M/S Swadeshi Construction Co. vs Executive Engineer, Dttdc Ltd.
2009 Latest Caselaw 4267 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        CS(OS)No.395A/1997

                                                 22nd October, 2009

M/S SWADESHI CONSTRUCTION CO.                                ...Claimants

                         Through:   None.

             VERSUS

EXECUTIVE ENGINEER, DTTDC LTD.                          ...Respondents.

                         Through:   Mr. Vikas Kumar, Advocate for Mr.
                                    Arvind Nayar, 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)

I.A. No.7727/1997 in C.S.(OS) No.395A/1997

1. I.A. No. 7727/97 in Suit No395A/97 is the application/ objections

filed under Sections 30 and 33 of the Arbitration Act, 1940 against the

award of the sole Arbitrator dated 27.11.1996.

CS(OS) No.395A/1997 Page 1

2. The main argument which has been pressed by the counsel

appearing for the objector is that the Arbitrator failed to give hearing and

did not allow any evidence to be led. This is averred in ground D in the

I.A. When I put it to the counsel that whether an application was moved

before the Arbitrator as to whether any evidence is required to be lead or

that the Arbitrator is not giving hearing, the counsel replied in negative. I

find that this ground is indeed very expansive and vague. It is not

possible for the Arbitrator, who is not present in the proceedings to

defend himself with respect to such a ground. I do not find any merit in

this ground because if this objection was legitimate, surely, immediately

after the award was passed the objector should have moved before the

Arbitrator stating that adequate hearing was not given and opportunity

for leading evidence was also not given. Admittedly, this has not been

done and therefore there is no basis to sustain this objection which is

accordingly rejected. The counsel for the objector thereafter has argued

that the award is against the terms of the contract between the parties,

however, on the query from the court the counsel could not point out

any specific violation of the terms of the contract or how the award in

this behalf is perverse or how the award can be assailed. Accordingly,

this Court is unable to accept this objection.

CS(OS) No.395A/1997 Page 2

3. That however takes me to the main objection which is pressed

which pertains to the grant of interest @ 18% per annum by the

Arbitrator. I find that this objection is well merited. This is because in a

consistent line of recent decisions of the Supreme Court, it has held that

in view of the change in the economic scenario and the consistent fall in

the rates of interest, the Courts have to be circumspect and lower rate of

interest should be awarded considering the changed scenario. These

Supreme Court judgments are:- Rajendra 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 . In this case the award is of the year 1996 i.e. more

than about 13 years back. Considering this long period of time and as

per the ratio of the aforesaid judgments of the Supreme Court instead of

interest @ 18% per annum, I in the facts and circumstances of the case,

award interest @ 9% per annum simple and therefore the award will be

for a sum of Rs.3,30,239/- with interest @ 9% per annum from 1.4.1995

till the date of payment. Accordingly, this objection petition is partly

allowed to the extent of interest. Rest of the objections are dismissed.

The award is accordingly made a rule of the Court with the aforesaid

CS(OS) No.395A/1997 Page 3 amendment as to the rate of interest. Since no one appeared on behalf

of the non-objector, I do not think it fit to award any costs in these

proceedings and therefore the parties are left to bear their own costs.

C.S.(OS) No.395A/199.7

In view of the order passed in I.A. No. 7727/1997, the suit also

stands disposed of.

                                                     VALMIKI J.MEHTA, J


October 22, 2009
Ne




CS(OS) No.395A/1997                                                   Page 4