Union Of India vs M/S Pandit Construction Co. & Ors.
2009 Latest Caselaw 2523 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+            FAO(OS) No.65/2000

                                Date of Decision : 08th July 2009

UNION OF INDIA                                      .....Appellant
              Through :         Ms. Saroj Bidawat, Adv.

             Versus

M/S PANDIT CONSTRUCTION CO. & ORS.         .....Respondents
              Through : Mr. Raman Kapoor, Adv.

CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE NEERAJ KISHAN KAUL

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


                    J U D G M E N T(Oral)

MUKUL MUDGAL,J.

1. With the consent of the learned counsel for the parties, this appeal

is taken up for hearing.

2. This appeal challenges the Judgment of the learned Single Judge

dated 13th August 1996 by which the Claims No.1, 4 and 16 in respect of

which Union of India, the appellant herein, had filed the objections were

rejected by the learned Single Judge. In respect of the Claim No.1

findings recorded by the Arbitrator are as follows:

FAO(OS) 65/2000 Page 1 "On consideration of documents filed and arguments advanced by parties and on perusal of R-9, I find that rebate condition was not fulfilled by respondents. The gross amount of various bills as shown in this exhibit does not show that work done was less than Rs.25,000/- during intervening period which is also established by reference to Cement Register filed by respondents.

The letters given by claimants (Exh.R-1 to R-8) are without any consideration.

Even if these letters are considered, there are defaults in payment of RA bills in other months also. I, therefore, held that respondents were not entitled to avail this conditional rebate and claimants are entitled for refund of Rs.78,426.62 say Rs.78,426/0."

3. The learned Single Judge held that the appellant did not

particularize the objections as to how the Arbitrator has gone wrong in the

above findings. In view of that, the learned Single Judge dismissed the

objection and in our view, rightly, as general pleas as to whether the

award is wrong obviously cannot form the basis of setting aside the

Arbitrator's award. In respect of Claim No.4 as against the sum of

Rs.1,05,000/- claimed by the respondent, the Arbitrator granted a sum of

Rs.45,000/-. The claim of the appellant was that there was no unlawful or

unauthorized deduction and whatever deductions were, the same were in

accordance with the terms and provisions of the contract. It was

contended that the Arbitrator had mis-conducted himself in granting the

claim of the respondent to the extent of Rs.45,000/-. The Arbitrator's

findings in respect of the said claim No.4 is as follows:

FAO(OS) 65/2000 Page 2 "On perusal of documents filed and arguments advanced by parties, I find that no notice under clause 14 has been placed on record by respondents. The completing certificate by E.E. has not been filed only it is pleaded that these defects were included in the said completion certificate. No such defects are mentioned in R-42 which is completion certificate signed S.E. No joint measurements for any defects are on record. On perusal of R-109, R-10 and Annex.C-4.A, I find that of one item quantity paid in 13th RA bill has been reduced in final bill. For some of the items reduction has been applied on entire quantity. R-44 relied by respondents is for seeking consent but no such consent was given by claimants. No loss was suffered by not removed and items are in use. Moreover items in R-44 are not supported by any notice under Cl.14 or any defects in completing certificate. Thus strictly speaking respondents were not entitled to make any reduction. However, considering the nature of defects and taking on overall view of the matter I hold that claimants are entitled for refund of at least Rs.45,000/-."

4. The above finding clearly shows that valid reasons have been given

by the Arbitrator in arriving at the finding of granting a sum of

Rs.45,000/-. These reasons are plausible and warrant no interference in

view of the law laid down by the Hon'ble Supreme Court in the cases of

Bharat Konkan Coal v. L. K. Ahuja, 2004 (3) SCR 1105 and State of

U.P. v. Allied Construction., (2003) (Supp-II) SCR 55. In both the cases,

it was held that there are limitations upon the scope of interference in

awards passed by an Arbitrator particularly, when the Arbitrator has

applied his mind to the pleadings, the evidence adduced before him and

FAO(OS) 65/2000 Page 3 the terms of the contract and in such a situation, the Hon'ble Supreme

Court has held that even if two views are possible; the court ought not to

reappraise the matter in an appeal. The court has also been held to be

precluded from the reappraisal of the evidence. The only scope for

interference prescribed by the Hon'ble Supreme Court in the Case of State

of U.P. (supra) is that when the reasons are totally perverse or the

judgment is based on a wrong proposition of law, and since no such plea

has been advanced before us there is no merit in the challenge to the

judgment of the learned Single Judge.

5. The learned counsel for the respondent Shri Raman Kapoor has not

been able to show us any authority that even if the award has been

accepted and indeed an application made by the claimant/respondent for

making it a Rule of the Court, even then the learned Single Judge has the

power to grant interest on the awarded amount though not granted by the

Arbitrator and not objected to by the claimant/Respondent. The arbitrator

awarded pendent lite interest at 12% per annum against claims 4, 5, 7, 8

and 9 which comes to Rs.46,000/-. However, the Arbitrator granted

future interest on the total awarded amount minus the pendent lite interest

(Rs.4,16,938 - Rs.46,000 = Rs.3,70,938/-). The respondent did not file

any objection against this award of the Arbitrator. Before the learned

Single Judge during the course of arguments it was sought to be urged on

behalf of the respondent that future interest should have been awarded on

FAO(OS) 65/2000 Page 4 the entire amount of Rs.4,16,938/- and not just Rs.3,70,938/- as awarded

by the Arbitrator. The learned Single Judge accepted this contention and

awarded interest on the additional amount of Rs.46,000/- as well.

6. In view of the peculiar facts of the present case, the learned counsel

for the respondent states that he does not wish to press for the interest on

the pendentelite interest awarded against claims 4, 5, 7, 8 and 9.

Consequently, the judgment of the learned Single Judge to the extent of

granting interest on Rs.46,000/- pendentelite awarded against claim 4, 5,

7, 8 and 9 is set aside and the appeal is allowed to this limited extent only

and dismissed in respect of other reliefs. It will be open to the respondent

to withdraw the amount deposited in this Court after adjustment of the

portion of the appeal which has been allowed, upon making an

appropriate application.

7. The appeal stands disposed of accordingly.

MUKUL MUDGAL, J.

NEERAJ KISHAN KAUL, J.

July 08, 2009
dr




FAO(OS) 65/2000                                                       Page 5