Delhi High Court
M/S Anant Raj Agencies vs Delhi Development Authority & Anr. on 30 April, 2009
Author: Vipin Sanghi
Bench: Vipin Sanghi
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 2669A/1998
% Date of Decision: 30th April, 2009
M/S ANANT RAJ AGENCIES ..... Plaintiffs
Through: Mr. Harish Malhotra, Senior
Advocate with Mr. Priyank Sharma,
Advocate
versus
DELHI DEVELOPMENT AUTHORITY & ANR. ..... Defendants
Through: Mr. D.S. Mahendru, Advocate
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
1. Whether the Reporters of local papers may No
be allowed to see the judgment?
2. To be referred to Reporter or not? No
3. Whether the judgment should be reported
in the Digest? No
VIPIN SANGHI, J. (Oral)
I.A. NO.4191/1999
1. The respondent DDA has filed these objections under Sections 30 and 33 of the Indian Arbitration Act, 1940, against the award dated 02.11.1998 made by the sole arbitrator, Mr. L.R. Pahwa. He was appointed as the sole arbitrator to adjudicate the claims of the petitioner against the respondent arising out of a contract for construction of 704 EWS houses in Block-F, Pocket-8 to 13 vide agreement No.5/EE/RPD-5/DDA/85-86.
2. Learned counsel for the objector DDA, at the time of hearing has made his submissions only in respect of a few items awarded by CS(OS)2669A/1998 Page 1 of 20 the learned arbitrator and has not questioned the remaining award. Accordingly, I now proceed to deal with each of the objections actually raised by the objector and argued by the parties.
3. Claim No.1 was made for recovery of Rs.1,95,06,866/- plus interest on account of non-payment of the final bill prepared and submitted by the claimant/ petitioner. While dealing with this claim, the learned arbitrator has dealt with various recoveries made by the respondent-objector, which were put to challenge in arbitration. Learned counsel for the respondent has sought to challenge the award made in respect of the recovery of Rs.55,322.10 on account of recovery of stipulated material at penal rates.
4. The respondent had sought to make a recovery at penal rates of the aforesaid amount, since there was a difference in the theoretical consumption and cement was provided by the respondent from its stores. The learned arbitrator while allowing the said claim for refund of an amount of Rs.55,322/- has taken into account the following considerations:
(a) The respondent was not in a position to contend that there was any misuse or pilferage or that the material was not consumed in the work nor the respondent has been able to give any evidence for loss being suffered, particularly when the recovery on the single rate basis i.e. as per agreement rate has already been made by the respondent.
(b) No notice had been issued by the respondent for any wastage or CS(OS)2669A/1998 Page 2 of 20 any material rendered surplus.
(c) There was bound to be variation in the theoretical calculations and actual calculations as sometime the cement is utilized for redoing in any particular item and sometime the cement was less in the bags issued.
(d) Similarly, in respect of SCI pipe and CI pipe, measurements are not taken for the pipes spigot portion which are going into socket. This also makes a difference in measurements.
(e) The respondent also failed to give the details of the recovery and is vague in its submission.
(f) No proof of loss suffered by the respondent was produced before the arbitrator.
5. Submission of learned counsel for the DDA is that in the contract there was no stipulation requiring the respondent to issue a notice with regard to material becoming surplus and on that account recovery being made. This position is not disputed by learned counsel for the petitioner. The contractual terms do not even make the penal rate recovery subject to misuse or pilferage. This position is also conceded by learned counsel for the petitioner. Since the recovery is in accordance with terms of the contract and is in the nature of liquidated damages, there was no requirement for the evidence of loss suffered being led before the arbitrator. The fact that single rate recovery is not disputed by the contractor itself establishes that there was surplus material, which was not returned by the petitioner CS(OS)2669A/1998 Page 3 of 20 contractor to the respondent. Pertinently, there was no challenge to the single rate recovery by the petitioner. The arbitrator could not have acted contrary to the agreement by introducing factors such as variation in theoretical calculations and actual calculations for certain assumed reasons such as the cement being utilized for redoing in particular item and it being less in the bags issued. Similarly, he could not have introduced factors such as the measurements not being taken for pipe spigot portion which are going into socket. It is not disputed by learned counsel for the petitioner that the theoretical calculations are worked out by providing for margins for all such factors as had been noted by the arbitrator. The purpose of penal rate recovery appears to be to check pilferage of materials supplied by respondent from its stores and also to prevent wastage on account of mismanagement and tardy work by the contractor. The said recovery being contractual, it cannot be disputed in the absence of any cogent and material evidence. From the award of the learned arbitrator, it is evident that he has acted merely on the basis of assumed shortage of supply in the cement bags and assumed consumed in redoing any particular item of work. Similarly, he has assumed that portions of pipe which goes into the socket have not been measured. In my view, the award in this respect cannot be sustained, as it is contrary to the contractual term and is also founded upon factors which are beyond the terms of the contract and have no factual basis. By acting contrary to the contractual terms the learned Arbitrator has committed misconduct of the proceedings. Accordingly, the objection of the respondent in respect of the award of Rs.55,322.10 for refund of CS(OS)2669A/1998 Page 4 of 20 recovery of stipulated material at penal rates is sustainable.
6. Learned counsel for the respondent has next sought to impugn the award allowing refund of the recovery of Rs.33,943/- on account of difference in costs of fitting at market rate and agreement rates. The learned arbitrator has accepted the claim of the petitioner on the ground that there was no liability of the claimant to pay the difference of the cost of the fittings, as all the fittings were provided at the time of completion of work and the work was declared completed by the respondent on 15.11.1991 and at the time of recording the completion certificate, it was not pointed out that any fittings were missing or were not provided for by the claimant. The learned arbitrator also found that the respondent had not placed on record any notice given to the claimant during the maintenance period or thereafter to the effect that the fittings had not been provided by the petitioner or that the respondent was itself providing the fittings at the risk and cost of the claimant. Learned counsel for the objector has not been able to point out any material placed before the arbitrator to show that this recovery was made after putting the respondent to notice that the fittings were being provided by the respondent at the risk and cost of the petitioner claimant. Accordingly, I see no merit in this objection of the respondent and the same is rejected.
7. Learned counsel for the objector then impugns the award made on the claim pertaining to item Nos. 3.5(a) & 3.5(c) of the contract. The submission of the petitioner was that the respondent had paid for the centering and shuttering of beams, which support the CS(OS)2669A/1998 Page 5 of 20 suspended floors under agreement items for centering and shuttering of lintels and beams i.e. agreement item No.3.5(c) instead of paying the same under item No. 3.5(a). The claimant had relied para 5.2.9.1(c) of the CPWD specification 1977 Vol. I, which provided that suspended floors landings and their support are to be measured under one head. The roof beams are support to the roof slab. The submission of the claimant was that since the centering and shuttering of beams forming part of the suspended floors has to be removed after the removal of the shuttering for suspended floor, there was no reason for it not being paid under the agreement item No.3.5(a) relating to centering and shuttering for suspended floor i.e. agreement item No.3.5(a).
8. The learned arbitrator gave the following reason in his award for allowing this claim for Rs.52,129/-:
"I have heard both the parties in details and have considered their respective submissions. I have also examined the agreement item no. 3.5 (a) and 3.5 (c) and the CPWD specification. The contentions of the claimant is correct and justified. The beams which form part of the suspended floors are in fact supports to the suspended floors and are not independent beams and form part of the suspended shuttering. These cannot be removed before the removal of centring and shuttering of the suspended floors. The centring and shuttering for the beams which forms part of the suspended floors has to be paid under the agreement item relating to suspended floor. In the CPWD specifications the word „support‟ has also been mentioned. The supports are nothing but the beams which give support to the suspended floor."
9. Learned counsel for the objector DDA has raised only a CS(OS)2669A/1998 Page 6 of 20 general objection to the aforesaid award and is not able to point out as to what is the error in the reasoning of the learned arbitrator, as extracted above. The award has been made on the basis of the undisputed figures and the award also indicates the manner of calculation of the amount. Accordingly, I find no justification in this objection of the objector. The same is accordingly, rejected.
10. Learned counsel for the objector next objects to the award on the claim founded upon Items 3.7(a) and 3.7(b). This claim was made by the claimant on account of quantity of steel less paid due to issue of overweight steel by the respondent. It was contended by the claimant petitioner that though the steel was issued by weightment, the measurement were recorded by the respondent on the basis of length multiplied by the standard weight of steel per meter length. The arbitrator takes note of the notices issued by the claimant in Exhibits C-2 to C-6, raising its said claim before the respondent. The respondent had refuted the liability towards payment for overweight of steel and contended that the payment had been made as per conditions of the agreement and that the claimant could not claim any extra payment. The respondent also contended that if and when overweight steel was received by the claimant, it was for the claimant to have informed the respondent. The learned arbitrator allowed this claim by recording his reason as follows:
"I have heard both the parties in detail and have considered their respective submissions made in this regard. It is an admitted fact that as per the practice in DDA the steel is issued by the weight and the payment is made by applying the standard weights and the lengths CS(OS)2669A/1998 Page 7 of 20 measured. The respondents admitted that the weight of steel paid has been calculated on the basis of standard steel weights. The respondent has also not denied the total quantity of steel issued to the claimant. There is no dispute about the quantity of tor steel being issued as 272718 kg and mild steel issued as 5510 kg. There is also no dispute that respondent has paid only 265206.20 kg of tor steel and 5160.13 of mild steel against agreement item no. 3.7(a) and 3.7 (b) respectively. There is no allegation on the part of the respondent that there was any wastage of steel at site. The difference in quantity issued and quantity paid has come because of different method adopted by the respondent in issuing and measuring the steel. The steel issued was overweight as is clear from the quantity issued and paid. Thus, the claimant is entitled for payment of difference of quantities due to overweight of mild steel and tor steel issued by the respondent.
11. Since the learned arbitrator has referred to Exhibits C-2 to C- 6 in the award, the same have been perused by me. Exhibits C-2 & C- 3 are communications dated 19.10.1985 and 22.10.1985 issued by the petitioner making reference to a circular issued by CPWD dated 15.07.1982 and stating that "steel which is issued by the department is mostly overweight". The letter dated 19.10.1985 further records that as per para 1 of the CPWD circular M.S. Rounds or Tor Steel bars upto and including 10 mm dia which are billed by the suppliers on actual weight basis, will be verified and accounted for in the stock account on actual weight basis and will also be issued on actual weight basis. As per para II of the circular M.S. Rounds or Tor Steel bars above 10 mm will on receipt, be verified and accounted for in stock accounts on standard section weight basis. These will also be issued CS(OS)2669A/1998 Page 8 of 20 on standard sectional weight basis. The claimant requested the respondent that M.S. Rounds and Tor Steels above 10 mm diameter on receipts from the departmental store on actual weight basis may be converted on standard section weight basis and issued on standard sectional weight basis by debiting or crediting the difference to the work. The communication dated 22.10.1985 reiterated the aforesaid position. Exhibit C-4 is another communication issued by the claimant dated 29.10.1985. This communication makes a reference to the respondent‟s letter dated 26.10.1985, which does not appear to have been placed before the arbitrator. However, the communication Exhibit C-4 indicates not only the stand of the respondent, but also clearly brings out the fact that there was actually no basis for the claimant petitioner to claim that the steel issued to it was overweight. It appears that the petitioner took a blind shot in the dark by claiming that the MS Rounds and Tor Steel bars issued to it were overweight, while that position was denied by the respondent. The letter dated 29.10.1985, insofar as it is relevant, reads as follows:
"In your above cited letter, you have written that you have instructed our site representative and Asstt Engineer-I in charge of the work to follow the circular, but so far no over weight steel has been received.
We think that it is not possible to find out whether a steel is over weight or not by naked eye. The overweight can only be determined by periodical checking of the weight of the steel received from the departmental store by cutting samples and weighing etc."
12. From the correspondence Exhibits C-2 to C-6, it appears that the grievance of the petitioner was that M.S. Rounds and Tor Steel bars CS(OS)2669A/1998 Page 9 of 20 above 10 mm diameter was being supplied on actual weight basis and not on standard section weight basis. However, that itself does not lead to the conclusion that the steel i.e. M.S. Rounds and Tor Steel above 10 mm diameter actually supplied by the respondent to the petitioner was overweight. As stated by the petitioner itself in Exhibit C -4, it is not possible to find out whether the steel is overweight or not by a naked eye. The overweight can only be determined by periodical checking of the weight of the steel received from the departmental store by cutting samples and weighing etc. It was not the petitioner‟s claim that this exercise had been done in respect of the MS Rounds and Tor Steel bar of above 10 mm diameter. It is clear that there was no evidence led before the arbitrator, for him to conclude that the M.S. Rounds and Tor Steel bars of 10 mm diameter or above supplied to the petitioner by the respondents was actually overweight. The learned arbitrator has observed that the steel issued was overweight "as is clear from the quantity issued and paid". I am not able to appreciate this reasoning of the learned arbitrator. Mr. Malhotra, learned senior counsel for the petitioner, has argued that it is for the arbitrator to appreciate and evaluate the facts and the Court cannot go into the same. It is not for the Court to examine the sufficiency and insufficiency of evidence so long as there is some evidence placed before the arbitrator.
13. There can be no quarrel with the legal proposition advanced by Mr. Malhotra. However, the present appears to be a case where there was no evidence at all before the arbitrator to conclude that the CS(OS)2669A/1998 Page 10 of 20 steel issued by the respondent, namely, M.S. Rounds and Tor Steel bars of above 10 mm diameter was overweight. Pertinently, this position has been denied by the respondent not only in the correspondence, as is evident from Exhibit C-4, but also before the arbitrator, as is evident from award itself. The award on Item Nos. 3.7(a) and 3.7(b) appears to have been made without any evidence whatsoever. This constitutes misconduct on the part of the Arbitrator. For the aforesaid reasons, the award made by the arbitrator in respect of item Nos. 3.7(a) and 3.7(b) for Rs.79,712.26 cannot be sustained and is, therefore, set aside.
14. The next objection raised by Mr. Mahendru is in respect of the award made by the arbitrator on the claim founded upon item 6.1 of the contract. This item pertains to providing and fixing T. iron for doors and windows. The case of the claimant before the arbitrator was that the respondent had not measured the weight of the M.S. Lugs, M.S. Flat welded at the back of the frame for fixing hinges, and the base tie welded to the door frame at the bottom. The claimant had claimed that as per the item, the entire weight of door/window frames including lugs, M.S. flats and base tie are to be measured for payment.
15. The respondent had contested this claim by stating that the claimant had provided M.S. base tie, M.S. Lugs and M.S. flats welded at the back of the frame as per the agreement item. The payment had been made on the basis of T. iron section only. The items, namely, M.S. lugs, M.S. flats and tie bar are included in the rate and hence, not payable.
CS(OS)2669A/1998 Page 11 of 20
16. The learned arbitrator notes that the respondent had not denied the fixing of M.S. flats at the back of the frame for fixing butt hinges and M.S. lugs and M.S. base tie being welded at the bottom of the door frames. The learned arbitrator rejected the defence of the respondent founded upon the interpretation of CPWD specification and para 4 of the additional specification. He notes that the specification does not provide that the M.S. lugs, M.S. flats and base tie are not to be measured for the purpose of calculating the total weight of the frames for payment. I see no force in the objection raised by the respondent to the award made by the arbitrator on the said claim. It is not the case of either of the parties that the contractor was not obliged to provide the M.S. lugs, M.S. flats welded at the back of the frame for fixing hinges and the base tie welded to the door frame at the bottom under the contract item. The claim of the claimant was not that he was required to do any additional item of work by providing the M.S. lugs, M.S. flat and base tie. The claimant‟s claim is only that the weight of M.S. lugs, M.S. flat as welded at the back of the frame for fixing hinges and the base tie welded at the door frame at the bottom should be included while computing the work done by the claimant. The learned arbitrator has observed that the specification relied upon by the respondent does not provide that the M.S. lugs, M.S. flat and base tie are not measured for the purpose of calculating the total weight for payment to the contractor. In my view, this finding of the learned arbitrator is unexceptionable. Accordingly, this objection of the respondent is rejected.
CS(OS)2669A/1998 Page 12 of 20
17. The next objection raised by Mr. Mahendru is in respect of item No.9.9(a). The claimant had made a claim for applying primer coat on new wood work. The same was awarded by the learned arbitrator for Rs.42,083/-. The defence of the respondent to the said claim was that the wooden door and window shutters which were supplied to the claimant for fixing were already finished with the primer coat and as such no primer coat was required to be applied on shutters. On the other hand, the stand of the petitioner was that the petitioner had applied a primer coat on the wooden doors and windows supplied to them for fixing.
18. The learned arbitrator allowed the said claim on the reasoning that the item for applying primer coat on the wood work is provided in the agreement. On that basis he has proceeded to make his award.
19. The submission of Mr. Mahendru, counsel for the DDA is that this claim of the petitioner was allowed though totally devoid of any evidence. The petitioner had not produced any material to show that it had procured and applied primer on wooden doors and windows shutters.
20. The reasoning given by the learned arbitrator, in my view, is patently fallacious and cannot be sustained. Merely because in the rate contract one of the items was pertaining to providing primer coating on wooden doors and windows, it does not necessarily follow that the said item of work was actually required to be performed by the contractor or that it was actually done by the contractor. The rate CS(OS)2669A/1998 Page 13 of 20 contract contains rates for varied specified items of work. As and when the eventuality arises, the contractor is required to carry out the works for which rates are fixed. There may be works required to be carried out, which are even beyond the items specified in the rate contract. For such items rates are to be fixed in accordance with the contract. However, it does not follow that each and every item contained in the rate contract has necessarily to be performed by the contractor. The claim for application of primer could have been sustained by the contractor by leading evidence to establish the purchase and procurement of primer and its application on the wooden doors and windows. The claimant contractor has, however, not led any evidence to substantiate the claim. The learned arbitrator has proceeded on the fallacious assumption that merely because the said claim pertains to an item contained in the rate contract, the same would have been performed by the contractor. Such an approach clearly tantamount to misconduct on the part of the learned Arbitrator. For the aforesaid reasons, I am of the view that the award on item No.9.9(a) for Rs.42,083/- cannot be sustained and is, accordingly, set aside.
21. The next objection of Mr. Mahendru is in respect of award made pertaining to item No.19 for cutting holes 15cm X 15cm in RCC work. The submission of Mr. Mahendru is that the cutting of holes in RCC work for laying GI pipes and SCI pipes is to be done by the contractor without charging any extra payment therefor under the terms of the contract. He refers to condition No.5.1 of the agreement CS(OS)2669A/1998 Page 14 of 20 which reads as follows:
"5.1 Cutting of holes in walls, floors, chajjas, R.C. C. slabs etc:
The tendered rate shall include the cost of cutting holes where ever required and making good the same and nothing extra shall be paid for this."
22. Mr. Mahendru submits that the learned Arbitrator has acted in ignorance of this contractual term and awarded the claim contrary to the said clause.
23. The submission of Mr. Malhotra in response to the aforesaid clause pointed out by the respondent-objector is that the claimant contractor was required to carry out extra work of cutting such of RCC slab since the drawing were given belatedly. Had the drawings been given on time, the occasion for cutting the RCC slab would not have been arisen.
24. A perusal of condition No.5.1 shows that the same specifically provides for cutting of holes, inter alia, in RCC slabs. It does not carve out any exceptions. In my view, the award made by the learned arbitrator on item No. 19 cannot be sustained since the same had been made without even taking note of condition No.5.1. The arbitrator has obviously not applied his mind to the said condition. Accordingly, the award made in item No.19 for Rs.52,809.74 is set aside.
25. The next objection of Mr. Mahendru is in respect of the award made on item Nos. 20(a) & 20 (b). This claim had been made for providing SCI collars to SCI pipe 100mm dia and 75mm dia, CS(OS)2669A/1998 Page 15 of 20 respectively. The claimant had stated that they were required to provide the SCI collars and SCI pipe as the location of WC P-trap and floor traps were such that the full length of pipes issued by the respondent could not be laid. The provision of collars was necessary as small length had to be joined while connecting these pipes to vertical stacks of pipes. The pipes were issued by the department in one length only. Had the respondent not wanted the collars to be provided the claimant should have been issued the pipes of required length. The arbitrator had awarded Rs.79,122/-. Mr. Mahendru has referred to condition No.3.15 of the specifications and conditions at page 57 which states "The contractor shall have to provide SCI collars required for fixing of SCI pipes of the required size free of cost and nothing extra shall be paid for the same."
26. The arbitrator, obviously, ignore the said clause and the award made by him is contrary to the said clause. At the time of arguments, Mr. Malhotra fairly concedes that the said award on item Nos.20(a) and 20(b) cannot be sustained and fairly stated that the same may be set aside. Accordingly, the award made on item Nos.20(a) & 20(b) for Rs.79,122/- is set aside.
27. The next objection of Mr. Mahendru is that the award made on item No.29 for straightening the bent up steel bars issued in coils and bent up bundles, and for cutting bars to the lengths/sizes required and hoisting the same for various levels cannot be sustained, in view of the decision of this Court in Narain Das R. Israni v. Delhi Development Authority 2005 VIII AD (Delhi) 556. The arbitrator has CS(OS)2669A/1998 Page 16 of 20 awarded an amount of Rs. 2,78,228/- under this claim. It is agreed by the petitioner as well that item 29 of the award is liable to be set aside in view of the aforesaid decision. The same is, accordingly, set aside.
28. Mr. Mahendru has then raised an objection with regard to the award made under item No.2 under the general heading "Other Payments Due". This claim was made for reimbursement of loss suffered due to infructuous expenditure on the hire charges of tools and plants, materials for centering and shuttering rendered idle on account of failure of department for delay in supplying the services, plans for sewerage water supply route for electrical cables, non-supply of doors and windows shutters and on account of timely decision not being taken by the respondent.
29. The learned arbitrator has given detailed reasons to conclude that the delay was entirely attributable to the respondent and that the petitioner contractor was, therefore, entitled to be compensated on account of such delay. He also took note of the fact that extension of time was granted by the respondent without levy of liquidated damages. The submission of the respondent that the petitioner was not entitled to claim any further damages, apart from those provided under clause 10CC was rejected by the learned arbitrator, by holding that:
"The denial of the respondent for the liability of escalation on the ground that they have already paid escalation under clause 10 CC is devoid of any merits as the escalation which is paid under clause 10 CC does not take into its ambit the actual escalation coming to the work."CS(OS)2669A/1998 Page 17 of 20
30. The reasoning adopted by the learned arbitrator appears to be unsustainable in view of the decision of this Court in DDA v. U. Kashyap 1998 VII AD (Delhi) 300. The ratio of this decision has been further followed by this Court in Jagat Ram Trehan & Sons v. DDA 2002 (63) DRJ 119. Para 12 of the Jagat Ram Trehan (supra) reads as follows:
"12. Now coming to the next objection of the counsel for the respondent with regard to the award of Rs.7,71,018/-, on account of escalation of cost of material and labour, in view of the fact that under clause 10 CC payment had already been made, the arbitrator was not justified in allowing the aforesaid amount as damages. Division Bench of this Court in Delhi Development Authority v. K.C. Goyal (supra) has held that once a particular formula is provided in the contract, applying some other formula and awarding the claim would amount to legal misconduct. Following the ratio of Delhi Development Authority v. K.C. Goyal (supra) I hold that arbitrator has committed legal misconduct in awarding a sum of Rs.7,71,018/- on account of escalation of cost of material and labour."
31. I, therefore, hold that the award on Item No. 2 under the heading "Other Payment Due" for Rs. 32,02,641/- is unsustainable and the same is set aside as the learned arbitrator has misconducted himself.
32. Mr. Mahendru has also challenged the award made on item No.3 towards reimbursement of expenses incurred on account of infructuous expenditure in maintaining contingents or artisans, labour and watch and ward staff after the date of completion recorded by the CS(OS)2669A/1998 Page 18 of 20 department. The case of the claimant was that the claimant was required to maintain its staff at the site on account of failure of the respondent to take over possession. The arbitrator has awarded an amount of Rs.1,23,000/- for the period 15.05.1992 till 14.08.1993, after taking into account the defect liability period during which the contractor was obliged to maintain its staff at the site from the date of completion of the work. The submission of Mr. Mahendru is that the respondent had issued various communications to the contractor which are found on record dated 21.12.1995, 02.01.1996 and 30.01.1996, whereby the respondent DDA had asked the claimant to handover the possession of the flats to them.
33. In response, Mr. Malhotra points out that the period for which the expenditure has been allowed is of the years 1992 and 1993, whereas the respondent had asked for the possession only in the year 1995-96. In my view, no error can be found in the award made on item No.3 since the DDA, it appears, was not in a position, and did not take over the possession of the flats upto 14.08.1993. This objection is, therefore, rejected.
34. It is lastly argued by Mr. Mahendru that the award made on item Nos.2 & 3 towards pre suit interest, pendente lite and future interest whereby the arbitrator has awarded interest @ 18% per annum is unreasonable. Mr. Malhotra in response submitted that since a large portion of the award has been set aside by the Court, the rate of interest should not be reduced.
35. Taking into consideration the decision of this Court in Narain CS(OS)2669A/1998 Page 19 of 20 Das R. Israni (supra) I am inclined to reduce the rate of interest for the pre-suit and pendente lite period @ 12% per annum. Accordingly, the award is made a rule of the Court and a decree is passed in terms of thereof, except to the extent it has been set aside hereinabove. In case the respondent makes payment of the decretal amount within three months no further interest shall be payable. However, in case the same is not so paid, the petitioner shall be entitled to further interest from the date hereof till payment/realization @ 9% per annum. Parties are left to bear their respective costs.
VIPIN SANGHI, J.
APRIL 28, 2009 rsk CS(OS)2669A/1998 Page 20 of 20