M/S. Sukumar Chand Jain vs Delhi Development Authority And ...
2009 Latest Caselaw 4524 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI
+                       C.S. (OS) No. 259/1996


                                         6th November, 2009.


M/S. SUKUMAR CHAND JAIN                                   ..Petitioner
                 Through:          None.
                 VERSUS

DELHI DEVELOPMENT AUTHORITY AND ANOTHER.
                                                    ...Respondent

Through: Mr. Neeraj Atri, Advocate with Mr. Vinod Atri, Advocate, Mr. Himanshu Kaushik, Advocate and Mr. Ramakant, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

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

2. To be referred to the Reporter or not?

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

    %                   JUDGMENT (ORAL)




C.S(OS)No.259/1996                                               Page 1
 VALMIKI J. MEHTA J

1. This matter has been called out after lunch and no one is present

on behalf of the non-objector. Even before lunch no one was present.

Accordingly, I am proceeding to dispose of the objections as filed by

the Delhi Development Authority under Sections 30 and 33 of the

Arbitration Act 1940 to the award dated 12.01.1996.

2. The counsel for the objector/DDA has basically challenged the

awarding of the amount with respect to claim No.14. A reference to

the objections as preferred by the objector shows that the claim in this

regard has been objected to on two grounds. The first ground

according to the objector is that the Arbitrator was totally unjustified

in over looking Ex.R-20 which clearly shows that the contractor in his

own handwriting in his own letter specifically and categorically said

that he is not making any claims whatsoever and he has suffered no

loss whatsoever. A reference to the relevant discussion in the relevant

page of the Award shows that the Arbitrator except by doing a mere

lip service has not gone into this aspect whereby the contractor has

himself said that he has not suffered any losses. The Arbitrator has

C.S(OS)No.259/1996 Page 2 overlooked this specific admission of the contractor contained in

Ex.R20, being the letter dated 27.9.1988, and has yet awarded the

claim. I may also note that even assuming that there is delay in

performance of the contract, in terms of Section 55 of the Contract

Act, 1872 a notice has to be given by a contractor alleging delay on

the part of the defaulting party/objector and it is only after a notice is

given can there by an Award for damages on account of delay. I note

that no such discussion is found with respect to claim No.14 which was

for an amount of Rs.18,00,000/- and against which an amount of

Rs.1,30,426.70 has been awarded. Accordingly, this part of the award

is clearly against of principles of law and justice because a specific and

direct admission of the contractor has been overlooked thus making

the award illegal and unsustainable in law.

3. The next claim which has been objected to on behalf of

the objector is with respect to claim No.15 with respect to the

awarding of interest @ 12% and 18% in the award. I note that the

award is of the year 1996. It has been now held by the Supreme

Court in a recent chain of judgments reported as Rajendra

C.S(OS)No.259/1996 Page 3 Construction Co. Vs. Maharashtra Housing & Area Development

Authority & ors.2005 (6) 678, McDermott International Inc. Vs. Burn

Standard Co. Ltd.& ors 2006 (11) SCC 181, Rajasthan State Road

Transport Corpn. Vs. Indag Rubber Ltd. (2006) 7 SCC 700 and

Krishna Bhagya Jala Nigam Ltd. Vs. G.Harischandra, 2007 (2) SCC

720 that the courts should take note of the changing economic

scenario and the falling rates of interest on account of liberalization of

the interest regime. The Supreme Court has mandated that the courts

should be alive to these events and the rates of interest should be

reduced by the courts, more so when the disputes are pending since a

long time and interest has to be awarded for a very very long period.

In this case as I have noted the award is of the year 1996 and interest

has been granted from 1994 at least. Accordingly, wherever in the

award interest is granted either @ 12% or 18%, the figure of 9% per

annum simple shall stand substituted. The effect of this is with respect

to the claims which have been awarded in favour of the claimant/non

objector, the rate of interest shall only be 9% per annum simple.

4. Before concluding, I may note that the counsel for the

DDA very fairly on instructions states that no other objections are C.S(OS)No.259/1996 Page 4 being pressed and only the two objections pertaining to claim nos. 14

and 15 are being pressed. Accordingly, with the above observations,

this objection petition is partly allowed and dismissed with respect to

other claims. The award is made rule of the court subject to the

modification made with respect to claim no. 14 and 15 above. In

view of the facts of the case, parties are left to bear their own costs.

                                                    VALMIKI J.MEHTA, J


November 6, 2009
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C.S(OS)No.259/1996                                                    Page 5