had to be joined while connecting these pipes to

vertical stacks of pipes. The pipes were issued by the department in

one length only. Had the respondent not wanted the collars to be

provided the claimant should have been issued the pipes of required

length. The arbitrator had awarded Rs.79,122/-. Mr. Mahendru has

referred to condition No.3.15 of the specifications and conditions at

page 57 which states "The contractor shall have to provide SCI collars

required for fixing of SCI pipes of the required size free of cost and

nothing extra shall be paid for the same."

26. The arbitrator, obviously, ignore the said clause and the

award made by him is contrary to the said clause. At the time of

arguments, Mr. Malhotra fairly concedes that the said award on item

Nos.20(a) and 20(b) cannot be sustained and fairly stated that the

same may be set aside. Accordingly, the award made on item

Nos.20(a) & 20(b) for Rs.79,122/- is set aside.

27. The next objection of Mr. Mahendru is that the award made

on item No.29 for straightening the bent up steel bars issued in coils

and bent up bundles, and for cutting bars to the lengths/sizes required

and hoisting the same for various levels cannot be sustained, in view of

the decision of this Court in Narain Das R. Israni v. Delhi

Development Authority 2005 VIII AD (Delhi) 556. The arbitrator has

awarded an amount of Rs. 2,78,228/- under this claim. It is agreed by

the petitioner as well that item 29 of the award is liable to be set aside

in view of the aforesaid decision. The same is, accordingly, set aside.

28. Mr. Mahendru has then raised an objection with regard to the

award made under item No.2 under the general heading "Other

Payments Due". This claim was made for reimbursement of loss

suffered due to infructuous expenditure on the hire charges of tools

and plants, materials for centering and shuttering rendered idle on

account of failure of department for delay in supplying the services,

plans for sewerage water supply route for electrical cables, non-supply

of doors and windows shutters and on account of timely decision not

being taken by the respondent.

29. The learned arbitrator has given detailed reasons to conclude

that the delay was entirely attributable to the respondent and that the

petitioner contractor was, therefore, entitled to be compensated on

account of such delay. He also took note of the fact that extension of

time was granted by the respondent without levy of liquidated

damages. The submission of the respondent that the petitioner was

not entitled to claim any further damages, apart from those provided

under clause 10CC was rejected by the learned arbitrator, by holding

that:

"The denial of the respondent for the liability of escalation on the ground that they have already paid escalation under clause 10 CC is devoid of any merits as the escalation which is paid under clause 10 CC does not take into its ambit the actual escalation coming to the work."

30. The reasoning adopted by the learned arbitrator appears to

be unsustainable in view of the decision of this Court in DDA v. U.

Kashyap 1998 VII AD (Delhi) 300. The ratio of this decision has been

further followed by this Court in Jagat Ram Trehan & Sons v. DDA

2002 (63) DRJ 119. Para 12 of the Jagat Ram Trehan (supra) reads

as follows:

"12. Now coming to the next objection of the counsel for the respondent with regard to the award of Rs.7,71,018/-, on account of escalation of cost of material and labour, in view of the fact that under clause 10 CC payment had already been made, the arbitrator was not justified in allowing the aforesaid amount as damages. Division Bench of this Court in Delhi Development Authority v. K.C. Goyal (supra) has held that once a particular formula is provided in the contract, applying some other formula and awarding the claim would amount to legal misconduct. Following the ratio of Delhi Development Authority v. K.C. Goyal (supra) I hold that arbitrator has committed legal misconduct in awarding a sum of Rs.7,71,018/- on account of escalation of cost of material and labour."

31. I, therefore, hold that the award on Item No. 2 under the

heading "Other Payment Due" for Rs. 32,02,641/- is unsustainable and

the same is set aside as the learned arbitrator has misconducted

himself.

32. Mr. Mahendru has also challenged the award made on item

No.3 towards reimbursement of expenses incurred on account of

infructuous expenditure in maintaining contingents or artisans, labour

and watch and ward staff after the date of completion recorded by the

department. The case of the claimant was that the claimant was

required to maintain its staff at the site on account of failure of the

respondent to take over possession. The arbitrator has awarded an

amount of Rs.1,23,000/- for the period 15.05.1992 till 14.08.1993, after

taking into account the defect liability period during which the

contractor was obliged to maintain its staff at the site from the date of

completion of the work. The submission of Mr. Mahendru is that the

respondent had issued various communications to the contractor which

are found on record dated 21.12.1995, 02.01.1996 and 30.01.1996,

whereby the respondent DDA had asked the claimant to handover the

possession of the flats to them.

33. In response, Mr. Malhotra points out that the period for which

the expenditure has been allowed is of the years 1992 and 1993,

whereas the respondent had asked for the possession only in the year

1995-96. In my view, no error can be found in the award made on item

No.3 since the DDA, it appears, was not in a position, and did not take

over the possession of the flats upto 14.08.1993. This objection is,

therefore, rejected.

34. It is lastly argued by Mr. Mahendru that the award made on

item Nos.2 & 3 towards pre suit interest, pendente lite and future

interest whereby the arbitrator has awarded interest @ 18% per

annum is unreasonable. Mr. Malhotra in response submitted that since

a large portion of the award has been set aside by the Court, the rate

of interest should not be reduced.

35. Taking into consideration the decision of this Court in Narain

Das R. Israni (supra) I am inclined to reduce the rate of interest for

the pre-suit and pendente lite period @ 12% per annum. Accordingly,

the award is made a rule of the Court and a decree is passed in terms

of thereof, except to the extent it has been set aside hereinabove. In

case the respondent makes payment of the decretal amount within

three months no further interest shall be payable. However, in case

the same is not so paid, the petitioner shall be entitled to further

interest from the date hereof till payment/realization @ 9% per annum.

Parties are left to bear their respective costs.

VIPIN SANGHI, J.

APRIL 28, 2009 rsk