Delhi High Court
Central Board Of Secondary ... vs Ramayana Press on 23 March, 2010
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. No.127/2004
Date of decision : March 23, 2010
CENTRAL BOARD OF SECONDARY EDUCATION ... Petitioner.
Through: Mr. Amit Bansal,Advocate
VERSUS
RAMAYANA PRESS ....Respondent
Through:
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 M/s Central Board of Secondary Education challenges the
Award of the sole Arbitrator dated 19.12.2003 only with respect to the aspect of
OMP-127/2004 Page 1
grant of labour wastage/idle labour charges to the respondent. The Arbitrator has
awarded an amount of Rs. 1, 05,000/-to the respondent/claimant under this claim.
2. Under the contract, the petitioner supplied paper to the respondent and the
respondent was to convert the paper into answer sheets and re-supply them back to
the petitioner. The respondent alleged that on account of delay in supply of the
paper, it suffered loss due to idle labour and therefore this claim was filed before
the Arbitrator along with other claims. The Arbitrator has allowed this claim by
giving the below mentioned reasoning:
" Even during the proceeding before the High Court or while filing the claim
before the Arbitrator it was not felt necessary by the Claimant to give these
details or to furnish the copies of the Attendence Registers. There is nothing to
establish the authenticity or genuineness of this Attendence Register since the
Claimant could not produce any audited accounts or details of bank transactions,
etc. as proof of the amount spent by him on labour or the number of person
engaged by him in various capacities and how much expenditure was incurred on
them during different months. In the absence of any collaboration or any basis to
establish the authenticity of the Attendence Registers or the details of the money
spent on this account I reject these documents. Moreover, we have to go by the
conditions of tender as elaborated/modified by letter of CBSE dated 29.10.1997.
There is no requirement for the Claimant to engage labour before the work is
awarded to him and the contract becomes final, which would be after accepting
the conditions of letter dated 29.10.1997 and on depositing of the security money
as well as the bank guarantee. Thus, no claim could be made for any labour
engaged prior to 7.11.1997 when the bank guarantee was submitted. There has
been some delay in supply of paper and it could reasonably be expected that the
Claimant would engage labour for execution of time bound work immediately but
the paper was supplied to him only on 29.11.1997. There was a delay of 21 days
and for this the Claimant could reasonably be expected to be compensated for the
idle labour. In the absence of details of the labour engaged and wages paid to
them, specific amount cannot be worked out but on a general basis a loss of
Rs.5,000/- per day on the cost of workers, electricity, idling of machinery, etc.
would be reasonable and I accordingly award an amount of Rs.1,05,000/- to the
Claimant for the loss suffered by him due to late supply of paper by 21 days."
3. No doubt, ordinarily, this court does not interfere with an Award under
Section 34, however, where the Award is wholly illegal and perverse, this court is
OMP-127/2004 Page 2
duty bound to interfere with such an Award. The facts of the present case show
that the claim for labour wastage/idle labour was in fact a fanciful claim because
the evidence filed by the respondent/claimant was dis-believed by the Arbitrator.
Further, no proof of actual payment by the respondent/claimant to the labour was
filed during the arbitration proceedings. The aforementioned portion of the Award
shows that the Arbitrator has clearly dis-believed the evidence as filed by the
respondent/claimant, however, in spite of the same, the Arbitrator has allowed the
claim. This in my opinion is wholly illegal and perverse. Once there is no proof of
labour being engaged or being paid, there cannot arise any question of any charges
payable towards labour wastage/idle labour. Further, even assuming that there is
employment of labour, what is the actual amount payable to it had to be proved.
Admittedly, there was nothing on the record before the Arbitrator to allow such a
claim.
4. It has been held by the Supreme Court in the case of State of Rajasthan Vs.
Ferro Concrete Pvt. Ltd. (2009) 12 SCC 1 that unless and until, there is some
evidence, an Arbitrator cannot allow a claim. The ratio of the judgment of the
Supreme Court in the case of Ferro Concrete Pvt. Ltd. (supra) clearly applies to
the facts of the present case, inasmuch as the admitted facts are that no evidence
which has been filed by the respondent, has been believed by the Arbitrator that the
respondent in fact, engaged labour or paid any amounts to such labour. Thus the
OMP-127/2004 Page 3
Award is based on no evidence and hence the Award is wholly illegal and
perverse and is liable to be set aside.
5. I, therefore, accept the objections and set aside the Award so far as it grants
an amount of Rs. 1,05,000/- to the respondent/claimant for alleged labour wastage.
Since principal claim is set aside, the interest on such amount also will
automatically be set aside.
6. With the aforesaid observations, the objection petition is allowed to the
extent that claim as granted by the Award for labour wastage is set aside. The
petition is disposed of, in terms of the above, without any order as to costs.
VALMIKI J. MEHTA, J
March 23, 2010
ib
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