Delhi High Court
National Hydro-Electric Power ... vs M/S Ali Mohammed Baba & Sons on 5 February, 2013
Author: Indermeet Kaur
25
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment:05.02.2013
+ FAO(OS) 78/2013
NATIONAL HYDRO-ELECTRIC POWER
CORPORATION LTD ..... Appellant
Through Mr. Kailash Vasdev, Sr. Adv.
with Mr. Ajit Pudussery,
Ms.Joanne Pudussery, Mr. Dinesh
Khurana and Mr. Shreejiges
Singhvi, Advs.
versus
M/S ALI MOHAMMED BABA & SONS ..... Respondents
Through Nemo.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.
CM No. 2120/2013 (Exemption)
1 Exemption allowed, subject to all just exceptions.
CM No.2122/2013 (delay of 13 days in refiling the appeal)
2 In view of the averments contained in the instant application,
delay of 13 days in refiling the appeal is condoned.
3 Application stands disposed of.
FAO (OS) No. 78/2013 & CM No.2121/2013 (for stay)
4 The respondent had entered into a contract with the appellant in
terms of a letter of Award dated 13.07.1989 whereby the respondent had
agreed to supply materials for commissioning of a 33 KV transmission
line for the URI hydro-electric project located at Baramullah District of
Jammu and Kashmir. The entire work was to be completed within a
period of nine months i.e. by 12.04.1990. The case of the appellant was
that the respondent did not adhere to the time schedule. The supply part
of the contract was not completed within the stipulated period and the
respondent even failed to complete the construction part within time.
The contract was ultimately abandoned. Disputes arose between the
parties which were referred to a sole Arbitrator who was the Chief
Engineer, In-Charge of the appellant's project. The Award was
pronounced on 30.04.2003. The appellant not satisfied with the Award
filed objections under Sections 30 & 33 of the Arbitration Act, 1940
(hereinafter referred to as the said 'Act') which were disposed of vide
the impugned order dated 11.09.2012.
5 Learned counsel for the appellant has confined his arguments on
two points. His first submission is that vide letter dated 17.01.1992, the
respondent had himself abandoned the contract and once it was clear
that the contractor had abandoned the work, the appellant was justified
in retaining 10% of each bill; even otherwise the letter dated 17.01.1992
was written by the contractor much after the time when the contract was
to be completed and the contractor had highlighted the problem relating
to non-availability of site only at that time which was disputed by the
appellant; not taking away the fact that this letter dated 17.01.1992 was
written much after the stipulated date of completion of the contract and
there was no justification for the contractor in not completing his part of
the contract.
6 This argument had been raised before the learned Single Judge
and it had been answered while dealing with claim No. 2. The Single
Judge had noted that in respect of claim No. 2 elaborate reasons had
been given by the Arbitrator and after considering the material brought
on record had given a definite finding as regards the failure on the part
of the appellant to make available the site to the contractor as to where
the line was to be laid; it also did not create a conducive atmosphere for
the work. This was after consideration of the evidence including the
testimony of the witnesses. Learned Single Judge had noted that the
view taken by the Arbitrator being a plausible one; he being an expert in
the field and being aware of the ground realities; the Award on this
count did not suffer from any illegality. The Single Judge refused to
interfere with this finding which finding stands endorsed by this Court.
7 The second submission of the learned counsel for the appellant is
bordered on reference to Clauses No. 39.1 to 39.3 of the contract which
read as under:-
"29.Clauses 391.1 to 39.3 of the contract read as under:
39.1 All costs, claims, damages or expenses which the Corporation may have paid
for which under the contract the Contractor is liable, may be deducted by the
Corporation from Performance Guarantee or from any moneys due or may be
recovered from the Contractor.
39.2 Any sum of money due and payable to the Contractor (including Performance
Guarantee returnable to him) under this contract may be appropriated by the
Corporation and set off against any claim of the Corporation out of or under any
contract made by the Contractor with the Corporation.
39.3 It is an agreed terms of the contract that the sum of money so withheld or
retained under this clause by the Corporation shall be kept, withheld or retained as
such by the Corporation till the claims arising out of in the same contract are either
mutually settled or determined by the Arbitrator, and the Contractor shall have no
claim for interest or damage whatsoever on this account or any other ground in
respect of any sum of money withheld or retained under this clause and duly notified
a such to the Contactor."
8 Submission being that there was an express prohibition on the
payment of interest.
9 Learned Single Judge had rightly noted that only when the
appellant retains the money payable under the performance bank
guarantee; the contractor shall have no claim for interest; the prohibition
of payment of interest would not apply to any legitimate claim made by
the contractor for a wrongful withholding of the moneys payable to him
and once it is held that some money was due to the contractor which was
not legitimately paid to him then obviously the prohibition against
payment of interest would be inapplicable. It was rightly noted that there
was no absolute prohibition on the payment of interest if the claim set
up by the contractor was a legitimate claim. Compound interest has been
disallowed by the Single Judge and to that extent the Award stood
modified directing that the interest would be payable only on the
principal sum.
10 On neither count does the order of the learned Single Judge brook
any interference. The appeal is without any merit. Appeal as also the
stay application stands dismissed.
INDERMEET KAUR, J.
FEBRUARY 05, 2013 SANJAY KISHAN KAUL, J.
A
