Delhi High Court
Union Of India vs Rccivl-Litl (Joint Venture) on 29 May, 2023
$~26
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 29th May, 2023
+ O.M.P.(COMM) 200/2023
UNION OF INDIA ..... Petitioner
Through: Mr. Manish Mohan, CGSC with
Mr. Jatin Teotia, Advocate for
UOI.
versus
RCCIVL-LITL (JOINT VENTURE) ..... Respondent
Through: Ms. Amrita Panda & Ms.
Chandrika Sharma, Advocates.
[M:-9873547805]
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
PRATEEK JALAN, J. (ORAL)
%
I.A. 10559/2023(exemption)
Exemption allowed, subject to all just exceptions.
The application stands disposed of.
I.A. 10561/2023(condonation of delay)
This is an application for condonation of delay of 18 days in re-
filing the petition.
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
Ms. Amrita Panda, learned counsel, enters appearance for the
respondent and accepts notice. She has no objection to this application
being allowed.
For the reasons stated in the application and with the consent of
learned counsel for the parties, the application is allowed and the delay
is condoned.
O.M.P. (COMM) 200/2023 & I.A. 10560/2023 [seeking stay of the
award]
1. By way of this petition under Section 34 of the Arbitration and
Conciliation Act, 1996 [hereinafter, "the Act"], the petitioner- Union
of India [hereinafter, "Union"] seeks to assail an award dated
07.11.2022, rendered by the learned sole arbitrator in arbitration
proceedings between the parties arising out of a contract for
construction of residential quarters for the Directorate General
Married Accommodation Project [hereinafter, "the Contract"].
2. The respondent herein [hereinafter, "the claimant"] was the
claimant in the arbitration proceedings. Its claims arose out of non-
payment of its final bill submitted on 04.10.2018. The claimant also
sought adjudication of claim Nos. 2(A) to 2(U) on account of disputed
elements of the final bill, interest and costs thereupon. The Union
made counter claims for recovery on account of "minus amount of
Final Bill", amounting to approximately ₹6.47 crores, and for
recovery on account of defective work allegedly carried out by the
claimant.
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
3. The learned arbitrator, by the impugned award, awarded the
claims of the claimant partially. As far as the amount claimed in the
final bill is concerned, the learned arbitrator awarded a sum of
₹4,51,13,888/-, as against a claim of 5,31,23,148/-, with interest @ 8%
per annum from 26.08.2019 to 07.11.2022. The disputed items in the
final bill have been awarded fully or partially as far as 13 of the 21
sub-claims are concerned.1 The rest of the disputed items of the final
bill have been held to have been correctly disallowed by the Union.
On the sums awarded to the claimant, past interest has been awarded
where considered appropriate, while deciding the individual claims.
Pendente lite and future interest have been awarded at 18% per
annum, in addition to costs of ₹20 lakhs. The counter claims of the
Union have all been rejected. In sum, therefore, the award is for the
sum of ₹8,26,97,491/-, alongwith interest as noted above.
4. It is first submitted by Mr. Manish Mohan, learned Central
Government Standing Counsel, that the contract underwent 11
extensions which were all granted by the Union. In these
circumstances, he submits that the learned arbitrator ought not to have
held the Union responsible for delay in implementation of the Contract
and ought not to have awarded the entire amount of the final bill in
favour of the claimant.
5. Upon perusal of the impugned award, I do not find that the
claims have been awarded on account of delay. Mr. Mohan is unable
to point towards any part of the award in this regard. In fact, the
Claim Nos. 2(A), 2(C), 2(E), 2(F), 2(G), 2(H), 2(K), 2(L), 2(N), 2(O), 2(R), 2(S), and 2(T).
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
claims have arisen on account of the final bill submitted by the
claimant for the work done, which was admittedly completed within
the finally extended period granted by the Union [ie. 30.11.2017]. The
case is, therefore, not one in which the learned arbitrator was called
upon to inquire into the question of delay, but was instead required to
adjudicate whether the claimant was entitled to payment under the
final bill raised for the work done.
6. The issues framed by the learned arbitrator, set out below, also
make this position clear:-
"48. Having regard to the pleadings filed by the Parties, the
following Issues/Points for Determination were framed by the
Tribunal in its Order No.5 dated 18th December 2019:
i. Whether the Claimant is entitled to Rs.5,31,23,148/- towards
Final Bill? (OPC)
ii. Whether the Claimant is entitled to interest on delayed
payment of Final Bill and towards expenses incurred on extension of
the Bank Guarantees and Retention Money. If yes, at what rate and
for what period? (OPC)
iii. Whether the Claimant is entitled to the claims raised? (OPC)
iv. Whether the Counterclaimant is entitled to the claims raised?
(OPR/CC)
v. Whether the parties are entitled to pre-reference, pendente-
lite interest on the claims raised. If yes, at what rate and for what
period? (On Parties)
VI. Whether the Parties are entitled to the cost of arbitration?
(On Parties)
vii. Reliefs."
7. On the question of the claimant's claim for payment of final bill
and the counter claim for recovery of the "minus amount of the final
bill", the learned arbitrator recorded that the Union disputed even the
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
undisputed portion of the final bill submitted by the claimant.2 He
rejected the demand of the Union for furnishing the bill in two
portions - "disputed" and "undisputed" - on the ground that such a
format was not postulated in Clause 55 of the Contract. The learned
arbitrator noticed the contractual provisions and the testimony of the
witnesses to come to the conclusion that the Union's insistence on the
submission of the final bill in two parts was de hors the Contract and
he held that the Union was obligated to release payments relating to
undisputed items within 180 days and to elucidate its objections to
what the Union considers to be disputed.3
8. The Union, on its part, submitted a final bill before the tribunal
on 12.04.2021, wherein it claimed that the final bill has been prepared
by it and has worked out in the negative, to the tune of ₹6.47 crores.
This was the subject matter of counter claim No. 1. The learned
arbitrator noted that the Union did not avail of the opportunity to lead
further evidence to prove the additional document placed by it by way
of an amendment of the statement of defence and counter claims,
including the revised final bill and certain deviation orders. The
learned arbitrator, therefore, held as follows:-
"65. The Claimant has disputed the veracity of the contents of the
Final Bill and the Deviation Order(s) taken on record pursuant to
the Order dated 29th October 2021; nevertheless, the Respondent
consciously chose not to lead any additional evidence to prove the
aforesaid two documents which not only form the basis of its
Counterclaim but also form its defence to the claims instituted by
the Claimant. In light of this, the Tribunal holds that the Respondent
Paragraph 61 of the award.
Paragraph 62 of the award.
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
has failed to prove the Final Bill and the Deviation Order(s) placed
on record of the Tribunal pursuant to Order dated 29th October 2021.
The Tribunal is mindful that arbitration proceedings are not subject
to the rigours of the Evidence Act However, it is also a settled law
that the principles of evidence apply to arbitrations as the provision
of Section 19 of the A&C Act are words of amplitude and not of
restriction [see SREI Infrastructure Finance Limited v Tuff Drilling
Private Limited 2018 (11) sec 470]. It is a general principle of law
that disputed documents require to be proved by the
proponent/protagonist party. Hence, it was incumbent on the
Respondent to lead appropriate evidence to prove the contents of the
Final Bill and the Deviation Orders. I must also note that Final Bill
had been prepared by the Respondent only in November 2020 and
was submitted to the Tribunal in April 2021. In the face of the
denial by the Claimant and the fact that the Respondent consciously
chose not to lead any evidence in this context, these documents do
not commend any credibility. Even otherwise, a bare perusal of the
Final Bill shows that it contains handwritten/manual
adjustments/alterations. Accordingly, the plea of the Respondent
seeking rejection of Claim No.1 on the ground that the Final Bill, as
prepared and submitted by the Respondent has worked out in the
negative, lacks credibility and is rejected."
xxxx xxxx xxxx
71. The Respondent has not led any independent evidence to
dispute the stand taken by the Claimant. In fact, the Respondent's
own witness has admitted that the Claimant had been paid the
monies towards escalation and earthwork in May 2018. It is also
worthwhile to note that in the purported Final Bill filed by the
Respondent, a sum of Rs. l ,75, 17,665/- has been shown as
outstanding towards the Claimant. However, in the very same
document, sundry manual changes have been carried out. The
Respondent has failed to produce the author of the Bill and the
person who made those manual changes in the purported Final
Bill filed by it. The Final Bill submitted by the Respondent after
almost two years of the commencement of these proceedings does
not commend any credibility."4
9. In view of the aforesaid findings, the learned arbitrator awarded
the amount of ₹4,51,13,888/- to the claimant on this account and
rejected counter claim No. 1. The difference in the amount claimed
Emphasis supplied.
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
and the amount awarded by the learned arbitrator arises on account of
a discrepancy between the claimed amount and the summary filed by
the claimant in Appendix-A. On this point, the Union's submissions
have been accepted.
10. The aforesaid findings are based upon an interpretation of the
Contract and an appreciation of the evidence led before the learned
arbitrator. To this extent, they are liable to interference under Section
34 of the Act only if they display perversity, or such irrationality as
may lead the Court to the conclusion that no reasonable person could
have arrived at these conclusions. Reference may be made in this
regard to the judgments of the Supreme Court inter alia in Associate
Builders vs. Delhi Development Authority,5 Ssangyong Engineering
and Construction Company Ltd. vs. NHAI6 and Delhi Airport Metro
Express Pvt. Ltd. vs. Delhi Metro Rail Corporation Ltd. 7 This is an
extremely high burden, which the Union has been unable to discharge
in the present case. Mr. Mohan has been unable to point to any of the
findings in the impugned award which can be characterised as
implausible or irrational.
11. As far as the various claims for disputed heads of the bill are
concerned [Claim Nos. 2(A) to 2(U)], Mr. Mohan does not press the
challenge on these findings, as they are based on an appreciation of
evidence alone.
(2015) 3 SCC 49.
(2019) 15 SCC 131.
(2022) 1 SCC 131.
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
12. The counter claims have also been rejected as they are, to a
large extent, a converse of the claims made by the claimant. Those
claims having been allowed on the aforesaid findings, as stated above,
there was no occasion for any award on counter claim No. 1. As far as
counter claim No. 2 (on account of defective work carried out by the
claimant) is concerned, the learned arbitrator has found that no details
of the rectification required to be carried out by the Union have been
placed on record, although it was stated in the statement of defence
that the details would be provided later. Counter claim No. 2 has,
therefore, been dismissed in the absence of any evidence in support
thereof. As far as counter claim No. 3 is concerned, the learned
arbitrator has again found that no independent evidence was adduced
in support of the counter claim. Mr. Mohan has not drawn my
attention to any evidence placed on record in the arbitration, which
was ignored by the learned arbitrator while returning these findings.
There findings are also, therefore, unimpeachable.
13. Mr. Mohan made two further arguments with regard to the
procedure employed by the learned arbitrator, based upon grounds G
and H of the petition, which read as follows:-
"G. BECAUSE the Ld. Arbitral Tribunal has neither
allowed competent technical officers of Petitioner to
explain & argue the case during hearings despite
Petitioner request through mail dt 03 Feb 2022 nor the
Ld. Arbitral Tribunal has appreciated the facts &
Contract Provisions, thus misconducted the arbitral
proceedings by adjudicating the Claim without proper
understanding and without giving full & proper
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
opportunity to the Petitioner. Furthermore, the
fundamental principles of natural justice have been
breached and therefore the award needs to be set aside.
H. BECAUSE the Ld. Arbitral Tribunal has failed to
appreciate that present case was not a Criminal Case
wherein statements of eyewitness(es) and evidence led
through them are of utmost importance. That it would be
pertinent to mention herein that subject case was for
adjudication of disputes arisen out of a construction
contract wherein Deviation Orders, documents/facts
presented before the Ld. Arbitral Tribunal by both parties
were required to be given congnizancea to decide the
issues on merit."
14. Although the communication dated 03.02.2022, referred to in
ground G, has not been placed on record, it is clear from paragraph 26
of the award that the evidence of witnesses had been concluded on
06.07.2021. Paragraph 27 of the award records that the Union herein
addressed arguments on counter claims on 27.10.2021 and 04.02.2022
and on claims on 30.09.2021 and 01.10.2021. The Union was
represented by counsel throughout the arbitral proceedings. Mr.
Mohan states that the aforesaid request dated 03.02.2022 was made to
permit an engineer to explain the technical aspects of the matter before
the learned arbitral tribunal. I do not find any procedural irregularity
warranting the interference of the Court in this regard. Matters of
procedure of the arbitral tribunal are within its own domain, subject to
compliance of the rules of natural justice as reflected inter alia in
Chapter V of the Act. No breach of any of those provisions has been
occasioned even if the learned arbitrator did not permit an engineer to
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
address arguments in place of counsel. It is always open to counsel to
take the assistance of the engineer in preparing his/her arguments.
15. The objection raised in ground H also does not commend to me.
Where oral evidence has been led, it is not just open to the learned
arbitrator but, in fact, incumbent upon the learned arbitrator to take
such evidence into account. The averment in ground H betrays a
misconception on part of the Union that oral evidence is relevant only
to criminal trials, and not to adjudication of civil disputes. Of course,
there may be civil disputes which can be decided on documents alone,
and the procedure in this regard is for the learned arbitrator to
determine, after hearing the submission of the parties. However, the
parties having agreed to a procedure which required oral evidence to
be led, no grievance can be raised that the learned arbitrator relied
upon such evidence to reach his conclusions.
16. For the aforesaid reasons, I do not find any merit in the present
petition.
17. The petition, alongwith pending application, is dismissed.
PRATEEK JALAN, J
MAY 29, 2023
'pv'/
Signature Not Verified
Digitally Signed By:SHITU
NAGPAL
Signing Date:30.05.2023
15:17:40
