M/S. Bahl Builders Pvt. Ltd. vs Union Of India
2009 Latest Caselaw 2778 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      F.A.O. (OS) NO.412 OF 2008

%                                 Date of decision: 22nd July, 2009
     M/S. BAHL BUILDERS PVT. LTD.              ..... Appellant
                     Through: Mr. Sandeep Sharma, Advocate.
                     versus
     UNION OF INDIA                            ..... Respondent
                     Through: Ms. Raman Oberoi, Advocate.
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE NEERAJ KISHAN KAUL

1.     Whether Reporters of the local newspapers may be allowed to see the
       judgment? [NO]
2.     Whether to be referred to the Reporter or not? [YES]
3.     Whether the judgment should be reported in the Digest? [YES]

MUKUL MUDGAL, J. (ORAL)

1. This appeal challenges the judgment of the learned Single

Judge dated 13th August, 2008. By the impugned judgment, the

award of the Sole Arbitrator dated 24th April, 2003 whereby the claim

was allowed to the extent of Rs.2,30,000/- in favour of the appellant

contractor with interest @ 15 per cent per annum was set aside.

2. The appellant/contractor sought to challenge the

judgment of the learned Single Judge on the ground that judgment of

the Hon'ble Supreme Court in the case of Ramnath International

Construction (P) Ltd. Vs. Union of India reported in (2007) 2 Supreme

Court Cases 453 was not applicable but, in fact, the issue involved

was covered by a three judges Bench decision of the Hon'ble Supreme

Court in the case of K.R. Raveendranathan Vs. State of Kerala reported

in (1998) 9 SCC 410. Learned counsel submitted that in view of this

judgment, the learned Single Judge ought not to have relied on

Ramnath International (supra) and ought to have relied on K.R.

Raveendranathan (supra). However, it has not been disputed before

us that Clause 11 involving interpretation in Ramnath International

(supra) was identical to Clause 11 in the present appeal. The orders

passed in the cases of K.R. Raveendranathan (supra) and Shyama

Charan Agarwala & Sons Vs. Union of India; 1999 (1) Arb. LR 699 have

been produced by the appellant before us.

3. The order passed in Shyama Charan Agarwala (supra)

followed the judgment of Hon'ble Supreme Court in K.R.

Raveendranathan (supra) and stated no other issue; and the order

passed in K.R. Raveendranathan (supra) followed the judgment of the

Hon'ble Supreme Court in Sudarsan Trading Co. Vs. Government of

Kerala; (1989) 2 SCC 38 and Hindustan Construction Co. Ltd. Vs. State

of Jammu & Kashmir; (1992) 4 SCC 17.

4. In our view, the learned Single Judge has correctly

analyzed Clause 11 and decision in judgment of Ramnath International

(supra) which squarely covers the issue involved as the clauses are

identical. It is also apparent that there is nothing in the two orders

cited by the appellant to suggest that the view taken in Ramnath

International (supra) is contrary to the said views.

5. Accordingly, we are satisfied that learned Single Judge

was justified in applying Ramnath International (supra). The clause

involved in Ramnath International (supra) was identical to the clause

involved in the present appeal. The learned Single Judge has rightly

held that the award was in respect of a matter that was clearly beyond

the jurisdiction of the Arbitrator, being an "excepted" item. Learned

Single Judge has correctly come to the conclusion that the award

betrays non-application of mind to the facts as the appellant's letter of

extension dated 12th August, 1997 had clearly posited that it was

subject to "Nil" financial implication. This meant that the contractor

could not have claimed any amount, towards the head which was

ultimately awarded. Learned Single Judge also took note of the fact

that nothing was shown from the correspondence or the record to

support the contractor's disclaimer or protest against this conditional

extension of time. Learned Single Judge, thus, in our view, correctly

held that the Arbitrator could not have awarded the sum that he did.

6. Accordingly, the appeal is dismissed.

7. The deposits made pursuant to the order of learned Single

Judge are now permitted to be withdrawn by the Union of India upon

an appropriate application being made before the Registry.

MUKUL MUDGAL [JUDGE]

NEERAJ KISHAN KAUL [JUDGE] JULY 22, 2009 'AA'/RS