Delhi High Court
Sanyukt Nirmata vs Delhi Development Authority on 11 March, 1997
Equivalent citations: 1997IIIAD(DELHI)400, 1997(1)ARBLR583(DELHI), 66(1997)DLT776, 1997(41)DRJ527
Author: J.B. Goel
Bench: J.B. Goel
JUDGMENT J.B. Goel, J.
(1) The petitioner was awarded the work pertaining to construction of 1776 Lig Houses in Sectors 6 & 7 at Rohini SH; construction of 336 Lig houses in Sector 6 Pocket 6 Rohini and an agreement bearing No.S/EE/RPD-l/82-83 was executed between the parties. The work was to commence on 28.11.1982 and the period of execution was 12 months. The work was not completed in time and was actually completed on 2.7.1985. It appears that some extra work was also done by the petitioner-contractor. Disputes arose about the various payments withheld or deducted from the bills, and also on account of extra items and extra costs/damages suffered due to delay in execution of the work which were not paid. Delay in completion of work was on the part of the respondent. The agreement between the parties in its clause 25 contained arbitration clause which provided that all questions and disputes shall be referred to the sole arbitration of the person to be appointed by the Engineer Member, Delhi Development Authority (for Short DDA). The petitioner raised disputes and approached the Engineer Member for appointment of the Arbitrator, who vide his letter No.EM-2(117) /88-Arbn/3308-ll, dated 1.3.1989 appointed Shri O.P. Goel, the then Chief Engineer, Public Witness .D., Delhi Administration as the Sole Arbitrator. As provided in clause 25 of the contract, it was also specified in the appointment order that as the amount of the claims in issue was above Rs. 50,000.00 the Arbitrator shall give reasons of the award as provided in the agreement. Later on three more claims No. 30, 31, and 32 made by Petitioner were- also referred to the arbitrator by Engineer Member in . pursuance of Order dated 24.4.1990 passed by this Court.
(2) The learned Arbitrator entered upon the reference and vide letter dated 22.3.1989 called upon the Petitioner to file statement of claims within 15 days and the respondent was directed to file the Counter Statement of facts. The parties were directed to file documents also. Petitioner submitted its claim on 2.5.1989 making claims under several heads. Claims under heads No. 1 to 30 pertains to various items of the work, Claim No. 31 pertains to interest at the rate of 20% per annum and in claim No. 32 Rs. 25000.00 was claimed as costs of the Arbitration.
(3) Respondent filed their Counter Statement of Facts on 21.8.1989 and disputed the claims made by the petitioner except the claim made at Item No. 17 which was stated to have been withheld till handing over of flats after quality control clearance. Rejoinder was also filed by the petitioner. Both the parties did not produce oral evidence but produced documents by way of evidence. Time for making the award was extended from time to time.
(4) The learned Arbitrator made his award on 29.5.1992. He disallowed the claims against claim Nos. 2, 5, 8, 10, 14, 15, 19, 20, 23, 24, 29, 30 and 32. Claim in respect of item Nos. 3, 4,6, 7, 9, 13, 16, 21, 22, 25, 26 and 27 of the petitioner were partly allowed whereas full claim was allowed in respect of claims Nos. I, Ii, 12, 17, 18 and 28. The learned Arbitrator awarded interest in respect of claims allowed except in respect of amounts awarded against claims No. 25, 26 and 27 at the rate of 12% per annum for the period before reference, pendent lite of reference and after award till payment.
(5) In all Rs. 3,01,381.00 including interest up to the date of Award with further interest at the rate of 12% per annum on the amount of Rs. 99,783.00 till date of decree/payment were awarded.
(6) The petitioner filed an application under section 14 of the Arbitration Act (for Short Act) on 23rd July, 1992; the award and the proceedings were filed in the Court, notice of filing of the award was given to both the parties, petitioner did not file any objections and only respondent has filed objections under sections 30 & -33 of the Act which were registered as Ia No. 3575/93. As there was delay in filing the objections a separate application under section 5 of the Limitation Act being Ia No. 2947/93 was filed.
(7) Petitioner in reply disputed the validity and correctness of these objections. On the pleadings of the parties the following issues were framed: 1. Whether any sufficient cause is made out for condensation of delay in filing the objections? 2. If issue No. 1 is found in favour of respondent No. 1, is the award dated 29th May, 1992 liable to be set aside, on the grounds taken up in the objection petition, being Ia No. 3575/93? 3. Relief.
(8) Issue No. 1 was decided on 1st September, 1995 in favour of the respondent. Application for condensation of delay was allowed and delay was condoned.
(9) Learned counsel for the respondent has contended that the learned Arbitrator was required to give reasons for the award under clause 25 of the agreement but he has not given any reasons and only conclusions are given and in respect of some claims even without any evidence or material on record and on mere conjunctures and the learned Arbitrator thereby has misconducted himself. The award is bad and liable to be set aside. He has relied on the authority College of Vocational Studies Vs. S.S. Jaitely Air 1987 Delhi 134 (DB) Whereas learned counsel for the petitioner has contended that there is no error apparent on the face of the award, the award as a reasoned one in respect of each item awarded and this court is not sitting in appeal and has only very limited power to interfere with the award. No ground exists to interfere with the award.
(10) He has relied on the State of Rajasthan Vs. Puri Construction Co. Ltd. & Am. It 1994(6) Sc 412; Dda Vs. Alka Ram ; M/s. Narain Dass R. Israni Vs. Union of India ; M/s. A.S. Sachdeva & Sons Vs. Dda 1996(1) Aib. Lr 148; M/s Atree Associates Vs. DDA; 1996 (3) Ad (Delhi) 769; Kochar Construction Works Vs. dDA 1996(1) Ad 821; M/s. Uttam Singh Duggal & Co. Vs. Union of India 1988(2) Arbitration Law Reporter 225; Municipal Corporation of Delhi Vs. Mis. Jagan Nath Ashok Kumar ; S.S. Jetty Vs. Dda 1994(1) Arbitration Law Reporter 274; Rawla Construction Company Vs. Union of India 1982 Rlr 20, Mis. Metro Electric Co. Vs. Dda 1980 Delhi 266 (DB); Pun Construction Co. Pvt. Ltd. Vs. Union of India ; Food Corporation of India Vs. Joginder Pal Mahinder Pal & Am. .
(11) As already noticed as provided in claim No. 25, the Arbitrator was required to give reasons as the claims exceeded Rs. 50,000.00 .
(12) Before going into the merits of the case brief reference is being made to the law about the scope of the power of the Court to interfere in the award given by an Arbitrator who is the Tribunal chosen by the parties.
(13) It is well established that an award made by an Arbitrator is conclusive as a judgment between the parties and the Court is entitled to set aside the award only if the Arbitrator has mis conducted himself for the proceedings or when the award has been made after the issue of an order by the Court superseding the arbitration or if the Arbitration proceedings have become invalid under section 35 of the Act, or where an award has been improperly procured or he has proceeded beyond jurisdiction or is otherwise invalid under section 30 of the Act. The award may be set aside by the Court on the ground of error on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the Arbitrator had committed some mistake in arriving at some conclusion. Jivaraj Bhai Ujamshi Sheth & Ors. Vs. Chintamanrao Balaji ; State of Rajasthan Vs. Mis. R.S. Sharma & Co. .
(14) It is also will settled that section 1 of the Evidence Act in its rigour is not intended to apply to proceedings before an Arbitrator.
(15) The scope of interference by the Court is limited. Appraisement of evidence by the Arbitrator is ordinarily never a matter which the Court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of evidence. The Court has no jurisdiction to sit in appeal and examine the correctness of the award on merits. The Arbitrator is the sole Judge of the quality as well as quantity of the evidence and it is not for the Court to take upon itself the task of being a Judge of the evidence before the Arbitrator. It may be possible that on the same evidence the court might arrive at different conclusions than the one arrived at by the Arbitrator but that by itself is no ground of setting aside the award of an Arbitrator where there is no violation of principles of natural justice nor there is any allegations of misconduct nor that the Arbitrator has not considered the material produced before him or has not heard the parties or has not given opportunity to lead evidence. Municipal Corporation of .Delhi Vs. Mis. Jagan Nath Ashok Kumar Air 1989 Sc 2316; Pun Contractors Pvt. Ltd. Vs. Union of India . As held in New India Civil Contractors Pvt. Ltd. Vs. Oil and Natural Gas Corporation It 1997(2) Sc 633 normally the Court would not interfere. The attempt of the Court should always be to support the Award within letter of law.
(16) Following observations made by Lord Goddard, CJ. in Mediterranean & Eastern Export Co. Ltd. vs. Fortress Fabrics Ltd. (1948)2 All Er 186 at pages 188-189 have been referred to with approval by the Supreme Court in Municipal Corporation of Delhi Vs. M/s. Jainath Ashok Kumar & Anr. in respect of an award made by an arbitrator who is a knowledgeable person on the subject matter of the dispute:- "The day has long gone by when the Courts looked with jealously on the jurisdiction of the Arbitrators. The modern tendency is in my opinion more especially in commercial arbitrations, to endeavour to uphold awards of the skilled persons that the parties themselves have selected to decide the questions at issue between them. If an arbitrator has acted within the terms of his submission and has not violated any rules of what is su often called natural justice the Courts should be slow indeed to set aside his award."
(17) In Food Corporation of India Vs. Joinder Pal Mahinder Pal the relevancy, importance, purpose of arbitration and scope of the power of the Court to interfere in the matter of award has been emphasised as under: "Arbitration as a mode for settlement of disputes between the parties has a tradition in India. It has a social purpose to fulfill today. It has a great urgency today when there has been an explosion of litigation in the Courts of law established by the sovereign power. New rights created, or awareness of these rights, the erosion of faith in the intrinsic sense of fairness of men, intolerant and uncompromising attitudes arc all the factors which block our courts. The courts are full of litigations which are pending for long time. Therefore, it should be the endeavour of those who are interested in the administration of justice to help settlement by arbitration if possible. It has also a social efficacy being the decision by the consent of the parties. It has greater scope of acceptance today when there is a certain erosion of faith in view of the failure in appreciating the functions of the Courts of law. It has also the advantage of not (only) quickness of decision but of simplicity of procedure. But in proceedings of arbitration, there must be adherence to justice, equity, law and fair play in actions. However, the proceedings of arbitration must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the disputes and create confidence of the people for whose benefit these processes are resorted to. It is, therefore, the function of the Courts of Law to oversee that the arbitrators act within the norms of justice. Once they do so and the award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. It is in this perspective that one should view the scope and limit of correction by the Court of an award made by the Arbitrator. ....."
(18) Thus, the jurisdiction to interfere by the Court of Law in an award made by the Arbitrator chosen by the parties is circumscribed. The adjudication of the disputes by the arbitrator can be challenged within the parameters of the several provisions of the Act and the Legislature in its wisdom has limited the scope and ambit of challenge to an award in the Act itself.
(19) When an Arbitrator is required to give reasons for the award, he is not required to write a detailed judgment setting out each logical step of his reasoning but it is sufficient if he indicates the brand of his thought process, so that errors can be eliminated and arbitrariness avoided. What reasons are sufficient in any particular case must depend upon the facts of that case. (DDA Vs. M/s. Alka Ram ; Dda Vs. Mis. Uppal Engineering Construction Co.; Narain Dass R. Israni Vs. Union of India ). In College of Vocational Studies Vs. S.S. Jaitely Air 1987 Delhi 134 (DB) also no different principle has been laid down.
(20) In Municipal Corporation of Delhi Vs. Mis. Jagan Nath Ashok Kumar, Air J9S7 Sc 2316 it was held that when the reasons given by the Arbitrator arc germane, relevant and have rational nexus with the conclusions arrived at by him, the reasonableness of the reasons cannot be challenged and it cannot be said to be unreasonable. The word "reasonable" has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor called on to act reasonably knows or ought to know. Reasons vary in its conclusions according to the idiosyncrasy of the individual and the limes and circumstances in which he thinks.
(21) In Goa, Daman & Diu Housing Board Vs. Ramakant V.P. Darkotkar (a decision by 5 Judges) the same principle has been applied. In that case a retired Superintending Engineer was appointed as Arbitrator, he was required to give reasons for the award.
(22) In his award the Arbitrator after setting out in detail rival contentions and the documents relied on therein, gave his Findings to the effect that, "Considering the arguments advanced by both the parties and after carefully considering the various letters, documents and exhibits relied by both the parties I give my finding as.........". . Awards were filed in Civil Court. Objection that the Arbitrator had not given reasons and so had misconducted himself was rejected by the Trial Court.
(23) In appeal the High Court upheld the objection that the Arbitrator had not given reason and had misconducted himself observing as under: "The Award nowhere contains any reasoning for the same nor docs even it obliquely mentions that in giving his findings the Arbitrator has even sought to adopt the reasoning of either of the parties. In our view as the obligation of the Arbitrator under clause 25 of the agreement stands, the reasons should appear to be so in this case, The awards were set aside and remitted to the Arbitrator for giving reasons for the same."
(24) In further appeal the Supreme Court reversing the decision of the High Court held that: "Of course the High Court has come to a finding that the Arbitrator was guilty of misconduct for his failure to give reasons as required. There is, however, nothing to show that the Arbitrator misconducted himself or the proceedings in any other manner nor there is anything to show that the awards have been improperly procured. There is no allegation, far less, any finding, that the Arbitrator was biased or unfair or he has not heard both the parties or he has not fairly considered the submissions of the parties in making the awards in question. In our opinion, it is evident from the-four awards made by the Arbitrator that the Arbitrator has considered all the Specific issues raised by the parties in the arbitration proceedings and came to his finding after giving cogent reasons. The above awards cannot under any circumstances be considered to be made by the Arbitrator without recording any reasons for the same."
(25) The validity of the award is to be judged in the light of this legal position.
(26) As already noticed claim of the petitioner in respect of 13 heads, namely, claim Nos. 2, 5, 8, 10, 14, 15, 19, 20, 23, 24,29, 30 and 32 has been disallowed and the petitioner has not raised objections against the award. As such claim of the petitioner in respect of these items is no longer in dispute here. The respondent has not filed any objections in respect or claims No. 12, 17 and 28. That is also not in dispute. Claims in respect of remaining heads have however been allowed some partly and some in full.
(27) Claim NO. 1. Rs. 5,221.00 cutting of holes and making good in brick masonry for passing of service pipes. Claimant had alleged that he had to lay 150 mm diameter, pipes for connecting two internal manholes in the Court Yard with the manhole in the outside verandah later as the decision for lay out of these was taken by the respondent after the brick work was completed up to the plinth level. The claimant had to cut holes in the brick masonary and make them good for laying of service pipes. He had claimed for this extra item vide his letter dated 20.1.1983 (Ex.C-1), reminder dated 29.1.1983 (C-2) and further letter dated 4.2.1983(C-2) in respect of 504 numbers of such man-holes at the rate of Rs. 5.00 each with 107.25% enhancement, i.e., at the rate of Rs. 10.36 each amounting to Rs. 5221.00 . The claim was denied in letter dated 2.2.1983(Ex.R-1) on the ground that the holes were to be left so that no cutting is involved at a later stagehand instructions had also been given at site by the site staff. The rate claimed was alleged to be on very higher side. The learned Arbitrator has found, that the lay out of the sewer line was-not given at the appropriate time and the brick work had to be cut to make holes and then to make good the holes after laying the La pipes, this fact was not denied by the respondent. On this material the learned Arbitrator held that for this work extra amount was admissible. The number of manholes was not disputed before the Arbitrator. The learned Arbitrator has found that the rate is based on Delhi Schedule of Rates (DSR) and that enhancement is permissible under contract. The claim was accordingly allowed as justified. This claim is based on material on record and reasons have been given which cannot be said to be mere conclusion. Objection against this claim has no merit.
(28) Claim N0.3 Rs. 3600.00 for making holes in Rcc and brick work and making good rain water pipes. It was alleged by the claimant that under normal situation cutting of holes in Rcc and brick work is not involved for rain water pipes as these are normally laid along outside face of walls, but in this case claimant had to pass the rain water pipes through Rcc slabs and brick work after cutting holes and incurred extra expenditure of it and in making good these holes as this part of service was not included in the items relating to rain water pipes. Claimant had made claim for this work vide letter of 19.9.1984 (Ex.C-5) which was not replied by the respondent. The claimant made claim on two counts (1) 168 nos. holes in Rcc at the rate of Rs. 5.29 and (2) 168 nos. in brick work at the rate of Rs. 5.00 with escalation of 107.25% i.e., Rs. 1841.28 plus Rs. 1740.00 = Rs. 3581.28. This claim was denied on the ground that the drawings were issued in time on 3.1.1983 and as per drawings this item could be executed simultaneously during progress of the work. Before the arbitrator the claimant restricted his claim to the work of cutting holes in 54 Rcc Slabs and 48 Parapet Walls. Obviously, it was found that the instructions to this effect were given later on on 2.1.1983 and work had started on 28.11.1982. This was found as extra work by the learned Arbitrator, for this rate of Rs. 5.29 and Rs. 5.00 in respect of holes in RCC. and parapet walls respectively only, i.e., in all Rs. 525.66 has been awarded against the claim of Rs. 3600.00 . The rates allowed have not been alleged to be excessive or unreasonable nor number of holes was disputed. This claim is also based on material on record and contains good reasons. There is no wrong in it.
(29) Claim N0.4. Rs. 2309/ towards balance payment reg. over weight steel fabricated and manufactured. It was alleged by the claimant that under clause 10 of the agreement the respondent had undertaken to supply the reinforcement steel but 8.25 Mt steel issued was overweight which was duly recorded in the Register maintained for the purpose. The steel was fabricated, manufactured and placed in position by the claimant which involved extra expenditure and claimed at the agreed rate of Rs. 5.60 Per Kg. Against claim of Rs. 46,172.00 a sum of Rs. 43863.00 had been allowed by the respondent. He claimed only difference of Rs. 2309.00 . The respondent did not dispute the quantity of overweight steel but denied the claim on the ground that no extra labour was involved. Learned Arbitrator has given credit of 10% of the quantity due to wastage etc. and awarded Rs. 2078.00 only for 90% of this overweight steel at the agreed rate of Rs. 5.60 per Kg. This claim was obviously found as extra work. Neither reasons are lacking nor it is without material. No fault can be found with it.
(30) Claim N0.6 Rs. 1,67,000.00 extra payment for keeping shuttering for longer period. According to the petitioner the Cpwd specifications provide period of 7 days for keeping shuttering in position the respondent specifically ordered the claimants not to remove the shuttering before 10 days after casting of Rcc slabs, and for this extra period the petitioner had to incur extra cost. The claimant had claimed extra-rate of 40% over the agreed rate for it as per letter dated 15.3.1983 (Ext. C-11). (A calculation mistake appears to have been made in this claim as in respect of one item for claim of Rs. 12,446.00 Rs. 1,29,288.00 has been claimed). The department disputed the claim on the ground that no-extra costs was incurred. However, it was admitted that the respondent had ordered to keep the shuttering of roof slabs for 6 flats out of 336 flats for more time due to use of Progolanna cement for casting Rcc slabs. Learned Arbitrator found that instructions period were given by the respondent on 16.5.1983 and by that time 65 quarters had been completed. Against total shuttering area of 18,380.16 sq. mt. for 336 quarters, proportionate claim for 65 quarters at the rate of Rs. l.00 per sq. meter as extra cost, i.e., in all a sum of Rs. 3.556.00 only has been awarded. The learned Arbitrator has considered the material and circumstances and it cannot be said that he has acted unreasonably in the circumstances. Reasons are not lacking. There is nothing wrong in it.
(31) Claim N0.7 Rs. 2900.00 difference in rate claimed under clause 12(v) and those allowed by DDA. The claim pertains to extra item of providing and "fixing water meter boxes of size 375x300x110 mm against agreed size of 300x300x110 mm size thereby dimensions was increased by 25% and the claimant had to place a special order for the manufacture of this non standard item nor this was covered under clause 12(1) to 12(4) of the agreement and being an extra item he had submitted the rate under clause 12(5) vide letter dated 24.6.1983 (Ex.C-13) but no reply was received. The total meter boxes were 336 nos. The petitioner had claimed at the rate of Rs. 71.90 whereas claim was allowed by respondent at the rate of Rs. 6339. The petitioner claimed difference at the rate of Rs. 8.51 each. This claim was denied on the ground that the rate allowed was proper for the changed specifications. The learned Arbitrator has found that the claimant had first given the rate of Rs. 67.20 in their letter dated 14.6.1983 (Ex.R-6) and the increased rate of Rs. 71.90 given after few days was without any justification. The rate of Rs. 67.20 has been allowed and the difference in rate of Rs. 3.81 each for 336 numbers amounting to Rs. 1,280.16 has been awarded. Obviously, in the absence of any material to the contrary the rate furnished by the claimant was found justified. On the material on the record it cannot be said that this was unreasonable or is lacking in reasons. This objection has also no force.
(32) Claim N0.9 Rs. 15,120.00 man-holes beyond stipulated deviations. The claimant had alleged that against agreed quantity of 168 nos. of man-holes, the quantity provided exceeded permissible 50% limit by 84 nos. and for this extra item they had revised their rates vide letter dated 26.2.1983 (Ex.C-14). The claimant claimed for 84 nos. at the difference in rate of Rs. 180.00 each. Claim made being @ Rs. 760.00 whereas the rate of Rs. 580.00 was allowed amounting to Rs. 15.120.00 . The claim was disputed on the ground that the deviation is to be taken trade wise as a whole and not itemwise. It was not disputed that against permissible 50% deviation limit agreed, quantity of 84 Nos. was beyond deviation limit. The learned Arbitrator relying on judgment of Supreme Court in Mehta Teja Singh & Co. has held that deviation under clause 12-A has to be applied on individual item. For the rate allowed he has observed:- "HOWEVER,the rate of Rs. 760.00 each worked out by them as compared to the agreement rates seems to be much higher. The work was executed during the period 1983-85 and the rate as per Delhi Schedule of Rates 1985 is Rs. 796.34 each. After allowing for difference in costs of cement the rate shall be Rs. 736.00 each. I consider that this rate being the market rate justified rate."
And accordingly awarded at the difference of rate of Rs. 156.00 for 84 numbers, i.e., Rs. 13.104.00 . The learned Arbitrator has given reasons both for entitlement as well as of rate which he was competent to do so. This award is also based on the material available. There is no error apparent in it.
(33) Claim NO.11 Rs. 193.00 on account of repairs of shutters. The claimant alleged as provided under clause 10 of the Contract the respondent had supplied wooden shutters which needed repairs, these were shown to the site staff of the respondent and also pointed out in their letter dated 22.3.1985 (Ex.C-19) and intimation of repair work was also given vide letter dated 19.4.1985 (Ex.C-20). And the amount of Rs. 193.00 was not paid. The claim was denied on the ground that the shutters issued were not in good condition and if there was any damages it was the sole responsibility of the claimant. The learned Arbitrator in the absence of denial at the appropriate time accepted that the Shutters were defective and the claim of Rs. 193.00 was held justified and was allowed. Reasons have been given and this Court cannot go into its unreasonableness. The claim also cannot be said to be unreasonably allowed. No serious dispute was also raised during arguments. Objection to this effect also has no merits.
(34) Claim No.l3: Claim for Rs. 5,113.80 rebate wrongly recovered of extra items. The claimant alleged that they had agreed to a rebate of 1% on estimated cost of work for payment of their running account bills regularly every month. And this was accepted by the respondent vide letter dated 18.11. 1982 which formed part of the agreement. And this rebate was not agreed to be given on extra/substituted items. This rebate was availed by the respondent which was objected vide letter (Ex.C-22). The case of the claimant is that the total value of extra substituted items was Rs. 8,18,913.00 and rebate of Rs. 5,113.80 was deducted to which they were not entitled to and which is liable to be refunded. Respondent claims that rebate was availed as agreed. Learned Arbitrator on the basis of agreement has found that it was available only on estimated cost. The estimated cost was Rs. 43,55,694.00 and not Rs. 40,55,964.00 taken by the learned Arbitrator apparently by mistake and on this estimated amount the rebate would be Rs. 54,446.17. It has also been so calculated by the learned Arbitrator. The total recovery of the rebate made is Rs. 56,897.72. The learned Arbitrator has allowed claim for Rs. 2,451.55. During arguments on being demonstrated by the learned counsel for the petitioner that the error was committed in taking the wrong figure of estimated value the learned counsel for the objector did not dispute correctness of the amount awarded. This objection thus does not survive.
(35) Claim No. 16: Rs. 5348.00 wrongful deduction in final bill. According to the claimant deduction of Rs. 5,347.92 P. had been wrongly effected in respect of item No. 1, 2, 3, and 4, from the final bill after the expiry of period of 3 years without ever complaining of defects. The claim was denied and it is alleged that the defects were noticed and pointed out on 2.5.1983. The learned Arbitrator has observed that this pertains to deduction made by the respondent for use of 12x3 mm lugs, instead of 15x3 lugs in doors, window and ventilators. And it was agreed before him that the deficiency was only to the extent of amount of Rs. 24.80, which only is recoverable. Balance amount of Rs. 5,323.20 has been awarded. This was obviously an admitted claim and as such now the respondent cannot raise any objection. In the circumstances the claim cannot be said to be unjustified requiring interference.
(36) Claim No.18: Rs. 1,515.00 Surcharges charges deducted in final Bill. According to the claimant Rs. l,515.00 were deducted as storage charges without giving any reasons or notice and against the provisions of the agreement. The respondent alleged that it was in accordance with agreement. Learned Arbitrator has observed that the storage charges have not been mentioned in the agreement and as such this deduction was not permissible under clause 42. The learned Arbitrator has awarded it after construing the relevant clause of the agreement which he is competent to do. No fault can be found with the reasons given by him. This objection also has no merit.
(37) Claim No.21: Rs. 30,741.00 Making grooves in Plaster. The claimant had alleged that he had executed the work of making grooves in the rooms and on outer face of walls, measurements of which is given. The case of the claimant is that this was an extra item not included in the Schedule of Quantities and had claimed payment for this extra item vide their letter dated 19.9.1984(Ex.C-5) which was not replied. They accordingly claimed for 19,546.19 meters at the rate of Rs. 1.58 per meter on the basis of Dsr Rates with enhancement. This claim was denied on the ground that the claimant had not done extra work beyond specifications and no payment was due. The learned Arbitrator has not awarded any amount for the grooves done inside the rooms. The work and quantities for the outside faces was admitted as 5445.60 meters and the payment for this was considered admissible. The rate of Rs. 1.58 was also not disputed before him. He accordingly allowed a sum of Rs. 8604.05 P. Thus the learned Arbitrator has obviously awarded after construing the agreement which he was competent to do. No fault can be found with this claim awarded.
(38) Claim No.22: Rs. 6,047.00 Rebate for regular monthly payments. The claimant had alleged that the rebate was conditional and on the estimated cost of the work for making regular monthly payments. He claimed refund of rebate in respect of 3 bills No. 9, 13, and 17, on the ground that the bills were paid late and not in time. This claim was denied on the ground that payments were made regularly and as agreed. Before the learned Arbitrator claim for refund of the rebate in respect of para No. 13 was not pressed. Regarding remaining two bills the objection was that the bills were not furnished by the claimant. Learned Arbitrator has rejected this plea on the ground that the bills had not been submitted in other cases also and the general practice has been that the bills arc prepared by the respondents and the claim has been allowed. The learned Arbitrator has given reasons for awarding this amount. This court cannot find fault with the reasons in the circumstances. Objection against this claim is also not tenable.
(39) Claim No.25 Claim for Rs. 7,12,600.00 : site and head office overheads during the prolongation of contract period. The work was for a period of 12 months and commenced on 28.11.1982 but actually completed on 2.7.1995 after stipulated period. Delay was for the reasons on the part of the respondent. The petitioner claimed for loss suffered in respect of establishment, site overheads with corresponding head office over heads for prolonged period of 19 months under 6 heads; Claims under heads I and 5 which have been partly allowed are as under:- i) Expenses regarding site staff Rs.2,63,150.00 wages for 19 months 13850x19 (as per break up given in Annexure A. ii) Head Office overheads @ Rs.47,500.00 Rs. 2500.00 p.m. for 19 months (2500x19) The respondent had denied the claim on the ground that there was no fault to entitle such claim and escalation is covered by clause 10(C). It is also alleged that only work of the value of Rs. 32 Lacs was done after stipulated period and payment was made even for overhead charges as per agreement. The execution of the work was delayed by 19 months is not disputed. It was also not the case of the respondent that this delay was due to any faults or lapses on the part of the petitioner. The learned Arbitrator on the material available has given the following findings: "ACCORDINGLY,I feel that the claim by the claimants is inflated. For the total period of 19 months, wages of site staff have been claimed fully. I hold that engineer, pump operator. Store keeper and material receiver, would be required for the extra period whereas the requirement of foreman, technical supervisor, Assistant Supervisor, Materials Marketing Munshi, Mechanics, and Watchmen would not be constant. Considering this element I consider that it will be fair if against this claim of Rs. 2,63,150.00 an amount of Rs. 92,000.00 is allowed."
Wages in respect of one Engineer, Pump Operator, Store Keeper and Material Receiver in Schedule 'A' was given as Rs. 4200.00 p.m. which has been allowed. The learned Arbitrator has not disallowed the full balance claim. The Arbitrator was the Chief Engineer and was an expert in the line. He would he aware of the expenditure involved on staff and over heads during execution of work. In such matter, some guess work is necessarily involved in such computation. No misconduct has been imputed to the Arbitrator. On the question of computation he is competent to make and it was within found on this computation made by him. In item No. 5 the claim has been made on account of office overheads at the rate of 50% of office expenses. The learned Arbitrator has given the following reasons: "Para 5 is regarding head office overheads. The claimant have claimed 50% of head office expenses. They are working contractors and done works in the past, had other works in hand, would be prospecting for other works. Therefore, 50% for one work are high. 10% of the expenses could be accepted for one work. Accordingly, he has allowed this claim at the rate of Rs. 500 p.m. for 19 months. For the same reasons as given in item (i) above no fault can be found with this claim also.
(40) Claim No.26: Rs. 3,66,400.00 : Escalation in respect of work done beyond stipulated date of completion. The claimant has claimed that the total value of the work done was Rs. 93,76,746.00 whereas up to the stipulated date of completion, the work done was of Rs. 57,12,738.00 and thus the value of the work done beyond stipulated period was of Rs. 36,64,010.00 . The claimant claimed escalation on it at the rate of 10% amounting to Rs. 3,66,400.00 . This claim was denied on the ground that this claim is repetition of claim No. 25 and moreover for the escalation in the labour wages Rs. 12,680.00 has been paid under clause 10(C) and also that there was no increase in the price of bricks, and no such claim had been made by the claimant during the progress of the work. The learned Arbitrator has found that no provision was made for increase in price as a result of prolongation of contract. He has obviously construed the term of the contract which he is entitled to do. The learned Arbitrator has observed that "It is considered that in a building work the cost of labour is about 30%. The value of work done after stipulated period is about 36 Lacs of rupees. Allowing for 25% total overhead including those covered under claim 25(.........). The inputs by the claimants would be of the order of Rs. 27 Lacs. The material inputs would be 70%, i.e., 19 Lacs. Material worth 17 Lacs has been supplied by the department. Thus an input of 8 lacs has been made by the claimant which deserves computation of escalation. The increase in total cost index on an average has been worked out as 8.75% which is for all factors, i.e., labour, cement, steel, pipes etc.". Being an expert in the line the Learned Arbitrator is aware about the components involved in assessing the cost and also the escalation involved. He has bifurcated the burden of escalation. He has made computation after taking into consideration the relevant factors which he was competent to do. No fault can be found with this computation. He has awarded only Rs. 10,000.00 on this head. It cannot be said to be unreasonable or docs not show the basis for making this award. His mental thought process is given. There is no error apparent in awarding it. This objection also fails.
(41) Claim No.27: Claim of Rs. 14,25,400.00 Loss of profit. The petitioner claimed that due to prolongation of contract the petitioner had suffered loss of profit of Rs. 75,000.00 per month for 19 months. This claim has been denied by the respondent on the ground that neither the claimant is entitled nor there is loss of profit involved. The learned Arbitrator has not accepted whole of this claim. He has allowed the claim of profit only in respect of amount awarded on Claims No. 25 & 26 at the rate of 10% due to prolongation of the time, as in claim against these items No. 25 & 26 he has not considered or awarded on this count. Claims allowed under heads 25 and 26 are Rs. 1,01,500.00 and Rs. 40,000.00 , i.e. Rs. l,41,500.00 and not Rs. 1,51,500.00 as wrongly mentioned obviously by mistake. This was also pointed out by the learned counsel for the petitioner during arguments. Thus on this claim amount payable would be Rs. 14,150.00 and not Rs. 15.150.00 . This mistake can be corrected by this Court under Section 15 of the Arbitration Act, and is so corrected. No fault can be found with this also.
(42) Claim No.31; Claimant has claimed pre suit pendente lite and future interest at the rate of 12%. This was not disputed during arguments. The learned Arbitrator was competent to award interest as allowed by him. In view of the above discussion except the clerical mistake of Rs.1,000.00 in item No. 271 do not find any error illegality or infirmity in the award. This clerical mistake is being corrected under Section 15 of the Act. Except this I do not find any merits in the objections and the same are hereby dismissed. It is accordingly ordered that the award dated 29.5.1992 of the Arbitrator is made a rule of the Court in the amount of Rs. 3,00,381.00 instead of Rs. 3,01,381.00 with interest as awarded by the learned Arbitrator. Petitioner is also awarded interest at the rate of 12% per annum from the date of this decree till realisation on the amount of Rs. 99,783.00 . Petitioner is also allowed costs assessed Rs. 3,000.00 . Award as corrected shall form part of the decree. Ia No. 3575/93 and Suit No. 2746/92 are disposed of accordingly.