Delhi High Court - Orders
Delhi State Industrial And ... vs Brij Gopal Construction Company Pvt. ... on 9 May, 2022
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~34(2022)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 221/2022
DELHI STATE INDUSTRIAL AND
INFRASTRUCTURE DEVELOPMENT
CORPORATION LTD. (DSIIDC) ..... Petitioner
Through: Dr Vikrant Narayan Vasudeva, Mr Rohit
Lochan, Advocates.
versus
BRIJ GOPAL CONSTRUCTION COMPANY
PVT. LTD ..... Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 09.05.2022 IA 7130/2022
1. Allowed, subject to all just exceptions.
O.M.P. (COMM) 221/2022 & IA 7131/2022 (delay)
2. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act'), impugning an arbitral award 27.09.2021.
3. The disputes between the parties arise in connection with the agreement to execute the works of 'Relocation of Industries Project at Bhorgarh (Bawana Phase-II)'. The parties had entered into an Agreement dated 03.07.2009 (Agreement number DSIIDC/EE(CD)XIII/AGT./06/2009- 10 - hereafter 'the Agreement'), whereby the respondent had agreed to execute the aforesaid works.
Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:11.05.20224. In terms of the Agreement, the respondent was required to construct 60 meter ROW Road including storm water drainage in New Industrial Area at Village Bhorgarh (Bawana Phase-II).
5. The execution of the works included filling of the carriage way with good earth and fly ash, apart from other works.
6. The respondent completed the work on 15.11.2009, which was prior to the scheduled date of completion. The respondent furnished the Completion Certificate dated 15.11.2009 certifying that the works were completed.
7. Certain disputes arose between the parties in connection with the said Agreement and the same were referred to arbitration by an Arbitral Tribunal constituted by Sh H.S. Dogra, Ex-DG, CPWD as the Sole Arbitrator.
8. The said arbitral proceedings culminated in an arbitral award dated 31.12.2015. Several claims raised by the respondent were allowed. However, the Arbitral Tribunal rejected the claim for excavation of fly ash and burrow pits (Claim no.3). The respondent challenged the said Arbitral award 31.12.2015 by filing a petition under Section 34 of the A&C Act before this Court [OMP (COMM) 279/2016: Brij Gopal Construction Co. Private Limited v. DSIIDC].
9. There was no dispute that the respondent had executed the work of excavation of fly ash. The respondent was also paid as per the rate analysis. According to the respondent, the analysis of rate prepared by the petitioner did not include excavation of fly ash.
10. The respondent had claimed a sum of ₹3,16,30,000/- relating to work of excavation of consolidated earth and fly ash. Whilst, the Arbitral Tribunal had allowed the claim regarding excavation of earth and awarded a sum of Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:11.05.2022 ₹1,17,03,400/-, it rejected the respondent's claim for excavation of fly ash. The Arbitral Tribunal found that the analysis of rates as prepared by the petitioner included provision of payment for wages of six Beldars and assumed that the same was perhaps for excavation of fly ash. The award was challenged in respect of this finding.
11. This Court considered the said challenge and found that the respondent's challenge to rejection of its Claim no.3, was merited. Accordingly, the arbitral award dated 31.12.2015 was set aside to the extent of Claim no.3. This Court had confined itself to setting aside the award to the limited extent as it was not permissible to modify the award in the proceedings under Section 34 of the A&C Act. Thereafter, the respondent filed an application praying that the amount as claimed be awarded, however, this Court had rejected the same by clarifying that it was open for the respondent to reagitate the issues in a fresh arbitration.
12. Pursuant to the said order, the respondent, once again, sought reference of the disputes to arbitration. Before the Arbitral Tribunal the respondent has made the following claims:-
"a) Claim no.1: Claim for a sum of ₹ 1,56,25,690/- (₹ One crore fifty six lakh twenty five thousand six hundred and ninety only) on account of excavation of flyash at burrow pits.
b) Claim No. 2: Claim for a sum of ₹ 42,22,789/- (₹ Forty two lakh twenty two thousand and seven hundred eighty nine only) towards pre-suit interest @ 12% w.e.f. 04/05/2010 and till the date of appointment of previous arbitrator 03/08/2012 Sh. H.S. Dogra against Claim no.1 above.
c) Claim no. 3: Claim for pendente lite interest @ 12% on claim 1 and 2 above i.e. On ₹ 1,98,48,479/- (₹ One Crore ninety eight lakh forty Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:11.05.2022 eight thousand for hundred seventy nine only) from the date of appointment of Ld Arbitrator sh.
H.S. Dogra i.e. From 04.08.2012 till the date of this award and future interest from the date of award till realisation.
d) Claim no.4: Claim for ₹ 12,00,000/- (₹ Twelve lakh only) towards cost of litigation/arbitration proceedings."
13. The principal claim raised by the respondent - Claim no.1 - relates to payment for excavation of fly ash. The Agreement between the parties included an item described "Carriage of flyash/pondash including loading and unloading from approved source of thermal power station dumping site to the site of work at Bhorgarh for all leads and lifts as per the direction of the Engineer in charge.". The Arbitral Tribunal found that the said item did not include excavation of flyash/pondash. Since there was no dispute that the respondent had executed the said work, the Arbitral Tribunal accepted the aforesaid claim based on the rates as per the Delhi Schedule of Rates, 2007 (DSR-2007).
14. The learned counsel appearing for the petitioner states that the Arbitral Tribunal had assumed that the respondent had carried out the said work despite the respondent not producing evidence for deployment of machinery and therefore, the impugned award is vitiated by patent illegality.
15. The said contention is unpersuasive. As the Arbitral Tribunal had noted that there was no dispute as to the quantity of fly ash transported by the respondent. The principal issue was regarding the work of excavation of fly ash. The Arbitral Tribunal had, in fact, found that the same to be an extra item which was required to be paid. The respondent's claim was based on the Delhi Schedule of Rates and this Court finds no infirmity with the Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:11.05.2022 Arbitral Tribunal accepting the same.
16. The Arbitral Tribunal has also awarded pre-suit interest at the rate of 12% per annum from 04.05.2010 (the date of cause of action) to 03.08.2012 (the date on which the Statement of Claim was filed before Sh H.S. Dogra). The said amount is quantified at ₹42,22,789/-. In addition to the above, the Arbitral Tribunal has also awarded pendente lite interest at the rate of 9% per annum on both the awarded amount of ₹1,56,25,690/- as well as the pre- reference interest of ₹42,22,789/-. The learned counsel appearing for the petitioner states that interest on the pre-award interest is impermissible.
17. Issue notice on the said limited question, returnable on 18.05.2022.
18. Notice shall go by speed post, approved courier and electronic modes. Dasti in addition. Dasti notice shall be served in person.
19. An affidavit of service be filed at least one week before the next date of hearing.
VIBHU BAKHRU, J MAY 9, 2022 pkv Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:Dushyant Rawal Signing Date:11.05.2022