Delhi High Court
M/S. Kirpal Singh Khurana & Sons vs Union Of India And Others on 27 March, 1995
Equivalent citations: 59(1995)DLT259, AIR 1996 DELHI 84, (1995) 59 DLT 259
JUDGMENT Usha Mehra, J.
1. M/s. Kirpal Singh khurana & Sons entered into a contract with Union of India through the Executive Engineer, P.W.D. for execution of the work of construction of Government Senior Secondary School at Andha Mugal, Delhi including the inter water supply and sanitary installations, the said agreement contained an arbitration clause. Disputes arose between the parties in respect of the contract which were referred to Shri V. Nainani, respondent No. 2 herein for adjudication in terms of the Arbitration clause.
2. The sole arbitrator made and published his award dated 30th June, 1992.
3. On an application moved under Section 14 the Arbitrator Act (in short 'Act') by the petitioner herein, directions were given to the arbitrator to file the award in court. Against claim No. 1 of the said award, the petitioner filed objections under Section 30 and 33 of the Act. The respondent/Union of India did not file any objection, on the contrary deposited an amount of Rs. 25,061.42. This court vide order dated 12th August, 1994 made the award against Claims No. 2, 3 and 4 rule of the court. Decree in terms of Claims No. 2, 3 and 4 was passed. It is only against Claim No. 1 that the controversy has arisen between the parties.
4. The arbitrator has given reason for the conclusion arrived at by him. The arbitrator while discussing Claim No. 1 was referred to various clauses of the agreement. Claim No. 1 has relates to a claim on a account of deviation in quantity of agreement in item 3.5.11 under clause 12-A of the agreement. The petitioner had claimed a sum of Rs. 2,02,821/- on account of deviation to the quantities of item No. 3.11 calling for revision of rates under Clause 12-A of the agreement. The agreement item No. 3.11 provides as under :
Item No. 3.11 :
"Reinforcement for RCC work including cutting, bending and binding placing in position etc. complete (b) Cold Twisted Bars".
5. The quantity as per the agreement worked out to 2,64,453 kg. and the rate was Rs. 7.50 per kg. Drawings were to be supplied by the respondent. On the basis of the drawings it transpired that the quantity of the agreement item No. 3.11 as provided for in the contract would be inadequate and the same was exceeding the deviation limit provided for in the contract. The deviation limit provided under the contract was 25%. As per the terms of the contract, the rates for individual item executed beyond 25% were to be paid in accordance with Clause 12-A of the Agreement. Clause 12-A of the agreement reads as follows :
Clause 12-A :
In the case of contract or substituted items which individually exceed the quantity stipulated in the contract by more than the deviation limit, except the item relating of foundation work, which the contractor is required to do under Clause 12 above, the contractor shall within 7 days of the receipt of the order, claim revision of the rates supported by proper analysis of items for quantities in excess of the deviation limit, notwithstanding the fact that rates for such item exist in the tender for the main work or can be derived in accordance with the provisions of sub-clause (ii) of Clause 12 and Engineer-in-charge may revise their rates, having regard to the prevailing market rates and the contractor shall be paid in accordance with the rates, so fixed. The Engineer-in-charge shall, however, be at liberty to cancel his order to carry out such increased quantities of work by giving notice in writing to the contractor and arrange to carry it out in such a manner as he may consider advisable. But under no circumstances, the contractor shall suspend the work on the plea of non-settlement of rates of items falling under this clause. All the provisions of the present paragraph shall equally apply to the decrease in the rates of the items for quantities in excess of the deviation limit, notwithstanding the fact that the rates for such items exist in the tender for the main work or can be derived in accordance with the provisions of sub-clause (ii) of the precedent clause 12 and the Engineer-in-charge may revise such rates having regard to the prevailing market rates."
6. It was the case of the petitioner that as per clause 12-A petitioner requested the respondent to revise the rates for this item of work executed beyond the deviation limit. Rates claimed were @ Rs. 8.68 per kg. The rate quoted by the petitioner for the excess work executed beyond the deviation limit was according to the prevalent market rate at that point of time. It was further contended by the petitioner that the respondent never denied the rate of Rs. 8.68 per kg. as the market rates, nor denied the claim of the only defense taken by the respondent, before the arbitrator was that the petitioner had not fulfillled other conditions required under the said clause for making this claim. What those conditions were, the respondent never specified before the arbitrator.
It is the grievance of the petitioner that the arbitrator behind the back of the petitioner/objector took into consideration the rate of other alleged contemporary agreements. The arbitrator against claim No. 1 stated as under :
"the respondent on the other hand argued that provisions of various sub-clauses of Clause 12(vi) precedent to applicability of/Clause 12-A were not satisfied in this case and thus the agreement rate only was payable for the whole quantity executed as per the terms agree. I uphold the contentions of the respondent in this regard. In fact keeping in view that the reinforcement was being issued by respondents at a fixed cost of Rs. 6.50 per kg. comparing with the agreement rates of other contemporary agreements. I am of the view that the agreement rate of Rs. 7.50 per kg. of the item already reflected its market rate."
7. From the reading of these observations it is apparent that the arbitrator did consider some contemporary agreements. There is nothing on the record to show that these agreements were relied by respondent or were shown to the petitioner by the arbitrator. Hence, reliance by the arbitrator on contemporary agreements to arrive at market rates behind the back of the petitioner tentamount to misconduct of the proceedings. The respondent has not been able to show even today that contemporary agreements were placed before the arbitrator to prove that Rs. 6.50 per kg. was the prevalent market rate. Therefore, I find force in the submissions of Mr. Sanjay Poddar, counsel for the objector that the arbitrator misconducted the proceedings in taking into consideration the documents behind the back of the petitioner, thereby depriving the opportunity to the petitioner to meet those documents or to explain the same. Thus, the award against Claim No. 1 is liable to be set aside. Order accordingly.