Delhi High Court
Govt. Of Nct Of Delhi vs Ved Prakash Mehta on 8 September, 2005
Author: Swatanter Kumar
Bench: Swatanter Kumar
JUDGMENT Swatanter Kumar, J.
1. These are the objections filed by the Objector under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) to the award dated 12th May, 1999 made and published by the Sole Arbitrator-Respondent No.2 in furtherance to the reference of disputes made to him for adjudication.
2. The necessary facts are that the Govt. of NCT of Delhi through its competent officer had invited tenders for execution of the work 'of Increasing the capacity of NG Drain from Dhansa Regulator to Bharat Nagar Bridge, SW: Construction of Additional Regulator at Dhansa Bund'. The Respondent No.1 has submitted his tenders which was accepted by the Objector and Agreement No. EE/NDD.II/88/99/I was executed between the parties. Certainly disputes arose between the parties in relation to the work and the Contractor invoked the arbitration clause in the year 1994.
3. According to the objector the disputes were false but still the matter was referred to the Arbitrator according to the provisions of Arbitration Act, 1940. The Arbitrator-Respondent No.2 made and published his award on 12.5.1999 after the commencement of the present Act and to the said award objections have been filed by the objector.
4. It is not in dispute between the parties that the provisions of the 1996 Act would be applicable to the facts and circumstances of the present case and the objections filed by the objector under Section 34 of the Act are liable to be dealt with and disposed of by the Court in terms of the provisions and scheme of the 1996 Act. The main grounds of objections are (1) that the Arbitrator has misconducted the arbitration proceedings by going beyond the jurisdiction and terms of reference. (2) As per the terms of agreement wherever the claim is allowed in excess of Rs. 75,000/- the Arbitrator is supposed to publish a speaking award and in the present case though the Arbitrator has allowed a claim of Rs. 12,51,450/- the Arbitrator has not given reasons for giving award against various claims of the Contractor. (3) Claims No.8, 9 and 10 were not originally referred to Arbitrator but still they have been taken into consideration and awarded in favor of the contractor.
5. The claim of Rs. 4,50,000/- and Rs. 1,50,000/- awarded by the Arbitrator to the Contractor is either based on no evidence or is based upon the forged and fabricated documents and lastly that the arbitrator could not have granted 18% interest which is highly unjustified, arbitrary and liable to be set aside.
6. Parties in any case have considered that the matter in controversy has to be resolved under the provisions of the 1996 Act. However, reference can be made to the judgment of the Supreme Court in the case of Thyssen Stahlunion GMBH Vs. Steel Authority of India Ltd., .
7. It is again not disputed that in terms of the Clause 25 of the Agreement between the parties the Arbitrator shall give reasons where the amount claimed in disputes exceeds Rs. 75,000/-. This will be more so keeping in view the provisions of Section 31(3) of the Arbitration and Conciliation Act, 1996. I have perused the award subject to the discussion made hereinafter in this judgment, it cannot be said that the award of the Arbitrator is not a reasoned award. It is a award running into nearly 9 pages supported by the detailed proceedings and discussion on arguments raised on behalf of the parties before the Arbitrator. The Arbitral Forum is not required to write judgments by detailed discussion. What the Arbitrator is required to do is to make it clear from the award and the proceedings annexed thereto that contentions of the parties in reference to the record were considered and there is a nexus of reasoning between the pleaded facts and the conclusion drawn by the arbitrator in favor or against the parties. It may be noticed that while passing the award the Arbitrator has not only given some reasons followed by the discussion in the daily proceedings but have also referred to the extracts of the letter which according to the arbitrator were practical admission of the claim of the parties. Reference can be made to the judgment of this Court in CS(OS) NO. 1048/1998 titled as 'M/s. Fixopan Engineers (P) Ltd. Vs. U.O.I. & Anr.' decided on August, 11, 2005.
8. Furthermore, reference can also be made to the judgment of the Supreme Court in M/s. Arosan Enterprises Ltd. Vs. Union of India & Anr., where the Court clearly held that under Section 30 of the old Act the findings of the facts recorded by the Arbitrator based on appreciation of material on record would not be interfered by the Court in such proceedings. The scope of Section 30 of the old Act was apparently much wider than the scope of the objections under Section 34 of the present Act. The objector must essentially satisfy that the objections are relatable to and are covered under any of the Clauses of Section 34 of the Act and a general talk of the content and conclusion of the award would not be satisfactory cause for interference by the Court. The main thrust of the submissions on behalf of the objector was that the Contractor had done no work at the site ad as such he was not entitled to any damages for non-performance or on account of the material and machinery collected at the site. Furthermore, there was no evidence before the arbitrator to allow such claims. This argument is again without any merit. The arbitrator finding in this regard would hardly call for any interference. In the statement of claim filed by the Contractor before the Arbitrator specific reference was made that the Respondents in paragraphs 8-10 an issue was raised that the Respondents have failed to provide details and drawings despite repeated requests by the claimants and the claimants' machinery, manpower and material were rendered ideal which subjected to heavy loss to the Contractor. The drawings were not even supplied till the expiry of the date of contract. The reply filed by the Respondents to the Claim Petition before the Arbitrator have been denied but content thereof was hardly and properly questioned by the Respondents before the Arbitrator.
9. In the written arguments which were filed on behalf of the Objector before the Arbitrator under Claim 1(i) it was stated that at site only small quantity of earth work was carried out and it was duly paid on 21st May, 1988 and thereafter no claim was raised by the Contractor. In fact it is stated in the same written submission that the Department have asked the Contractor to go slow vide letter dated 20th January, 1988 but that has no relevancy to the claims in question. Thus, the denial that no work was carried out at the site by the Contractor is demolished by the own pleadings of the Objector before the Arbitrator. The findings recorded by the Arbitrator in this regard thus can hardly be questioned. The learned Counsel appearing for the Contractor has relied upon the judgment of the Supreme Court in the case of M/s A.T. Brij Paul Singh and Bros. Vs. State of Gujarat, where it was held that the party entrusting the work commits breach of contract, the Contractor will be entitled to claim damages for loss of profit which he expected to earn by undertaking the works contract. What must be the measure of profit and what proof should be tendered to sustain the claim are different matters but the claim under this head is certainly admissible. The arbitrator while dealing with the claim under these heads had referred to the letter of the Respondents dated 29th April, 1988, 10th June, 1988 and 21st May, 1988 in regard to non furnishing of drawings as well as wastage of manpower and material at site and the factum of the work being carried on at the site in question.
10. The learned Counsel appearing for the Objector while relying upon the judgment of the Supreme Court in the case of O.N.G.C. Vs. Saw Pipes Ltd., contented that the findings are not based upon any evidence and in fact are contrary to law. Merely referring to the judgment would not suffice. The objectors have failed to administer before the Court from the record of the arbitrator as to what claim is against law and is not based upon evidence. This Court while entertaining objections against the award does not sit as a Court of Appeal which would interfere with every findings of fact or finding of the law. The provisions of Section 34 of the Act are to be construed strictly and once the legislature in its wisdom has prescribed limitation for setting aside of arbitral award the objector must essentially show that he is covered by either of the grounds stated in those provisions. The claims were referred to the arbitrator and every claim which has been granted by the Arbitrator has been so asked for by the Claimant in his statement of claim and was duly discussed by the Arbitrator in the daily proceedings. The objections filed by the objector for all purposes and intent, challenges the finding of facts recorded by the Arbitrator. The scope of challenge besides being limited is not covered in the case of the petitioner by any of the provisions of Section 34 of the Act.
11. Lastly coming to the claim of interest granted by the Arbitrator there is no substance in the submission made on behalf of the Objector. Prior to the date of enforcement of this Act the question of interest could be debated in view of the judgment of the Supreme Court in the case of Executive Engineer, Irrigation, Galimala & Ors. Vs. Abnadutta Jena, . However, in view of the recent judgment of the Supreme Court in the case of T.P. George Vs. State of Kerala & Anr., and the provisions of Section 31(7)(a), award of interest can hardly be questioned. The grant of interest @ 18% per annum is justified in the facts and circumstances of the present case. In the face of the provisions of Section 31(7)(a) & (b) of the Act it was not obligatory upon the Arbitrator to discuss in detail the reasons for awarding 18% per annum. That is the expected rate of interest which a party would be entitled to unless the Arbitrator otherwise directs. Thus even this objection of the objector is without any merit.
12. For the reasons aforestated, I find no merit in this Petition, the same is dismissed while leaving the parties to bear their own costs.