Bses Rajdhani Power Limited vs M/S. Ranjit Singh Rana & Anr.
2010 Latest Caselaw 357 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          OMP No. 35/2003
                                                    21th January, 2010

BSES RAJDHANI POWER LIMITED                  ...Petitioner
                 Through: Mr. I.S. Alag, Mr. Rishabh Bhutani,
                           Mr. R.S. Bist, Advocates

              VERSUS

M/S. RANJIT SINGH RANA & ANR.           ....Respondents

Through: Mr. Abinash K. Mishra, 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. By this petition under Section 34 of the Arbitration and Conciliation Act, 1996 the petitioner challenges the Award dated 28.10.2002 with respect to only two Claims i.e. Claim Nos. 1 & 5. Claim No. 1 was with respect to the claim of the respondent/contractor for escalation under Clause 10 CC. Claim No. 5 was with regard to loss of profit.

2. Mr. Alag, learned counsel for the Objector contended that there was accord and satisfaction when the contractor signed the bill and stated that "bill and measurements accepted in full and final, no claims, no dues except security". It is further contended by Mr. Alag, learned counsel that it has not been contended on behalf of the respondent/ contractor nor proved in the

OMP 35/2003 Page 1 arbitration proceedings that the bill and measurements were accepted under any force or coercion so that it can be alleged that the full and final satisfaction certificate is not binding.

3. I am inclined to accept this objection qua Claim No. 1 because once the contractor specifically accepts the measurement and in fact also accepts the bill, by stating that, he has not only no dues but also no claims whatsoever, then, it is not open for the contractor to claim that he is entitled, still, to other claims under the contract. To the aforesaid argument of Mr. Alag, no counter argument of any substance could be given by the counsel for the respondent inasmuch as the fact of the matter is that there was, in fact, no undue pressure upon the contractor at the time of settlement of the final bill as none was so averred.

4. Claim No. 5 under the Award is with respect to loss of profit. This claim was awarded for a sum of Rs. 14,33,100/- by the Arbitrator, This issue also is covered in terms of the reasoning given for Claim No. 1, because the contractor has specifically stated that he has no claims and no dues whatsoever. Even assuming that signing of the final bill was without prejudice, so far as this Claim is concerned, I am of the opinion that even in law, this head of, loss of profit could not be awarded to the contractor. Before a contractor claims loss of profit it is necessary that either there is a rescission of the contract and there is a consequent claim by the contractor for the profit margin for the balance portion of the unperformed work or that the contractor was forced to keep more men and machinery at site than was necessary and therefore he suffers loss of profit for the excess machinery or labour which could have been utilised for any other contract or that with the machinery and labour at site, the contractor was forced to have lesser productivity than as would have been the output, normally, from such machinery and labour.

None of these issues have in this manner been canvassed by the respondent before the Arbitrator. There is no concept of idling machinery and

OMP 35/2003 Page 2 labour when the contractor, in fact, is performing the work and when a contractor is performing the work, profit margin is automatically included in the cost of the work being executed. In such circumstances, once the profit is inbuilt, there does not arise any question of any loss of profit.

5. Accordingly, so far as these two Claims i.e. Claim Nos. 1 and 5 are concerned, the Award is set aside. No other issue is pressed by the counsel for the Objector.

6. With the aforesaid observations, the Objection Petition is disposed of by setting aside the findings of the Award qua Claim Nos. 1 and 5 and sustaining the Award with respect to the remaining portions thereof. The parties to bear their own costs.

                                                      VALMIKI J.MEHTA, J


January 21, 2010
dkg




OMP 35/2003                                                                     Page 3