Sh. Bharat Lal vs Municipal Corporation Of Delhi & ...
2010 Latest Caselaw 1090 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          O.M.P. No. 178/2002
                                                           24th February, 2010

SH. BHARAT LAL
                                                                  ...Petitioner

                           Through:     Mr. B.K.Dewan, Advocate with Mr.
                                        Bhavesh Kumar Sharma, Advocate.


MUNICIPAL CORPORATION OF DELHI & ORS.
                                                           ....Respondents.

                           Through:     Ms. Shyel Trehan, 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)

VALMIKI J.MEHTA, J

1. In this petition under Section 34 of the Arbitration and Conciliation

Act, 1996, the counsel for the petitioner has restricted his objections to counter

claim No.2 as awarded by the Arbitrator. Disputes arose between the parties

with respect to a contract awarded to the petitioner by the respondent for

construction of a Community Hall at Ramesh Nagar, West Zone, Delhi.

Counter Claim No.2 has been decided by the Arbitrator as under:

OMP 178/2002 Page 1 " Counter Claim No.2 filed by the Respondent Respondent claim Rs.15.50 lacs towards risk and cost amount due to extra expenditure incurred for completing the work.

The claimant mentions that respondent had committed breach of contract and failed to discharge their obligation, as neither have site nor drawing and design.

Award: As per provision of clause 3, the respondent invited fresh tender at the risk and cost of the claimant and respondent had awarded contract 37.5% above the estimated cost, thus Rs.15,43,620/- had been incurred by the respondent against the original contract awarded to the claimant. At the same time the claimant can be panelized to the maximum extent on the difference of estimated cost + justified percentage of rate worked out during 1 st offer to the contract value of the claimant (Rs.31,90,617/- + Rs.8,15,522/- - Rs.28,36,140/-) i.e. Rs.11,69,999/-. Thus Rs.11,69,999/- awarded to the respondent."

2. This Award is an Award under the Arbitration and Conciliation

Act, 1996 and the same has to be a reasoned Award by virtue of Section

31(3).What is a reasoned Award is no longer res integra and the Supreme Court

in the judgment reported as Mc. Dermott International Inc. Vs. Burn Standard

Co. Ltd. (2006)11SCC 181 has dealt with the issue. No doubt, reasons do not

have to be elaborate reasons, however, there must be germane reasons which

must bear nexus to the conclusions. On a reading of the Counter Claim No.2, as

awarded by the Arbitrator, shows that it is totally bereft of reasons because the

contentions of the petitioner as regards the non-availability of the site or

drawings or designs have not been dealt with. The counsel for the petitioner has

taken me through certain correspondence emanating from the respondent itself

which shows that the site in question was handed over only on 17.2.1997 for

work which had to be completed in one year from 21.3.1996. The respondents

thereafter seem to have given extension only of six months up to 30.9.1997 and

not for one year. There are also other issues with regard to extension being

OMP 178/2002 Page 2 subject to liquidated damages and hence not unconditional. All these issues

ought to have been dealt with by the Arbitrator by passing a reasoned Award. It

has been held by the Constitutional Bench of the Supreme Court in the

judgment reported as S.N.Mukherjee Vs. Union of India AIR 1990 SC 1984

that a judgment would be a judgment in the eyes of law and would be

considered a speaking judgment only if it deals with the contentions as raised by

an aggrieved person. Since the various contentions of the petitioner are not

dealt with in the subject Award, I find that the present is a fit case where the

matter so far as Counter Claim No.2 is concerned, be remanded back to the

Arbitrator.

The Supreme Court recently in the judgment reported as Som Datt

Builders (P) Ltd. Vs. State of Kerala 2009 (10) SCC 259 has held that under

the Arbitration and Conciliation Act, 1996 there can in effect be a remand and

for which purpose the Supreme Court has referred to provision of Section 34. I

must also note that the counsel for the respondent also very fairly has agreed to

the remand because the Award with respect to Counter Claim No.2 is not such

which could be strenuously supported in that it is a reasoned Award. I must

hasten to add that I have not expressed any opinion on the merits of the matter

and it will be open to the Arbitrator to pass a fresh Award in accordance with

law and the merits of the case after considering and deciding the respective

contention of the parties.

OMP 178/2002 Page 3

3. Accordingly, the Award is upheld except to the extent of Counter

Claim No.2 which is remanded back to the Arbitrator for a fresh decision on

merits in accordance with law. No other issue was pressed by the counsel for

the petitioner. Petition stands disposed of. Let the arbitration record, which is in

this Court, be returned back to the Arbitrator by a special messenger. Parties

are left to bear their own costs.

                                                     VALMIKI J.MEHTA, J


February 24, 2010
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OMP 178/2002                                                                  Page 4