Municipal Corporation Of Delhi vs M/S. Engineering Development And ...
2010 Latest Caselaw 2449 Del

                                            #F-49
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      O.M.P. 457/2003

MUNICIPAL CORPORATION
OF DELHI                                    ..... Petitioner
                    Through                 Mr. Gaurang Kanth, Advocate
             versus

M/S. ENGINEERING
DEVELOPMENT AND ANR.                        ..... Respondents
                 Through:                   Ms. Anusuya Salwan, Advocate
                                            for R-1


%                                  Date of Decision : May 06, 2010

CORAM:
HON'BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment?       No.
2. To be referred to the Reporter or not?                                          No.
3. Whether the judgment should be reported in the Digest?                          No.


                               JUDGMENT

MANMOHAN, J (ORAL)

1. Mr. Gaurang Kanth, Advocate, today appears for petitioner-

objector and states that due to compelling personal reasons, he could

not appear yesterday. He further states that for his non appearance, no

official of respondent-MCD is responsible. Keeping in view the

aforesaid explanation, the order dated 5th May, 2010 directing the Law

Officer of respondent-MCD to appear personally, is recalled and his

personal presence is dispensed with.

2. Present petition has been filed under Section 34 of the Arbitration

and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996")

challenging the arbitral Award dated 14th July, 2003 passed by Mr.

C.M. Vij, Sole Arbitrator.

3. Mr. Kanth impugns the arbitral Award insofar as it awards

Claims No. 1(b), 1(e) and 6. He submits that respondent-claimant is

not entitled to any compensation on account of reinforcement of RCC

work including straightening, cutting and bending etc. inasmuch as the

same is covered by a Correction Slip issued by CPWD in the year 1990.

4. Mr. Kanth further submits that the Arbitrator has erroneously

awarded Claim No. 6 without there being any pleading in the claim

petition with regard to exact break up of expenses actually incurred by

respondent-claimant.

5. Mr. Kanth lastly states that the rate of interest awarded by the

Arbitrator is usurious and excessive.

6. Having heard the parties, I am of the view that the scope of

interference by this Court with an arbitral award under Section 34(2) of

Act, 1996 is extremely limited. Supreme Court in Delhi Development

Authority Vs. R.S. Sharma and Company, New Delhi reported in

(2008) 13 SCC 80, after referring to a catena of judgments including

Oil & Natural Gas Corporation Ltd. Oil & Natural Gas Corporation

Ltd. Vs. Saw Pipes Ltd. reported in (2003) 5 SCC 705 has held that an

arbitral award is open to interference by a court under Section 34(2) of

the Act, 1996 if it is contrary to either the substantive provisions of law

or the contractual provisions and/or is opposed to public policy.

7. I am of the opinion that Claim No. 1(b) could not be awarded by

the Arbitrator in view of the Correction Slip issued by the CPWD in the

year 1990. In fact, in M/s. Anant Raj Agencies Vs. D.D.A. & Anr.

reported in MANU/DE/3153/2009 I had disallowed a similar claim on

the ground that it was contrary to the contractual provision.

Consequently, the impugned award to the extent it directs petitioner-

objector to pay Rs. 1,02,637/- against Claim No. 1(b) is set aside.

8. As far as Claim No. 6 is concerned, I am of the opinion that even

in a civil suit there is a distinction between pleading and proof. In

pleading only, the facts germane to the claim and its cause of action

have to be stated. Proof of the claim has to be given subsequently. In

the present case, I find that respondent-claimant had pleaded the basis

of its claim for on site and off site overheads. Subsequently, during the

arbitral proceedings, respondent-claimant had produced its salary

register clearly showing the break up of the overheads that it had

incurred under the said claim. In any event, the Arbitrator has given

cogent reasons for award of the said claim and the same calls for no

interference under Section 34 proceedings.

9. As far as the award of interest is concerned, I deem it appropriate

to reduce the rate of interest in all the claims to 9% per annum simple

interest for all the periods including post award till the date of payment.

The Supreme Court in Rajendra Construction Co. Vs. Maharashtra

Housing & Area Development Authority and Ors. reported in (2005) 6

SCC 678; McDermott International Inc.'s case (supra) and Rajasthan

State Road Transport Corporation Vs. Indag Rubber Ltd. reported in

(2006) 7 SCC 700 had reduced the rate of interest.

10. With the aforesaid observations, impugned Award is modified to

the extent that Claim No. 1(b) is set aside, Claim No. 1(e) to the extent

it awards interest on the amount awarded under Claim No. 1(b) is also

set aside and rate of interest is reduced to 9% per annum simple interest

for all periods in all the claims.

MANMOHAN,J MAY 06, 2010 rn