M/S Satish Builders vs The Chairman, Airport Authority
2014 Latest Caselaw 3437 Del

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*IN THE HIGH COURT OF DELHI AT NEW DELHI
+                         OMP No. 183/2014
%                      Judgement Reserved on: 15th July, 2014
                       Judgement pronounced on: 31st July, 2014


       M/S SATISH BUILDERS                      ..... Petitioner
                     Through:          Mr.Rajesh Pandey, Adv.

                          versus

       THE CHAIRMAN, AIRPORT AUTHORITY
       OF INDIA                ..... Respondent
                   Through: Mr.Sunil Ahuja, Adv.

CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA


JUDGMENT

1. Vide this petition, the petitioner has challenged the award

dated 27th November, 2012 on several grounds.

2. The brief facts of the case, relevant for the purpose of

disposal of the present petition are mentioned herein.

3. There is no dispute to the fact that the petitioner who is a

registered partnership firm had entered into a contract for

execution of work of "construction of RCC Box Culverts across

New Taxi Tracks at Jaipur Airport, Jaipur. The stipulated time

for completion of the work was six months starting from 16th

May, 2007 to 15th November, 2007. The petitioner, however,

could not complete the work within the stipulated time. The

contract was rescinded vide its letter dated 14th September, 2007.

The petitioner raised an arbitration dispute and the matter was

referred to the Sole Arbitrator. The petitioner had made following

claims before the Sole Arbitrator which are as under:-

"Claim No. I Rs. 21,00,000/-for designing of the Box Culverts

Claim No. II Rs. 3,90,760/- towards refund of forfeited earnest money.

Claim No. III Rs. 17,74,775/-

towards loss of profit due to non execution of the work.

Claim No. IV Interest @ 18% on the amount due till the date of actual payment.

Claim No. V Rs.2,00,000/- cost of arbitration proceedings".

4. The respondents also put up its counter claims which are as

under:-

Expenses on publication of fresh notice inviting tender (NIT) Rs.62,946/-

Excess cost and expenses borne on fresh award to another qualified contractor/agency for Rs.18,93,450/-

                Financial     loss     suffered    by    the
                respondent       because          of    non

availability of full operation of new taxi tracks for Rs.18,96, 480/-

For salary/emoluments of Engineers staff deputed for the project for Rs.1,46,250/-

Performance guarantee amount of Rs.9,92,388/- plus interest p.a.

Cost of litigation/arbitration proceedings for Rs.2,00,000/- (revised to 4,87,555/-)

Interest at the rate of 18% per annum.

5. In the rejoinder filed before the Arbitrator, the petitioner

controverted the counter claims of the respondents. Parties,

thereafter, led their evidence and they had submitted documents

in support of their claims which has been enumerated by the

learned Tribunal in para 47 of its award.

6. Learned Tribunal, thereafter proceeded to give its finding

on various claims of the petitioner as well as counter claims of

the respondent.

7. The challenge to award by petitioner is under Section 34 of

the Arbitration and Conciliation Act (hereinafter referred to as

"the Act") It is the settled law that the petitioner can challenge the

award under Section 34 only on the grounds enumerated

thereunder. Section 34 of the Act reads as under :-

"34 Application for setting aside arbitral award. --

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if--

(a) the party making the application furnishes proof that--

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless

such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that--

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India. Explanation. --Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section

8. It is also apparent that this court in exercise of its

jurisdiction under Section 34 cannot sit as an Appellate Court.

The petitioner, while challenging the award is required to show

that the award is against the public policy or is patently wrong or

is not in accordance with the terms and conditions of the

agreement or that there was any procedural violations of the

terms and conditions of the contract by the Arbitrator.

9. The petitioner certainly cannot challenge an award on the

ground that the opinion held by the arbitrator on the evidence

produced before him, is illegal or wrong unless it is shown that it

is against the established law of the land or shocks the conscience

of the court or that there is an error apparent on the face of the

award. As far as position of law on the subject is concerned, it is

sufficient to refer to the well settled decision of the Supreme

Court in The New India Civil Erectors (P) Ltd. v. Oil & Natural

Gas Corporation, JT 1997 (2) SC 633, it has been observed as

under:-

11. ..... if the parties set limits to

action by the arbitrator, then the arbitrator had to follow the limits set for him and the court can find that he exceeded his jurisdiction on proof of such excess.......Therefore, it appears to us that there are two different and distinct grounds involved in many of the cases. One is the error apparent on the face of the award, and the other is that the arbitrator exceeded his jurisdiction. In the latter case, the courts can look into the arbitration agreement but in the former, it cannot,............"

10. The petitioner has challenged this award on the grounds

that the award is absolutely wrong and illegal and all the findings

of the learned Tribunal are wrong and illegal. It is contended that

findings on claim No. 1 is wrong and illegal and contrary to the

facts. It is submitted that as per the agreement design of the box

culverts was required to be prepared by a structural consultant on

the basis of design data to be supplied by the respondent and to

avoid delay, it was necessary to supply design data along with

other relevant parameters along with the award letter but the

respondent failed to supply design data for design of culverts.

The respondent could not supply the complete design data on 16th

May, 2007 and structural designs only for two RCC Box of two

type Culverts were supplied only after 15 days from the date of

award of the work i.e. 22nd May, 2007 and it was deficient in

many respects and the said deficiencies were reported vide letter

dated 30th May, 2007, to the respondents. The respondents had

admitted the deficiencies and supplied the necessary parameters

only on 18th June, 2007. The lay out plan showing location of

Type A and B Culverts were not supplied and the location of 5

Culverts were also not disclosed. It is submitted that because of

the delay on the part of the respondents, the petitioner was

prevented from completing the work. All these contentions were

also raised by the petitioner before the learned Tribunal and the

learned Tribunal after going through all the records and

correspondence exchanged between the parties, had given the

finding which reads as follows:-

"61 As regards the actual practice to be adopted for preparation of the structural designs, the claimant was required to get the designs prepared from a qualified and registered structural consultant all complete as per particular specifications and thereafter it was required to be approved by the Engineer-in-Charge of the respondent and then it was to be vetted and approved by the IIT. But the designs of culverts available on record shows that the same were prepared on 26.7.2007 and were vetted by the IIT Delhi on 31.7.2007 and were sent to the respondent on 12.8.2012. It clearly shows that the claimant has by-passed the approval of the

structural designs by the Engineer-in- Charge of the respondent which was one of the pre-condition as per the Bill of Quantities available on record. It is apparent that the basic purpose behind approval of the structural designs by the Engineer-in-Charge of the respondent before getting the same vetted from IIT, Delhi, was to see that if any defects appeared or any rectifications were required in the designs considering all the connected aspects, the same could be done before getting the designs vetted from the IIT, Delhi.

62. In the present case the claimant, despite being specifically asked by the respondent, to depute its representative and to send the Structural Consultant to the site to inspect the same to enable them to prepare the designs correctly, none was sent by the claimant.

11. It, therefore, is clear that the learned Tribunal has duly

considered all the evidence produced by the petitioner and then

gave its findings. The findings of the learned Arbitrator on the

claims and counter claims are also challenged by the petitioner

only on the ground that they are illegal and wrong. A general plea

of challenge is taken by the petitioner. No reasons which make

the finding of Ld. Tribunal illegal or wrong are shown. In this

case non-performance of the contract within the stipulated time

was the reason for termination of the contract and the learned

Arbitrator, after elaborate discussion, had fixed the liabilities in

terms of the contract and passed the award.

Non performance of the contract within the stipulated time was

the reason for permission of the contact and the learned Arbitrator

has fixed the liabilities in view of the terms of the contract and

passed the award.

12. From the reading of the award, it is apparent that the

learned Arbitrator has considered all the contentions of the

petitioner and had taken into consideration all the documents

produced by the petitioner. It is not the case of the petitioner that

his contentions or documents were not considered by learned

Arbitrator. The award is well reasoned award dealing with all the

claims and counter claims discussing evidences supporting or

against the claims and counter claims. It is also not the

petitioner's claim that the arbitrator had exceeded his brief. No

contention that the award is against any public policy. The

petitioner has challenged the award on the ground that it is illegal

and wrong. In the present case, from the facts pleaded by the

petitioner in its petition, it is clear that the petitioner has

challenged the finding only on the ground that the findings are

illegal and contrary to the facts. However, from a careful perusal

of the award, it is apparent that all the contentions raised by the

parties during the arbitral proceedings and all the evidence

produced by the parties during the arbitral proceedings have been

considered and discussed by the Arbitrator and it is only after

elaborate consideration of all the evidence on record and

discussing the law and the procedure, the Arbitrator has reached

to the conclusion and had passed its award.

13. In case of The New India Civil Erectors (P) Ltd. v. Oil &

Natural Gas Corporation, JT 1997 (2) SC 633, the Supreme

Court has held that "the attempt of the court should always be to

support the award within the letter of law". The petitioner as such

has failed to establish any reason for this court to set aside the

arbitration award. The petition has no merits. The same is

dismissed.

14. The petition is disposed of in the above terms.

15. No order as to costs.

(DEEPA SHARMA) JUDGE JULY 31, 2014 j