Delhi High Court
Jeet Singh vs Delhi Development Authority on 22 July, 2009
Author: Shiv Narayan Dhingra
Bench: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: 09.07.2009
Date of Order: 22nd July, 2009
CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections)
% 22.07.2009
Jeet Singh ... Plaintiff/Petitioner
Through: Nemo
Versus
Delhi Development Authority ... Defendant/Respondent
Through: Mr. Gaurav Sarin, Advocate with
Ms. Supriya Juneja, Advocate for DDA
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
DDA/Respondent has filed objections against award dated 3.12.1994 whereby the learned Arbitrator allowed some and disallowed some of the claims and counter claims. Objections have been filed claim-wise. They are being dealt with claim-wise.
2. Claim No.1 was raised by the petitioner for a sum of Rs.22,059.61 on account of part rates and claim no.10 was raised for Rs.10,000/- on account of balance payment. The Arbitrator considered both these claims together. The CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 1 of 8 respondent during the arbitration proceedings submitted a second running bill and final bill and admitted that an amount of Rs.15,990/- was payable under these bills to the petitioner however, this admission was made subject to admissibility of counter claim of DDA. The Arbitrator awarded Rs.15,990/- on the basis of this admission.
3. Claim no. 2 was on account of penal rate recovery of cement, made by the claimant for a sum of Rs.6,105/-. The respondent admitted refund of Rs.4537.50 and disputed amount of Rs.1567.50. The learned Arbitrator observed that by virtue of clause 42 of the agreement, the recovery could not be enforced unless the DDA/respondent established loss suffered by it.
4. Clause 42 regarding consumption of cement provided that the cement to be used had to be calculated on the basis of statement showing quantity of cement theoretically to be used in different items of works, as provided in the Delhi Schedule of Rates, 1981 printed by the CPWD and over this theoretical quantity of cement, a variation upto 3%± would be allowed where the cost is not more than Rs.5 lac and 2%± variation to be allowed where the cost of the tender was more than Rs.5 lac. It is provided that in the event where there was difference in the quantity of cement issued and theoretical quantity, inclusive of variation then the remaining cement shall be returnable. If it is not returned the contractor shall pay penalty at the rate of twice the issue rate.
4. When this clause was made a part of the contract the cement was a controlled item. The market rate of the cement was more than double the control rate and this clause was introduced to prevent the pilferage and misuse of the CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 2 of 8 cement by contractor. The theoretical quantities were provided in the Delhi Schedule of Rates. The learned Arbitrator's observation that the respondents (DDA) was to establish a loss suffered by it and the contract was hit by Section 74 of the Indian Contract Act is contrary to law. The contractor had agreed to this provision with open eyes. It was not required by DDA to show that DDA had suffered a loss. The parties were at liberty to provide a clause based on theoretical quantities, since it is not practically possible to measure and check actual quantity of cement used. It is settled law that the Arbitrator is bound by the terms of the agreement and cannot write a new agreement between the parties. Allowing of Rs.1567.50 by the Arbitrator was not permissible being contrary to contract. DDA was not supposed to prove either pilferage or misuse or loss. I, therefore, consider that the Arbitrator exceeded his jurisdiction by allowing this amount contrary to the contract. This part of the award is therefore set aside.
6. No serious objection has been raised against claim No.3.
7. Under Claim No.4 petitioner had claimed Rs.5000/- on account of barricading the site. The learned Arbitrator observed that the special barricading done by the petitioner along the alignment on both sides as per specifications/directions of the Engineer-in-Charge was to be paid as this was recorded in the measurement book and was not paid. He therefore, allowed a sum of Rs.3521.88 against this claim. The relevant conditions/clauses regarding barricading are as under:
CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 3 of 8
25. The Contractor shall take all necessary measures for the safety of traffic during construction and provide, erect and maintain such barricades, including signs, markings, flags, lights and flag-men as necessary at either end of the excavation/embankment and at such intermediate point as directed by the Engineer-in-Charge for the proper identification of the construction.
26. The temporary warning lamps shall be installed at the barricades during the houses of darkness on kept lit at.
27. All arrangements for traffic during construction including maintenance thereof shall be considered as incident ailing to the works and contractor responsibility and nothing shall be payable to him this respect.
8. A perusal of above clauses would show that while executing the work, the contractor was supposed to take measures for public safety and was supposed to barricade the site during construction and this barricading was to be done all along the construction as a part of contract. No separate amount was payable to the contractor for barricading. Merely because barricading had been recorded in the measurement book would not entitle the contractor to claim amount on account of barricading. The contractor is entitled to the claim only as per contract. If the contract does not provide for an item to be paid, even if it is recorded in the measurement book, no claim can be laid for such an item. I, therefore hold that the award of the Arbitrator on this count is contrary to contract and is liable to be set aside.
9. In Claim No. 8, the petitioner claimed Rs. 20,000/- paid short for excavation and timbering on the ground that the work was carried out in running sand conditions under water. The slopes of excavation were given which were necessary according to site conditions and open timbering was inevitable to retain CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 4 of 8 the sides of excavation in loose soil and running sand conditions in water. It was stated that open timbering was provided being necessary in accordance with the agreement and no payment had been made against these items. The claimant/petitioner restricted its claim to the tune of Rs.12,428/-. The respondent has objected to award against this claim stating that the Arbitrator awarded a sum of Rs.10,488/- to the petitioner but failed to give any reasons for awarding this amount. The learned Arbitrator also failed to consider that the payment in regard to the excavation has already been made and the claim made by the petitioner was over and above the amount already received by him and due to him.
10. A perusal of contract shows that the excavation of trenches was provided under item nos. 1-7. The open timbering was provided in item no.6, in case of those trenches where depth exceeded 1.5 meter the respondent/DDA had finalized the final bill as stated by the learned Arbitrator in claim no.1. This bill included all the items as payable to the petitioner and a sum of Rs. 15,990/- was awarded by the Arbitrator on the basis of final bill. It is not understood once the final bill was agreed to between the parties and payment received under final bill, how the additional claim could be raised in respect of different items. All items executed by the contractor and measured form part of the final bill. In the present case, even items like barricading were measured and recorded in the measurement book. Once the final bill has been settled, additional claim in respect of short payment could not have been entertained by the learned Arbitrator. The learned Arbitrator has given no reason as to on what basis he awarded Rs.10,488/- to the claimant and why he did CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 5 of 8 not award Rs.12,428/- to which the claim was restricted by the claimant during the proceedings. I find that awarding of this amount was contrary to the contract and no payment could have been allowed by the Arbitrator on whims and fancies. He could allow only those claims, which were as per contract but were not included in the final bill. The award in respect of this claim is set aside.
11. Counter claim no. 1 made by the respondent/DDA for a sum of Rs. 1,67,651/- was rejected by the learned Arbitrator. The respondent had claimed this amount stating that the bill of the petitioner was in minus due to deductions items and statement of incomplete work. However undisputedly, the minus bill was only for Rs.5,776/- showing Rs.5,776/- was to be recovered from the petitioner. The Arbitrator observed that since the respondent had agreed in claim no.1 and that claimant was entitled for Rs.15,990/- after finalization of the final bill, this counter claim of minus bill was not tenable. I find no reason to disturb this finding.
12. Counter claim no.2 was regarding penal recovery of cement, for which I have already made observation in claim no. 2. Counter Claim No. 3 was made by the respondent for sum of Rs.27,935/- for penalty under Clause 14 of the agreement, as claimant had failed to rectify the defects despite notice dated 22.10.1992. The learned Arbitrator observed that respondent levied compensation under Clause 14 much after the stipulated date of completion i.e. 13.5.1991 at the time when the process of arbitration had already started he observed that mere presence of a provision in the agreement does not empower the respondent to levy compensation unless the loss was proved and rejected the counter claim.
CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 6 of 8
13. The respondent/DDA had submitted that this was not a valid ground for rejecting the counter claim. The Arbitrator failed to take into consideration Exhibit R-13/1 showing that the claimant had failed to remove the defects as pointed out to him and the respondent was within its right to levy the penalty in terms of clause 14.
14. A perusal of clause shows that all notices of inferior quality or defective work were to be served on the contractor, within 06 months of completion of the work, by Engineer-in-Charge specifying the material and articles. It is apparent that the notice was not served within six months as provided in the contract. The penalty could be levied only if the notice was served in accordance with this clause. The learned Arbitrator therefore rightly rejected this counter claim.
15. The learned Arbitrator also rejected a counter claim of the respondent/DDA for Rs.93,977/- on account of risk and costs for rectification of defects under Clause 14 on the same grounds. I consider that for the reason stated in para 14 above the Arbitrator rightly rejected this counter claim. Another counter claim was raised by respondent for sum of Rs.20,607.58 on the ground that agreement item no.4 was partly done by claimant and remaining part of the item was got executed at the risk and cost of the claimant. The Arbitrator observed that this was not covered under Clause 14 and the Claimant was not paid for the work not done therefore this counter claim was not tenable. I find no reason to disturb the award on this count. Another counter claim of Rs.22,935/- was made by the respondent on account of extension of time. The learned Arbitrator allowed a sum of Rs.987/- against this award. No challenge has been made to this part of the award. CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 7 of 8
16. In view of my above discussion the award given by the learned Arbitrator for a sum of Rs.1567.50 under claim no.2, Rs.3521.88 under claim no.4 and Rs.10,488/- under claim no.8 are hereby set aside, rest of the award is upheld and made a Rule of Court. The petitioner would be entitled to an interest @ 6% from the date of award till recovery.
Decree Sheet be prepared.
July 22, 2009 SHIV NARAYAN DHINGRA, J.
vn
CS (OS) No. 436A/1995 & IA No. 2838/1995 (Objections) Page 8 of 8