Jeet Singh vs Delhi Development Authority
2009 Latest Caselaw 2767 Del

              * IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                          Date of Reserve: 09.07.2009
                                                         Date of Order: 22nd July, 2009

CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections)
%                                                                       22.07.2009

       Jeet Singh                                  ... Plaintiff/Petitioner
                             Through: Nemo

              Versus


       Delhi Development Authority      ... Defendant/Respondent
                      Through: Mr. Gaurav Sarin, Advocate with
                      Ms. Supriya Juneja, Advocate for DDA


JUSTICE SHIV NARAYAN DHINGRA

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

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

DDA/Respondent has filed objections against award dated 3.12.1994

whereby the learned Arbitrator allowed some and disallowed some of the claims and

counter claims. Objections have been filed claim-wise. They are being dealt with

claim-wise.

2. Claim No.1 was raised by the petitioner for a sum of Rs.22,059.61 on

account of part rates and claim no.10 was raised for Rs.10,000/- on account of

balance payment. The Arbitrator considered both these claims together. The

respondent during the arbitration proceedings submitted a second running bill and

final bill and admitted that an amount of Rs.15,990/- was payable under these bills to

the petitioner however, this admission was made subject to admissibility of counter

claim of DDA. The Arbitrator awarded Rs.15,990/- on the basis of this admission.

3. Claim no. 2 was on account of penal rate recovery of cement, made by

the claimant for a sum of Rs.6,105/-. The respondent admitted refund of Rs.4537.50

and disputed amount of Rs.1567.50. The learned Arbitrator observed that by virtue

of clause 42 of the agreement, the recovery could not be enforced unless the

DDA/respondent established loss suffered by it.

4. Clause 42 regarding consumption of cement provided that the cement

to be used had to be calculated on the basis of statement showing quantity of

cement theoretically to be used in different items of works, as provided in the Delhi

Schedule of Rates, 1981 printed by the CPWD and over this theoretical quantity of

cement, a variation upto 3%± would be allowed where the cost is not more than Rs.5

lac and 2%± variation to be allowed where the cost of the tender was more than

Rs.5 lac. It is provided that in the event where there was difference in the quantity of

cement issued and theoretical quantity, inclusive of variation then the remaining

cement shall be returnable. If it is not returned the contractor shall pay penalty at the

rate of twice the issue rate.

4. When this clause was made a part of the contract the cement was a

controlled item. The market rate of the cement was more than double the control

rate and this clause was introduced to prevent the pilferage and misuse of the

cement by contractor. The theoretical quantities were provided in the Delhi

Schedule of Rates. The learned Arbitrator's observation that the respondents (DDA)

was to establish a loss suffered by it and the contract was hit by Section 74 of the

Indian Contract Act is contrary to law. The contractor had agreed to this provision

with open eyes. It was not required by DDA to show that DDA had suffered a loss.

The parties were at liberty to provide a clause based on theoretical quantities, since

it is not practically possible to measure and check actual quantity of cement used. It

is settled law that the Arbitrator is bound by the terms of the agreement and cannot

write a new agreement between the parties. Allowing of Rs.1567.50 by the

Arbitrator was not permissible being contrary to contract. DDA was not supposed to

prove either pilferage or misuse or loss. I, therefore, consider that the Arbitrator

exceeded his jurisdiction by allowing this amount contrary to the contract. This part

of the award is therefore set aside.

6. No serious objection has been raised against claim No.3.

7. Under Claim No.4 petitioner had claimed Rs.5000/- on account of

barricading the site. The learned Arbitrator observed that the special barricading

done by the petitioner along the alignment on both sides as per

specifications/directions of the Engineer-in-Charge was to be paid as this was

recorded in the measurement book and was not paid. He therefore, allowed a sum

of Rs.3521.88 against this claim. The relevant conditions/clauses regarding

barricading are as under:

25. The Contractor shall take all necessary measures for the safety of traffic during construction and provide, erect and maintain such barricades, including signs, markings, flags, lights and flag-men as necessary at either end of the excavation/embankment and at such intermediate point as directed by the Engineer-in-Charge for the proper identification of the construction.

26. The temporary warning lamps shall be installed at the barricades during the houses of darkness on kept lit at.

27. All arrangements for traffic during construction including maintenance thereof shall be considered as incident ailing to the works and contractor responsibility and nothing shall be payable to him this respect.

8. A perusal of above clauses would show that while executing the work,

the contractor was supposed to take measures for public safety and was supposed

to barricade the site during construction and this barricading was to be done all

along the construction as a part of contract. No separate amount was payable to the

contractor for barricading. Merely because barricading had been recorded in the

measurement book would not entitle the contractor to claim amount on account of

barricading. The contractor is entitled to the claim only as per contract. If the

contract does not provide for an item to be paid, even if it is recorded in the

measurement book, no claim can be laid for such an item. I, therefore hold that the

award of the Arbitrator on this count is contrary to contract and is liable to be set

aside.

9. In Claim No. 8, the petitioner claimed Rs. 20,000/- paid short for

excavation and timbering on the ground that the work was carried out in running

sand conditions under water. The slopes of excavation were given which were

necessary according to site conditions and open timbering was inevitable to retain

the sides of excavation in loose soil and running sand conditions in water. It was

stated that open timbering was provided being necessary in accordance with the

agreement and no payment had been made against these items. The

claimant/petitioner restricted its claim to the tune of Rs.12,428/-. The respondent

has objected to award against this claim stating that the Arbitrator awarded a sum of

Rs.10,488/- to the petitioner but failed to give any reasons for awarding this amount.

The learned Arbitrator also failed to consider that the payment in regard to the

excavation has already been made and the claim made by the petitioner was over

and above the amount already received by him and due to him.

10. A perusal of contract shows that the excavation of trenches was

provided under item nos. 1-7. The open timbering was provided in item no.6, in case

of those trenches where depth exceeded 1.5 meter the respondent/DDA had

finalized the final bill as stated by the learned Arbitrator in claim no.1. This bill

included all the items as payable to the petitioner and a sum of Rs. 15,990/- was

awarded by the Arbitrator on the basis of final bill. It is not understood once the final

bill was agreed to between the parties and payment received under final bill, how the

additional claim could be raised in respect of different items. All items executed by

the contractor and measured form part of the final bill. In the present case, even

items like barricading were measured and recorded in the measurement book. Once

the final bill has been settled, additional claim in respect of short payment could not

have been entertained by the learned Arbitrator. The learned Arbitrator has given no

reason as to on what basis he awarded Rs.10,488/- to the claimant and why he did

not award Rs.12,428/- to which the claim was restricted by the claimant during the

proceedings. I find that awarding of this amount was contrary to the contract and no

payment could have been allowed by the Arbitrator on whims and fancies. He could

allow only those claims, which were as per contract but were not included in the final

bill. The award in respect of this claim is set aside.

11. Counter claim no. 1 made by the respondent/DDA for a sum of Rs.

1,67,651/- was rejected by the learned Arbitrator. The respondent had claimed this

amount stating that the bill of the petitioner was in minus due to deductions items

and statement of incomplete work. However undisputedly, the minus bill was only

for Rs.5,776/- showing Rs.5,776/- was to be recovered from the petitioner. The

Arbitrator observed that since the respondent had agreed in claim no.1 and that

claimant was entitled for Rs.15,990/- after finalization of the final bill, this counter

claim of minus bill was not tenable. I find no reason to disturb this finding.

12. Counter claim no.2 was regarding penal recovery of cement, for which

I have already made observation in claim no. 2. Counter Claim No. 3 was made by

the respondent for sum of Rs.27,935/- for penalty under Clause 14 of the agreement,

as claimant had failed to rectify the defects despite notice dated 22.10.1992. The

learned Arbitrator observed that respondent levied compensation under Clause 14

much after the stipulated date of completion i.e. 13.5.1991 at the time when the

process of arbitration had already started he observed that mere presence of a

provision in the agreement does not empower the respondent to levy compensation

unless the loss was proved and rejected the counter claim.

13. The respondent/DDA had submitted that this was not a valid ground

for rejecting the counter claim. The Arbitrator failed to take into consideration Exhibit

R-13/1 showing that the claimant had failed to remove the defects as pointed out to

him and the respondent was within its right to levy the penalty in terms of clause 14.

14. A perusal of clause shows that all notices of inferior quality or

defective work were to be served on the contractor, within 06 months of completion

of the work, by Engineer-in-Charge specifying the material and articles. It is

apparent that the notice was not served within six months as provided in the

contract. The penalty could be levied only if the notice was served in accordance

with this clause. The learned Arbitrator therefore rightly rejected this counter claim.

15. The learned Arbitrator also rejected a counter claim of the

respondent/DDA for Rs.93,977/- on account of risk and costs for rectification of

defects under Clause 14 on the same grounds. I consider that for the reason stated

in para 14 above the Arbitrator rightly rejected this counter claim. Another counter

claim was raised by respondent for sum of Rs.20,607.58 on the ground that

agreement item no.4 was partly done by claimant and remaining part of the item was

got executed at the risk and cost of the claimant. The Arbitrator observed that this

was not covered under Clause 14 and the Claimant was not paid for the work not

done therefore this counter claim was not tenable. I find no reason to disturb the

award on this count. Another counter claim of Rs.22,935/- was made by the

respondent on account of extension of time. The learned Arbitrator allowed a sum of

Rs.987/- against this award. No challenge has been made to this part of the award.

16. In view of my above discussion the award given by the learned

Arbitrator for a sum of Rs.1567.50 under claim no.2, Rs.3521.88 under claim no.4

and Rs.10,488/- under claim no.8 are hereby set aside, rest of the award is upheld

and made a Rule of Court. The petitioner would be entitled to an interest @ 6% from

the date of award till recovery.

Decree Sheet be prepared.

July 22, 2009                                      SHIV NARAYAN DHINGRA, J.
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