Delhi High Court
V.K. Dewan & Co. vs Delhi Jal Board & Ors. on 16 October, 2018
SINDHU KRISHNAKUMAR
23.10.2018 19:26
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 16th October, 2018
+ O.M.P. (COMM) 43/2017
V.K. DEWAN & CO. ..... Petitioner
Through: Mr. Shashi Dewan, partner of
Petitioner in person. (M:9810111765)
versus
DELHI JAL BOARD & ORS. ..... Respondents
Through: Ms. Sangeeta Bharti, ASC for DJB
with Mr. Krishanu Adhikary,
Advocate. (M:9654074250)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. Present petition under Section 34 of the Arbitration and Conciliation
Act, 1996 challenges the award dated 18th June, 2008 passed by the learned
Sole Arbitrator.
2. Brief background is that the Petitioner was awarded a work order
No./Supply order No. F8(5) EE(W)C-VII/2000/1497 dated 7th August, 2000.
Completion certificate was given to the Petitioner on 1st March, 2005.
Disputes arose between the parties and a Sole Arbitrator was, accordingly,
appointed on 16th December, 2005. Petitioner had challenged the
appointment of Arbitrator before this Court. However, the Petitioner chose
to withdraw the said challenge on 20th September, 2007 in OMP
No.154/2006. The matter remained pending before the learned Arbitrator for
some time.
3. On 14th January, 2008, the Petitioner wrote a letter on the letterhead of
the Petitioner firm, withdrawing his claims in the following terms.
" Dated:14.1.2009
Shri Surinder Gandotra,
Sole Arbitrator,
115, Palika Bazar, Connaught Place,
New Delhi-110001
In the matter of arbitration between:
V.K. Dewan & Co.,
MD-67, Vishakha Enclave,
Pitampura, Delhi-110088
v/s
Delhi Jal Board,
(thru) Executive Engineer ....
Jal Sadan, Shiv Mandir Marg,
Lajpat Nagar, Phase-11
New Delhi-1100
In regard to: Construction of under ground reservoir
and booster pumping station at SurajMal Vihar, Trans-
Yamuna, Delhi
(Contract agreement no.: 8 of 2000...)
In the aforesaid matter, without prejudice to his right
to agitate elsewhere, the claimant contractor
withdraws all his claims.
Copy to:
Delhi Jal Board
(thru) Executive Engineer
Jal Sadan, Shiv Mandir Marg
Lajpat Nagar, Phase-11
New Delhi-1100"
4. Since the Petitioner withdrew the claims before the Arbitrator, the
Arbitrator awarded costs. Operative portion of the award, by which costs
have been awarded in favour of the Respondent, reads as under:
" I Surinder Gandotra arbitrator make and publish this
award and hereby direct that M/s. V. K. Dewan & Co
should pay a sum of Rs.5,00,000/- to the Chief
Executive Delhi Jal Board forthwith + Rs.3,00,000/-
towards cost of litigation in the court of Arbitrator,
and cost of litigation in Delhi High Court incurred by
them + Rs.1,91,550/- as arbitration fee for both the
parties M/s Delhi Jal Board and M/s. V. K. Dewan &
Co under Section 31 & 38 of Arbitration and
Conciliation Act 1996. Now the total amount to be
paid by M/s. Dewan & Co. come to Rs.9,91,550/-.
Thus M/s. Dewan & Co. has to pay a sum of
Rs.9,91,550/- (Rupees Nine Lacs Ninety One Thousand
Five Hundred Fifty only) to Delhi Jal Board within a
period of 1 month from the date of order and incase
M/s. V. K. Dewan & Co. fails to pay this amount of
Rs.9,91,550/- the Delhi Jal Board will be entitled to
recover and interest of 15% on this amount from M/s.
Dewan & Co. till its full realization of the amount
Rs.9,91,550/- (Rupees Nine Lacs Nintey One Thousand
Five Hundred Fifty only.) "
5. Thus, the Ld. Arbitrator awarded a total of Rs. 9,91,550/- which was
inclusive of Rs. 5 lakhs to be paid to the CEO of Delhi Jal Board, 3 lakhs
towards litigation costs and the fees of the arbitrator.
6. The primary submission of the Petitioner, who appears in person, is
that the costs awarded i.e. Rs.5 Lakhs to the CEO of Delhi Jal Board, Rs.3
Lakhs towards the cost of litigation in the Delhi High Court and before the
Arbitrator as also fee of the Arbitrator are amounts which were never
claimed by the Respondent. The learned Arbitrator is not permitted to
award costs beyond what has been claimed by the parties. He also raised an
objection to the manner in which the Arbitrator has quantified his bill of
Rs.1,91,550/-.
7. However, there is no basis to award Rs.5 Lakhs to the CEO of Delhi
Jal Board and Rs.3 Lakhs towards the cost of litigation in the Delhi High
Court and Arbitration. The fee of the Arbitrator appears to be exaggerated.
The computation of the arbitrator's fees is as under:
Arbitration Fee Rs. 60,000
Based on the claim of M/s. Dewan & Rs. 55,000
Co. including interest right from the
beginning of the contract till the end
of the contract and interest on
delayed payments made by Delhi Jal
Board to the contractor.
Administrative Fee Rs. 30,000
Rs. 30,000
TOTAL Rs. 1,75,000
Towards conveyance charges @ Rs. Rs. 16,550
750/- per hearing and total hearing
in this case were around 20
Grand Total Rs. 1,91,550
8. The Petitioner has submitted that the Arbitrator has charged fees
which are totally baseless in as much as administrative fees has been
charged when there was no secretarial staff used by the Arbitrator. Further,
commuting charges have been billed, when the hearings were held in the
office of the arbitrator itself.
9. This Court does not wish to examine the objections which have been
raised as unnecessary allegations are being made against the Arbitrator and
the fee awarded. The fact remains that the Petitioner had withdrawn his
claims and a reasonable amount could have been awarded by the Arbitrator
as costs. There is no doubt that the Petitioner has withdrawn the claims on
14th January, 2008 and the award was published on 18th June, 2008. Thus
the matter was contested in the High Court as also before the arbitrator, by
the Respondent. The initial disputes arose in 2005 and the withdrawal took
place in 2008 i.e., after a period of three years. So the Respondent cannot be
faulted for demanding costs. Without going into the different terms and
heads under which the costs have been awarded, a lumpsum cost of
Rs.1,50,000/- is awarded in favour of the Respondent which would cover
both the fee of the Arbitrator as well as litigation costs before the Arbitrator.
10. The amount is directed to be paid by the Petitioner within a period of
four weeks failing which simple interest @ 8% per annum shall be payable
on the awarded amount.
11. OMP is disposed of in the above terms.
PRATHIBA M. SINGH, J.
OCTOBER 16, 2018/dk
