Delhi High Court
North Municipal Corporation Of ... vs Shri Umesh Kumar Gupta & Anr on 18 November, 2014
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 474/2013
Decided on 18th November, 2014
NORTH MUNICIPAL CORPORATION OF DELHI &
ANR ..... Appellants
Through: Mr. Sunil K Goel, Adv.
versus
SHRI UMESH KUMAR GUPTA & ANR ..... Respondents
Through: Mr. Ranjeet Kumar, Adv.
CORAM:
HON'BLE MR. JUSTICE A.K. PATHAK
A.K.PATHAK, J.(ORAL)
1. Respondent was enrolled as a contractor with the appellant.
Appellant awarded work of improvement of corridor at ground floor in
GLM Hospital in City Zone to the respondent. Work was completed by the
respondent in time, inasmuch as, same was inspected by the Engineer-in-
Chief, who recorded the same in measurement book no. 1018, after taking
measurement. After completing the work respondent raised the final bill.
Appellant did not pass the bill despite requests of the respondent for
preparing and passing the final bill. Instead, appellant started disputing the
factum of work done by the respondent. In these circumstances, respondent
FAO 474/2013 Page 1 of 5
invoked Arbitration Clause No. 25 of the General Terms and Conditions of
Agreement and issued notice dated 17th April, 2008. Appellant sent a reply
and requested the respondent to submit details of the work carried out
including names of Junior Engineers and Assistant Engineers under whose
supervision he had executed the work. Entire information was submitted by
the respondent to appellant vide letter dated 2nd May, 2008. Despite this bill
was not prepared and passed by the appellant.
2. Ultimately, respondent approached this Court for appointment of an
Arbitrator wherein Arbitrator was appointed, vide order dated 15th May,
2009, passed in Arbitration Application No. 236/2008 titled Shri Umesh
Kumar Gupta vs. Municipal Corporation of Delhi & Anr. Pursuant to the
order passed by this Court, Arbitrator entered upon the reference and
afforded opportunity to the parties file their respective pleadings,
documents, inasmuch as, to lead oral evidence.
3. Following issues were framed by the Arbitrator :-
i) Whether the claims filed by the Claimant are not
arbitrable as the Claimant has not raised the claims
before the SE concerned/CE concerned in view of Clause
25 of the General Terms & Conditions?
ii) Whether the Claims no.2,3 and 4 of the Claim Petition
are also not arbitrable being beyond the General Terms &
Conditions of the Agreement and as such are out of the
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ambit of Section 28(3) of the Arbitration & Conciliation
Act, 1996?
iii) Whether the claims of the Claimant are barred by
limitation?
iv) Whether the Claimant is entitled to the claims as made
out by him in the Claim Petition?
4. On the basis of evidence adduced by the parties, Arbitrator held that
claim no.1 did not survive as the principal amount was paid during the
pendency of arbitration proceedings. As regards claim no. 2 about earnest
money, it was ordered to be refunded. Claim no. 3 regarding damages was
declined. Claim no. 5 was in respect of interest on the delayed payment and
withheld earnest money @ 18 % per annum from the date of completion of
work/notice till the date of payment. This claim has been allowed and
appellant has been directed to pay interest @ 9 % per annum on `1,30,664/-
with effect from 1st September, 2006, that is, 3 months after submission of
the bill till the date of payment, that is, 31st March, 2011. Interest on the
earnest money has also been allowed. Claim no. 4 was with regard to the
costs of proceedings which has been partially allowed.
5. Aggrieved by the Award appellant preferred a petition under Section
34 of the Arbitration & Conciliation Act, 1996 (for short, hereinafter
referred to as the 'Act') which has been dismissed by the trial court by the
FAO 474/2013 Page 3 of 5
order impugned in this appeal. Trial court has held that full opportunity was
given to appellant to contest the case by the Arbitrator, inasmuch as, Award
was well reasoned Award. All the objections of appellant had been taken
due care of. It has been further held that court could not have sifted and
weighed the evidence on record so as to substitute its findings as against the
findings returned by the Arbitrator, as if hearing the appeal. Trial court
concluded that none of the grounds, as envisaged under Section 34 of the
Act, could be made out.
6. I have heard learned counsel for the parties and perused the Award as
well as impugned order and do not find any illegality or perversity therein.
Learned counsel for the appellant submitted that awarded amounts have
already been paid and appellant is challenging the Award only with regard
to award of interest. It is contended that respondent had failed to pursue the
matter, thus, appellant cannot be blamed for the delayed payment.
Respondent did not follow up the matter with the officials of respondent and
was himself guilty of contributory negligence. I do not find any force in this
contention. First of all, no such ground was taken before the Arbitrator,
therefore, appellant cannot rake up this issue at this stage. Findings of
Arbitrator on merits cannot be sifted and weighed by scrutinizing the
FAO 474/2013 Page 4 of 5
evidence adduced before the Arbitrator at threadbare as if this Court is
hearing an appeal against the award. The grounds of challenge as envisaged
under Section 34 of the Act have to be disclosed before an award can be
interfered with. Award can also be interfered with if it is shown to be
absurd so as to shock the conscience of the court. Arbitrator has given
reasons for awarding interest. Admittedly, there was a long delay in
processing the bill by the appellant for which no justification could be
offered before the Arbitrator. Respondent had submitted the bill, therefore,
it was obligatory on the part of the appellant to process the bill on the basis
of records available with it. It was also obligatory on the part of appellant to
clear the bill within a period of three months as envisaged in Clause 9 of the
General Terms and Conditions of the Agreement. Arbitrator has taken note
of all these facts and has awarded the interest.
7. In view of above discussions, appeal is dismissed. Dasti.
A.K. PATHAK, J.
NOVEMBER 18, 2014/ga
