M/S Anant Raj Agencies vs Delhi Development Authority & ...
2009 Latest Caselaw 2519 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  CS(OS)1887A/1996.

%                                Date of decision:08.07.2009

M/S ANANT RAJ AGENCIES              .......               Petitioner
                       Through: Mr. Harish Malhotra, Sr. Advocate with
                                Mr. Uttam Datt & Ms. Meenakshi,
                                Advocates.

                               Versus

DELHI DEVELOPMENT AUTHORITY & ANR..... Respondents

                       Through: Mr. D.S. Mehandru with Ms. Alpana
                                Pandey, Advocates.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?       Yes

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

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


RAJIV SAHAI ENDLAW, J.

1. The petitioner had filed a petition under Sections 14 & 17 of

the Arbitration Act, 1940 inter-alia for filing of the arbitral award

dated 26th July, 1996 in this court and for making the same a rule of

the court. Upon the arbitral award being filed in this court and

notice thereof being issued, I.A. No.12811/1996 under Sections 30 &

33 of the Act was filed by the respondent DDA. No objections have

been preferred by the petitioner to the award. Upon completion of

pleadings in the objections preferred by DDA, the usual issues were

framed on 11th August, 1997.

2. Disputes and differences had arisen out of the contract for

construction of 448 EWS Houses in Block-G, Pockets 12 to 15,

Rohini, Delhi. The objections preferred by DDA are hereafter taken

up in seriatim as in the objection petition.

3. Re: Deduction of Rs.40,540.39p by DDA from the final bill with respect to items 1.1 to 12.6.

a) The award in para 4 thereof records that no reason for this

deduction had been given by DDA and DDA before the

Arbitrator also said nothing about this short payment. The

Arbitrator thus for the reason of DDA having failed to give

any justification for deduction thereof allowed the said

payment to the petitioner.

b) The objection of DDA merely is that according to Clause 25

A this was an excepted matter, as the decision of the Supdt.

Engineer in this behalf is final and thus the award is outside

the scope of arbitration. The counsel for DDA has along

with a brief synopsis dated 15th January, 2007 placed on

record a tabulation with respect to the various claims,

award thereon and the objections of DDA thereto. However,

therein also I do not find any reference to the award in the

said sum. No arguments also have been addressed on the

same.

c) A perusal of the agreement shows that Clause 25 A inter-

alia provides that the decision of Supdt. Engineer regarding

the quantum of reduction as well as justification thereof in

respect of rates of substandard work which may be decided

to be accepted will be final and would not be open to

arbitration. DDA has in its objections neither pleaded nor

shown that it had before the Arbitrator pleaded or shown

that the said deduction was within the ambit of Clause 25 A

or on account of substandard work or had the approval of

the Supdt. Engineer. Without the same being pleaded or

shown, no error on the face of the award or misconduct can

be found. Even before this court nothing was shown as

aforesaid. Without the contention having been considered

before the Arbitrator of as to whether the said deduction

was within the ambit of Clause 25 A or not, the same is not

entertainable by this court.

The objection is dismissed.

4. Re: Deduction of Rs.1,03,577.72p from the final bill with respect to items 1.1 to 12.6.

a) The Arbitrator has held that the said deduction is on

account of various rebates to which DDA under the

agreement was entitled to for making regular monthly

payments and for making payment of the final bill within six

months of the date of completion of work and for making

payments of extra items within three months of the date of

occurrence and for releasing of security deposit within one

month after the expiry of six months maintenance period.

The Arbitrator found that the responsibility for preparing

the bills was on both the parties; if the petitioner prepared

the bill it had to be scrutinized by DDA by deputing the Jr.

Engineer to check the measurements; in terms of Clause 8 A

of the agreement measurements had to be recorded by an

officer of DDA; though under the agreement the

responsibility to submit the final bill is on the contractor but

on the basis of measurements by official of DDA; that there

was no evidence that DDA after completion of work ever

recorded the measurements or intimated the same to the

claimant; in the absence of recording of detailed

measurements no fault can be attributed to the claimant;

that there is practice prevailing in DDA for preparation of

running bills and the final bills by DDA; that no notice had

been given by DDA to the petitioner to file the running

account bills. In the circumstances the award holds that

DDA had failed to make the payments/release the security

deposit within the time and only whereupon it was entitled

to avail the rebate. The award thus directs payment of

amounts so deducted, to the petitioner.

b) The objection of DDA to this award is that the same is

contrary to R-7. If is further contended that the first 17

running bills were paid regularly and monthly and

subsequently on five different occasions two running bills

were paid within one month's time and thus deduction on

the said 27 bills could not have been disallowed. The rebate

on the said bills is stated to be amounting to Rs.14,995.89p.

c) The aforesaid would show that DDA accepts the award of

Rs.1,03,577.72p less Rs.14,995.89p.

d) The objections aforesaid of DDA are factual and this court in

exercise of jurisdiction under Sections 30 & 33 of the Act

cannot reappraise the evidence or to sit in appeal over the

award. An erroneous decision is neither an error apparent

on the face of the award nor misconduct.

e) This objection is also accordingly dismissed.

5. Re: Deduction of Rs.1,11,642.56p from the final bill with respect to agreement items 1.1 to 12.6 on account of double of rate recovery under Clause 42 of the agreement.

a) Under Clause 42 of the agreement the surplus materials not

returned had to be recovered at penal rates. The Arbitrator

has held that DDA has not given any detail for the excess

amount on this account. Petitioner admitted deduction to

the extent of Rs.57,107/-. The Arbitrator also found that

neither there was any notice on record to show that there

was any wastage of any material by the petitioner nor were

there any averments in this regard; that while steel had

been issued to the petitioner on weighment basis, recovery

had been made on the basis of liener measurements

multiplied by standard co-efficient; that there was no

averment of any wastage and the entire material had been

used in the work; that since different methods had been

adopted at the time of issue and at the time of making

payment for steel, there was bound to be difference if the

steel is overweight. The Arbitrator accordingly not finding

any proof of wastage or loss, held the recovery at penal rate

of Rs.1,11,642.56p minus admitted Rs.57,107/-, to be bad

and awarded the said amount.

b) The objection of DDA is that the award in this respect is

contrary to the terms of the agreement.

c) The said objection is misconceived. The Arbitrator has not

made the award by holding that DDA was not entitled to

recover for the wastage on penal rates. The award returns a

finding of fact that there was no wastage. Such finding of

fact of the Arbitrator is not interferable. The objection is

rejected.

6. Re: Award of Rs.42,788.69p under items 3.5 (a) and 3.5

(c).

a) This amount has been allowed for the quantity of shuttering

of beams, holding the same to be an integral part of roof

slab and holding the same to be payable along with the

centering and shuttering of roof slab. The Arbitrator has in

this regard relied upon CPWD specifications. The

contention of DDA that the rates payable for beams were

different from that for slabs even under the CPWD

specifications was negatived by the Arbitrator.

b) The objection is that the Arbitrator misunderstood the

matter and has ignored para 5.2.9.1 (c) on page 104 of the

CPWD's specifications, 1977, Vol.I and thus the award for

the said amount is liable to be set aside.

c) No arguments have been addressed on this aspect also.

Moreover, from the objection it transpires that the objection

is as to the interpretation of CPWD specifications to which

the Arbitrator has also referred. It is not as if the Arbitrator

has not dealt with the Specification 5.2.9.1 (c). However,

the Arbitrator has interpreted the same to be entitling the

petitioner to the said amount of Rs.42,788.69p. For

arguments sake even if it is to be held that Arbitrator has

wrongly interpreted the said specifications, when even a

wrong application of law has been held to be not an error

apparent on the face of the award or misconduct, the

question of interference with the award on this ground does

not arise.

The objection is accordingly dismissed.

7. Re: Award of Rs.29,173.40p under item 3.6 for wrongful omission of certain RCC work done by the petitioner.

a) The award records that the deduction for the said amount

was made by DDA for not plastering with cement mortar 1:3

to the exposed RCC work under item 3.6. The petitioner had

denied that no such surface had remained unplasterred. The

contention of DDA was that the RCC surface where 12 mm

or 15 mm plaster had been done was considered as exposed

surface and for which deduction had been made. The

Arbitrator held that as per CPWD specifications, RCC

surface on which 12 mm and 15 mm cement plaster had

been done could not be considered as permanently exposed

surface and thus allowed the claim.

b) The objection before this court is that in terms of the item

3.6, wherever 6 mm cement plaster was not done, the DDA

was entitled to make a deduction; it is further contended

that the Arbitrator has failed to appreciate the controversy.

c) I am unable to sustain the said objection also. The Apex

Court in M/s Sudarsan Trading Co. Vs. Govt. of Kerala

AIR 1989 SC 890 and in Food Corpn. of India Vs.

Joginder Pal Mohinder Pal AIR 1989 SC 1263 relied upon

by the senior counsel for the petitioner held that the court

has no jurisdiction to find out whether the Arbitrator had

acted correctly or not and the court cannot substitute its

own evaluation of the conclusion of law or fact to come to

the conclusion that the Arbitrator had acted contrary to

bargain between the parties. It was further held that

whether a particular amount was liable to be paid or

damages liable to be sustained was a decision within the

competency of the Arbitrator and the court could not take

upon itself the burden of saying that any part of the award

was contrary to the contract and thus beyond the

jurisdiction of the Arbitrator. The objection is thus

meritless and is rejected.

8. Re: Award of Rs.75,541.69p under item No.3.7 on account of overweight steel supplied by DDA to the petitioner.

a) The contention of DDA before the Arbitrator was that there

was no provision in the agreement for adjustment of

overweight steel. The Arbitrator held that while the

petitioner had asked for Tor steel only, DDA had given

partly Tor steel and partly mild steel and the petitioner is

entitled for payment of differences of quantities of Tor steel

and mild steel and arrived at the figure of Rs.75,541.69p for

the same.

b) DDA save for pleading that the award is contrary to Clause

12 of additional conditions and thus contrary to the terms &

conditions of the agreement has not objected to the formula

applied by the Arbitrator for arriving at the figure of

Rs.75,541.69p.

c) In the award in this respect I neither find any plea of DDA

with respect to Clause 12 of the additional conditions nor

any adjudication on the same. DDA, before the Arbitrator

had opposed the said claim only on the ground that there

was no provision in the agreement for adjustment of

overweight steel and the payment had been made to the

petitioner as per CPWD specifications, 1977 applicable to

the agreement. In the absence of the plea on which

objection is taken having been shown to have been taken

before the Arbitrator and in the absence of the same having

been dealt with by the Arbitrator, the objection before this

court cannot be entertained for the first time and is

accordingly rejected.

9. Re. Award of Rs.56,372.45p under item No.6.1for providing T iron frames for doors and windows.

a) The claim was on account of DDA while making the payment

having not measured the weight of M.S. lugs, M.S. flats

welded at the back of the frame for fixing butt hinges and

the sill tie welded to door frame at the bottom. DDA before

the Arbitrator contended that weight of the said items was

not liable to be paid and also on the ground that no

reference thereto had been made by the petitioner during

the execution of the work.

The Arbitrator held that DDA had not denied fixing of the

lugs, welding to M.S. flats and sill tie or the quantities

claimed by the petitioner. The award further holds that the

interpretation of DDA of the CPWD specifications is not

correct; the specifications do not provide that lugs, M.S.

flats and sill tie will not be measured for the purpose of

calculating the total weight of chowkhat for payment.

Accordingly the claim was allowed.

b) The objection of DDA is that the Arbitrator's interpretation

of CPWD specifications is incorrect.

c) For the reason stated above, the same does not constitute a

ground for interference with the award.

10. Re: Award of Rs.8,587.40p under item No.9.9 (a) for applying priming coat on wood work.

a) While DDA contended that the wooden door and shutters

supplied to petitioner for fixing were finished with primer

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

the petitioner controverted and contended that it had

applied the primer coat on the entire quantity of wooden

doors and windows supplied to if and as per the

requirements of CPWD specifications. The Arbitrator found

that DDA had partly measured the quantity of primer coat

done on the shutters and thus concluded that DDA was

liable for payment for application of primer on the entire

quantity of shutters.

b) The objection to the award is that the part primer referred

to by the Arbitrator was with respect to item No.9.9 (b) i.e.

application of primer on mild steel work and not on wooden

shutters.

c) This dispute is purely factual. Moreover, the award does

not record or deal with any contention of DDA before the

Arbitrator that the part payment for primer and on the basis

whereof the claim for balance payment was allowed was

with respect to mild steel work. In the absence of the

objection having been recorded or dealt with in the award,

the same is not maintainable before this court and is

dismissed.

11. Re. Award of Rs.20,388.32p under item No.9.10 (a) for painting on steel work.

a) The claim was on account of incomplete measurement by

DDA. The Arbitrator found short measurements to a certain

extent and allowed the claim.

b) The objection before this court is that there was no proof

before the Arbitrator of application of extra quantity

claimed.

c) The sufficiency or insufficiency of evidence for the award is

not open for consideration under Sections 30&33 of the Act.

The objection is rejected.

12. Re: Award of Rs.5,730.26p under item No.11.2 (a) for providing and fixing brass bib cocks.

a) The opposition of DDA before the Arbitrator was of, though

the agreement providing for fixing of the same, the

petitioner having failed to do so. The Arbitrator held that

since as per the agreement the bib cocks were to be fixed,

DDA would not have recorded the completion of work if the

such bib cocks had not been fixed and hence allowed the

claim.

b) The objection before this court is that the completion

certificate was subject to provision of certain items

including the bib cocks and the Arbitrator has ignored the

completion certificate Exhibit R-1. The completion

certificate R-1 is contained in the record filed by the

Arbitrator. I am unable to find any notation therein of the

bib cocks having not been fixed or remaining to be fixed.

The completion however certificate generally refers to

fixing of brass fittings remaining. In the absence of anything

to show that the brass fittings referred to in the completion

certificate R-1 did not include bib cocks, the award to this

extent is contrary to the document. Moreover, the Arbitrator

has not given any reason as to why he has not included the

bib cocks in the brass fittings. Accordingly, the award in so

far as of Rs.5,730.26p under item No.11.2 (a) is set aside.

13. Re: Award of Rs.3,820.17p under item No.11.8 (a) towards price of brass stop cock.

a) The award and the objection under this head is the same as

under item No.11.2 (a) and for the same reasons the award

under this head is set aside.

14. Re: Award of Rs.16,621.16p towards painting and GI pipes and fittings.

a) While the petitioner contended that the painting of GI pipes

had been done, DDA contended otherwise. The Arbitrator

held that since the said work was required to be done in

terms of the agreement and since completion certificate had

been issued, the work is deemed to have been done and

allowed the claim. The objection is that the completion

certificate R-1 notes that the said work had not been done.

b) A perusal of R-1 shows that it has noted therein that final

coat of white wash paint and colour washing had not been

done. In my view, the aforesaid cannot include the painting

of GI pipes in which no final coat is required before delivery

of possession. Thus the finding of the Arbitrator cannot be

said to be contrary to the document and the objection is

dismissed.

15. Re: Award of Rs.425.87p under item No.11.5 for providing and fixing PVC connections.

a) The claim was opposed for the reason of petitioner having

abandoned the work and having left the site incomplete and

the PVC connections having not been provided. The

Arbitrator on the basis of the completion certificate and in

the absence of any proof of work having been abandoned

allowed the claim.

b) The objection before this court is of the finding of the

Arbitrator being contrary to fact and completion certificate.

c) A perusal of the completion certificate R-1 on arbitral

record does not show any noting therein of certain PVC

connections remaining to be provided. Accordingly, the

objection is rejected.

16. Re: Award of Rs.5990.23p towards excavating trenches for laying SW pipes.

a) The opposition was that the said work though part of the

agreement had not been executed and the SW pipes having

been laid on the existing ground level. The Arbitrator held

that the SW pipes could not be laid on ground level and

allowed the claim.

b) The objection before this court is that there was no proof

before the Arbitrator to substantiate the claim and the

award being based on presumption.

c) I find that if as per the agreement, the SW pipes had to be

laid in trenches and had not been so laid, the same would

have been mentioned in the completion certificate or there

would have been other correspondence in this regard. In

the circumstances nothing wrong can be found with the

approach of the Arbitrator in believing that SW pipes could

not be laid on the ground and must be in trenches.

The objection is rejected.

17. Re: Award of Rs.12,44.54p under item No.12.6 for making connection of sewer lines with the existing manhole.

a) The dispute was again with respect to execution/non

execution of the work. The Arbitrator held that since the

sewer lines could not be used unless connected with the

main sewerage line, the work must have been done and

accordingly the claim allowed.

b) The objection again is of the award being presumptuous.

c) As aforesaid no defect can be found with the approach

adopted by the Arbitrator.

18. Re: Award of Rs.3,083.25p for extra and substituted items 1 to 5 & 20.

a) Though the execution of the extra items was not disputed,

the dispute was with respect to the rates paid therefor. The

formula for application of rates was also not in dispute. The

dispute was only as to certain rebates claimed by DDA on

the same. The Arbitrator held that DDA was not entitled to

claim rebates under the provision claimed.

b) The objection is that the Arbitrator has failed to consider

the letters dated 10th, 23rd & 31st August, 1985 to the

petitioner whereunder DDA was entitled to rebate and that

the award is contrary to the agreement between the parties

contained in the said letters.

c) I do not find any discussion in the award with respect to the

aforesaid letters; though DDA has pleaded that the bone of

contention between the parties has been noted by the

Arbitrator in para 2 at page 22 of the award but I do not

find any reference to the aforesaid letters therein also. It

has not been argued that the said letters were before the

Arbitrator. I have not found the said letters in the arbitral

record also. In the absence of the objection now taken

before this court having been shown to be taken before the

Arbitrator and having been dealt with by the Arbitrator, no

case of error on the face of the award or of misconduct is

made out.

The objection is rejected.

19. Re: Award of Rs.1,660.69p under extra item No.6 for providing balcony railings.

a) The case of the claimant was that payment therefor had

been made to it, treating the same as a RCC wall. The

contention of DDA was that the payment had been made as

per CPWD specifications. The Arbitrator held the railings to

be different from wall and thus allowed the claim.

b) The objection is that as per the drawings only a wall had to

be made and thus the payment had been correctly made.

c) The dispute aforesaid being of a factual nature and on

which the finding of the Arbitrator being the forum chosen

by the parties is final, the objection is misconceived and is

rejected. The senior counsel for petitioner has rightly relied

upon MCD Vs. Jagan Nath Ashok Kumar AIR 1987 SC

2316 laying down that reasonableness of reasons given by

an arbitrator in making his award cannot be challenged.

20. Re: Award of Rs.6,516.87p under extra item No.7 for rendering exposed surface of RCC railing with cement mortar.

a) This award and the objection thereto is the same as award

and objection under item No.6 above and the objection is

rejected for the reasons as in item No.6.

21. Re: Award of Rs.24,486.59p under extra item No.5 for centering and shuttering for RCC railings.

a) This award and objection thereto also is on the same

reasons as with respect to item No.6 above and the

objection is rejected for the same reason.

22. Re: Award of Rs.30,302.72p under extra item No.9 for fixing brass stop cock.

a) The award and the objection is the same as with respect to

the other brass items above. In view of the notings in the

completion certificate R-1 with respect to brass fittings, the

objection is allowed and the award to the extent of

Rs.30,302.72p is set aside.

23. Re: Award of Rs.3,327.80p under extra item No.19(a) for providing and laying cement concrete around floor traps.

a) While petitioner claimed to have done the work, DDA

contended that petitioner was not asked to provide the

same but had provided the same and for which payment had

been made. The Arbitrator found that as per the practice of

DDA the cement concrete around floor traps was required

to be provided and there being no dispute as to the rate,

allowed the claim for quantity found less paid.

b) In the objection before this court dispute as to

measurements is raised.

c) The same is outside the ambit of Sections 30&33 of the Act

and the objection is rejected.

24. Re: Award of Rs.19,665.65p under extra item No.19(b) for cement concrete around floor traps on other floors.

a) The award and the objection is the same as under item No.19(a) above and for the reasons stated above the objection is rejected.

25. Re: Award of Rs.21,314.20p under extra item No.23 for making grooves in the plastered surfaces.

a) Though the direction for carrying out the said work and

carrying out of the said work was not disputed, it was the

case of DDA that no separate payment was required to be

made with respect thereto. The Arbitrator after referring to

the CPWD specifications held that the same were to be

required to be paid separately.

b) The objection before this court is again on the

interpretation/view of the CPWD specifications and is not

maintainable and the objection is rejected.

26. Re: Award of Rs.6,199.20p under extra item No.24 for making cheques in treads of staircases.

a) While the petitioner contended that the work was carried out

as per the directions of DDA, DDA denied so. The Arbitrator

held that since the work was done as per the requirement at

site, payment therefor could not be denied.

b) The objection is of there being no proof before the

Arbitrator of the work having been done.

c) The award does not notice any contention of the respondent

of the said work having not been done. The only contention

of the respondent was that it had not directed carrying out

of the said work. The objection being beyond the face of the

award and even otherwise being factual in nature is

rejected.

27. Re: Award of Rs.42,195.98p under extra item No.25 for cutting holes in brick work for laying GI pipes and SCI pipes.

a) The contention of DDA was that this item of work was not

payable as per the condition of the contract on page 57

under para 3.1.6. The petitioner contended that since the

layout of SCI pipe and GI pipe had not been provided on

time by DDA the petitioner was required to carry out the

extra work. The Arbitrator found that DDA had not issued

the layout on due date and for the reason whereof the

petitioner had to do extra work; the petitioner could not

leave holes at the time of execution of work. There being no

disputes as per the quantity or the rate, the claim was

allowed.

b) The objection before this court is again on the basis of the

condition of contract relied upon before the Arbitrator also.

It is contended that the petitioner ought to have left the

holes as may be required for the said purpose and nothing

extra was payable therefor.

c) From Clause 3.1.6 of the contract relied upon by the

Arbitrator the view taken by the Arbitrator of DDA being

required to provide a plan and the finding of fact of the

Arbitrator of DDA having not so provided the plan and the

petitioner being thus not in a position to leave holes cannot

be said to be such which is improbable. On the settled

principles, the objection is not maintainable under Sections

30&33 of the Act and is rejected.

28. Re: Award of Rs.72,737.28 under extra item No.26(a) & 26(b) for providing SCI collars to SCI pipes.

a) The contention of the petitioner before the Arbitrator was

that the item was executed as per requirement at site; that

DDA issued pipes of one length only leading to the necessity

of providing collars; had DDA not intended to pay for the

collars, it should have provided the pipes of the required

length. DDA contended that the petitioner had used the

collars for their own benefit.

b) The Arbitrator held that DDA had not denied the provision

of the collars and the quantity claimed and had also not

denied the issue of pipes of the same length, while pipes of

different length were required and use of which pipes

necessitated use of collars. Hence the collars were found

payable and the award with respect thereto made in

accordance with the DSR rates applicable to the contract.

c) The objection before this court is that under Clause 3.15 of

the specifications and conditions of contract, the petitioner

was to provide the collars free of cost and nothing extra was

payable therefore and thus it is contended that the award is

contrary to the terms & conditions agreed.

d) The objection is tenable. The petitioner has in its reply to

the objections not stated that the respondent had not taken

the said plea before the Arbitrator and has also not disputed

Clause 3.15 relied by DDA. As per the said clause, the

petitioner was required to provide SCI collars required for

fixing SCI pipes of the required size free of cost and nothing

extra is payable therefore. The award does not deal with

this aspect. The arbitrator cannot award what is prohibited

under the agreement. The award under this item being

contrary to the agreement between the parties is set aside.

29. Re: Award of Rs.8,751.04p under extra item No.27 for providing flush pipe to flushing cistern. The dispute was on account of the length of the pipe used.

a) The contention of the petitioner was that in view of the

location of the WC pan, extra length had to be used. The

Arbitrator found in favour of the petitioner as per the site

condition.

b) The objection before this court is that no specific length of

the pipe had been provided for in the specifications and it

was a lump sum item and the claim for extra length was not

entertainable.

c) The Arbitrator has in the award held that as per CPWD

specifications, 1977, Vol.II, Page 83 Para 18.1.4 the length

of flush pipe to be provided is 1.25 mtr. while the petitioner

had to provide 1.80 mtr. No objection has been taken to the

said reasoning of the Arbitrator and in view whereof the

award under this item is non-interfereable in these

proceedings.

30. Re: Award of Rs.5,664.96p under extra item No.28 for providing and fixing SCI terminal guards.

a) The dispute was that the said guards had not been provided

at site and thus had not been paid. The Arbitrator held that

the provision of such terminal guards was necessary for

completion of works and with respect whereto a certificate

had been issued and thus allowed the claim.

b) The objection is on the basis of the completion certificate

Exhibit R-1. However a perusal of R-1 does not show any

noting therein of the said terminal guards having not been

provided. The objection is thus rejected.

31. Re: Award of Rs.1,84,903/- under extra item No.30 for straightening, cutting and hoisting of the steel bars issued in coils and bent up bundles.

a) The dispute was that the said works were covered as per

the CPWD specifications and the rates were included in the

rate of item already paid. The Arbitrator on the

interpretation of the agreement and the CPWD

specifications allowed the claim.

b) The objection besides on the basis of interpretation of

CPWD specifications is also on the basis of additional

conditions Clause 12 as per which no claim on account of

issuance of twisted bars, flats, tees, angles in available

length were to be entertained. It is thus contended that the

award is contrary to the agreement.

c) The petitioner in reply to the objections has not

controverted Clause 12 of additional conditions referred to

in the objections. In view thereof the award on this account

is contrary to the agreement between the parties and is set

aside. Senior counsel for the petitioner also fairly agreed to

the setting aside of the award to this extent for the reason

of the petitioner having not given notice for carrying out

said extra work, as required to be given, as held in Wee Aar

Constructive Builders Vs. DDA 2001 (3) Arb. LR 468

(Delhi).

32. Re: Award of Rs.41,26,467/- under item No.2 of other payments due on account of loss due to increase in price of building materials and other expenses.

a) The claims under other payments due were made owing to

alleged delay in execution of the work. The date of award of

work was 31st August, 1985 and the date of start was 10th

September, 1985. Stipulated date of completion was 9th July,

1986. The work could be completed only on 30th August,

1991. The delays according to the petitioner were

attributable to DDA. It was also not disputed that DDA had

granted extension of time up to 30th August, 1991without

levy of compensation. It was contended by the petitioner on

the basis thereof that DDA thus admitted delay attributable

to it. It was the contention of DDA before the Arbitrator that

the claims under said head were not arbitrable; that the

petitioner is not entitled to any amount for delay in as much

as the petitioner had been compensated under Clause 10 CC

of the agreement; that in terms of Clause 1 of the additional

specifications and conditions of the contract also no

damages were liable to be paid.

b) The Arbitrator held the claims to be arbitrable in as much as

the agreement was for reference of all claims under the

agreement and the said claim was also under the agreement.

The Arbitrator also held that the work had been delayed

because of lapses of DDA in handing over of site, layout plan,

drawings, finalization of colour scheme etc. sanction of extra

and substituted items and payment of running account bills

and in supply of stipulated material. It was further held that

whenever there is delay in building contract, the contractor

is bound to suffer. It was further held that Clause 1 of the

Additional Specifications and Conditions of contract did not

bar the said claims and excluded only those losses which

were suffered because of change in programme of

construction during the stipulated period of contract and

not beyond the stipulated period of the contract. It was held

that Clause 1 did not cover the delay on account of drawings,

decisions, non-release of payments. The Arbitrator also held

that Clause 10 CC does not take into its ambit complete

escalation coming into work though the amounts given under

Clause 10 CC were deductable from the actual escalation to

which the petitioner may be entitled. Holding so, the

Arbitrator applying the method of cost indices worked out

the total escalation to be of Rs.48,58,012.90p and after

deducting therefrom Rs.7,31,546/- given under Clause 10

CC, made an award for Rs.41,26,467/-.

c) The objection of DDA inter-alia is that DDA had granted

extension of time without levy of compensation on the basis

of undertaking of the petitioner that it had not suffered any

damages and was not to claim any such damages. It was thus

contended that the petitioner was barred from putting forth

such claim. Reliance was also placed on M/s Ishwar Singh

& Sons Vs. DDA MANU/DE/0310/1994 laying down that

arbitrator has no jurisdiction to award any sum on account of

damages contrary to specific provision of the contract. DDA

also relied upon C-67 in this regard.

d) The petitioner has in reply to the objections not denied

having given an undertaking. With respect to Annexure C-67

it is stated that the same was given under coercion as huge

payments of the petitioners were withheld and otherwise it

was not the requirement of the contract that any such

undertaking will be given.

e) The counsel for DDA has in this regard also relied upon

Anant Raj Agencies Vs. DDA 2005 (1) Arbitration Law

Reporter 590 (Delhi). In the said judgment, following the

judgments of the Division Benches of this court in DDA Vs.

U. Kashyap 1998 VII AD (Delhi) 300 & in DDA Vs. K.C.

Goyal & Co. 2001 II AD (Delhi) 116 it was held that an

award for compensation for escalation on the basis of cost

indices, beyond Clause 10 CC of the contract is erroneous on

the face of it and amounts to misconduct. It was further held

that where a contract provides for a formula as per which

escalation has to be worked out, Arbitrator being bound by

the contract between the parties cannot adopt a different

methodology. The award for amounts in excess of those

worked out under Clause 10 CC was thus set aside holding

the same to be in patent duplication.

f) I also find that the same view has been taken thereafter also.

Two other single judges of this court in Anant Raj Agencies

Vs. DDA CS(OS) No.2650A/1996 decided on 21st February,

2008 as well as in Jagat Ram Trehan & Sons Vs. DDA

2002 63 DRJ 92 have taken the same view.

g) I however find that another Division Bench of this court in

DDA Vs. M/s S.S. Jetley MANU/DE/0861/2000, inspite of

earlier judgment in V. Kashyap (Supra) held that claim for

prolongation of contract due to fault of DDA and for idle

labour, staff, machinery, centering, shuttering and

electricity, water etc. was dehors Clause 10 CC and

allowable. It was however reiterated that with respect to

items provided in 10 CC, no formula other than that applied

in 10 CC can be applied.

h) The matter does not rest there. Even in subsequent

judgment, dichotomy persists. Another single judge in Satya

Prakash & Bros. Vs. DDA decided on 28th September, 2001

held that arbitrator cannot act contrary to contract and the

award, since it was not possible to bifurcate the amount

awarded on account of delay by DDA in taking decisions (for

which it was held no claim could be allowed owing to clause

1) and for delay on account of non supply of cement, and

further since award did not deal with aforesaid clause 1, the

matter was remanded back. However, another single judge

in Narayan Das R. Israni Vs. DDA 126 (2006) DLT 10 held

that clause 10 CC applies only in respect of increase in

labour rates and material rates for period beyond stipulated

time and refused to interfere with the award for damages

under other heads on account of prolongation of contract for

reasons attributable to DDA.

i) I however find that in the present case, the challenge is not

to the computation done under clause 10CC. The claim and

award though on account of prolongation for reasons

attributable to DDA the damages awarded with respect

thereto are under the same heads as under clause 10CC. It is

for this reason only that the arbitrator after assessing the

damages payable by DDA to petitioner for such prolongation

has allowed deduction therefrom the amount already paid

under clause 10CC. Had the said assessment been with

respect to items not covered clause 10CC, the question of

deducting therefrom the amount assessed and paid under

clause 10CC would not have arisen. The arbitrator has thus

assessed damages under the same head as in clause 10CC

but applying the formula other than that provided in clause

in 10CC. This is an error apparent on face of record and not

permissible as per the judgments (supra) and thus this part

of the award is not sustainable and liable to be set aside.

j) I also find that the Arbitrator though noticing that

undertakings had been given by the petitioner at the time of

seeking extension of time, not to claim damages from DDA,

has not dealt with the same. The said undertaking by the

petitioner takes the form of a contract between the parties

and the said contract having provided that no damages

would be payable the petitioner could not turn around and

claim damages for delay. Though the petitioner has

contended that the said undertakings were under coercion

but no finding in that regard has been returned by the

Arbitrator. No further material has been cited to show that

immediately after furnishing the undertaking or at any time

did the petitioner take a stand that the said undertaking had

been obtained under coercion. The award is liable to set

aside for this reason as well.

33. Re: Award of Rs.1,28,000/- under item No.3 of other payments due on account of deployment of watch and ward staff at the site.

(a) The only objection is that there was no evidence before the

Arbitrator for the said claim of the petitioner. The sufficiency

or insufficiency of evidence is outside the domain of a

proceeding under Sections 30&33 of the Act. The petitioner

had claimed a sum of Rs.6,10,950/- on this account. The

Arbitrator after finding that the petitioner remained at site and

recording that DDA had not disputed the said position and

after further recording that the petitioner was not required to

remain at site after the defect liability period and on his

assessment of the salaries of the staff deployed by the

petitioner made the award. The said award is not interfereable

by this court and this court cannot impose its own opinion in

place of the award of the Arbitrator. The objection is

accordingly dismissed.

34. Re: Award of interest.

(a) The Arbitrator has awarded interest on the claims other

than the "other dues" at 18% per annum from 1st March, 1992

till the date of the award and upon failure to pay the awarded

amount within 60 days from the date of award, at 18% per

annum with quarterly rests from the date of the award till the

actual payment or till the decree whichever is earlier. Interest

at 18% per annum has been awarded on the amounts allowed

under "other dues" from the date of the award.

(b) In view of the recent dicta of the courts, taking note of the

rates of interest prevailing from time to time, I deem it

appropriate to modify the rate of interest from the date of the

award to 12% simple interest till the date of the decree. No

interference is however called for to the award of interest at

18% per annum for the pre reference period pendent lite

before arbitrator.

35. IA No.12811/96 is allowed to the aforesaid extent. Judgment is

pronounced in terms of the award as modified above. Decree sheet

be drawn up. Petitioner shall also be entitled to interest on the

principal amount under Section 28 of the Act from the date of decree

till the date of payment at the rate of 9% per annum.

RAJIV SAHAI ENDLAW (JUDGE) July 8, 2009 PP