Delhi High Court
Vijay Kumar Goel vs Delhi Jal Board & Anr. on 5 September, 2012
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
O.M.P. 253 of 2004
Reserved on: August 6, 2012
Decision on: September 5, 2012
VIJAY KUMAR GOEL ..... Petitioner
Through: Mr. Harish Malhotra, Sr. Advocate
with Mr. R.K. Modi, Advocate.
versus
DELHI JAL BOARD & ANR. ..... Respondents
Through: None.
CORAM: JUSTICE S. MURALIDHAR
JUDGMENT
05.09.2012
1. The challenge in this petition under Section 34 of the Arbitration and
Conciliation Act, 1996 ('Act') is to an Award dated 7th May 2004 passed
by the sole Arbitrator (Respondent No.2 herein) in the dispute between the
Petitioner and Respondent No.1 Delhi Jal Board ('DJB') arising out of an
award by the DJB in favour of the Petitioner of the work of providing and
laying new sewer line in place of existing sewer line in Sectors IX and
XIII, Rohini Blocks - D, E, F, G and H by a letter dated 12th February
1998.
2. The scheduled date of the commencement of the work was 15th March
1998. It was to be completed within a period of 10 months ending on 14th
January 1999. According to the Petitioner, the contract period expired on
14th January 1999 without the Petitioner even being allowed to commence
the work as the DJB failed to make available the required site, drawings
and designs and even the stipulated material. It is stated that on 8th January
1999, the DJB on its own granted provisional extension of time ('EoT') for
completion of the work up to 30th April 1999 without prejudice to the right
of the DJB to levy liquidated damages ('LD'). The Petitioner states that by
a letter dated 19th January 1999 it wrote to the DJB making it clear that
since the DJB had failed to adhere to the terms and conditions of the
contract and the original contract period had also expired, the Petitioner
was not interested in the EoT and its accounts may be finalized. It is stated
that without reference to this letter, the DJB again wrote to the Petitioner
on 19th March 1999 stating that the time had been extended up to 30th April
1999. By a further letter dated 23rd April 1999, the DJB on its own granted
another EoT up to 30th June 1999. By a further letter dated 17th June 1999,
the fourth EoT was granted up to 31st October 1999.
3. The Petitioner states that despite his request for closure of the contract,
by a letter dated 27th July 1999 the DJB served a notice on the Petitioner
asking him to show cause why LD should not be levied. On 11th August
1999, the Petitioner replied pointing out that he had never applied for the
EoT and that the EoTs unilaterally granted by the DJB did not bind the
Petitioner. Thereafter the DJB levied LD on the Petitioner to the tune of
10% of the contract value and issued another show cause notice dated 25th
August 1999 as to why the work should not be executed through some
other Contractor at the risk and cost of the Petitioner. By his letter dated
31st August 1999 the Petitioner disputed the right of the DJB to do so. By
a letter dated 8th October 1999 the DJB rescinded the contract. By a letter
dated 24th March 2000, the DJB required the Petitioner to show cause as to
why he should not be debarred from tendering further in DJB. By a letter
dated 4th September 2000, the DJB debarred the Petitioner for applying for
tenders for a period of 3 years.
4. The disputes between the parties were referred to the sole Arbitrator
who gave the impugned Award dated 7th May 2004. However, the
impugned Award makes no reference to the application by the Petitioner
challenging the jurisdiction of the learned Arbitrator. The Petitioner also
filed OMP No. 19 of 2003 challenging the appointment of Respondent
No.2 as sole Arbitrator which was later dismissed as withdrawn since the
impugned Award had been passed by then.
5. The challenge to the impugned Award is on the ground that the learned
Arbitrator has failed to deal with the application filed by the Petitioner
challenging the jurisdiction of the learned Arbitrator. A perusal of the
arbitral record shows that there indeed was such an application made by
the Petitioner. It has, however, not been dealt with by the learned
Arbitrator in the impugned Award. Without dealing with the said
objections, the learned Arbitrator dismissed all the claims of the Petitioner
and allowed the counter-claim of the DJB to the extent of Rs. 16,99,556.
Even the issues framed by the learned Arbitrator overlook the fact that the
Petitioner had filed an application questioning the jurisdiction of the
learned Arbitrator. This by itself constitutes sufficient ground to set aside
the impugned Award. It is not necessary therefore to examine the
correctness of the impugned Award as regards the individual items of
claims and counter-claims.
6. With the aforementioned observations, the impugned Award is set aside.
The petition is allowed, but in the circumstances, with no order as to costs.
S. MURALIDHAR, J.
September 5, 2012
hk
