Delhi High Court
Union Of India (Uoi) And Ors vs Nav Bhart Nirman Company And Anr. on 9 September, 2003
Equivalent citations: 2003(3)ARBLR309(DELHI), 106(2003)DLT617, 2003(70)DRJ551, 2003(3)RAJ549
Author: R.C. Jain
Bench: R.C. Jain
JUDGMENT R.C. Jain, J.
1. Through this application under Section 34 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as "Act") Union of India seeks for setting aside the arbitral Award dated 25.1.01 with additional Award dated 11.6.01. Along with said application, an application under sub-section 3 of Section 34 of the Act has also been made explaining the delay in not challenging the said Awards within a period of three months from the date of making of the additional Award and for extension of time beyond three months but within a further period of 30 days. The Arbitral Award dated 25.1.01 and the additional award dated 11.6.01 rendered by the sole arbitrator are sought to be challenged and set aside primarily on the ground that the sole arbitrator has exceeded his jurisdiction and powers and thereby misconducted the proceedings by making an additional award on the application filed by the respondent-contractor under Section 33 of the Act because the said provision could be invoked only for the purpose of correcting any computation errors, clerical or typographical errors or any other errors of similar nature and not for making an additional award, the Arbitrtor having already considered the claims but did not make any award qua the said items.
2. The germane facts leading to the present applications are that disputes having arisen between the parties in relation to a certain work executed by the respondent-contractor M/S Nav Bharat Nirman Company & Anr., the Chief Engineer (CPWD) vide his letter No. 4(16)/97-A&C(NDZ)1, dated 9.7.78 appointed Dr. Y. P. C. Dangay as the Sole Arbitrator to decide the said disputes and make the Award. The sole arbitrator entered upon the reference on 30th July, 1998, and made and signed the Award on 25.1.01. On 10.2.01, the Contractor moved an application under Section 33 of the Act before the Arbitrator seeking modification of the Award which application was opposed on behalf of the Union of India by filing objections. On 11.6.01 the sole arbitrator passed an additional award in respect of extra item No. 42/23 and 43/24 i.e. fire retarded paint and flame proofing respectively, The awards of the arbitrator are under challenge in this application under Section 34 of the Act.
3. In the application under Section 34(3) of the Act it is averred by the Union of India that though the additional Award was made by the Arbitrator on 11.6.01, still a copy of the said award was received by the Union of India-objector in their office on 27.6.01 and on receipt of the same, case was processed at different levels viz. Executive Engineer, Chief Engineer and Government counsel which consumed sufficient time as a result of which the application under Section 34 of the Act could not be filed within three months of the date of disposal of the application under Section 33 of the Act which is stated to be due to the reasons beyond the control of the petitioners and unavoidable necessity of procuring the case at various administrative channels.
4. Both the applications are being opposed by the respondent-contractor by filing replies. It is pleaded that the application under Section 34 is patently barred by limitation as the same was filed on 31.10.01 e.g. beyond a period of 120 days even from the date of making of the additional award viz. 11.6.01. It is also contended that no case has been made out by the petitioner-Union of India for invoking the jurisdiction and powers of the Court under Section 34(3) of the Act for entertaining the application within a period of 30 days from the expiry of the initial period of 90 days prescribed by the statute for filing the objections under Section 34 of the Act. On merits it is denied that any ground is made out for setting aside the additional award of the arbitrator. On the other hand it is pleaded that even in the original claim filed by the respondent-contractor he has made a claim for fire retarded paint and flame proofing respectively, but since no award to this claim was omitted in the original award, vide an application under Section 33(4) of the Act the Arbitrator was requested to rectify the said commission and the arbitrator has thereafter rendered the award in respect of the said two items which was a consequence of omission in the original award.
5. I have heard Shri A. K. Bhardwaj, learned counsel representing the petitioner-Union of India and Mr. C. S. Rathor, Advocate representing the respondent-contractor and have given my thoughtful consideration to their respective submissions.
6. Before I proceed to consider the application under Section 34 for setting aside the additional award of the sole arbitrator dated 11.6.02, it is desirable that the application under Section 34(3) of the Act should be answered. It may be noted here that as per the petitioner's own showing the application under Section 34 was not moved within 90 days of the making of the additional award on 11.6.01. The application was in fact filed in the Court first time on 4th October, 2001 that is on 113th day of the making of the additional award but within 120 days. Therefore, it will not be correct to say that the application was moved after 120 days of the making of the additional award. Now the question is as to whether on the face of the facts and circumstances disclosed in the application under Section 34(3) of the Act, the court should exercise its discretion vested in it under the said provisions of law and entertain the present application filed beyond a period of three months. The legislature in its wisdom has prescribed a time limit of three months for making an application for setting aside an Award and the starting points of limitation are (i) date of receipt of Award or two date of disposal of application under Section 33, if made. The proviso permits extension of this period by a further maximum outer limit is three months and 30 days. In the case in hand the reasons given in the application under Section 34(3) are routine and stereotyped as it is stated that firstly the delay has been occasioned on account of processing the case at various levels for taking a decision to challenge the Award and then in seeking the appointment of the Government counsel through the Ministry of law. Can these reasons be considered sufficient for extension of time in view of the fact that the petitioner is a government and act through its authorities/officers. In the opinion of this Court the answer is a plain "No" because if these reasons of procedural delay or delay in processing the case in the government offices is considered to be a sufficient cause for extending the time for making the application under Section 34 of the Act, it would amount to prescribing a different period of limitation in the cases where the government or governmental agency is a party to an award. If that had been the intention of the legislature it would have been so reflected in the statute itself. The Apex Court and this Court has held time and again that no special privileges is conferred on the government or governmental agencies to seek condensation of delay or extension of time merely on the ground that the delay has been accessioned due to various channels involved in processing the matter. In the opinion of this court the grounds stated in the application do not afford any sufficient cause on account of which the petitioner can be said to have been prevented from making the application within a period of three months. Accordingly the application under Section 34(3) of the Act merits dismissal and consequently on this short ground alone the application under Section 34 of the Act can also be dismissed.
7. However, irrespective of the dismissal of application under Section 34(3) filed by the Union of India, this Court has considered their objections to the additional award. The only submission made on behalf of the petitioner is that the respondent-contractor was not within its rights to make an application under Section 33 and the Arbitral Tribunal was not competent to make additional award as according to the learned counsel the scope of this application and the additional award is confined only to correct any computation, clerical or typographical errors or any other errors of similar nature occurring in the Award and not to make an additional award on the claims already made and considered by the arbitrator. The additional award of the arbitrator dated 11.6.01 reads as under:
" I have heard both the parties and do hereby give an additional award as follows:
The error pointed out by the claimants at page 5 of the Award in last but one para that C-9 shall be read as R-9, appears to be correct. Hence, C.9 shall be read as R.9 As regards extra item No. 42/23 and 43/24, i.e. fire retarded paint and flame proofing respectively, the following additional declaratory award is given.
As claimants have vehemently argued that the dismantled material on which the fire retarded paint and flame proofing was executed, is still lying in hanger under the custody of the respondents which can still be got tested from the authorised laboratories. I give declaratory award that the material be got tested from any of the authorised laboratories and in case their report is in positive, the claimants shall be paid for the work done as per their bill which is filed as C-16 and C-18 i.e. Rs. 187.50 P/Sqm. For quantity of 1200 sqm. For fire retarded paint and Rs. 48 p/Sqm. For a quantity of 600 sqm. for flame proofing.
CASE NO. ARB/YPCD/580 Further, as regards interest by way of damages, the claimants are awarded pre-suit simple interest & 14% per annum, which was omitted in the original Award, with effect from the date when claimants amount is become due i.e. From 2.6.97 as per C-18.
The other conditions of the award will remain the same."
8. Sub Section (4) of Section 33 lays down that unless otherwise agreed by the parties, a party with notice to the other party, may request, within 30 days from the receipt of the arbitral award, the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the arbitral award. In other words the arbitrator is empowered to make additional award in respect of any item of claim on which the arbitrator had omitted to consider and give an award in the original award. It is not the case of the petitioner-Union of India that the extra item No.42/23 and 43/24 i.e. fire retarded paint and flame proofing respectively, and the claim of interest as per Clause C-18 were not the subject matter of the original claim filed by the respondent-contractor before the Arbitrator. No specific amount was awarded against these items of work and, therefore, in the opinion of this court even on merits the petitioner are not entitled to challenge the additional award of the arbitrator and the additional award made by the arbitrator is not liable to be set aside.
9. In the result both the applications under Section 34 and 34(3) of the Arbitration Act & Conciliation are hereby dismissed leaving the parties to bear their own costs. respondent-contractor before the Arbitrator. No specific amount was awarded against these items of work and, therefore, in the opinion of this court even on merits the petitioner are not entitled to challenge the additional award of the arbitrator and the additional award made by the arbitrator is not liable to be set aside.
10. In the result both the applications under Section 34 and 34(3) of the Arbitration Act & Conciliation are hereby dismissed leaving the parties to bear their own costs.