[Cites 13, Cited by 0]
Delhi High Court
Dda vs M/S Harjinder Brothers on 11 December, 2025
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 04.12.2025
Judgment pronounced on:11.12.2025
+ FAO 475/2013 and CM APPL. 20058/2013
DDA .....Appellant
Through: Ms. Chand Chopra and Ms. Anshika
Prakash, Advocates for Mr. Sanjay
Katyal, Standing Counsel.
versus
M/S HARJINDER BROTHERS .....Respondent
Through: None.
CORAM:
HON'BLE MS. JUSTICE CHANDRASEKHARAN SUDHA
JUDGMENT
CHANDRASEKHARAN SUDHA, J.
1. This is an appeal under Section 37(1)(b) of the
Arbitration and Conciliation Act, 1996 (the Act), filed by the
petitioner/DDA in CS 95/2023 on the file of the learned
Additional District Judge-12, Central District, Delhi aggrieved by
the order dated 13.08.2013, whereby the application filed by them
under Section 34 of the Act was dismissed.
2. The parties herein shall be referred to in the same rank
as they are arrayed in the claim before the Arbitrator.
3. Initially, the claimant filed a suit for recovery of an
amount of ₹5,00,000/- against the respondent/ defendant/ Delhi
Development Authority (the DDA). In the plaint, it was alleged
thus:- The claimant a registered partnership Firm duly registered
under the Indian Partnership Act, 1932, is a registered contractor
with the DDA. The DDA invited sealed item rate tenders for
construction of 103 dwelling units in Pocket-3, Sector-9, Dwarka,
New Delhi. As the rates offered by the claimant was the lowest
amongst all the tenderers, the same was accepted by the DDA. An
agreement no. EE/WD-6/AC/94-95 was executed between the
parties on 25.08.1994. As per the agreement, the date for starting
of the work was 02.09.1994. The time allotted for completion of
the work was 18 months. The stipulated date of completion of
work was 01.03.1996 and the actual date of completion of work
was 16.05.1997. Thereafter, certain disputes arose with regard to
the contract for which a suit for recovery, that is, suit number 1008
of 2001 was filed before the before this court.
3.1 Pursuant thereto, a fresh dispute arose with regard to the
supplementary agreement executed between the parties after the
completion of the original agreement. It was alleged that the
claimant had completed the work in all aspects and that the date of
completion of work had also been recorded as 16.05.1997. All the
works except a few items remained to be completed. The
remaining items of work were to be completed when the flats were
actually allotted or possession handed over to the allottees. It was
in this connection a supplementary agreement came to be executed
between the parties on 31.03.2000. When the supplementary
agreement was executed, the DDA had with them sufficient
amount against the original agreement and also against the watch
and ward charges payable to the claimant in accordance with
circular no. 520 dated 30.03.1999, which had also been made part
of the supplementary agreement.
3.2 There were a few items of work proposed to be executed
at the time of handing over of the possession of the flats, which
were detailed in the supplementary agreement. In addition, the
plaintiff was assigned with the work of watch and ward, for which
it was agreed that they would be paid ₹ 6,600/- per month.
Initially, the supplementary agreement was valid for a period of 12
months, that is, till 30.03.2001. By the said date, the DDA failed to
hand over possession of the flats to the allottees. Hence, the DDA
wanted the period of the agreement be extended to which the
claimant had no objection. Accordingly, the supplementary
agreement was extended as desired by the DDA.
3.3 Approximately, 45 dwelling units had been allotted to
different allottees. As the allottees were not taking possession of
the flats in time and as the remaining works to be completed as per
the supplementary agreement involved use of costly materials, the
DDA desired those items of work to be completed only at the time
of actual allotment and also that watch and ward be kept till the
actual allotment took place. Hence, the claimant was bound to
engage watch and ward in order to protect the materials that had
been installed inside the flats.
3.4 Though the works as specified in the schedule of the
supplementary agreement were carried out as per the instructions
of the DDA, payments were not made for the work executed or for
the watch and ward maintained by the claimant in terms of
supplementary agreement. In terms of the original agreement, a
sum of ₹ 1,55,829/- was with the DDA as security deposit. This
amount fell due and it was required to be released. As per the
supplementary agreement, the claimant was required to furnish a
security deposit of ₹ 1,50,000/-. It was agreed that the bank
guarantee of ₹ 1,55,829/- given as per the original agreement and
in the possession of the DDA, would be treated as the security
deposit for the supplementary agreement. Thus, the bank guarantee
given for the original agreement was retained by the DDA to
which the claimant never objected. However, without any notice to
the claimant a letter dated 03.09.2002 was addressed to the Senior
Manager, Punjab and Sindh Bank, New Delhi by the DDA for
encashment of the bank guarantee, dated 22.12.1995, amounting to
₹ 1,55,829/-. The letter was also endorsed to the claimant. The
letter contained no reason as to why the bank guarantee was
required to be encashed by the DDA. The DDA was supposed to
specify the amount of bank guarantee that was required for any
loss or damages caused or suffered due to action or inaction of the
claimant. However, nothing was communicated to the claimant.
Before the claimant could approach the Court, the DDA got the
bank guarantee encashed.
3.5 The DDA has still not paid the huge amount payable to
the claimant as per the supplementary agreement, though notice
under Section 53 B of the Delhi Development Act, 1957 has been
served on the former. The DDA had no right to encash the bank
guarantee. On the other hand, they were liable to clear the huge
amount due to claimant. Hence, the suit seeking a decree for an
amount of ₹ 5 lakhs along with interest and costs from the DDA.
4. The DDA filed written statement disputing the allegations
in the plaint. It was contended thus:- The claimant did not
complete the work in all aspects. The completion certificate issued
by the Engineer-in-charge dated 16.05.1997 was subject to
completion of remaining items of work, such as final coat of white
washing, painting, etc., including fixing and providing glass panes,
fixing of fittings, fixtures etc. as well as rectification of defects
which were certified by the Superintending Engineer concerned.
The allegation that certain items of work had not been completed
as desired by the DDA is incorrect and false. The claimant was
free to execute the works that remained and also to rectify the
defects that were pointed out and thereafter, could have handed
over the flats to the DDA. However, they failed to complete the
construction and hence an amount of ₹ 2,66,000/- was withheld in
the final bill which was accepted by the claimant also. The
supplementary agreement executed between the parties was in
accordance with circular no. 520 dated 30.03.1999 issued by the
Office of the Engineer member-DDA, which also formed part of
the supplementary agreement. As per the circular, the contractors
were to continue to provide for watch and ward during the period;
the contractors entering into supplementary agreement for the
same including finishing items, fixing of fittings etc. were required
to be executed at the time of handing over the possession of the
flats; the charges would be payable with effect from the date when
all liabilities/obligations of the main agreement including defect
liability period has been fulfilled and duly certified by the
Engineer-in-charge and accepted by the next higher authority. In
addition, the contractor would be liable to make good any loss or
damage to the work already executed and to be executed under the
supplementary agreement for which no extra charges was liable to
be paid to them. It is clear from condition no. 3 of the circular, that
the charges of watch and ward would be payable only when all the
liabilities/obligations of the main agreement had been fulfilled and
such fulfilment was duly certified by the Engineer-in-charge.
However, the claimant never fulfilled the same and hence such
charges were neither due nor payable to them. A sum of ₹1,84,800
had been inadvertently paid to the claimant by the DDA for watch
and ward services under the supplementary agreement and
therefore, the DDA was entitled to recover/adjust the said amount
wrongly paid to the claimant.
4.1 The allegation that the claimant had been instructed by
the DDA to keep the finishing work pending till the flats were
actually allotted was denied. According to the DDA, it was the
claimant who had failed to execute and complete all the works
agreed as per the initial agreement. The supplementary agreement
contained no terms for making any payment to the contractor. The
DDA had never stopped the claimant from executing the works
completely. The DDA had never requested the claimant to provide
watch and ward services after recording of completion certificate,
that is, on 16.05.1997 till entering into the supplementary
agreement on 31.03.2000. The DDA never desired the claimant to
do watch and ward for the period from 16.05.1997 to 31.03.2000.
Therefore, the claimant cannot claim charges for watch and ward
for the said period. It was because the claimant had not completed
the works within the agreed time, amounts had been withheld in
the final bill and as such payment for the work which was not
executed under the main agreement cannot be given.
4.2 An amount of ₹1,55,829/- in the form of bank guarantee
in the possession of the DDA as security deposit against the
main/original agreement, was adjusted/converted and kept as
security deposit for the supplementary agreement. Clause 29 of the
main agreement enables the DDA to adjust or withhold any
amounts that were wrongly paid to the claimant. Hence, on the
strength of Clause 29, the bank guarantee of ₹ 1,55,829/- was
encashed by the DDA as it had made a wrong payment of ₹
1,84,000 to the claimant. No illegality has been committed by the
DDA in encashing the bank guarantee. Hence, it was contended
that the claimant was not entitled to any reliefs prayed for in the
plaint.
5. During the course of the trial of the case, both the parties
submitted that on account of the technical nature of the case, the
matter be referred for arbitration. The request was allowed.
Pursuant to the same, when the matter came up before the
arbitrator, the plaint was treated as the statement of claim and the
written statement of the DDA as counter to the same. Before the
arbitrator both the parties agreed to rely on the affidavits of their
respective witnesses and that cross examination was not required.
6. The arbitrator after considering the materials on record and
after hearing both sides passed an Award dated 09.08.2011 in
favour of the claimant. The said Award was challenged under
Section 34 of the Act by the DDA. The District Court by the
impugned order dismissed the application under Section 34 of the
Act. Aggrieved, the DDA has come up in appeal.
7. It was submitted by the learned counsel for the DDA that
the findings of the Section 34 court are erroneous, perverse and not
supported by the materials on record. The work as per the first
agreement was not completed by the contractor within the
stipulated time which necessitated the execution of the
supplementary agreement dated 31.03.2000. The completion
certificate dated 16.05.1997 was only a conditional certificate,
which was issued subject to the removal of defects by the
contractor. However, all the defects remained unattended for the
period from 16.05.1997 till 31.03.2000.
7.1 It was further pointed out that under clause 29 of the
original agreement, the DDA had the right to recover any over-
payment made. Further, circular no. 520 dated 30.03.1999 which
has been incorporated in the supplementary agreement mandated
that watch and ward charges was payable only after all the
liabilities under the main agreement including the curing of defects
had been completed or fulfilled by the contractor and certified by
the Engineer concerned. The supplementary agreement
has clarified that the watch and ward charges was the
responsibility of the contractor till the allotment of all flats to the
allotees.
7.2 Further, the claimant never produced any material(s) to
show proof of actual expenditure on watch and ward charges and
therefore, no amount under the said head was payable. However,
the arbitrator on a misappreciation of the materials on record
regarding watch and ward charges, held that the DDA had gone
wrong in encashing the bank guarantee. Likewise, the District
Court while adjudicating the application under Section 34 also
went wrong in appreciating the materials on record and has
erroneously confirmed the Award of the arbitrator, which requires
to be interfered with by this court. According to the learned
counsel, an amount of ₹ 1,84,800/- had been inadvertently paid to
the claimant and it was for recovery of the said amount, the bank
guarantee had been encashed.
8. There was no representation on behalf of the claimant at
the time of hearing.
9. Heard the learned counsel for the appellant/DDA.
10. It is settled law that the scope of enquiry in an appeal
under Section 37 of the Act is quite limited. The Apex Court in
Punjab State Civil Supplies Corpn. Ltd. v. Sanman Rice Mills
2024 SCC OnLine SC 2632, held that the scope of intervention of
the court in arbitral matters is virtually prohibited, if not absolutely
barred and that interference is confined only to the extent
envisaged under Section 34 of the Act. The appellate power of
Section 37 of the Act is limited within the domain of Section 34 of
the Act. It is exercisable only to find out if the court, exercising
power under Section 34 of the Act, has acted within its limits as
prescribed thereunder or has exceeded or failed to exercise the
power so conferred. The Appellate Court has no authority under
law to consider the matter in dispute before the arbitral tribunal on
merits to find out as to whether the decision of the arbitral tribunal
is right or wrong upon reappraisal of evidence as if it is sitting in
an ordinary court of appeal. It is only where the court exercising
power under Section 34 has failed to exercise its jurisdiction
vested in it by Section 34 or has travelled beyond its jurisdiction
that the appellate court can step in and set aside the order passed
under Section 34 of the Act. Its power is more akin to that of
superintendence as is vested in civil courts while exercising
revisionary powers. The arbitral award is not liable to be interfered
with unless a case for interference as set out in Section 34 is made
out. It cannot be disturbed only for the reason that, instead of the
view taken by the arbitral tribunal, the other view, which is also a
possible view, is a better view according to the appellate court.
11. The learned counsel for the DDA relied upon Section
34(2)(b)(ii) of the Act to justify the appeal. As per the said
provision, an arbitral award is liable to be set aside if it is in
conflict with the public policy of India. Explanation 1 to this sub-
section says that an award is in conflict with the public policy of
India, only if, (i) the making of the award was induced or affected
by fraud or corruption or was in violation of section 75 or section
81; or (ii) it is in contravention of the fundamental policy of Indian
law; or (iii) it is in conflict with the most basic notions of morality
or justice. Explanation 2 states that for the avoidance of doubt, the
test as to whether there is a contravention with the fundamental
policy of Indian law shall not entail a review on the merits of the
dispute.
12. The aforesaid explanations to Section 34 (2)(b)(ii) of the
Act came into the statute book with effect from 23.10.2015 only.
Therefore, the same cannot apply to the case on hand. It is the
provision that existed earlier, which would be applicable. The
earlier explanation reads -
"without prejudice to the generality of sub-clause (ii), it is
hereby declared, for the avoidance of any doubt, that an award is
in conflict with the public policy of India, if the making of the
award was induced or affected by fraud or corruption or was in
violation of Section 75 or Section 81."
13. In ONGC vs. Western GECO International Limited,
(2014) 9 SCC 263, fundamental policy was interpreted as:-
"Fundamental policy of Indian law" includes three juristic
principles - first, the duty to adopt a judicial approach requiring
fairness, reasonableness and absence of arbitrariness; second
compliance with principles of natural justice, particularly proper
application of mind which must appear from the reasons recorded;
third the wednesbury principle that a decision cannot be perverse
or so irrational that no reasonable person would reach it. If the
arbitrator fails to draw an inference which ought to have been
drawn, or draw an untenable inference resulting in miscarriage of
justice, the award violates the fundamental policy of Indian law.
13.1 In Hindustan Zinc Ltd. vs Friends Coal Carbonisation
(2006) 4 SSC 445, it was held that an award which is contrary to
the substantive provisions of law or against the terms of the
contract is patently illegal and can be interfered with under Section
34 (2) of the Act as being opposed to the public policy of India.
13.2 In Associate Builders vs DDA, (2015) 3 SCC 49, the
scope of public policy under Section 34 (2)(b)(ii) was explained as
the merits of an arbitral Award can be examined only when the
Award is in conflict with public policy of India, and even then
only within narrow judicially recognised limits. The Section 34
court cannot act as a first appellate court on facts. A violation
occurs only when - (a) the award ignores binding statutes or
judicial precedence, (b) there is lack of judicial approach, (c)
natural justice is violated, (d) findings are perverse, such as being
based on no evidence, ignoring vital evidence, or considering
irrelevant material. An award can be set aside for being contrary to
justice or morality only if it shocks the conscience of the court. It
was held that justice for public policy does not mean what the
court personally considers fair, but only situations that shock
judicial conscience. Patent illegality will have to go to the root of
the matter; involve contravention of substantive law, contravention
of the Act, or/and contravention of the terms of the contract.
However, if the arbitrator adopts a possible and reasonable
construction of the contract, the court cannot substitute its own
interpretation.
14. Having thus reminded myself of the law on the point, I
proceed to consider the case on hand. It was submitted by the
learner counsel for the DDA that the challenge in this appeal is
confined to claims (a) and (d) as raised by the claimant before the
arbitrator. Claim (a) is regarding the encashment of the bank
guarantee and claim (d) is relating to the charges towards watch
and ward. The arbitrator from the materials on record found that
the work had been completed by 16.05.1997 as was evident from
the completion certificate and that an amount of ₹1,84,800/- was in
fact paid to the claimant as watch and ward charges. The arbitrator,
on an examination of the registers concerned, found that there was
delay in taking over possession of the flats by the DDA. That
being the position, the claimant was bound to keep the property
safe and secure till possession was taken over by the DDA.
Further, relying on Section 70 of the Indian Contract Act, 1872, it
was found that charges incurred by the claimant towards watch and
ward charges was not a gratuitous act done by the claimant and
therefore, they were eligible for the legitimate charges incurred by
them towards the said head.
14.1 Regarding the encashment of bank guarantee, the
arbitrator found that the same had been encashed without any
notice to the claimant and without showing that any loss had been
caused to the DDA by the action or inaction of the claimant.
15. An interesting aspect that needs to be noticed before I go
into the merits of the case is that the DDA has produced neither the
original agreement nor the supplementary agreement along with
the appeal, though certain other documents like the claim
application, the counter, rejoinder etc. have been produced. The
said agreements though referred to by the arbitrator in the Award
is not seen admitted in evidence or marked by either side as part of
their evidence.
16. When the attention of the learned counsel was drawn to
the absence of both the agreements on record, it was submitted that
the entire TCR needs to be called for and perused by this Court.
The Section concerned of this Court dealing with the records
informs that the entire TCR is before the Court. I have perused the
entire TCR. But both the agreements are not seen. However,
neither the execution of the agreements nor its clauses are disputed
by either side. Therefore, in the absence of the agreements before
me, I shall refer to and rely on the clauses referred to in the Award
by the arbitrator.
17. Circular no. 509 dated 02.05.1997, part of the
supplementary agreement reads thus:-
"...........
In supersession of the detailed guidelines issued earlier on
the subject vide Circular No, 474 circulated vide No. EM.1
(10)95/19517 dated 8.11.1995, the following new guidelines
have been approved by the WAB.
1. In all future NITs based оп PWD-7 or PWD-8 for
housing and similar projects, DDA will specifically
introduce a provision relating to drawing up of
Supplementary Agreement for the execution of following
types of finishing items during the process of handing over
of the flats /built up spaces to the perspective allottees.
i. final cot [sic] of white wash / distemper, painting and
water proofing cement paint etc.
ii. final floor grinding
iii. providing and fixing glass panes
iv. providing and fixing glass panes
v. providing and fixing of sanitary fittings and fixtures
vi. fixing of door/window shutters including fittings and
fixtures
vii. Etc. etc.
2. In all future NITs of housing and similar projects, the
following two independent schedules of items would be
included :
a. Schedule-A : It would contain all those items or those
parts of items which are to be executed under the Main
Agreement b.
b. Schedule-B: It would contain all those items or those
parts of items which may be executed under the
Supplementary Agreement for the type finishing items as
detailed of para-1 above.
Schedule B: it would also include, an independent item
for watch and ward to be paid during the currency of the
Supplementary Agreement.
3. All future NITs of housing and similar projects would
also be so framed as to indicate separately the time of
completion, earnest money / security etc. for schedule A as
well as schedule 8 of the items of the work.
4. The base date for working out of escalation under
clause-10 CC for Schedule B to be executed under
Supplementary Agreement shall be the same as for the
Schedule A Operation of Clause 10 CC will, however, be
otherwise covered by the relevant provisions of the main
agreement.
5. An additional clause 6 (c) would be added to the
standard contract formats PWD-7 or future NITs as per the
enclosed modified draft PWD-8 in all (Annexure-1).
6. The Supplementary Agreement would be drawn min
future contracts per the enclosed modified draft for the
Supplementary Agreement (Annexure II) once all the
obligations under main agreement (in respect of Schedule
A) are fulfilled by the agency.
7. The final bill to the two agreements i.e. the Main
Agreement as well as the Supplementary Agreement shall be
dealt with and finalised independently in accordance with
the relevant provisions of the two agreements contained
herein.
8 For the existing agreements of housing and similar
projects wherein, for drawing up provisions Supplementary
Agreement do not exist, possibility of drawing up the
Supplementary Agreement with respect to contractors as per
these modified standing instructions shall be explored. The
time period for execution of work under Schedule B shall be
initially for one year (or less as per merits of the case) to be
suitably extended from time to time with mutual consent of
both the parties. The contractors would be entitled for the
payment of watch and ward / service charges etc. during thr
operation of the Supplementary Agreement in respect of the
existing contracts also as per the pre-decided rates to be
worked out on the basis of the norms / guidelines separately
issued on the subject vide circular No. 510 dated 2.5.1997.
These instructions shall be implemented with immediate
effect.
............."
17.1. Pursuant to the aforesaid circular guidelines were issued
which reads thus:-
"............
Subject: Guidelines for operation of supplementary
agreement in respect of Watch & Ward/Service Charges
Clause.
According to the instructions issued vide Circular no. 509
dated 2.5.97 regarding operation of Supplementary
Agreement, contractors are required to be paid for watch and
ward / service charges etc. for the operation of Clause -2(j),
contained therein. For drawing up Supplementary
Agreement, in respect of running contracts, in order to
maintain uniformity in the operation of this clause, following
guidelines are issued to be followed judiciously by the Tender
Accepting Authority (Chief Engineer will be the final
Authority even, where, the tenders were accepted with the
prior approval of WAB):-
1. On an average for and upto a Housing Pocket of 150
SFS/MIG Houses or 200 LIG/EWS Houses, a payment of Rs.
6600/- per month may be considered reasonable.
2. For every additional, 50 houses or so, additional
payment of Rs. 1100/- per month may be considered
reasonable.
3. Nothing extra will be permitted for T&P and sundries
required for watch and ward operation.
The above guidelines are for normal locations and for the
general guidance. For exceptionally, small pockets or small
buildings, the Tender Accepting Authority shall take a
judicious view of the totality of the circumstances in deciding
the above charges. Similarly, for the pockets located in areas
vulnerable to unscrupulous activities, extra cost may be
suitably permitted on judicious basis."
(Emphasis Supplied)
17.2 Circular no. 509 was modified on 30.03.1999, which reads
thus:-
"SUB: CLARIFICATION TO EM'S INSTRUCTIONS
ISSUED UNDER CIRCULAR NO. 509 & 510 DT.
02.05.1997.
Certain clarifications have been sought to Standing
Instructions no. 509 dated 02.05.1997 in respect of
applicability of the payment of watch ward charges for the
intervening period i.e, from the date of closure of the main
agreement till the signing of the Supplementary Agreement by
the contractors in respect of old contracts wherein condition
of the Supplementary Agreement, does not form part of the
contract. The matter has both examined in detail and it has
been decided that watch & ward charges are payable for the
Intervening period subject to the following:
1 The contractors have been continuing to provide
watch & ward services during the said period.
2. The contractors are entering into the Supplementary
Agreement for the same including finishing items, fixing of
fittings etc. required to be executed at the time of handing-
over ever of the possession of the flats.
3. The charges would be payable w.e.f. the date when all
liabilities/obligations of the main agreement including Defect
Liability period, had been fulfilled and duly certified by the
Engineer- in-charge and accepted by the next higher
authority.
4 In addition, the contractors shall be liable to make
good any loss or damage to the work already executed and
to be executed under the Supplementary Agreement for
which nothing extra shall be payable to the Contractors.
5. Adherence to the other guidelines as contained in
Circular 509 dt. 02.05.97 and 510 dt. 02.05.97."
(Emphasis Supplied)
17.3 The Completion Certificate reads thus:-
" COMPLETION CERTIFICATE
I have inspected the work of Const. of additional DU's (25
MIG + 30 LIG + 48 HIG) four storeyed houses in Pocket-3
sector-19 Dwarka, the contract value of which is
Rs.1,47,41,623/- vide agreement No. 3/EE/WD-6/94-95/DDA
today i.e. 16/8/99. As a result of this inspection, & my
previous inspections, I find that the work has been carried
out generally to the specifications, and has been completed
satisfactorily. There are no noticeable defects except for the
following:
1- The panel door shutters provided in wet areas are
checked and it is observed that the sizes of bottom rail, top
rail and styles etc, are not as per Specifications.
2- G.I. clamps provided in G.I. stacks are not provided at
distances specified in the specification. The brackets for
washroom, cistern are not fixed in CC blocks. Also the hold-
fast for sanitary stacks and rain water pipes not fixed in the
CC blocks.
3- The grinding of mosaic floors observed very poor, as
the chips are not visible in the Floors. The glass strips are
also not visible.
4- Quality of putty provided for fixing the glass panes
observed cracked and found missing in many windows which
shows that the quality of putty is not good.
5- Brackets provided for wash basins & cisterns also
observed to be below specifications.
6- Locking arrangement in wire gauze shutters in kitchen
not provided."
(Emphasis Supplied)
18. Admittedly, Circular number 509 dated 02.05.1997 is
part of the supplementary agreement. The arbitrator is seen to have
perused and inspected the registers concerned and found that there
was inordinate delay in allotment of flats by the DDA. Even after
the issuance of the Completion Certificate, admittedly the flats
were not taken over by the DDA. There is no case for the DDA
that they took over the flats. On the other hand, they only contend
that the claimant could have handed over possession of the
completed flats. As long as possession was not taken over by the
DDA, it was the responsibility of the claimant to keep the flats safe
and secure, for which they are certainly entitled to watch and ward
charges. In addition, an amount of ₹1,84,800/- is seen to have been
given under this head, though the DDA claims that it was paid
inadvertently.
19. Further, the bank guarantee was encashed by the DDA on
the ground that over payment had been made by them. But clause
29 of the agreement, on which the DDA relies on itself, says that
an audit has to be conducted to ascertain the amounts due. The
relevant portion of clause 29 is seen extracted in the Award, which
reads thus:-
"Delhi Development Authority shall have right to cause
an audit and technical examination of works and the final
bills of the contractor including all supporting vouchers,
abstract etc. to be made after payment of the final bill and
if as result of such audit and technical examination any
sum is found to have been over paid in respect of any
work done by the contractor under the contract or any
work claimed by him to have been done by him under the
contract and found not to have been executed, the
contractor shall be liable to refund the amount of over
payment and it shall be lawful for Delhi Development
Authority to recover the same from him in the manner
legally prescribed in sub clause (1) of this clause or in
any other manner permissible ......"
20. Admittedly, no audit was conducted by the DDA. In the
light of the aforesaid Clause and the Circulars referred to
hereinabove, the arbitrator has not committed any infirmity or
illegality in arriving at his conclusions. I do not find any perversity
or illegality in the findings of the arbitrator. Therefore, the Section
34 court has rightly confirmed the findings of the arbitrator.
21. In these circumstances, I find no infirmity in
the impugned order calling for an interference by this Court.
22. The appeal sans merit is thus dismissed. Application(s),
if any pending, shall stand closed.
CHANDRASEKHARAN SUDHA
(JUDGE)
DECEMBER 11, 2025/Rs/Er
