Delhi Cantt. Board vs M/S. Quarts Control ...
2011 Latest Caselaw 4566 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No.236/2001

%                                           16th September, 2011

DELHI CANTT. BOARD                                  ...... Appellant
                          Through:    Mr. Sunil Satyarthi, Adv.

                          VERSUS

M/S. QUARTS CONTROL COMMUNICATION & SYSTEM
                                         ...... Respondent
                    Through:  Mr. R.K.Sharma, Adv.
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?

VALMIKI J. MEHTA, J (ORAL)

1.            The challenge by means of this First Appeal under Section

39 of the Arbitration and Conciliation Act, 1940 is to the impugned order

of the Court below dated 8.3.2001 which dismissed objections of the

appellant herein filed under Section 30 and 33 of the Act to the Award.

2.            The disputes between the parties pertain to work orders

awarded to the respondent by the appellant pertaining to repairs of

electrification of different CF properties and for which purpose a

contract was entered into between the parties on 20.7.1987.            On

RFA No.236/2001                                              Page 1 of 6
 disputes and differences having arisen, the respondent invoked

arbitration proceedings and filed its claims before the Arbitrator who

published his Award dated 27.5.98, awarding certain claims.

3.          The dispute between the parties so far as the present

appeal is concerned, pertains to claim nos. 2, 3 and 4.

4.          Claim no.2 was the claim for payment with respect to the

value of work done under work order no.5(ii). The respondent/contractor

claimed a sum of Rs.22,594.35 against the original quotation of

Rs.16,000/-. The work was actually done for which the bill was

submitted as per measurement for Rs.22,594.35. The defence of the

appellant was that the work was defective and therefore payment was

not to be made to the respondent.       In this regard, the Arbitrator has

observed that he directed the appellant to produce the list of specific

defects/incomplete work and the concerned measurement book/site

order book, but the same were not produced. The Arbitrator therefore

held that since the appellant could not produce any document to prove

that the defects existed and work was done by any other agency, an

amount of Rs.21,000/- was awarded to the respondent. The Arbitrator

has arrived at a finding of fact and unless the finding of fact is perverse,

a Court hearing objections cannot interfere with the Award. I do not find




RFA No.236/2001                                             Page 2 of 6
 any perversity in view of the failure of the respondent to point out the

defects and also file the measurement books.

5.           Claim no.3 was the claim for the balance amount of the

work done for work order no. 5(iii). The Arbitrator has observed that

total payments made against the bill amount of Rs.1,69,152.35 was

Rs.1,22,638.35, The original value of the work order was Rs.1,48,000/-.

Once again the Arbitrator while dealing with this claim has observed

that the respondent could not produce the measurement book to show

the measurements recorded and could not also prove by any

documentary evidence, alleged expenses incurred for rectifying the

defects,   though   the     same   were   directed   to   be   produced      for

consideration by the Arbitrator. Considering all the facts, the Arbitrator

allowed    deduction   of   Rs.6,000/- from   the    balance   amount     and

accordingly awarded a sum of Rs.40,514/- to the respondent.             Once

again this is a finding of fact and I feel that in fact the Arbitrator has

been liberal towards the appellant because in spite of defects being not

proved, yet, a sum of Rs.6,000/- was directed to be deducted. There is

therefore no perversity in the Award with respect to this claim no.3 for

this Court to interfere with the same and that too in appeal against an

order dismissing the objections.




RFA No.236/2001                                                Page 3 of 6
 6.          Claim no.4 was the claim with respect to value of the work

order no.5(iv) for Rs.55,000/-. The original value of the work order was

Rs.52,186.36. Even with regard to this claim, the Arbitrator has noted

that the relevant measurement book was not produced stating that the

same is misplaced. The appellant also could not produce any expense

vouchers to show incurring of costs for rectifying the defects.       The

Arbitrator referred to the fact that he had already allowed deduction

from claim no.3 for Rs.6,000/- and accordingly he allowed a deduction of

Rs.2,000/- with respect to claim no.4. Once again this finding of fact

need not be interfered with as there is no perversity in the same.

7.          I may note that the Arbitration was conducted by the

Superintendent Engineer, who is a technical person, and such technical

persons are allowed certain leeway as they are normally conversant

with such type of works.

8.          Though the impugned order does not discuss the claim as

this Court had done, I note that the impugned order refers to the fact

that a Court hearing objections does not sit in an appeal over the Award

and it is not possible to substitute the Court's evaluation for the

conclusions of the fact as arrived at by the Arbitrator. This is a correct

position of law.




RFA No.236/2001                                            Page 4 of 6
 9.          Though, the counsel for the appellant has not argued one

issue, I find that the issue of interest granted by the Award at 16% per

annum simple from 1.3.1989 is an aspect which requires interference .

The Supreme Court in its recent chain of judgments in Rajendra

Construction Co. v. Maharashtra Housing & Area Development

Authority    and    others,    2005     (6)   SCC    678,    McDermott

International Inc. v. Burn Standard Co. Ltd. and others, 2006

(11) SCC 181, Rajasthan State Road Transport Corporation v.

Indag Rubber Ltd.,       (2006) 7 SCC 700, Krishna Bhagya Jala

Nigam Ltd. v. G.Harischandra, 2007 (2) SCC 720 & State of

Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd (2009) 3

Arb. LR 140 (SC) has mandated the Courts to reduce the high rates of

interest, accordingly, in the facts and circumstance of the case, I direct

that instead of interest at 16% per annum, interest should be awarded

at 10% per annum simple. I however clarify that since the respondent

has already been harassed and has not received the amount under the

Award which has been passed over 13 years back, accordingly, the

concession in rate of interest by reducing the interest from 16% to 10%

per annum simple will only operate, if payment under today's judgment

is made by the appellant to the respondent within a period of 3 months

from today. In case this payment is not made in this period of three


RFA No.236/2001                                             Page 5 of 6
 months then considering that the respondent has been very patiently

waiting for payment of its amount from 1998, the interest will otherwise

continue to be 16% per annum simple as directed by the Award.


10.        The appeal is accordingly disposed of in terms of the above

observations.

11.        Trial Court record be sent back.




SEPTEMBER 16, 2011                             VALMIKI J. MEHTA, J.

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