Delhi Jal Board & Anr. vs M/S Dev Raj Kataria & Anr.
2015 Latest Caselaw 9165 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         OMP No. 493/2007
%                                                    9th December, 2015

DELHI JAL BOARD & ANR.                                     ..... Petitioners

                          Through:       Ms. K.Kiran, Advocate.

                          versus

M/S DEV RAJ KATARIA & ANR.                                 ..... Respondents

                          Through:       Mr. Sunil Goel and Mr. Jatin Kumar,
                                         Advocates for R-1.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This petition under Section 34 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as 'the Act') is filed by the

Delhi Jal Board/petitioner impugning the Award of the Arbitrator dated

10.5.2007, as modified by the Order dated 31.5.2007, whereby, an amount

of Rs.13,63,984/- has been awarded in favour of the respondent

no.1/Contractor and against the petitioner/objector. Respondent no.1 has also

been awarded interest at 9% per annum simple w.e.f 20.8.2002 till

realization.

2. The disputes between the parties arose out of a contract for

construction of an outfall storm water drain for Tara Apartments, near

Tuglakabad Extension and adjoining areas awarded to the respondent no.1

by the petitioner vide Letter of the petitioner dated 16.9.1996. The period of

completion of the contract was to be 8 months from the date from which

petitioner would ask the respondent no.1 to commence the work under the

contract. Before commencement of work in terms of Clauses 11 and 24 of

the Contract, the respondent no.1 had to take a Soil Testing Report from a

reputed agency and also give approved structural designs and drawings from

IIT to the petitioner. Though the Contract was awarded on 16.9.1996, the

letter by the petitioner to the contractor to commence the work was given

two years later on 1.9.1998 and the respondent no.1 was asked to commence

the work from 11.9.1998. From September, 1998, till August, 2002, not

much work could be done by the contractor because it has otherwise come

on record that there was start and stop and then start and stop and then again

start and stop for the work essentially on the ground of either the petitioner

not getting the requisite road cutting permission or permission from the

police, or these permissions having been expired and not renewed or the

police stopping the work or because of monsoon season and so on.

Respondent no.1 in the later part of the year 2002 refused to perform the

contract on original terms and thus the disputes arose between the parties.

3. Respondent no.1 ultimately invoked the arbitration clause on

20.8.2008 and which has resulted in the impugned Award in favour of the

respondent no.1. By the subject Award, a counter claim of the petitioner of

Rs.4,69,016/- was allowed with respect to steel supplied by the petitioner to

the respondent no.1 but not utilized or returned to the petitioner and hence

out of the total awarded amount of Rs.18,33,000/-, this amount of

Rs.4,69,016/- was reduced resulting in the net amount of Rs.13,63,984/-

being awarded in favour of the respondent no.1 and against the petitioner

along with interest and costs.

4. Before, I turn to the arguments urged on behalf of the

petitioner, it is necessary at this stage, more so in the facts of the present

case as are discussed in detail in the Award alongwith the relevant evidences

to note the legal position that this Court while hearing the objections under

Section 34 of the Act does not sit as an appellate court to re-apprise the

findings of facts and conclusions arrived by the award. If two views are

possible and the arbitrator takes one possible and plausible view, courts do

not interfere under Section 34 of the Act. Courts can only interfere if the

award is patently illegal or against the contractual provisions or the findings

and conclusions are wholly perverse. The object of stating the aforesaid

legal position is that the impugned Award is a detailed Award which refers

to the facts of the case along with the respective correspondences between

the parties along with the other documents relevant to determine the disputes

and has thereafter held the petitioner guilty of delays and breaches with

respect to performances of its obligation under the contract. Accordingly,

the Arbitrator in the Award has held that the respondent no.1 was justified in

rescinding the contract as the petitioner failed to agree to fresh terms.

Arbitrator thereafter has gone claim by claim and on each claim has

discussed the respective evidences. By discussing respective evidences led

by the parties, the Arbitrator in the Award has taken one possible view,

which is permissible in law for arriving at the conclusions. Once in the

arbitration record there exists the requisite evidence, and such evidence leads

to the conclusions as arrived at by the Arbitrator for wholly or partially

allowing different claims, then this Court cannot interfere with such an

Award.

5. Though at this stage, I would have to refer extensively to the

initial pages of the Award till internal page 11 of the Award, I have no

option but to do the same, because, it is in these paras that the Arbitrator has

exhaustively referred to the various facts, issues, documents and the

correspondences between the parties, and on such basis the Arbitrator has

arrived at the fundamental conclusion that it is the petitioner and not the

respondent no.1 who was guilty of breach of performance of obligations

under the contract. Having arrived at this important conclusion, the

Arbitrator has thereafter decided each claim as per the evidences which were

available on record, by allowing the claims either wholly or partially. These

relevant paras of the Award which give the necessary facts, evidences and

conclusions are as under:-

"Tenders were invited for the work of construction of an outfall storm water drain for Tara Apartments, near Tuglakabad Extension and adjoining areas. The Claimant having submitted the tender in May, 1996 was awarded the contract for the work at negotiated cost of Rs.1,23,33,192/- vide letter of the Executive Engineer No. 6979 dated September 16, 1996. The time for completion was stipulated as eight months. However, the actual date of commencement was not indicated. The contractor claims that though he had submitted stamp papers to the Respondent within ten days of work order for execution of a formal contract agreement, even this formality was not completed for a long time, that is till 15th June, 2001. It was only through letter no.1915 dated September 1, 1998 that the contractor was asked to commence work with effect from September 11, 1998. Of course the contractor was also asked to prepare designs and drawings after soil testing and to submit the same. Consequent thereupon soil investigation were undertaken, designs and drawings were got prepared and checked from the IIT Delhi and submitted to the Respondents on October 12, 1998 (C-6) with the request to obtain the road-cutting permission from PWD and police authorities. In between certain queries were raised and replied to on 10th November, 1998 (C-8). Thereafter, further correction in drawings and designs were suggested by the report and that too was

complied with towards the close of November, 1998). Finally the designs and drawings were approved by the Respondent on January 21,1999 (See C-12 and R-6). It is the case of the contractor that with a view to execute the contracted work without delay he had gone in for a deep bore-well and electric connection making an investment of more than 3 lacs. Of course, it is also alleged that he had got constructed temporary structures for site office, material stores, chowkidars' huts etc. besides transporting machinery like mixtures, vibrators and shuttering plates etc. The grievance of the contractor is that despite his having taken prompt action for the proper execution of the contractor work, the Respondent was lackadaisical in its approach despite reminders (see Exhibit C-13) and the work could not be started as the Respondent failed to obtain from PWD and Traffic Police Department necessary road-cutting permission. The requisite fee for permission was deposited by the Respondent on 13th May 1999 (C-16) & the permission was obtained only on 18th May, 1999 (C-17). By letter of 18th May, 1999 the Jal Board issued two indents one dated 28th October, 1998 and the other dated 25th February, 1999. We, however, do not know the exact quantity of those indents. The contractor was also asked to submit the water test report and to start the work "at the earliest". It appears that the contractor did proceed with making arrangements for start of work but want to adequate quantity of steel and cement in the central store came in the way (See C-18 dated 14th June, 1999 and C-13). As if this was not enough, the rainy season in June 1999 also proved to be a stumbling block. On June 14, 1999 the Claimant was directed to defer the work till October, 1999 and till the rainy season was over [See C-18]. It appears from the letter dated 16/12/99 of the contractor (C-19) that the work could still not be started as there was no requisite supply of cement and steel of required diameter. While all this was going on, the parties faced another monsoon in the year 2000. The Department issued provisional extension of time vide its letter dated August 10,2000 [C-20]. The extension so granted was upto March 31,2001. However, it made no mention of price escalation under Clause 10 CC of the Contract. On 20/9/2000 [R-12-A], the Board while referring to the provisional extension upto 31/3/2001, asked the contractor whether he was still interested in execution of the work. On October 27,2000 the contractor wrote [C-21] to the Respondent that he was prepared to execute the work subject to the following five assurances from the Respondent:

(i) Department will issue clear-cut extension of time without any levy of compensation of penalty.

(ii) 25% of total cement & steel required for work will be issued before start of work.

(iii) Road cutting and Police permission will be obtained in advance, before starting the work.

(iv) Timely payments of Bills will be ensured, as this was a Deposit work for which major amounts were already deposited by the agencies.

(v) Work tax not having been provided in the contract, will not be charged.

On May 22, 2001 a meeting took place between the parties to sort out the problems. The case of the Claimant is that the Respondent was still not ready for starting the work. Interestingly the formal contract was executed only on June 15, 2001 and significantly it made time as the essence of the contract. To cut short, the Respondent wrote to the Claimant August 20, 2001 (C-23) to start the work with effect from September 15, 2001 while admitting that the "work could not be started due to not getting the proportionate share of cost by D.D.A". The contractor wrote back requesting for clear extension of time of eight months with effect from September 16,2001 or from the date when the road cutting permission was conveyed. The said permission was conveyed to the contractor on 27/12/2001 [R-14A]. The letter of permission is R-14B and is dated 18/10/2001. It was valid only for a period of six months w.e.f. 19/10/2001. On 8/1/2001 the contractor wrote a letter (C-26) for further "continuous permission" to ensure that the "progress of work does not suffer". The Department was also asked to ensure timely payments and regular supply of cement, steel etc. By letter dated 23/1/2002[C-27] the Board assured that permission from traffic police "shall be ensured throughout the execution of the work". It also issued cement (1000 bags) for the first time on 11/1/2002 and indent for 20 MT of steel was issued on 9/1/02. The excavation work thus started on 2/2/02 when barricades were provided by the Board [R- 16A and C-28]. The work however, was still not destined to have smooth sailing. On February, 2002 a Traffic Police Inspector came to the site and stopped the work. This was brought to the notice of the Respondent by letter dated February 18.2002 [C-28]. That the work was stopped by the traffic police is also borne out from the letter dated 4/2/2002 addressed by the Board to the Executive Engineer (PWD)[See R-16A]. The letter needs to be reproduced. Which runs as under:

Sir, In response to your above stated letter and road cutting permission from traffic police, this office alongwith the contractor made a programme to start the work at site and accordingly on 2.2.2002 barricades were provided at site to start the excavation. The field staff of traffic police i.e z.o incharge

and constables asked to stop the work till their Traffic Inspector (Incharge) inspects the site and allow the closure of one of the carriage way for which permission had already been accorded by the traffic police. During the inspection T.I. desired that certain works are required to be done before the light traffic allowed in both the directions on the other carriage way and the work should only be started after these works are executed as per details given below:

(i) Carpetting of the other carriage way in its full width.

(ii) Provision of dividers in the middle of carriage way to segregate the traffic coming from opposite directions.

(iii) Removal of tree near T-junction of Tara Apartment and shifting of letter box from Road to Footpath. You are, therefore, requested to get these works executed on top priority so that the work of construction of S.W. Drain may be taken up. Also since the work is getting delayed due to above stated reasons, you are, therefore, also requested to extend the validity of your permission upto 30.6.2002.

                   Thanking you,                                               Sd/-
                                                         EX. ENGINEER © DR-VI

It appears that till at least 19/4/2002 steps to get the police clearance were not taken. I say so on the basis of letter dated 19/4/2002 (R-16 B) addressed by the Chief Engineer of the Board to the Chief Engineer of PWD. It shows that before clearance from the traffic police following work was required to be executed by the PWD

(i) Carpetting of the other carriage way in its full width.

(ii) Provision of dividers in the middle of carriage way to segregate the traffic coming from opposite directions.

(iii) Removal of tree near T-Junction of Tara Apartment and shifting of letter box from Road to Footpath and that all this remained to be done.

I was told during arguments that the said works have not been done till date.

On 20/3/02 the Board wrote to the contractor that the design and drawings already approved needed to be revised as "during a recent visit of the site" it was "observed that the depth of the proposed S.W. Drain seems to be increased at some places as per typography of the alignment/road." The contractor protested. He wrote back on 9/4/02 (C-29) that the designs duly approved by IIT and based on parameters

and data given by the Board stood already submitted and that any change in parameters at this "belated stage after finalization of designs" would amount to "preparing a totally new designs/drawings." The contractor, however, asked the Board to get the revised designs prepared by it and "give further direction for execution". The contractor further stated that he shall be entitled "for compensation of losses being suffered due to delay on part of the department." The letter, however had no response. The Claimant thus wrote letter dated May 23, 2002 asking for revision of the terms and rates of contract. This time the contractor had not to wait much longer for a response. By letter dated June 18, 2002 (C-32) the Respondent informed the Claimant that due to non-availability of road cutting permission from Traffic Police, the work was not feasible upto monsoon and a direction was given for transfer of 1,000 bags of cement to some other work which direction was followed. The Claimant received yet another letter on July 23, 2002 (C-33) informing him that his request for increase in rates could not be allowed and that revised structural drawings be submitted. The contractor, it appears, at that stage felt that enough was enough. He invoked the Arbitration Clause on August 20, 2002 (C-34). This is how the proceedings commenced before me. However, before I proceed further, it may be mentioned that from the letter of the Claimant dated 16th September, 2002 (C-35). It appears that on 13th September, 2002 a discussion had taken place between the Claimant on the one side and Chief Engineer and the Superintending Engineer on behalf of the Respondent with regard to this contract. The Executive Engineer was also present at the meeting and it was pointed out at the meeting that the commencement of the contracted work was not feasible as requisite permission from the police had still not been received and further as on account of change in the site conditions, the designs and drawings needed to be modified. It was also stated on behalf of the Respondent that in any case contracted work could start only after the monsoon season. I may clarifying that the permission from the traffic police referred to above was with regard to the blocking of one carriage way of the main road and that to get such permission it was necessary to for the PWD to first carry out three works detailed in the letter of April 19, 2002 already referred to above and which works have not been done till date." (underlining added)

6. In my opinion no fault whatsoever can be found with the

aforesaid findings and conclusions of the Arbitrator in the impugned Award.

I completely reject the arguments as are urged by the petitioner before this

Court that it is not the petitioner but the respondent no.1 who is guilty of

delays being caused in performance of the contract. All the conclusions

arrived at by the Arbitrator are as per the correspondences exchanged

between the parties and the other documents on record, and I am not

referring to the same in detail, but it is clear that a contract which was

awarded in 1996 came into operation only after about two years in

September, 1998, and even thereafter, though the respondent no.1 complied

with this part of the bargain by giving the necessary soil testing report and

structural designs as approved by IIT, petitioner miserably failed either in

releasing the steel and cement under the contract or obtaining the road-

cutting permission or obtaining the traffic police permission or failing to

obtain extension thereto or parties mutually agreeing to postpone the work

during the monsoon seasons of the years 1999, 2000 and 2001.

Accordingly, I agree with the conclusion arrived at by the Arbitrator that the

petitioner was guilty of delays in performance of the contract and

consequentially the respondent no.1 was entitled to the claims as awarded

under the contract.

7. The first objection raised by the petitioner is with respect to

Claim no.1 whereby the Arbitrator has awarded refund of the security

deposit of Rs.1 lakh which was given by the respondent no.1 as a security

for performance under the contract. I have already reproduced above the

detailed findings and conclusions of the Arbitrator, and therefore on the

respondent no.1 being entitled to rescind the contract, clearly the respondent

no.1 was entitled to refund of the security deposit. I, therefore, agree with

the conclusions of the Arbitrator in awarding Claim no.1 of refund of the

security deposit.

8. Claim no.2 was filed by the respondent no.1 with respect to its

claim of costs incurred for the soil bearing capacity test report given by M/s

Soil Engineering Consultants for a sum of Rs.13,500/- and of payments to

IIT for approval of the designs and drawings of an amount of Rs.1,35,000/-.

While dealing with this claim, the Arbitrator notes that towards this head of

expenditures the respondent no.1 in its income tax returns had shown a total

sum of Rs.1,53,590/-, and accordingly, the Arbitrator has awarded the

claimed amount to the respondent no.1 under this claim. Arbitrator has also

referred to the correspondences and documents showing soil testing report

was submitted by the respondent no.1 to the petitioner as also submission of

the approved structural designs and drawings from IIT. I have already

reproduced the relevant discussions on facts by the Arbitrator on these

aspects in the earlier part of this judgment. Accordingly, I do not find that

awarding of Claim no.2 by the Arbitrator in any manner is illegal or perverse

for this Court to interfere with the same under the scope of Section 34 of the

Act.

9. So far as Claim no.3 is concerned, this claim is for a sum of

Rs.9,70,000/- towards expenditures incurred by the respondent no.1 towards

site mobilization, water and electricity arrangements, construction of

temporary structures and transportation of the machinery etc. While

discussing this claim, the Arbitrator has allowed the costs of the electricity

connection on the basis of the receipt filed by the respondent no.1 for

obtaining the electricity connection. With respect to the water connection,

the Arbitrator after examining the evidence led, including the Local

Commissioner's report, has held that the depth of the bore well was not 380

feet as per the case of the respondent no.1 but it was only 100 feet and

therefore the respondent no.1 instead of being allowed its total claim of Rs.3

lacs was only awarded Rs.80,000/-. With respect to construction of

structures, the Arbitrator has found a brick wall structure with G.I sheet

roofing of about 65 feet x 9.5 inches, and hence the Arbitrator allowed a sum

of Rs.1,20,000/- against the claim of Rs.2,40,000/-. Arbitrator had allowed

the claim of transportation charges of Rs.20,000/- towards heavy machinery

etc and Rs.15,000/- towards transportation of steel and cement on the basis

that there was no challenge to the deposition of the witness of the respondent

no.1. Accordingly, a total amount of Rs.2,39,805/- was awarded by the

Arbitrator under Claim no.3 instead of a sum of Rs.9,70,000/- as claimed by

the respondent no.1.

10. Arbitrator has while discussing each of the sub-claims of claim

no.3 dealt with the relevant evidence existing before him, and after dealing

with such evidence, has believed some evidence and disbelieved other part

of the evidence and has accordingly granted a lesser amount with respect to

each of the sub-claims. Arbitrator in the opinion of this Court has therefore

acted reasonably and fairly and the conclusions arrived at by the Arbitrator

on the basis of such discussion and evidence cannot be interfered with by

this Court under Section 34 of the Act. Objections to claim no.3 are also

therefore dismissed.

11. Claim no.4 filed by the respondent no.1 for an amount of

Rs.40,000/- was for expenditure incurred for contracted work. Arbitrator

has allowed this claim. Claim no.4 has been dealt with by the Arbitrator as

under:-

"Claim No.4 The Claimant has also set up a claim for Rs.40,000/- towards expenditure alleged to have been incurred by him at the commencement of the contracted work. It is his case that he had brought J.C.B. machine for digging and four dumpers and that besides all this the work of cutting and bending the steel bars had also been undertaken. Of course, the Claimant has not placed on the record any document to show as to how much had been paid by him towards hire charges but then we have on the record the affidavit of the site supervisor Mr. Madan Mohan who has deposed that on account of hire charges etc. a sum of Rs.40,000/- had been spent. That the steel had been cut and bent bears support from the report of Local Commissioner also. Significantly in the cross- examination of Mr. Madan Mohan this part of his affidavit has remained unchallenged. I am, therefore, inclined to allow this amount."

It is however noted that though the claim is based on the

expenditure incurred, no documentary proof of expenditure incurred was

filed by the respondent no.1 in the arbitration proceedings. In the opinion of

this Court on a mere self-serving statement of the contractor's witness, the

Arbitrator could not have awarded the monetary amount of Rs.40,000/-.

Howsoever valid the merits of a claim, the same in law cannot be allowed

unless the same is substantiated, especially a claim on the basis of

expenditure said to have been incurred. The money expended has to be

proved by documentary evidence. Therefore, so far as the objection to

Claim no.4 is concerned, the same is allowed by setting aside this Claim

no.4 for a sum of Rs.40,000/-.

12. Claim no.5 filed by the respondent no.1 was towards overheads

of staff salaries and office expenses from October, 1998 to August, 2002

during the period of contract. However, it is noted that even for this claim

which pertains to monetary expenditure, the respondent no.1/contractor did

not file any proof as to incurring of this expenditure as no vouchers or

payment is proved by means of cheques with the bank account etc etc.

Really therefore the self-serving statement of the respondent no.1 has been

believed by the Award, and in my opinion merely mentioning that

respondent no.1 has engaged these persons is not an automatic proof with

respect to incurring of the specific expenditure of a specific amount with

respect to such personnel. No doubt, when personnel are engaged and

salaries of such persons can be allowed, however, unless and until the claim

of expenditure incurred is established and proved as per law, howsoever a

good claim may be, the same has to fail. Claim no.5 is dealt with by the

Arbitrator as per the following discussion:-

"Claim No.5:

Claim No.5 is for Rs.6,90,000/-. It is with regard to alleged loss of overheads on staff salaries and office expenses from October, 1998 till August, 2002.

The case of the Claimant is that three chowkidars, one site supervisor and one site engineer had been engaged and that while each of the chowkidars was being paid Rs.2,500/- per month, the site supervisor was getting a salary of Rs.3,000/- per month. As for the site engineer, it is alleged that his salary was Rs.4,500/- per month.

It appears from Clause No.54 of the Special Conditions of Contract that the contractor was required to engage at least one graduate engineer for supervision of the work. In case of its non- compliance, the contractor was to incur penalty of Rs.3,000/- per month.

We have on the record the affidavit of Mr. Madan Mohan who was the site supervisor. It appears from his affidavit that three chowkidars besides a site engineer had been engaged and that he himself was the site supervisor. It further appears from his affidavit that Rs.15,000/- per month was being paid towards salaries of the said staff. That the above staff had been engaged finds support from the affidavit of the contractor Mr. Dev Raj Kataria also. He has categorically stated that whereas Mr. Madan Mohan was being paid Rs.3,000/- per month, the salary of Mr. Verma who was the graduate engineer was Rs.4,500/- per month. It is also in his affidavit that three chowkidars had been engaged at the salary of Rs.2,500/- per month per chowkidar and further that the period during which the staff had remained engaged was from October 1998 to August 2002. The perusal of the cross-examination of both these witnesses would go to show that this part of their assertion has remain unchallenged.

That the staff had been engaged finds support from letters of the contractor dated 6th January 1999, 8th February 1999, 12th April, 1999 and from the letter dated 18th February 2002. Reference may also be made to letter C-11 of November 1998 which shows that Mr. Verma had been engaged as a graduate engineer. Significantly, no penalty was imposed under the aforesaid Clause 54 and that itself would show that a graduate engineer had actually been engaged. In view of my above discussion the finding goes in favour of the contractor."

13. On the same reasoning whereby Claim no.4 as allowed has

been set aside on account of lack of documentary evidence of proof of

expenditure, on the same reasoning, this Claim no. 5 also has to be set aside

as there is no documentary proof with respect to expenditure allegedly

incurred by the respondent no.1. Even if such expenditure was incurred,

unless the proof of the specific amount of expenditure in terms of specific

amounts of moneys and payment of expenses to the different employees of

specific monetary amounts are proved by the respondent no.1, the Arbitrator

could not have awarded this claim. Claim no.5 awarded by the Arbitrator is

also therefore set aside on account of the illegality as the same being allowed

without any supportive evidence filed by the respondent no.1 with respect to

the expenditure incurred. Qua this aspect counsel for respondent no.1

wanted to cite judgments on the scope of interference under Section 34 of

the Act but there is no need to refer to the judgments relied upon by the

counsel for the respondent no.1 as regards the scope of Section 34 inasmuch

as the law is well settled that an award is interfered with if the award is

illegal or violative of contractual provisions or perverse, and in the present

case since the Arbitrator has allowed huge monetary claim without any

evidence to support the actual proof of expenditure made by the respondent

no.1, the Award is clearly against the law of the land/illegal, and in any case

a perverse conclusion, and therefore, the Award of the Claim no.5 is

therefore bound to be set aside and accordingly set aside.

14. At this stage, counsel for the respondent no.1 argued that once

engagement of personnel has been proved, the claim has been rightly

allowed by the Award, however, there is difference between engagement of

personnel and proof of expenditure incurred for the personnel and the other

head expenses, and it is only when the actual monetary expenditure of the

specific amount claimed is actually shown to have been incurred by payment

of salaries etc, only in such circumstances a specific amount can be claimed

and awarded, and in which regard the respondent no.1 has failed to do so by

leading evidence of incurring of expenditure or pertaining to proof of actual

payments.

15. The next claim is Claim no.6 pertaining to overheads towards

machinery, tools, plants and other materials. In this regard, the Arbitrator

has taken into account the documentary evidence in the form of Valuation

Report of the machinery as C-36, value of scaffolding and the barricading

boards as also the jacks for lifting scaffolding etc. Arbitrator also notes that

a tractor was found at the spot as noticed by the Local Commissioner Mr.

Sharma. Arbitrator has thoroughly examined the evidence on record with

respect to number of items of machinery, barricading, phaora, taslas etc and

after noting the different values of the machinery, has awarded, not the

amount as claimed by the contractor, but a lesser amount as per the evidence

existing on record. For arriving at these conclusions, the Arbitrator has done

an educated guess work and once there is reasonable amount of evidence,

Arbitrator can arrive at a conclusion on the basis of evidence on record and

hence the Award in this regard cannot be faulted with. The relevant

observations in this regard of the Arbitrator for allowing of this claim for

Rs.5 lacs instead of Rs.9,20,000/- as claimed is as under and to which I

agree:-

"If against the cost value assessed by him as Rs.22,29,100/- the depreciated value is assessed by him as Rs.9,53,000/- then, without going into each item, the depreciated value of Rs.14,69,600/- would come to Rs.6,39,580/-. However this depreciation is upto the period of 24th October, 2002 whereas by end of February, 2002 the contractor had come to know that it was no use keeping the machinery etc at site. By removing it in time he could have saved depreciation. Keeping all this in view I feel that depreciation needs to be allowed only to the tune of around Rs.500,000/-. I am conscious of the fact that this way I may be, to some extent, accused of entering into the realm of conjectures but I do feel that keeping in view the facts stated above, the amount arrived at by me is equitable more so when, during arguments, faced with this problem, the learned Counsel for the parties could not come out with any other method to make an assessment."

16. I therefore do not agree that the Award with respect to Claim

no.6 is in any manner illegal or perverse for this Court to interfere with the

same under Section 34 of the Act. I also disagree with the counsel for the

objector that there is any duplication of the claim while awarding claim no. 6

inasmuch as Claim no.3 is with respect to getting of electricity and water

connections and construction of a site office as also certain transportation

charges, whereas the present claim does not fall within Claim no.3 but is a

separate claim towards loss in the value of the machinery on account of the

same remaining idle during the period of work, and the contract which had

to be rescinded by the respondent no.1 on account of breaches of delays by

the petitioner.

17. The next objection by the petitioner is with respect to awarding

of interest @ 9% per annum simple. In law once a person is entitled to a

particular amount on a particular date but payment of that amount is delayed,

the aggrieved person is entitled to compensation by whatever name called

whether interest or damages vide Union of India Vs. M/s. N.K. Garg & Co.

passed in O.M.P. No.327/2002 decided on 2.11.2015. Hence, objection to

awarding of interest is rejected.

18. That takes us to the counter claim of the petitioner which was

dismissed by the Arbitrator and in this regard it is noted that once in terms of

the discussion given by the Arbitrator, and as already given above, that it

was not the respondent no.1 but the petitioner who was guilty of delays, and

the respondent no.1 had therefore rightly rescinded the contract, there does

not arise any question of the petitioner being entitled to any counter claim

and which has rightly been dismissed by the Arbitrator. I may note that one

counter claim is allowed with respect to the value of the steel which was

with the respondent no.1 and in this regard the Arbitrator has already passed

the Award for reduction of the total awarded amount to the respondent no.1

of Rs.18,33,000/- by the sum of Rs.4,69,016/- towards the claim of costs of

steel supplied by the petitioner to the respondent no.1. The objection

therefore with respect to the Arbitrator not having awarded the counter claim

of the petitioner is also dismissed.

19. In view of the above, the objection petition is disposed of by

dismissing the objections with respect to all claims except with respect to

Claim nos.4 and 5 and the Award of the Arbitrator would stand modified by

deleting Claim nos.4 and 5 which have been awarded by the impugned

Award dated 10.5.2007 as modified by the Order dated 31.5.2007.

20. Petitioner has deposited the amount in this Court pursuant to

the Award. Since however the Award is partly set aside, respondent no.1

will only be entitled to certain amount but also there will be an issue as to

what is the total amount which the respondent no.1 will be entitled to

especially in view of the judgment of the Supreme Court in the case of

P.S.L. Ramanathan Chettiar and Ors. Vs. O. Rm. P. Rm. Ramanathan

Chettiar, AIR 1968 SC 1047. Respondent no.1 therefore can move an

application giving its calculation of the amount due under the Award as

modified by the present judgment and on such application being moved

alongwith necessary calculations, the amount deposited in this Court to the

extent allowable to the respondent no.1 would be released to the

respondent no.1 in terms of the orders disposing of the application of the

respondent no.1.

DECEMBER 09, 2015                                VALMIKI J. MEHTA, J
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