Delhi High Court
G.D. Tewari And Co. vs Dda And Anr. on 19 April, 2005
Equivalent citations: 2005(2)ARBLR241(DELHI), 120(2005)DLT225, 2005(85)DRJ601
Author: Pradeep Nandrajog
Bench: Pradeep Nandrajog
JUDGMENT Pradeep Nandrajog, J.
1. DDA has filed objections to the award dated 19.5.1996 passed and published by Sh. K.D. Bali who was appointed as a sole arbitrator to decide the disputes raised for adjudication by the contractor. Dispute pertained to a contract under which contractor was to construct 590 SFS flats at Vasant Kunj including the work pertaining to scooter garages and internal development vide agreement number 14/HD-II/84-85.
2. Since all and sundry objections have been taken to the award pertaining to each and every claim awarded, it would be advisable to deal with the objections claim-wise.
3. But before that, a brief preamble of the facts. Work was awarded to the contractor on 17.12.1984 at a cost of Rs.1,77,18,245/- which was 50% above the estimated cost of the work, being Rs.1,17,53,397/-. Stipulated date of start of work was 27.12.1984. Completion date was 26.12.1985. Work was actually completed on 31.7.1989. Time was extended without levy of compensation.
4. Contractor had 11 substantive claims, 12th being claim for payment of interest.
5. Arbitrator held against DDA on the question of delay as would be evident from the findings pertaining to claim number 9. Findings pertaining to fixation of liability on DDA for delay are based on evidence led. Learned arbitrator has referred to the documentary evidence being exhibits C-8 to C-10, C-13 to C-18, C-20 to C-30, C-32 to C-37, C-39, C-40, C-43, C-46, C-49, C-50, C-52, C-53, C-80, C-83 to C-90, C-92 to C-102, C-111, C-119, C-120, C-123, C-124, C-126, C-127, C-128 to C-136, C-138, C-142 to 144 and R-20, R-21, R-31, R-32, R-34, R-35, R-40 and R-45. Learned arbitrator has also considered exhibits C-4, which contained the contractor's undertaking not to claim damages for the extended period of the contract. Learned arbitrator has also note that payment under clause 10 CC of the Contract, which provided for escalation, was paid by the department for the extended period of contract till last but final bill.
6. Finding on the issue of delay was principally a finding which would have bearing on claim No.9. Its other effect would be on the issue whether the contractor discharged its obligations under the contract.
7. It is trite that a finding of fact recorded by the arbitrator unless perverse cannot be questioned by way of objection to the award. Indeed, learned counsel for the DDA, except from briefly touching upon the issue of delay, left the argument midway, faced with the situation that what learned counsel was actually doing was requiring this court to re-appreciate the evidence.
8. Finding of fact pertaining to delay recorded by the learned arbitrator, which finding is based on evidence that DDA was responsible for delay is accordingly affirmed.
9. Turning to the claims, claim No.1 was for refund of the security deposit in sum of Rs.1,00,000/- lying in form of bank guarantee. Learned arbitrator had directed that the bank guarantee be returned. Learned arbitrator has noted that for completion of the work up to 31.7.1989 time was extended without levy of compensation. Learned arbitrator has noted the defense of DDA predicated on Clauses 17 and 47 of the contract, namely, that the contractor has not furnished the labour clearance certificate and to defects certificate pertaining to the works, absence of which, as per DDA entitled DDA to retain the bank guarantee for encashment if contractor did not comply with said clauses of the contract.
10. Learned arbitrator has held that defect liability period was of 6 months and there was no evidence that claimant was intimated any defect in the said six months period. On the issue of certificate required as per clause 17 and 46, learned arbitrator has held that admittedly no complaint of any labour violation or a claim from labour was received and, therefore, he held that non-furnishing of the certificate was irrelevant.
11. Pertaining to the defect liability period, learned counsel for the DDA could not point out any statutory provision which required the contractor to obtain a certificate on defect liability period being over certifying that no defects were found or if found were removed. Thus, the very defense of the DDA that the contractor did not submit a clearance certificate pertaining to defect liability period is without any foundation.
12. Clause 46 of the contract reads as under:-
"Security deposit shall not be refunded till clearance certificate from the labour office is obtained by the contractor."
13. Clause 17 of the contract requires a completion certificate to be obtained by the contractor. It reads as under:-
"Clause 17.
If the contractor or his working people or servants shall break, deface, injure or destroy any part of building in which they may be working, or any building, road, road curb, fence, enclosure, water pipe, cables, drains, electric or telephone post or wires, trees, grass or grassland or cultivated ground contiguous to the premises on which the work or any part of it being executed, or if any damage shall happen to the work while in progress from any cause whatever or if any defect shrinkage or other faults appear in the work within six months (3 months in the case of any work other than road work costing Rs.40,000/- and below) after a certificate final or otherwise of its completion. Completion shall have been given by the Engineer-in-Charge on aforesaid rising out of defective or improper materials or workmanship the contractor shall upon a receipt of a notice in writing on that behalf make the same good at his own expense, or in default the Engineer-in-Charge may cause the same to be made good by other workmen and deduct the expense from any sums that may be then or at any time thereafter become due to the contractor, or from his security deposit (except for the portion pertaining to asphaltic work, which is governed by sub-para (iii) of clause 35) or the proceeds of sale thereof or of a sufficient portion thereof. The security deposit of the contractor (except the portion pertaining to asphaltic work which is governed by sub-para (iii) of clause 35) shall not be refunded before the expiry of six months (three months in case of any work other than road work costing Rs.40,000/- and below) after the issue of the certificate final or otherwise of completion of work or till the final bill has been prepared and passed whichever is later."
14. Exhibit R-48 would reveal that although a completion certificate in the form of a certificate was never issued by the department, but on the final bill submitted, while certifying for payment, DDA has certified the following:-
"Certified that:-
1. The work has been carried out as per terms of conditions.
2. No T and P has been issued.
3. The contractor has made his own arrangement of water.
4. All necessary recovery has been made.
5. No labour complaint received so far.
6. The completion certificate has been recorded vide M.B. No.509 P-89.
7. The contractor himself is a graduate engineer.
8. The extension of time has been sanctioned by SB, CC2 up to 31/7/89 vide letter number F7(6)84/C-II/S.W/Pkt V/Ors-III/Part II/4363 dated 3-8-90 as per M.B. No.895.
15. Certification aforenoted notes that completion certificate has been noted in the M.B. (Measurement Book) and that no labour complaint has been received so far.
16. Award pertaining to claim No.1 does not suffer from any illegality. Objection is accordingly rejected and finding by the arbitrator is upheld.
17. Claim No.2 in sum of Rs.6,000/- has been allowed. Claim was for amount paid as bank charges for keeping alive the bank guarantee towards security deposit. Finding is:
"The work was actually completed on 31.7.89. The respondent has not released the bank guarantee till the last date of hearing though, the security deposit had matured for refund long back. The claimants had filed certificate from the bank C-148 and had claimed Rs.6,000/-. I, therefore, hold that the said bank guarantee was got extended by the respondents unjustifiably and award Rs.6,000/- as claimed in favor of the claimants'.
18. Since finding of fact that delay was attributable to DDA as also award pertaining to claim No.1 has been upheld by me, finding pertaining to claim No.2 has to be upheld. Indeed, if DDA forced the contractor to keep alive the bank guarantee, contractor would have a lawful claim to be reimbursed the bank charges. Award pertaining to claim No.2 has to be upheld.
19. Claim No.3 in sum of Rs.20,000/- has been allowed. Claim was for refund of Rs.20,000/- deducted from the 20th running account bill. Deduction being on account of alleged defective work. As per DDA this deduction was made as per defects noted by Chief Technical Examiner and Quality Control Cell of DDA. Reliance was placed by DDA on R-3 and R-4.
20. In the context of R-3 and R-4, learned arbitrator has noted:
"However as per claimants these letters were never endorsed to the claimants and therefore, no opportunity was given to the claimants nor any detail was ever given."
21. Clause 17 of the contract, noted in para 13 above, required the contractor to remove the defects upon receipt of notice from the DDA and if not rectified, entitled DDA to rectify the same at the cost of the contractor. Learned counsel for DDA could not show any document that contractor was notified R-3 and R-4. Counsel could additionally not show any proof that DDA had rectified the defects and had incurred costs. The award is accordingly upheld.
22. Claim No.4 in sum of Rs.36,641/- has been awarded. Claim was for refund of the amount deducted as 0.25% rebate on the 56th running bill. Learned arbitrator had noted that due to paucity of funds, DDA had paid the amount under the bill in Installments and that too belatedly.
23. Learned counsel for the DDA did not dispute that contractor had offered rebate conditional on bills being paid in time.
24. If a benefit is available under a contract conditional upon a promise, the promisecannot avail the benefit till it complies with the condition. Bill was payable under clause 8 of the contract which reads as under:-
"Clause 8 A bill shall be submitted by the contractor each month on or before the date fixed by the Engineer-in-Charge for all work executed in the previous month, and the Engineer-in-Charge shall take or cause to be taken the requisite measurements for the purpose of having the same verified, and the claim, as far as admissible, adjusted as far as possible before the expiry of ten days from the presentation of the bill. If the contractor does not submit the bill within the time fixed as aforesaid, the Engineer-in-Charge may depute within seven days of the date fixed as aforesaid, as subordinate to measure up the said work in the presence of the contractor whose counter signature to the measurement list will be sufficient warrant, and the Engineer-in-Charge may prepare a bill from such list."
Rebate was conditional upon timely payment. Thus finding of the learned arbitrator is perfectly legal and valid.
25. Claim No.5 has been rejected.
26. Claim No.6 in sum of Rs.83,269.83 has been allowed. Claim was for refund of amount deducted towards alleged defective works under the 56th running bill.
27. DDA justified the deductions on R-3 to R-5, being reports of Chief Technical Examiner and Quality Control Cell. Arbitrator has noted that these were never intimated to the contractor. Counsel for DDA could not point out that R-3 to R-5 were intimated to the contractor. Counsel could also not point out that DDA had incurred any expenses towards rectification. Thus for the reasons on which I have upheld the award pertaining to claim No.3, award pertaining to claim No.6 has to be upheld.
28. Claim No.7 in sum of Rs.5,330/- has been allowed. Learned arbitrator has held:-
"The claimants had offered conditional rebate of 0.25% if the Respondents sanction extra/substituted items within three months of occurrence. The Respondents failed to substantiate their entitlement of availing the conditional rebate on extra/substitued items and the said recovery in the bill filed as Exhibit C-146 D. From the record of the Respondents' bill it is seen that Rs.1,583/- and Rs.3,747- has been recovered. The said recovery is totally unjustified. Therefore, I award a sum of Rs.5,330/- in favor of the Claimants under this claim."
29. For the reasons on which I have upheld the award pertaining to claim No.4, award pertaining to claim No.7 is upheld.
30. Claim No.8 in sum of Rs.39,64,500/- was divided into VIII parts with part number IV further divided into 44 sub-heads. A sum of Rs.11,44,771.14 has been awarded. Summary of claim No.8 as awarded may be set out for facility of decision. It is as follows:-
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Part. Sum Awarded.
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I. Rs.1,36,498/-
II. Nil
III. Nil
IV. Sub-head 1 and 2 Rs.24,395/-
Sub-head 3 and 4 Rs.11,759/-
Sub-head 5 Rs.1,70,188/-
Sub-head 6 and 7 Nil
Sub-head 8 Rs.33,202.68/-
Sub-head 9 to 11 Nil
Sub-head 12 Rs.1,00,033/-
Sub-head 13 Nil
Sub-head 14 Rs.30,000/-
Sub-head 15 Rs.11,070/-
Sub-head 16 Rs.10,374/-
Sub-head 17 and 18 Nil
Sub-head 19 Rs.18,325/-
Sub-head 20 Rs.24,192/-
Sub-head 21 Rs.2,31,860/-
Sub-head 22 Nil
Sub-head 23 Rs.80,000/-
Sub-head 24 and 25 Nil
Sub-head 26 Rs.90,500/-
Sub-head 27 to 43 Nil
Sub-head 44 Rs.70,826.46
V. Rs.1,01,548/-
VI. Nil
VII. Nil
VIII. Nil
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Total Rs.11,44,771/-
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31. Since contractor has not filed objections to the award, I need not deal with the claims which have been rejected.
32. Claim no.8 was for final bill.
33. Part I was for payment for agreed items. Learned arbitrator has noted that DDA had finalized the bill during the course of arbitration proceedings and had filed the same vide R-48. DDA had accepted liability to pay qua agreement items in sum of Rs. 1,36,498/-. Learned arbitrator has noted that thereafter DDA back tracked and alleged deductions towards recoveries. Noting that DDA had already effected recoveries in sum of Rs.1,20,000/- as per pages 7 to 9 of the final bill (R-48), earned arbitrator has held that DDA could not effect double recoveries. Thus, sum admitted as payable for agreement items in sum of Rs.1,36,498/- has been awarded.
34. Learned counsel for DDA fairly conceded that the award pertaining to part-I of claim No. 8 was legal. I may also note that in the objections filed by DDA, no specific challenge has been made to this part of the award.
35. As noted above, part-II and III of claim No.8 have been rejected. Contractor has accepted the rejection, in that, has not challenged the award. Issue has thus attained finality.
36. Claim under sub-head 1 and 2 of part-IV has been allowed in sum of Rs.24,561.69. Claim was on account of alleged extra item of work regarding 100 mm and 75 mm diameter sand cast-iron collars.
37. Noting that clause 12 of the contract empowered DDA to require extra item of work to be carried out, learned arbitrator has held that DDA after initially allowing said claim, scored it of. Therefore, it has been concluded that payment had to be made.
38. Clause 3.14 of the contract under the heading "Additional Specifications and Conditions" stipulates :
"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."
39. A mistake is no admission. Upon detection, a mistake can be rectified. The logic of the learned arbitrator that since DDA accepted liability to pay, it could not evade payment notwithstanding clause 3.14 of the contract is irrational and hence perverse. In the teeth of said stipulation, contractor was not entitled to lay a claim for said cast-iron collars (SCI collars) as an extra item. The award pertaining to sub-head 1 and 2 of part-IV of claim No.8 is accordingly set aside.
40. Sub-head 3 and 4 of part-IV of claim No.,8 have been allowed in sum of Rs.11,759/-. Reasons are as under :
"Items No.3 and 4 are with regard to cutting holes in brick walls and RCC walls under agreement item no.11.8. Both these items were executed and not denied by the Respondents. Claimants rely on Exh.C-48 item no.1 and 2 and C-98. I hold that the said items are payable and covered under applicable DSR in terms of the contract. I therefore, award Rs.11,759/- in favor of the Claimants after adjustment of the rates."
41. Item of work to be executed under agreed item No.11.8 of the contract was providing and fixing sand cast iron/cast iron spun iron soil, waste and vent pipes.
42. If an item of work require some other work to be performed inevitably, under the inclusive principle, the said work cannot be charged as an extra item and it's price has to be deemed to be included in the price quoted. (See HUDSON'S Building and Engineering Contracts Paras 4.037 to 4.039 11th Edition)
43. Learned counsel for the contractor could not explain as to how the work of providing and fixing pipes could be accomplished without cutting holes in the walls for purposes of grouting the pipes. Indeed, to carry out item No.11.8 of the contract, the work in question was inevitable. The award cannot thus be sustained qua item No.3 and 4. It is accordingly set aside qua said items.
44. Sub-head 5 of part-IV of claim No.8 has been allowed in sum of Rs.1,70,708.39. Claim was for extra work of fixing ornamental grills. Learned arbitrator has noted that agreed item No.6.3 of the contract required the contractor to affix ordinary grills. In the context of the drawing, C-139, adopted by DDA during execution, learned arbitrator has held that the drawing showed that grill was ornamental. Applying DSR 1981 rates, claim has been awarded for 52,045.34 kg of iron used.
45. Finding that the design of the grill was ornamental is an inference drawn from the drawing Ex.C-139. Counsel for DDA could not show how inference drawn was perverse. The award qua this sub-head is accordingly upheld.
46. Nil has been awarded under sub-head 6 and 7 of part IV of claim No.8 and that takes me to the objection pertaining to sub-head 8. A sum of Rs.33,022.68/- has been awarded. Claim was for making groove both outside and inside at the junction of RCC and brick work. Taking note of the fact that agreement did not provide for the contractor to make a groove, treating it to be an extra item, learned arbitrator allowed the claim by applying DSR 1981 rates.
47. In the objections filed, it is stated by DDA that groove was included in the item of plastering.
48. Contract requires the contractor to plaster the walls and the roof. It does not stipulate that the contractor shall make a groove at the junction of RCC and brick work.
49. Learned counsel for the claimant explained that the effect of making a groove was to give a suspended look to the roof.
50. Learned counsel for the DDA did not dispute that DSR 1981 makes a special rate provision for cutting a groove after plastering work is done. It is thus obvious that making of a groove is not incidental to the work of plastering. It is a totally unrelated work which results in asthetic beauty of plastering work. I therefore find no merit in the objection. Award pertaining to extra item No.8 is accordingly upheld.
51. No amount has been awarded under sub-heads 9 to 11 of part IV of claim No.8. Sub-head 12 has been allowed in sum of Rs.1,00,033/-. Claim was for applying water proofing cement paint on sponge surface. Learned arbitrator has allowed the claim on the basis that as per ISI specifications, 25% extra quantity of water proofing cement paint was utilized if sponge finish was to be achieved. Accordingly, on the quoted rates, learned arbitrator granted benefit of 25% extra.
52. Specifications set out in the contract for the work in question are to be found in entry at serial number 9.4 of the specifications. It reads as under:-
"15mm thick cement plaste 1.5 (1 cement: 5 of coarse sand) finished rough with sponge."
53. I fail to understand the logic of the reasoning adopted by the learned arbitrator. Contractor was required to complete the cement plastering work finished rough with sponge. It has to be presumed that aware of the extent of work required, contractor would have taken that into consideration while submitting the tender. It is not a case where a particular specification of an item requires to be considered or interpreted. If it was a case of interpreting a specification, one could have argued that II specifications interpret the same in a manner different than CPWD specifications and in such eventuality, arbitrator would have been justified if he adopted ISI or CPWD interpretation. However, what has been ignored by the learned arbitrator is that the contract required the contractor to finish the work as sponge surface. Award pertaining to item No.12 of part IV of claim No.8 is accordingly set aside.
54. Award pertaining to sub head 13 of part IV of claim No.8 is NIL. Claim under sub-head 14 has been allowed in sum of Rs.30,000/-. Claim was on account of cost of bitumen. Learned arbitrator held that item No.2.6, 8.4 and 10.3 of the contract incorporated merely the nomenclature of the work to be done but excluded the cost of the material required to complete the work.
55. Item specifications being 2.6, 8.4 and 10.3 required the contractor to apply a coat of bitumen on 3 different surfaces corresponding to each of the three items.
56. Logic of the reasoning of the learned arbitrator if seen in light of the award pertaining to sub-head 7 shows the inherent contradictions. As noted above, claim number sub-head 7 has been rejected. Rejection is on the ground that the work of fixing of but hinges include the supply of hinges. Contractor was claiming extra for hinges on the ground that the work required only affixation of hinges. For parity of reasoning, work of applying bitumen would require bitumen to be used. Even otherwise, perusal of the quoted rate being between 6 to 7 rupees per square meter would show that if quotation was for merely applying bitumen, rate would be too excessive. Be that as it may, where the required work is to apply bitumen of an approved quality, it must include the supply of bitumen by the contractor. To clarify, item No.8.4 of the contract reads:-
"Painting top of roof with bitumen of approved quality........."
57. The specification of the item requires painting top of roof with bitumen and as this court sees the description of the item, there is no scope for any ambiguity, much less one which requires an adjudication. Award pertaining to extra item No.14 of part IV of claim No.8 is accordingly set aside.
58. Sub-head 15 of part IV of claim No.8 has been allowed in sum of Rs.11,070/-.
59. Item No.15.5. of the specifications required the contractor to:-
"laying wearing course with stone aggregate including screening, sorting, spreading to temperate and consolidation with road roller, complete including spreading and consolidation of binding material (payment to be made for quantity of only stone agg. used excluding blinding material."
60. Contractor had claimed the said sum alleging that to make the surface compact and to fill the voids in the stone metal before use of binding material, it was required to fill the voids by adding screening material. It was alleged by the claimant that it had claimed the said during running bill, Exhibit C-98D. DDA denied that the work was executed.
61. Learned arbitrator has found that the work was executed and therefore ordered payment in sum of Rs.11,070/- as against the claim of Rs.30,696.93/-.
62. I do not find fault with the learned arbitrator when he has awarded the sum of Rs.11,070/-. If the work was done, which in fact it was, I fail to understand why DDA took up a false defense. A look at the specifications pertaining to item 15.5. as noted in para 59 above shows that the work in question included screening. Had DDA pointed this out to the learned arbitrator, learned arbitrator would have focused on the issue and probably would have not allowed the claim for the reason the work in question included screening.
63. Surprisingly, in the objections filed, DDA has not brought out the said aspect to the notice of this court. Learned counsel for the DDA during argument failed to point out the ambit of specification 15.5.
64. Be that as it may, notwithstanding the fact that DDA failed to point out the span of the specification to the arbitrator, fact of the matter remains that item of work at serial No.15.5. included screening. Thus, screening material to be provided and screening work executed being an integral part of the work to complete the specifications of item 15.5 requires the award pertaining to sub-head 15 to be set aside. Ordered accordingly.
65. Sub-head 16 of part IV of claim No.8 has been allowed in sum of Rs.10,374/-. Claim was on account of adding red pigment in cement concrete provided for pavement. defense of DDA was that the item of work was not executed. A finding of fact has been returned by the arbitrator that the work was executed and with red pigment added to the cement concrete mixed. Finding is a pure find of fact and based on evidence being Exhibit C-98D, the award is upheld.
66. No amount has been awarded pertaining to sub-heads 17 and 18 of part IV of claim No.8.
67. Sub-head 19 of part IV of claim No.8 has been awarded in sum of Rs.18,325/-. Claim was on account of additional expenses incurred for providing M.S. Flats of different sizes and for welding to T-Iron frames for fixing M.S. Hinges.
68. Basis of the claim was that demand was pertaining to item number 6.1 of the contract. It was pleaded price payable was determined by the department by converting the length of iron frames into weight by applying co-efficient and while so doing, weight of the flat and welding was not considered. DDA took a defense that the amount was not payable as no such instructions were issued. As per DDA, alternatively it was stated that the work was composite and comprehensive and quoted rates were inclusive of all operations.
69. Learned arbitrator held that the contractor had welded M.S. Flats to T-Iron frames and that this was not contemplated by the contract.
70. Specification 6.1 of the contract reads as under:-
"6.1Providing and fixing 'T' iron frames 40x40x5mm for doors, windows, and ventilators of M.S. Steel Tea sections, joints mitred and welded .......... or with a wooden plugs or screws or rawl plugs and screws or with fixing clips or with bolts and nuts as required including fixing of necessary butt hunges and screws ............."
71. Payment has to be made on the basis of the weight of steel in kilograms.
72. Nature of the pleadings leading to the claim shows that the contractor had a grievance to the manner in which weight was being determined and not to the issue that the work in question was an additional work or not. Learned counsel for DDA had no option but to concede that since payment was to be made by weight, entire weight of the iron used in steel works under item number 6.1 had to be considered for purposes of payment.
73. I, therefore, find nothing objectionable in the award pertaining to this item of work. The award is accordingly upheld.
74. Sub-head No.20 has been allowed in sum of Rs.24,192/-. Basis of the claim which has found favor with the learned arbitrator is that as per contract C.P. fittings were of ZIM, PARKO, GEM or equivalent quality and as against that, DDA required the contractor to provide costlier equipment of ISI Mark or Kingston Mark.
75. In the context of the evidence led, being exhibit C-38, C-42, C-47, C-48, C-76, C-98, R-28, R-30 and R-31, learned arbitrator has held that since contractor was required to affix CP fittings of higher quality than the quality specified in the contract, contractor was entitled for extra payment.
76. In the objection filed, it is stated that DDA never pressed for better quality of CP fittings to be affixed. I am afraid, objections run in the teeth of documentary evidence as noted by the learned arbitrator. Surely, if DDA required the contractor to alter the specification of an item which entail higher cost, DDA was rightly held liable to compensate the contractor.
77. Claim under sub-head 21 has been allowed in sum of Rs.2,31,860/-. Dispute pertained to the quality of work under item numer 9.4 of the contract.
78. Specification of item number 9.4 has been noted by me in para 52 above.
79. Dispute pertaining to this item of work under sub-head 21 was the contractor's assertion that it was made to apply cement slurry before dashing cement motor as well as before sponge. It was stated by the contractor that this extra work was decided in the co-ordination meeting held on 17.3.1988. DDA denied that this was an extra work and asserted that this operation was included under specification pertaining to item number 9.4.
80. Noting that DDA has not denied application of cement slurry, learned arbitrator held that the specification did not refer to apply cement slurry and accordingly allowed the claim.
81. In the objection filed, it is reiterated by DDA that no directions were issued and that the work was an integral part of the works required to be carried out to complete the specifications of item number 9.4 of the contract.
82. If the work in question was an integral part of the specifications of item No.9.4, what was the need for a decision by the co-ordination committee on 17.3.1988? The answer is obvious. Since the work was not included in the scope of specifications, coordination committee decided that for technical reasons the work has to be carried out. Further, DDA has not shown any literature or technical material to the court to show that application of cement slurry is an integral part of cement plastering and finishing roof with sponge. The award pertaining to sub-head 21 is accordingly upheld.
83. Claim under sub-head 22 has been rejected. Claim under sub-head 23 has been allowed in sum of Rs.80,000/-. Claim was for alleged extra work for straightening and cutting the reinforcement steel bars to carry out the work against item number 3.7 of the contract.
84. Item of work 3.7 of the contract reads as under:-
"Reinforcement for RCC work including bending, binding and placing in position complete
(a) Mild steel and medium tensile steel bars
(b) Cold twisted bars.
85. Learned arbitrator has held that the work of straightening and cutting was not included within the scope of specifications as per item No.3.7.
86. Laying a challenge to award under this claim, learned counsel for DDA relied upon a decision of a learned Single Judge of this court reported as 2001 (IV) AD (Delhi) 65 M/s. Weer Aar Constructive Builders v. D.D.A.
87. Claim was for straightening bent up steel bars issued in coils and bent up bundles and, therefore, contractor claimed to be compensated for said work. Learned arbitrator has treated the work of straightening bent up steel bars as an extra work.
88. Offer submitted by the contractor shows that the contractor had quoted for aforesaid work noted in para 84 above. Issue which arises for consideration is whether the work of straightening bent up steel bars would be included under specification 3.7 aforesaid.
89. A learned Single Judge of this court in Suit No.1985-A/1984 K.C. Chibber v. D.D.A. while considering a similar descriptive clause in the schedule of quantities requiring the contractor to execute the work of reenforcement for RCC works included bending, binding and placing in position held that the clause would exclude straightening of bent up steel bars for which extra was payable.
90. Decision in Weer Aar Constructive Builders relied upon by counsel for DDA noted decision in K.C. Chibber's case. Decision in K.C. Chibber's case was distinguished on the ground that in K.C. Chibber's case, petitioner had notified DDA that straightening of steel was to be treated as an extra item of work and this was not objected to by DDA.
91. In Weer Aar Constructive Builder's case, learned Single Judge held that since bending, binding and placing in position steel for RCC works was included in the contracted, said work necessarily required the process of straightening before cutting and, therefore it was held that no claim for extra was maintainable on said account.
92. Learned counsel for the respondent could not point out any evidence that contractor had written to DDA when work was on that he would be having a claim as an extra item for straightening of bent up steel bars issued in coils.
93. I, therefore, go Along with the decision in Weer Aar Constructive Builder's case.
94. Hudsons in Building and Engineering Contracts has noted that where a work is an integral part of a listed work or has to be inevitably performed to achieve the desired works, it would be deemed that said work is inclusive of the desired works and price quoted is included in the quoted price for the work in question. (see para 4.037 to 4.039 of 11th Edition). For this additional reason, the award pertaining to sub-head 23 is set aside.
95. Claim under sub-head 24 and 25 of part IV of claim No.8 has been rejected.
96. Claim under sub-head 26 has been allowed in sum of Rs.90,500/-. Claim was on account of shuttering and centering. According to the claimant, DDA had wrongly measured and accordingly paid less while measuring the centering and shuttering for the supporting beems of the suspended floor slab.
97. Award shows that the learned arbitrator has referred to the evidence led and has held that extra propping and centering was done. Finding is a pure finding of fact and since it is based on evidence, the award has to be upheld.
98. Objection to the award pertaining to sub-head 26 is accordingly rejected.
99. Claim has been rejected pertaining to sub-heads 27 to 43.
100. Claim under sub-head 44 has been allowed in sum of Rs.70,826.46.
101. While allowing the claim, learned arbitrator has held that having adopted steel Sections F-4 and F-7, midway during execution of the works DDA adopted steel sections F-6 and F-8. He noted that composite sections of steel doors and windows became heavier than indicated and therefore contractor had to be compensated.
102. Item of work pertained to specifications as per item No.6.4. Learned arbitrator noted that contract specified work required payment to be made based on area. Noting that since heavier sections were used, learned arbitrator allowed the claim due to use of heavier sections. In other words, learned arbitrator compensated the contractor as by weight, more steel was used.
103. Reasoning of the arbitrator cannot be labelled as perverse. On the contrary, reasoning is logical and in the context of the factual dispute has to be upheld.
104. Part V of the claim No.8 was in sum of Rs.10,32,277/-. Claim was under clause 10 CC of the contractor. Claim was allowed in sum of Rs.1,01,548/-.
105. Learned arbitrator noted that the final bill did not include payment under clause 10CC and accordingly allowed part of the claim for the reason manner in which claim was computed by the contractor was not acceptable to DDA. Contractor reworked the figure as per the methods suggested by DDA.
106. In the objections filed, DDA has stated that all payments under clause 10 CC were paid. Learned counsel for DDA could not show any document to justify the objections. On the contrary, I find that while submitting the final bill, supplementary bill for escalation under clause 10 CC was not submitted. Record of the arbitrator shows that parties were required to re-work payment under clause 10 CC for the work done between the last running bill and the final bill. This was worked upon and claim awarded in sum of Rs.1,01,548/- as against Rs.10,32,277/- claimed. The award pertaining to part V of claim No.8 has therefore to be upheld.
107. Claim under part VI to VII of claim No.8 has been rejected.
108. Claim No.9 in sum of Rs.30,00,000/- was on account of damages due to delay in completion of the work, delay being attributed to DDA. Learned arbitrator has allowed damages in sum of Rs.23,84,082/-. Said sum has been arrived at as under:-
(1) Price escalation in cost of material..............Rs.41,04,724/-
(2) Establishment ............... Rs. 3,56,900/-
(3) Hire Charges for equipment ................ Rs. 1,63,400/-
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Rs.46,25,024/-
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Minus payment under clause 10 CC Rs.22,40,942/-
Payable Rs.23,84,082/-
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109. Award pertaining to claim No.9 is patently erroneous insofar it relates to a claim for escalation in cost of material. Division Bench of this court in the decision reported as 1998 (VII) AD Delhi 300 DDA v. U. Kashyap and in the decision reported as 2001 (II) AD Delhi 116 DDA v. K.C. Goyal have held that where the contract provides for a formula as per which escalation has to be worked out, being bound by the contract, arbitrator cannot adopt a different methodology and in the context of clause 10CC of said contracts which is identical to clause 10CC of the present contract set aside the awards which gave benefit of escalation contrary to or beyond the escalation as per clause 10CC of the contract.
110.Thus claim in sum of Rs.41,04,724/- for increase in price of materials due to escalation has to be set aside. Qua establishment cost and hire charges for equipment, claim not being covered by clause 10 CC, claim has to be allowed. Award pertaining to claim No.9 is accordingly modified to Rs.5,20,300/-.
111. Claim No.10 has been allowed in sum of Rs.84,300/-. Claim was towards cost of watch and ward. Reasoning is as under:-
"It was observed that the aforesaid contract was completed as recorded by the Respondents on 31.7.89 but the Respondents did not take possession of DUs as the Respondents had no arrangement for taking over and for watch and ward till other services are commissioned by the other agencies. Therefore, the Respondents desired that the Claimants should maintain watch and ward for safe custody of the dwelling units and to avoid pilferage of fixtures and fittings. The claimants relied upon C-93, C-121 to 12, C-125, C-126, C-128, C-135 and C-137 and details has been furnished in Annexure 'D'. The contentions of the Respondents were not found satisfactory on facts and evidence. Since the Claimants maintained the said watch and ward arrangement for safe custody on account of Respondents, the Respondents are liable to pay the same to the Claimants.
However, it is seen from details in Exhibit C-135 that 160 units out of 164 units were handed over by October, 1990 and so I allow one supervisor, four chowkidars (2 for night and 2 for day) from August 89 to October 90 i.e. 15 months and two chowkidars one for night and one for day) from November 90 to Extra cost works out to:
i) Rs.2900 x 15 months (from 1.8.89 to 31.10.90 = 43,500.00
ii) Rs.1200 x 34 months (from 1.11.90 to 31.8.93 = 40,800.00 Rs.84,300.00 Therefore I award an amount of Rs.84,300/- in favor of the Claimants under this claim."
112. It was not expected that DDA would take over the possession of the flats immediately on the next very day when work was completed. Till measurements were taken and work inspected, contractor was to protect the work. 3 months time for this would be reasonable. I accordingly modify sum awarded under claim No.10 to Rs.72,000/-. 3 months wages under each head is reduced.
113. Claim No.11 was not pressed. Nil has been awarded.
114. Interest @ 18% has been awarded on the claims allowed. Noting that final bill was payable by 31.1.1990, learned arbitrator had awarded interest from 1.9.90 as it was demanded w.e.f. said date.
115. Contract does not stipulate rate of interest. It has thus to be governed by the Interest Act 1978. Scheduled banks were giving interest on fixed deposits in the year 1990 @ 12% p.a. compounded quarterly. It would approximate to 18% simple interest per annum. I uphold the award of interest.
116. IA 12624/96 is accordingly disposed of modifying the award dated 19.5.1996 published by Shri K.D. Bali as under:-
(i) Award pertaining to claims 1 to 7 is upheld.
(ii) Award pertaining to parts I, II, III and sub-heads 5, 6, 7, 8, 9, 10, 11, 13, 16, 17, 18, 19, 20, 21, 22, 24, 25, 26, 27 to 43 and 44 of part IV of claim No.8 are upheld.
(iii) Award pertaining to sub-heads 1, 2, 3, 4, 12, 14, 15 and 23 of part IV of claim No.,8 is set aside.
(iv) Award pertaining to part V, VI and VII of claim No.8 is upheld.
(v) Award pertaining to claim No.9 and 10 is modified as per para 113 and 114.
(vi) Award pertaining to claim No.11 and award of interest is upheld.
CS(OS) No.1381A/96 Award dated 19.5.1996 published by Sh. K.D. Bali is made a rule of the court with modifications as per para 107 above. Post decreetal interest is awarded @ 12% P.A. from date of decree till date of realization.
No costs.