Delhi High Court
M/S Anant Raj Agencies vs Delhi Development Authority & Anr..... on 8 July, 2009
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS)1887A/1996.
% Date of decision:08.07.2009
M/S ANANT RAJ AGENCIES ....... Petitioner
Through: Mr. Harish Malhotra, Sr. Advocate with
Mr. Uttam Datt & Ms. Meenakshi,
Advocates.
Versus
DELHI DEVELOPMENT AUTHORITY & ANR..... Respondents
Through: Mr. D.S. Mehandru with Ms. Alpana
Pandey, Advocates.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? Yes
2. To be referred to the reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
RAJIV SAHAI ENDLAW, J.
1. The petitioner had filed a petition under Sections 14 & 17 of the Arbitration Act, 1940 inter-alia for filing of the arbitral award dated 26th July, 1996 in this court and for making the same a rule of the court. Upon the arbitral award being filed in this court and notice thereof being issued, I.A. No.12811/1996 under Sections 30 & 33 of the Act was filed by the respondent DDA. No objections have been preferred by the petitioner to the award. Upon completion of pleadings in the objections preferred by DDA, the usual issues were framed on 11th August, 1997.
2. Disputes and differences had arisen out of the contract for construction of 448 EWS Houses in Block-G, Pockets 12 to 15, CS(OS)1887A/1996 Page 1 of 26 Rohini, Delhi. The objections preferred by DDA are hereafter taken up in seriatim as in the objection petition.
3. Re: Deduction of Rs.40,540.39p by DDA from the final bill with respect to items 1.1 to 12.6.
a) The award in para 4 thereof records that no reason for this deduction had been given by DDA and DDA before the Arbitrator also said nothing about this short payment. The Arbitrator thus for the reason of DDA having failed to give any justification for deduction thereof allowed the said payment to the petitioner.
b) The objection of DDA merely is that according to Clause 25 A this was an excepted matter, as the decision of the Supdt.
Engineer in this behalf is final and thus the award is outside the scope of arbitration. The counsel for DDA has along with a brief synopsis dated 15th January, 2007 placed on record a tabulation with respect to the various claims, award thereon and the objections of DDA thereto. However, therein also I do not find any reference to the award in the said sum. No arguments also have been addressed on the same.
c) A perusal of the agreement shows that Clause 25 A inter- alia provides that the decision of Supdt. Engineer regarding the quantum of reduction as well as justification thereof in respect of rates of substandard work which may be decided to be accepted will be final and would not be open to arbitration. DDA has in its objections neither pleaded nor shown that it had before the Arbitrator pleaded or shown that the said deduction was within the ambit of Clause 25 A or on account of substandard work or had the approval of the Supdt. Engineer. Without the same being pleaded or CS(OS)1887A/1996 Page 2 of 26 shown, no error on the face of the award or misconduct can be found. Even before this court nothing was shown as aforesaid. Without the contention having been considered before the Arbitrator of as to whether the said deduction was within the ambit of Clause 25 A or not, the same is not entertainable by this court.
The objection is dismissed.
4. Re: Deduction of Rs.1,03,577.72p from the final bill with respect to items 1.1 to 12.6.
a) The Arbitrator has held that the said deduction is on account of various rebates to which DDA under the agreement was entitled to for making regular monthly payments and for making payment of the final bill within six months of the date of completion of work and for making payments of extra items within three months of the date of occurrence and for releasing of security deposit within one month after the expiry of six months maintenance period. The Arbitrator found that the responsibility for preparing the bills was on both the parties; if the petitioner prepared the bill it had to be scrutinized by DDA by deputing the Jr. Engineer to check the measurements; in terms of Clause 8 A of the agreement measurements had to be recorded by an officer of DDA; though under the agreement the responsibility to submit the final bill is on the contractor but on the basis of measurements by official of DDA; that there was no evidence that DDA after completion of work ever recorded the measurements or intimated the same to the claimant; in the absence of recording of detailed measurements no fault can be attributed to the claimant; that there is practice prevailing in DDA for preparation of CS(OS)1887A/1996 Page 3 of 26 running bills and the final bills by DDA; that no notice had been given by DDA to the petitioner to file the running account bills. In the circumstances the award holds that DDA had failed to make the payments/release the security deposit within the time and only whereupon it was entitled to avail the rebate. The award thus directs payment of amounts so deducted, to the petitioner.
b) The objection of DDA to this award is that the same is contrary to R-7. If is further contended that the first 17 running bills were paid regularly and monthly and subsequently on five different occasions two running bills were paid within one month's time and thus deduction on the said 27 bills could not have been disallowed. The rebate on the said bills is stated to be amounting to Rs.14,995.89p.
c) The aforesaid would show that DDA accepts the award of Rs.1,03,577.72p less Rs.14,995.89p.
d) The objections aforesaid of DDA are factual and this court in exercise of jurisdiction under Sections 30 & 33 of the Act cannot reappraise the evidence or to sit in appeal over the award. An erroneous decision is neither an error apparent on the face of the award nor misconduct.
e) This objection is also accordingly dismissed.
5. Re: Deduction of Rs.1,11,642.56p from the final bill with respect to agreement items 1.1 to 12.6 on account of double of rate recovery under Clause 42 of the agreement.
a) Under Clause 42 of the agreement the surplus materials not returned had to be recovered at penal rates. The Arbitrator has held that DDA has not given any detail for the excess amount on this account. Petitioner admitted deduction to the extent of Rs.57,107/-. The Arbitrator also found that CS(OS)1887A/1996 Page 4 of 26 neither there was any notice on record to show that there was any wastage of any material by the petitioner nor were there any averments in this regard; that while steel had been issued to the petitioner on weighment basis, recovery had been made on the basis of liener measurements multiplied by standard co-efficient; that there was no averment of any wastage and the entire material had been used in the work; that since different methods had been adopted at the time of issue and at the time of making payment for steel, there was bound to be difference if the steel is overweight. The Arbitrator accordingly not finding any proof of wastage or loss, held the recovery at penal rate of Rs.1,11,642.56p minus admitted Rs.57,107/-, to be bad and awarded the said amount.
b) The objection of DDA is that the award in this respect is contrary to the terms of the agreement.
c) The said objection is misconceived. The Arbitrator has not made the award by holding that DDA was not entitled to recover for the wastage on penal rates. The award returns a finding of fact that there was no wastage. Such finding of fact of the Arbitrator is not interferable. The objection is rejected.
6. Re: Award of Rs.42,788.69p under items 3.5 (a) and 3.5
(c).
a) This amount has been allowed for the quantity of shuttering of beams, holding the same to be an integral part of roof slab and holding the same to be payable along with the centering and shuttering of roof slab. The Arbitrator has in this regard relied upon CPWD specifications. The contention of DDA that the rates payable for beams were CS(OS)1887A/1996 Page 5 of 26 different from that for slabs even under the CPWD specifications was negatived by the Arbitrator.
b) The objection is that the Arbitrator misunderstood the matter and has ignored para 5.2.9.1 (c) on page 104 of the CPWD's specifications, 1977, Vol.I and thus the award for the said amount is liable to be set aside.
c) No arguments have been addressed on this aspect also. Moreover, from the objection it transpires that the objection is as to the interpretation of CPWD specifications to which the Arbitrator has also referred. It is not as if the Arbitrator has not dealt with the Specification 5.2.9.1 (c). However, the Arbitrator has interpreted the same to be entitling the petitioner to the said amount of Rs.42,788.69p. For arguments sake even if it is to be held that Arbitrator has wrongly interpreted the said specifications, when even a wrong application of law has been held to be not an error apparent on the face of the award or misconduct, the question of interference with the award on this ground does not arise.
The objection is accordingly dismissed.
7. Re: Award of Rs.29,173.40p under item 3.6 for wrongful omission of certain RCC work done by the petitioner.
a) The award records that the deduction for the said amount was made by DDA for not plastering with cement mortar 1:3 to the exposed RCC work under item 3.6. The petitioner had denied that no such surface had remained unplasterred. The contention of DDA was that the RCC surface where 12 mm or 15 mm plaster had been done was considered as exposed surface and for which deduction had been made. The Arbitrator held that as per CPWD specifications, RCC CS(OS)1887A/1996 Page 6 of 26 surface on which 12 mm and 15 mm cement plaster had been done could not be considered as permanently exposed surface and thus allowed the claim.
b) The objection before this court is that in terms of the item 3.6, wherever 6 mm cement plaster was not done, the DDA was entitled to make a deduction; it is further contended that the Arbitrator has failed to appreciate the controversy.
c) I am unable to sustain the said objection also. The Apex Court in M/s Sudarsan Trading Co. Vs. Govt. of Kerala AIR 1989 SC 890 and in Food Corpn. of India Vs. Joginder Pal Mohinder Pal AIR 1989 SC 1263 relied upon by the senior counsel for the petitioner held that the court has no jurisdiction to find out whether the Arbitrator had acted correctly or not and the court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the Arbitrator had acted contrary to bargain between the parties. It was further held that whether a particular amount was liable to be paid or damages liable to be sustained was a decision within the competency of the Arbitrator and the court could not take upon itself the burden of saying that any part of the award was contrary to the contract and thus beyond the jurisdiction of the Arbitrator. The objection is thus meritless and is rejected.
8. Re: Award of Rs.75,541.69p under item No.3.7 on account of overweight steel supplied by DDA to the petitioner.
a) The contention of DDA before the Arbitrator was that there was no provision in the agreement for adjustment of overweight steel. The Arbitrator held that while the petitioner had asked for Tor steel only, DDA had given CS(OS)1887A/1996 Page 7 of 26 partly Tor steel and partly mild steel and the petitioner is entitled for payment of differences of quantities of Tor steel and mild steel and arrived at the figure of Rs.75,541.69p for the same.
b) DDA save for pleading that the award is contrary to Clause 12 of additional conditions and thus contrary to the terms & conditions of the agreement has not objected to the formula applied by the Arbitrator for arriving at the figure of Rs.75,541.69p.
c) In the award in this respect I neither find any plea of DDA with respect to Clause 12 of the additional conditions nor any adjudication on the same. DDA, before the Arbitrator had opposed the said claim only on the ground that there was no provision in the agreement for adjustment of overweight steel and the payment had been made to the petitioner as per CPWD specifications, 1977 applicable to the agreement. In the absence of the plea on which objection is taken having been shown to have been taken before the Arbitrator and in the absence of the same having been dealt with by the Arbitrator, the objection before this court cannot be entertained for the first time and is accordingly rejected.
9. Re. Award of Rs.56,372.45p under item No.6.1for providing T iron frames for doors and windows.
a) The claim was on account of DDA while making the payment having not measured the weight of M.S. lugs, M.S. flats welded at the back of the frame for fixing butt hinges and the sill tie welded to door frame at the bottom. DDA before the Arbitrator contended that weight of the said items was not liable to be paid and also on the ground that no CS(OS)1887A/1996 Page 8 of 26 reference thereto had been made by the petitioner during the execution of the work.
The Arbitrator held that DDA had not denied fixing of the lugs, welding to M.S. flats and sill tie or the quantities claimed by the petitioner. The award further holds that the interpretation of DDA of the CPWD specifications is not correct; the specifications do not provide that lugs, M.S. flats and sill tie will not be measured for the purpose of calculating the total weight of chowkhat for payment. Accordingly the claim was allowed.
b) The objection of DDA is that the Arbitrator's interpretation of CPWD specifications is incorrect.
c) For the reason stated above, the same does not constitute a ground for interference with the award.
10. Re: Award of Rs.8,587.40p under item No.9.9 (a) for applying priming coat on wood work.
a) While DDA contended that the wooden door and shutters supplied to petitioner for fixing were finished with primer coat and as such no primer coat was required to be applied, the petitioner controverted and contended that it had applied the primer coat on the entire quantity of wooden doors and windows supplied to if and as per the requirements of CPWD specifications. The Arbitrator found that DDA had partly measured the quantity of primer coat done on the shutters and thus concluded that DDA was liable for payment for application of primer on the entire quantity of shutters.
b) The objection to the award is that the part primer referred to by the Arbitrator was with respect to item No.9.9 (b) i.e. CS(OS)1887A/1996 Page 9 of 26 application of primer on mild steel work and not on wooden shutters.
c) This dispute is purely factual. Moreover, the award does not record or deal with any contention of DDA before the Arbitrator that the part payment for primer and on the basis whereof the claim for balance payment was allowed was with respect to mild steel work. In the absence of the objection having been recorded or dealt with in the award, the same is not maintainable before this court and is dismissed.
11. Re. Award of Rs.20,388.32p under item No.9.10 (a) for painting on steel work.
a) The claim was on account of incomplete measurement by DDA. The Arbitrator found short measurements to a certain extent and allowed the claim.
b) The objection before this court is that there was no proof before the Arbitrator of application of extra quantity claimed.
c) The sufficiency or insufficiency of evidence for the award is not open for consideration under Sections 30&33 of the Act. The objection is rejected.
12. Re: Award of Rs.5,730.26p under item No.11.2 (a) for providing and fixing brass bib cocks.
a) The opposition of DDA before the Arbitrator was of, though the agreement providing for fixing of the same, the petitioner having failed to do so. The Arbitrator held that since as per the agreement the bib cocks were to be fixed, DDA would not have recorded the completion of work if the such bib cocks had not been fixed and hence allowed the claim.
CS(OS)1887A/1996 Page 10 of 26
b) The objection before this court is that the completion certificate was subject to provision of certain items including the bib cocks and the Arbitrator has ignored the completion certificate Exhibit R-1. The completion certificate R-1 is contained in the record filed by the Arbitrator. I am unable to find any notation therein of the bib cocks having not been fixed or remaining to be fixed. The completion however certificate generally refers to fixing of brass fittings remaining. In the absence of anything to show that the brass fittings referred to in the completion certificate R-1 did not include bib cocks, the award to this extent is contrary to the document. Moreover, the Arbitrator has not given any reason as to why he has not included the bib cocks in the brass fittings. Accordingly, the award in so far as of Rs.5,730.26p under item No.11.2 (a) is set aside.
13. Re: Award of Rs.3,820.17p under item No.11.8 (a) towards price of brass stop cock.
a) The award and the objection under this head is the same as under item No.11.2 (a) and for the same reasons the award under this head is set aside.
14. Re: Award of Rs.16,621.16p towards painting and GI pipes and fittings.
a) While the petitioner contended that the painting of GI pipes had been done, DDA contended otherwise. The Arbitrator held that since the said work was required to be done in terms of the agreement and since completion certificate had been issued, the work is deemed to have been done and allowed the claim. The objection is that the completion certificate R-1 notes that the said work had not been done.
b) A perusal of R-1 shows that it has noted therein that final coat of white wash paint and colour washing had not been CS(OS)1887A/1996 Page 11 of 26 done. In my view, the aforesaid cannot include the painting of GI pipes in which no final coat is required before delivery of possession. Thus the finding of the Arbitrator cannot be said to be contrary to the document and the objection is dismissed.
15. Re: Award of Rs.425.87p under item No.11.5 for providing and fixing PVC connections.
a) The claim was opposed for the reason of petitioner having abandoned the work and having left the site incomplete and the PVC connections having not been provided. The Arbitrator on the basis of the completion certificate and in the absence of any proof of work having been abandoned allowed the claim.
b) The objection before this court is of the finding of the Arbitrator being contrary to fact and completion certificate.
c) A perusal of the completion certificate R-1 on arbitral record does not show any noting therein of certain PVC connections remaining to be provided. Accordingly, the objection is rejected.
16. Re: Award of Rs.5990.23p towards excavating trenches for laying SW pipes.
a) The opposition was that the said work though part of the agreement had not been executed and the SW pipes having been laid on the existing ground level. The Arbitrator held that the SW pipes could not be laid on ground level and allowed the claim.
b) The objection before this court is that there was no proof before the Arbitrator to substantiate the claim and the award being based on presumption.
CS(OS)1887A/1996 Page 12 of 26
c) I find that if as per the agreement, the SW pipes had to be laid in trenches and had not been so laid, the same would have been mentioned in the completion certificate or there would have been other correspondence in this regard. In the circumstances nothing wrong can be found with the approach of the Arbitrator in believing that SW pipes could not be laid on the ground and must be in trenches. The objection is rejected.
17. Re: Award of Rs.12,44.54p under item No.12.6 for making connection of sewer lines with the existing manhole.
a) The dispute was again with respect to execution/non execution of the work. The Arbitrator held that since the sewer lines could not be used unless connected with the main sewerage line, the work must have been done and accordingly the claim allowed.
b) The objection again is of the award being presumptuous.
c) As aforesaid no defect can be found with the approach adopted by the Arbitrator.
18. Re: Award of Rs.3,083.25p for extra and substituted items 1 to 5 & 20.
a) Though the execution of the extra items was not disputed, the dispute was with respect to the rates paid therefor. The formula for application of rates was also not in dispute. The dispute was only as to certain rebates claimed by DDA on the same. The Arbitrator held that DDA was not entitled to claim rebates under the provision claimed.
b) The objection is that the Arbitrator has failed to consider the letters dated 10th, 23rd & 31st August, 1985 to the petitioner whereunder DDA was entitled to rebate and that CS(OS)1887A/1996 Page 13 of 26 the award is contrary to the agreement between the parties contained in the said letters.
c) I do not find any discussion in the award with respect to the aforesaid letters; though DDA has pleaded that the bone of contention between the parties has been noted by the Arbitrator in para 2 at page 22 of the award but I do not find any reference to the aforesaid letters therein also. It has not been argued that the said letters were before the Arbitrator. I have not found the said letters in the arbitral record also. In the absence of the objection now taken before this court having been shown to be taken before the Arbitrator and having been dealt with by the Arbitrator, no case of error on the face of the award or of misconduct is made out.
The objection is rejected.
19. Re: Award of Rs.1,660.69p under extra item No.6 for providing balcony railings.
a) The case of the claimant was that payment therefor had been made to it, treating the same as a RCC wall. The contention of DDA was that the payment had been made as per CPWD specifications. The Arbitrator held the railings to be different from wall and thus allowed the claim.
b) The objection is that as per the drawings only a wall had to be made and thus the payment had been correctly made.
c) The dispute aforesaid being of a factual nature and on which the finding of the Arbitrator being the forum chosen by the parties is final, the objection is misconceived and is rejected. The senior counsel for petitioner has rightly relied upon MCD Vs. Jagan Nath Ashok Kumar AIR 1987 SC CS(OS)1887A/1996 Page 14 of 26 2316 laying down that reasonableness of reasons given by an arbitrator in making his award cannot be challenged.
20. Re: Award of Rs.6,516.87p under extra item No.7 for rendering exposed surface of RCC railing with cement mortar.
a) This award and the objection thereto is the same as award and objection under item No.6 above and the objection is rejected for the reasons as in item No.6.
21. Re: Award of Rs.24,486.59p under extra item No.5 for centering and shuttering for RCC railings.
a) This award and objection thereto also is on the same reasons as with respect to item No.6 above and the objection is rejected for the same reason.
22. Re: Award of Rs.30,302.72p under extra item No.9 for fixing brass stop cock.
a) The award and the objection is the same as with respect to the other brass items above. In view of the notings in the completion certificate R-1 with respect to brass fittings, the objection is allowed and the award to the extent of Rs.30,302.72p is set aside.
23. Re: Award of Rs.3,327.80p under extra item No.19(a) for providing and laying cement concrete around floor traps.
a) While petitioner claimed to have done the work, DDA contended that petitioner was not asked to provide the same but had provided the same and for which payment had been made. The Arbitrator found that as per the practice of DDA the cement concrete around floor traps was required to be provided and there being no dispute as to the rate, allowed the claim for quantity found less paid.
b) In the objection before this court dispute as to measurements is raised.
CS(OS)1887A/1996 Page 15 of 26
c) The same is outside the ambit of Sections 30&33 of the Act and the objection is rejected.
24. Re: Award of Rs.19,665.65p under extra item No.19(b) for cement concrete around floor traps on other floors.
a) The award and the objection is the same as under item No.19(a) above and for the reasons stated above the objection is rejected.
25. Re: Award of Rs.21,314.20p under extra item No.23 for making grooves in the plastered surfaces.
a) Though the direction for carrying out the said work and carrying out of the said work was not disputed, it was the case of DDA that no separate payment was required to be made with respect thereto. The Arbitrator after referring to the CPWD specifications held that the same were to be required to be paid separately.
b) The objection before this court is again on the interpretation/view of the CPWD specifications and is not maintainable and the objection is rejected.
26. Re: Award of Rs.6,199.20p under extra item No.24 for making cheques in treads of staircases.
a) While the petitioner contended that the work was carried out as per the directions of DDA, DDA denied so. The Arbitrator held that since the work was done as per the requirement at site, payment therefor could not be denied.
b) The objection is of there being no proof before the Arbitrator of the work having been done.
c) The award does not notice any contention of the respondent of the said work having not been done. The only contention of the respondent was that it had not directed carrying out of the said work. The objection being beyond the face of the award and even otherwise being factual in nature is rejected.
CS(OS)1887A/1996 Page 16 of 26
27. Re: Award of Rs.42,195.98p under extra item No.25 for cutting holes in brick work for laying GI pipes and SCI pipes.
a) The contention of DDA was that this item of work was not payable as per the condition of the contract on page 57 under para 3.1.6. The petitioner contended that since the layout of SCI pipe and GI pipe had not been provided on time by DDA the petitioner was required to carry out the extra work. The Arbitrator found that DDA had not issued the layout on due date and for the reason whereof the petitioner had to do extra work; the petitioner could not leave holes at the time of execution of work. There being no disputes as per the quantity or the rate, the claim was allowed.
b) The objection before this court is again on the basis of the condition of contract relied upon before the Arbitrator also. It is contended that the petitioner ought to have left the holes as may be required for the said purpose and nothing extra was payable therefor.
c) From Clause 3.1.6 of the contract relied upon by the Arbitrator the view taken by the Arbitrator of DDA being required to provide a plan and the finding of fact of the Arbitrator of DDA having not so provided the plan and the petitioner being thus not in a position to leave holes cannot be said to be such which is improbable. On the settled principles, the objection is not maintainable under Sections 30&33 of the Act and is rejected.
28. Re: Award of Rs.72,737.28 under extra item No.26(a) & 26(b) for providing SCI collars to SCI pipes.
a) The contention of the petitioner before the Arbitrator was that the item was executed as per requirement at site; that CS(OS)1887A/1996 Page 17 of 26 DDA issued pipes of one length only leading to the necessity of providing collars; had DDA not intended to pay for the collars, it should have provided the pipes of the required length. DDA contended that the petitioner had used the collars for their own benefit.
b) The Arbitrator held that DDA had not denied the provision of the collars and the quantity claimed and had also not denied the issue of pipes of the same length, while pipes of different length were required and use of which pipes necessitated use of collars. Hence the collars were found payable and the award with respect thereto made in accordance with the DSR rates applicable to the contract.
c) The objection before this court is that under Clause 3.15 of the specifications and conditions of contract, the petitioner was to provide the collars free of cost and nothing extra was payable therefore and thus it is contended that the award is contrary to the terms & conditions agreed.
d) The objection is tenable. The petitioner has in its reply to the objections not stated that the respondent had not taken the said plea before the Arbitrator and has also not disputed Clause 3.15 relied by DDA. As per the said clause, the petitioner was required to provide SCI collars required for fixing SCI pipes of the required size free of cost and nothing extra is payable therefore. The award does not deal with this aspect. The arbitrator cannot award what is prohibited under the agreement. The award under this item being contrary to the agreement between the parties is set aside.
29. Re: Award of Rs.8,751.04p under extra item No.27 for providing flush pipe to flushing cistern. The dispute was on account of the length of the pipe used.
CS(OS)1887A/1996 Page 18 of 26
a) The contention of the petitioner was that in view of the location of the WC pan, extra length had to be used. The Arbitrator found in favour of the petitioner as per the site condition.
b) The objection before this court is that no specific length of the pipe had been provided for in the specifications and it was a lump sum item and the claim for extra length was not entertainable.
c) The Arbitrator has in the award held that as per CPWD specifications, 1977, Vol.II, Page 83 Para 18.1.4 the length of flush pipe to be provided is 1.25 mtr. while the petitioner had to provide 1.80 mtr. No objection has been taken to the said reasoning of the Arbitrator and in view whereof the award under this item is non-interfereable in these proceedings.
30. Re: Award of Rs.5,664.96p under extra item No.28 for providing and fixing SCI terminal guards.
a) The dispute was that the said guards had not been provided at site and thus had not been paid. The Arbitrator held that the provision of such terminal guards was necessary for completion of works and with respect whereto a certificate had been issued and thus allowed the claim.
b) The objection is on the basis of the completion certificate Exhibit R-1. However a perusal of R-1 does not show any noting therein of the said terminal guards having not been provided. The objection is thus rejected.
31. Re: Award of Rs.1,84,903/- under extra item No.30 for straightening, cutting and hoisting of the steel bars issued in coils and bent up bundles.
a) The dispute was that the said works were covered as per the CPWD specifications and the rates were included in the CS(OS)1887A/1996 Page 19 of 26 rate of item already paid. The Arbitrator on the interpretation of the agreement and the CPWD specifications allowed the claim.
b) The objection besides on the basis of interpretation of CPWD specifications is also on the basis of additional conditions Clause 12 as per which no claim on account of issuance of twisted bars, flats, tees, angles in available length were to be entertained. It is thus contended that the award is contrary to the agreement.
c) The petitioner in reply to the objections has not controverted Clause 12 of additional conditions referred to in the objections. In view thereof the award on this account is contrary to the agreement between the parties and is set aside. Senior counsel for the petitioner also fairly agreed to the setting aside of the award to this extent for the reason of the petitioner having not given notice for carrying out said extra work, as required to be given, as held in Wee Aar Constructive Builders Vs. DDA 2001 (3) Arb. LR 468 (Delhi).
32. Re: Award of Rs.41,26,467/- under item No.2 of other payments due on account of loss due to increase in price of building materials and other expenses.
a) The claims under other payments due were made owing to alleged delay in execution of the work. The date of award of work was 31st August, 1985 and the date of start was 10th September, 1985. Stipulated date of completion was 9th July, 1986. The work could be completed only on 30th August, 1991. The delays according to the petitioner were attributable to DDA. It was also not disputed that DDA had granted extension of time up to 30th August, 1991without levy of compensation. It was contended by the petitioner on CS(OS)1887A/1996 Page 20 of 26 the basis thereof that DDA thus admitted delay attributable to it. It was the contention of DDA before the Arbitrator that the claims under said head were not arbitrable; that the petitioner is not entitled to any amount for delay in as much as the petitioner had been compensated under Clause 10 CC of the agreement; that in terms of Clause 1 of the additional specifications and conditions of the contract also no damages were liable to be paid.
b) The Arbitrator held the claims to be arbitrable in as much as the agreement was for reference of all claims under the agreement and the said claim was also under the agreement. The Arbitrator also held that the work had been delayed because of lapses of DDA in handing over of site, layout plan, drawings, finalization of colour scheme etc. sanction of extra and substituted items and payment of running account bills and in supply of stipulated material. It was further held that whenever there is delay in building contract, the contractor is bound to suffer. It was further held that Clause 1 of the Additional Specifications and Conditions of contract did not bar the said claims and excluded only those losses which were suffered because of change in programme of construction during the stipulated period of contract and not beyond the stipulated period of the contract. It was held that Clause 1 did not cover the delay on account of drawings, decisions, non-release of payments. The Arbitrator also held that Clause 10 CC does not take into its ambit complete escalation coming into work though the amounts given under Clause 10 CC were deductable from the actual escalation to which the petitioner may be entitled. Holding so, the Arbitrator applying the method of cost indices worked out CS(OS)1887A/1996 Page 21 of 26 the total escalation to be of Rs.48,58,012.90p and after deducting therefrom Rs.7,31,546/- given under Clause 10 CC, made an award for Rs.41,26,467/-.
c) The objection of DDA inter-alia is that DDA had granted extension of time without levy of compensation on the basis of undertaking of the petitioner that it had not suffered any damages and was not to claim any such damages. It was thus contended that the petitioner was barred from putting forth such claim. Reliance was also placed on M/s Ishwar Singh & Sons Vs. DDA MANU/DE/0310/1994 laying down that arbitrator has no jurisdiction to award any sum on account of damages contrary to specific provision of the contract. DDA also relied upon C-67 in this regard.
d) The petitioner has in reply to the objections not denied having given an undertaking. With respect to Annexure C-67 it is stated that the same was given under coercion as huge payments of the petitioners were withheld and otherwise it was not the requirement of the contract that any such undertaking will be given.
e) The counsel for DDA has in this regard also relied upon Anant Raj Agencies Vs. DDA 2005 (1) Arbitration Law Reporter 590 (Delhi). In the said judgment, following the judgments of the Division Benches of this court in DDA Vs. U. Kashyap 1998 VII AD (Delhi) 300 & in DDA Vs. K.C. Goyal & Co. 2001 II AD (Delhi) 116 it was held that an award for compensation for escalation on the basis of cost indices, beyond Clause 10 CC of the contract is erroneous on the face of it and amounts to misconduct. It was further held that where a contract provides for a formula as per which escalation has to be worked out, Arbitrator being bound by CS(OS)1887A/1996 Page 22 of 26 the contract between the parties cannot adopt a different methodology. The award for amounts in excess of those worked out under Clause 10 CC was thus set aside holding the same to be in patent duplication.
f) I also find that the same view has been taken thereafter also. Two other single judges of this court in Anant Raj Agencies Vs. DDA CS(OS) No.2650A/1996 decided on 21st February, 2008 as well as in Jagat Ram Trehan & Sons Vs. DDA 2002 63 DRJ 92 have taken the same view.
g) I however find that another Division Bench of this court in DDA Vs. M/s S.S. Jetley MANU/DE/0861/2000, inspite of earlier judgment in V. Kashyap (Supra) held that claim for prolongation of contract due to fault of DDA and for idle labour, staff, machinery, centering, shuttering and electricity, water etc. was dehors Clause 10 CC and allowable. It was however reiterated that with respect to items provided in 10 CC, no formula other than that applied in 10 CC can be applied.
h) The matter does not rest there. Even in subsequent judgment, dichotomy persists. Another single judge in Satya Prakash & Bros. Vs. DDA decided on 28th September, 2001 held that arbitrator cannot act contrary to contract and the award, since it was not possible to bifurcate the amount awarded on account of delay by DDA in taking decisions (for which it was held no claim could be allowed owing to clause
1) and for delay on account of non supply of cement, and further since award did not deal with aforesaid clause 1, the matter was remanded back. However, another single judge in Narayan Das R. Israni Vs. DDA 126 (2006) DLT 10 held that clause 10 CC applies only in respect of increase in CS(OS)1887A/1996 Page 23 of 26 labour rates and material rates for period beyond stipulated time and refused to interfere with the award for damages under other heads on account of prolongation of contract for reasons attributable to DDA.
i) I however find that in the present case, the challenge is not to the computation done under clause 10CC. The claim and award though on account of prolongation for reasons attributable to DDA the damages awarded with respect thereto are under the same heads as under clause 10CC. It is for this reason only that the arbitrator after assessing the damages payable by DDA to petitioner for such prolongation has allowed deduction therefrom the amount already paid under clause 10CC. Had the said assessment been with respect to items not covered clause 10CC, the question of deducting therefrom the amount assessed and paid under clause 10CC would not have arisen. The arbitrator has thus assessed damages under the same head as in clause 10CC but applying the formula other than that provided in clause in 10CC. This is an error apparent on face of record and not permissible as per the judgments (supra) and thus this part of the award is not sustainable and liable to be set aside.
j) I also find that the Arbitrator though noticing that undertakings had been given by the petitioner at the time of seeking extension of time, not to claim damages from DDA, has not dealt with the same. The said undertaking by the petitioner takes the form of a contract between the parties and the said contract having provided that no damages would be payable the petitioner could not turn around and claim damages for delay. Though the petitioner has contended that the said undertakings were under coercion CS(OS)1887A/1996 Page 24 of 26 but no finding in that regard has been returned by the Arbitrator. No further material has been cited to show that immediately after furnishing the undertaking or at any time did the petitioner take a stand that the said undertaking had been obtained under coercion. The award is liable to set aside for this reason as well.
33. Re: Award of Rs.1,28,000/- under item No.3 of other payments due on account of deployment of watch and ward staff at the site.
(a) The only objection is that there was no evidence before the Arbitrator for the said claim of the petitioner. The sufficiency or insufficiency of evidence is outside the domain of a proceeding under Sections 30&33 of the Act. The petitioner had claimed a sum of Rs.6,10,950/- on this account. The Arbitrator after finding that the petitioner remained at site and recording that DDA had not disputed the said position and after further recording that the petitioner was not required to remain at site after the defect liability period and on his assessment of the salaries of the staff deployed by the petitioner made the award. The said award is not interfereable by this court and this court cannot impose its own opinion in place of the award of the Arbitrator. The objection is accordingly dismissed.
34. Re: Award of interest.
(a) The Arbitrator has awarded interest on the claims other than the "other dues" at 18% per annum from 1st March, 1992 till the date of the award and upon failure to pay the awarded amount within 60 days from the date of award, at 18% per annum with quarterly rests from the date of the award till the actual payment or till the decree whichever is earlier. Interest CS(OS)1887A/1996 Page 25 of 26 at 18% per annum has been awarded on the amounts allowed under "other dues" from the date of the award.
(b) In view of the recent dicta of the courts, taking note of the rates of interest prevailing from time to time, I deem it appropriate to modify the rate of interest from the date of the award to 12% simple interest till the date of the decree. No interference is however called for to the award of interest at 18% per annum for the pre reference period pendent lite before arbitrator.
35. IA No.12811/96 is allowed to the aforesaid extent. Judgment is pronounced in terms of the award as modified above. Decree sheet be drawn up. Petitioner shall also be entitled to interest on the principal amount under Section 28 of the Act from the date of decree till the date of payment at the rate of 9% per annum.
RAJIV SAHAI ENDLAW (JUDGE) July 8, 2009 PP CS(OS)1887A/1996 Page 26 of 26