National Project Construction ... vs Sadhu Singh & Co
2012 Latest Caselaw 5359 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+                     Date of Decision: 07.09.2012


%      FAO(OS) 439/2012 & C.M. No.15733-34/2012

       NATIONAL PROJECT CONSTRUCTION
       CORPORATION LTD.                        ..... Appellant
                    Through: Mr. R.Venkataramni, Senior Advocate
                             with Mr. Santosh Kumar, Advocate

                         versus

       SADHU SINGH & CO                               ..... Respondent
                    Through:


       CORAM:
       HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
       HON'BLE MR. JUSTICE VIPIN SANGHI


VIPIN SANGHI, J. (Oral)

1. The appellant assails the order dated 28.03.2012 passed by the learned single Judge in CS(OS) 1421A/2006 dismissing the objections preferred by the appellant, National Projects Construction Limited (NPCC) under Sections 30 and 33 of the Arbitration Act, 1940 (the Act) to the award dated 05.06.2006. The refilling of the appeal is delayed by 67 days and the appellant has filed C.M. No.15734/2012 for seeking condonation of delay. C.M. No.15733/2012 has been filed to seek stay of the impugned order.

2. We have heard learned senior counsel for the appellant. We do not find any justification for condonation of delay of 67 days in refiling of the appeal. The only reason contained in the application is stereotype, i.e. the dislocation of the original file in the office of the advocate. It is not disclosed as to when and how the file got dislocated and when and how it was relocated. The application is not even supported by the affidavit of the appellant's counsel. We fail to appreciate how the General Manager of the appellant could claim any personal knowledge of such facts. We may also note that in cases involving objections to an arbitral award, the law prescribes a strict period of limitation, and delay even in the matter of filing of objections to an award cannot be condoned for a period beyond thirty days. On the same principle, in our view, delay in filing or refiling of appeal arising out of an order dismissing objections to an award cannot be taken lightly, as it seriously prejudices the rights of the award holder.

3. We have observed in the case of Union of India v. Jia Lall Kishori Lall (P) Ltd. & Anr. (FAO(OS) 334/2012) decided on 27.07.2012 as follows:

"We may notice that the aspect of delay in re-filing in matters pertaining to objections to award has received the attention of this Court. This is so as by inordinate delay in refiling, a party cannot be permitted to do what it otherwise is not entitled i.e. the period of limitation operating in view of the provisions of the said Act. The views expressed by the Division Bench in the case of The Executive Engineer (Irrigation and Flood Control) v. Shree Ram Construction Co. and other connected matters; 2010 (120) DRJ 615, deal with this issue. There a finding has been reached that delay in re-filing is not to be condoned in routine. A special leave petition filed in one of the connected

matters to The Executive Engineer (Irrigation and Flood Control) v. Shree Ram Construction Co's case (supra) against the said order stands dismissed on merits after condoning the delay. The Division Bench after taking into account the pronouncement in Union of India v. Popular Construction Company; (2001) 8 SCC 470 observed that in matters of condonation of delay in re-filing the petition, a stricter scrutiny, than is done while considering an application for condonation of delay filed under Section 5 of the Limitation Act, 1963, has to take place keeping in mind that the total permissible period within which the application can be permitted to be filed under Section 34 of the said Act is 3 months plus an additional 30 days under Section 34(3) of the said Act. Thus, if the delay in re-filing exceeds this period, then the scrutiny becomes more rigorous and there has to be satisfactory and credible explanation for the delay. Otherwise, the legislative object of not permitting delayed objections from being filed gets defeated."

4. In any case, we have examined the matter on merits as well. The award was originally made by the Arbitrator on 25.04.1996 which was set aside in CS(OS) 1465A of 1996 on 20.12.2005 as it was a lumpsum non- speaking award, and the matter was remanded back to the Arbitrator for passing a fresh award giving reasons in respect of each claim after hearing the parties. Consequently, the impugned award dated 05.06.2006 was passed by the Sole Arbitrator giving detailed reasons in respect of each of the claims and counter claims.

5. The appellant challenged the award made in respect of claim Nos. 1,3 to 6, 17, 28, 36, 42, 44, 52 to 55, the grant of interest, and the award made on counter claim nos. 1 to 4. The leaned Arbitrator awarded Nil

amount in respect of 33 claims of the respondent claimant. The contract in question between the parties related to construction of south side portion of the road overbridge at Sewa Nagar vide work order No.186/402 dated 14.11.1981 awarded by the appellant to the respondent. The stipulated period for completion of the work under the contract was 12 months beginning 08.04.1981 and expiring on 07.04.1982. There were inevitable delays on account of non-availability of site, delay in issue of materials by NPCC, delay in providing designs and drawings, increase in the scope of work and collapse of Span 4-B. The work was completed with delay of about 7 months. The delay in handing over of a portion of the site was admitted by the appellant vide Annexure 1/36, which was handed over as late as February, 1982. Admittedly some drawings were given as late as 01.04.1982. It appears, another Work Order was placed on the respondent by the appellant after collapse of Span 4-B for the erection and dismantling of centering of Span 1-A due to change of drawings. The learned Arbitrator held that the delay of 2 months explained by the respondent on account of change in centering and shuttering, due to collapse of Span 4-B, and the concretisation along with reinforcement was reasonable. Moreover there was increased scope of work vide letter dated 07.08.1981 issued by the appellant. The appellant took no action against the respondent on the ground that there was delay occasioned by the respondent. The arbitral tribunal held that the delay in execution of the work was on account of the aforementioned hindrances created by the appellant. The aforesaid finding of fact is based on evidence. The same has also been appreciated by the learned single Judge. It cannot be said that the said finding is not supported by evidence on record or is contrary to the evidence on record. This finding, as held by the

learned single Judge cannot be held to be perverse or an error apparent on the face of the record.

6. The various claims made by the respondent and allowed by the arbitral tribunal stem out of the aforesaid finding of fact. The learned single Judge, in the impugned order has claim wise considered the objection of the appellant and found the same to be lacking in merit. While hearing objections to an arbitral award, the Court does not sit in appeal. The Court is not required to re-appreciate the evidence and to function like an appellate court over the award made by the arbitral tribunal. The parameters within which the Court is required to examine an arbitral award are well defined. The learned single Judge has upheld the Arbitrators view that since the delay was on account of the appellant, clauses 18 and 20 of the Special Conditions of Contract (SCC) could not come to the rescue of the appellant while dealing with claim No.1, wherein the respondent had claimed the amount on account of increased cost due to increased inputs for completing the work within the reduced time available. It was held that on account of the said delays, the respondent had to employ additional labour to complete the work as it was a project of national importance which was required to be completed before the start of the Asian Games, 1982. Consequently, the respondent was held entitled to compensation under Section 73 of the Contract Act. Substantial amount of work had been done by the respondent after 09.12.1981 as was evident from the payments made by the appellant after 24.12.1981. Consequently, there was reasonable justification offered by the Tribunal for allowing claim No.1. In our view, the learned single Judge rightly rejected the objection raised by the appellant to claim No.1.

7. The learned Arbitrator also returned the finding of fact that after the collapse of Span 4-B, the work was stopped by the appellant as drawings and designs had to be revised as per the Enquiry Committee report. This resulted in the respondent keeping the labour and supervisory staff idle during the period 10.12.1981 to 28.01.1982. This finding of fact is also un-exceptional. Founded upon this finding, the Arbitrator awarded claim no.3 for idle labour. The defence of the appellant founded upon clause 29 of the contract was rejected by interpreting the said clause. The interpretation adopted by the learned Arbitrator was not shown to be contrary to the contract, or wholly unacceptable. In fact the said interpretation was a plausible interpretation and therefore did not call for interference by the Court.

8. Claim Nos. 4 and 5 stem out of the finding returned by the Tribunal in relation to the collapse of Span 4-B. In our view the learned single Judge rightly rejected the appellant's objection to the award made on these claims.

9. We have perused the impugned order and the learned senior counsel for the appellant has not been able to point out any error either in the award or in the order of the learned single Judge made in respect of any of the awarded claims of the respondent. Similarly no worthwhile argument has been advanced in respect of the rejection of the counter claims of the appellant. The learned single Judge has reduced the rate of interest to 9% simple interest per annum for all the periods for which interest has been awarded by the learned Arbitrator and to that extent the award stands modified.

10. We find the approach of the learned single Judge to be perfectly legal. Consequently, the present appeal and C.M. No.15733-34/2012 are dismissed. There shall be no order as to costs.

VIPIN SANGHI, J.

SANJAY KISHAN KAUL, J.

SEPTEMBER 07, 2012 as