Delhi High Court
Iilm Academy Of Higher Learning vs Jbg Buildcon Pvt Ltd on 29 October, 2018
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:29th October, 2018
+ O.M.P. 644/2011
IILM ACADEMY OF HIGHER LEARNING ..... Petitioner
Through: Mr. Samrat Nigam, Mr. Sandeep
Mittal & Ms. Rekha, Advocates (M-
9560952425).
versus
JBG BUILDCON PVT LTD ..... Respondent
Through: Mr. Sandeep Sharma, Mr. Aman
Dhyani & Mr. Nilesh Deep,
Advocates (M-9717464364).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. The present petition under Section 34 has been filed challenging the
award dated 13th May, 2011 passed by the Learned Sole Arbitrator who was
appointed by this Court vide order dated 8th September, 2006.
2. The brief background is that the Respondent is a contractor who was
awarded a contract for construction of building of IILM campus at plot no.
16, Knowledge Park-II, Greater Noida, U.P. The Learned Arbitrator had, on
9th September, 2006, pursuant to the directions of this Court, conducted joint
measurements and recorded the same, in the presence of the parties. The
present contract was awarded along with the two other contracts in the same
campus for construction of management block at plot nos.17 and 18,
Knowledge Park-II, Greater Noida, U.P. and construction of the new
workshop building.
3. The present petition, however, relates to the construction of the
campus at plot no. 16, Knowledge Park-II, Greater Noida, U.P. The Learned
Arbitrator had conducted the joint measurements which were jointly
accepted by the parties. The contractor was the Claimant before the
Arbitrator and the Respondent in the present petition (hereinafter
'contractor'). The contractor raised various claims in respect of outstanding
payments which were due from the Petitioner. The various claims raised, the
amounts awarded as also the objections and findings thereon are set out
below:
Claim No.1: Towards work executed at site as per RA bills
submitted by the claimant upto 5.8.2006
Claim No.2 Towards payment of work done after 5.8.2006
There were several items under these claims. Both these claims were
decided jointly by the Learned Arbitrator and after considering the various
items under which the claims were made by the contractor, the Learned
Arbitrator awarded a sum of Rs.17,29,249/-.
4. The allowing of claim under Item No.10 is objected by the counsel for
the Petitioner in respect of 'anti-termite treatment'. The learned counsel
submits that this claim is not liable to be awarded as the anti-termite
treatment was not done.
5. The Ld. Arbitrator has succinctly dealt with the objection of the
Petitioner to this claim being awarded and has noticed that the same was
duly certified in the 1st RA Bill for Blocks 16A and 16B. The Ld. Arbitrator
also notes that during joint measurements, it was accepted between the
parties that a total of 1479.98 M2 was in fact executed. These are factual
issues and the claims awarded are based on the certification as also the
documents on record. They are beyond the scope of interference under
Section 34 of the Act. The award on this item is upheld. No other objection
is pressed.
CLAIM NO.4 - Damages for illegal termination
6. The contractor argued that the termination which had taken place on
28th August, 2006, was illegal and it is therefore entitled to loss of profits for
the unexecuted work. The finding of the arbitrator is that both parties were
guilty of breach, hence this is a NIL award, qua this claim. No objections are
therefore maintainable on this claim.
CLAIM NO.5 - Towards material, construction of labour hutments,
godowns, construction of site office
7. In respect of this claim, the findings of the Learned Arbitrator are as
under:
"...3 After hearing the parties and considering the
documents on record I find that the claimant on
24.8.2006 on the request of the respondent prepared a
list of materials and indicated the value and submitted
the said list to the President of the Respondent
Academy. The said letter dt. 24.4.2008 was duly
received by the respondent along with valuation of the
materials lying at site. After four days i.e. on
28.8.2006, the respondent terminated the contract of
the claimant without issuance of any show cause
notice. Thereafter the claimant was not allowed access
to the site and was not allowed to take back his
materials & tools/plants. In the arbitration
proceedings the value of the materials have not been
controverted nor any suggestion or arguments
advanced by the Respondent as to what was the actual
value of the material left by the claimant at site. The
claimant Shri S.S. Maan in his evidence has proved
that he has sent the detailed list of materials, T&P etc.
along with their valuation and the said list was
prepared by his Engineer in his presence after due
verification and counting the list of rate and purchase
of the material was duly approved. The said evidence
has not been controverted nr there is any cross-
examination by the respondent on this aspect. In the
cross examination Shri Maan had submitted that after
the termination of the contract on 28.4.2006 the
respondent had stopped his entry at the site and his
staff and labour were removed from the site. The
relevant extract from his cross examination is
"Thereafter the respondent stopped my entry at the site
and our staff & labour were removed from the site.
Our material, tools and plants were taken by the
respondents in their custody". There is nothing
contrary on record to show that the materials , tools &
plants of the claimant were removed. I, therefore, hold
that the claimant is entitled to the material left at site
by the claimant. I accept the valuation of the material
as assessed by the claimant vide his letter dated
24.8.2006. Since the value of the materials shown in
letter dated 24.8.2006 as Rs. 36,20,200/- pertained to
all the three contracts, the claimant is entitled to only
1/3rd of its value under the present contract i.e. Rs.
12,00,000/-. However, I consider it appropriate to
deduct 20% in the value as given by the claimant. I
therefore award Rs. 9,60,000/- under this claim."
In respect of this claim, the submission of Mr. Samrat Nigam, Ld. Counsel
for the Petitioner is that there is no basis for the Arbitrator to hold that entry
of the contractor was prevented in any manner. He submits that except the
bald averment recorded by the Arbitrator in the cross-examination, there is
no evidence and it is completely denied that the Petitioner had restricted the
access to the premises.
8. A perusal of the paragraph extracted above shows that the contractor
had written a letter dated 24th August, 2006 listing out the materials which
were on site and giving the value of the said materials. Admittedly, as
recorded in para 2 under claim 5 of the award, the Petitioner received the
said letter, but chose not to reply to the same. The only letter which was sent
by the Petitioner after the receipt of letter dated 24th August, 2006 was the
termination letter on 28th August, 2006. The termination itself was
challenged by the contractor in the arbitral proceedings. In any event, the
cross-examination recorded of the contractor is clear and categorical that the
contractor was stopped from removing the staff, labour, material, tools and
plants which were taken by the Petitioner into their custody. The contractor
had claimed that the value was total of Rs.36,20,200/- in respect of all three
contracts and hence Rs.12 lakhs was liable to be awarded in the present
case. The Petitioner does not dispute that it made use of the contractor's
machines, tools, plants which were lying in the premises. The Learned
Arbitrator had deducted 20% in the value claimed i.e. Rs.12 lakhs and
awarded Rs.9,60,000/-. The reasoning of the Arbitrator is sound and valid.
The objections raised that the same is based on a bald averment of the
contractor, is not correct. In fact if the Petitioner felt that there was no
material on site, it ought to have led adequate evidence to establish its stand.
The contractor failed to do so.
9. The award therefore does not warrant any interference on this count.
CLAIM NO.3 - Interest on delayed payments
CLAIM NO.6 - Interest pendent elite and future
10. These two claims relate to interest on delayed payments and interest
pendente lite and future interest which has been filed, awarded by the
Arbitrator.
11. In respect of interest, on the last two hearings, when the matter was
heard, the calculations were produced on record in respect of payment of
interest. Counsel for the contractor had fairly agreed that if the Petitioner is
willing to undertake to make the payments due under all the four awards on
or before 31st May, 2019, his client is willing to accept Simple Interest @
6% per annum. However, today when the matter was heard, there appears to
be no consensus or agreement between the parties. Accordingly, the interest
awarded by the Learned Arbitrator is being examined on merits. The claim
of the contractor was for interest @ 15% per annum on account of delayed
payments on the running bills which was submitted on 5th August, 2006. The
Learned Arbitrator has awarded interest @ 9% per annum on claims no.l and
2 w.e.f. October, 2006 till date of realization. This is a reasonable rate of
interest awarded by the Arbitrator because most items for which the claims
were made by the contractor were not even seriously disputed by the
Petitioner.
12. Insofar as the claims no.4 and 5 are concerned, the claim no.4 now is
a NIL award. In respect of claim no.5, Simple Interest @ 9% per annum
from the date of award has been given by the Learned Arbitrator. The same
is also reasonable and does not warrant any interference.
13. Insofar as the counter claims are concerned, all of them have been
rejected and no objections have been pressed in respect thereof.
14. The OMP is accordingly disposed of in the above terms.
PRATHIBA M. SINGH
JUDGE
OCTOBER 29, 2018/Rahul
