Delhi District Court
Farmers Cooperative Group Housing ... vs M/S Budhiraja Electricals ... on 5 April, 2021
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL-02) SOUTH DISTRICT, SAKET
COURT, NEW DELHI
ARBT. A. (COMM.) 12/20
Farmers Cooperative Group Housing Society Ltd.,
Plot No. 8, Sector - 13, Rohini,
Delhi - 110 085 ..... Petitioner
Versus
1. M/s Budhiraja Electricals (Partnership Firm),
1464/1, Gurudwara Road, Kotla Mubarakpur,
New Delhi - 110003
2. Shri Amit George (Advocate),
(Sole Arbitrator),
Office at : T-5, Green Park Extension,
New Delhi ..... Respondents
Date of Institution : 04.09.2018
Date of arguments : 20.03.2021
Date of Judgement : 05.04.2021
JUDGEMENT
1. This is a petition U/s 34 of Arbitration & Conciliation Act, 1996 (hereinafter referred as "A&C Act") filed by the petitioner, Farmers Cooperative Group Housing Society Ltd. on 04.09.2018 directed against the award dated 31.07.2018, passed by Shri Amit George, Ld. Sole Arbitrator. BACKGROUND FACTS
2. In brief, background facts leading to filing of this petition, are that for the purpose of executing the work of "Electric Installation in Dwelling Units for Farmers Coop. Group Housing Society Ltd. at Rohini" a notice inviting tender ("NIT" in short) estimated at Rs.29,92,985/- was floated by the petitioner/Farmers Cooperative through M/s Garg & Associates, M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 1 of 21 an architectural and engineering consultancy firm. In terms of the NIT, the claimant/Budhiraja Electricals submitted its tender for an amount of Rs.32,39,213/- on 03.10.1985 vide letter of even date, addressed to the Architect of the respondent. Alongwith the tender, earnest money amounting to Rs.20,000/- was furnished in the shape of a demand draft favouring the President of the respondent, drawn on the Bank of Baroda, Defence Colony Branch, New Delhi.
3. On 28.10.1985, certain negotiations were held by the claimant/Budhiraja Electricals with the Architect. Besides clarifications on various technical points as sought by the petitioner, the claimant/Budhiraja offered a rebate @ 7% on the tendered amount of Rs.32,39,213/- vide the claimant's/Budhiraja's letter dated 28.10.1985. The period allowed for completion was two and a half years as per the NIT, however, during the negotiations held on 28.10.1985, the said period was increased to three years.
4. Petitioner/Farmers Cooperative, under the signature of its Honorary Secretary, awarded the work to the claimant/Budhiraja Electricals at a negotiated amount of Rs.30,12,468/- vide a letter of aceptance dated 07.12.1985. Subsequently, in terms of the letter of acceptance, an agreement dated 29.01.1986 was entered into between the parties. Certain disputes arose between the parties during the pendency of the works. The claimant/Budhiraja Electricals submitted its claims before the Architect vide its letter dated 15.04.1998. As the Architect failed to take any decision with regard to the claims, the claimant/Budhiraja Electrical's vide letter dated 20.05.1998 invoked arbitration and appointed its nominee arbitrator and M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 2 of 21 asked the petitioner to appoint its own nominee arbitrator. Since the petitioner did not appoint an arbitrator, the claimant/Budhiraja proceeded to file an application U/s 11 of the A&C Act before the Hon'ble High Court of Delhi praying for appointment of an independent arbitrator to resolve the disputes. The Hon'ble High Court came to the ultimate conclusion that purusant to Clause 46 of the Agreement the disputes were required to be referred to arbitration. The Hon'ble High Court accordingly proceeded to appoint an Arbitrator to adjudicate the disputes between the parties.
5. Arbitral tribunal was constituted in terms of the order dated 23.05.2013 of our High Court in Arb. P. 193/2013 titled "M/s Budhiraja Electricals Vs. Farmers Cooperative Group Housing Society Ltd. & Anr." and Ld. Arbitrator passed the award dated 31.07.2018 whereby a sum of Rs.7,68,602/- was awarded in favour of the claimant/Budhiraja Electricals as regards Claim No. 1 i.e. for payment against 12 th and final R/A Bill submitted on 22.11.1995 and a sum of Rs.1,50,000/- towards Claim No. 3 i.e. for Retention Money interalia security deposit including earnest money and interest pendent-lite and future @ 12% per annum. Aggrieved with the award, petitioner/Farmers Cooperative preferred this petition U/s 34 of A&C Act.
6. This court has heard submissions advanced by Shri Anil Kumar, learned counsel for the petitioner as well as Shri Arjun Bhati, learned counsel for respondent and has perused the material on record.
7. Shri Anil Kumar, Ld. Counsel, appearing for the petitioner, has submitted that the impugned award passed by the Ld. Arbitrator is based upon assumptions and presumptions and M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 3 of 21 that the Ld. Arbitrator has failed to appreciate that there was/is no written agreement between the claimant and respondent no. 1. It is submitted that respondent despite the objections raised by the petitioner society failed to file the duly signed agreement before the Ld. Arbitrator, to prove the existence of the valid written agreement between the parties. It is submitted that the Ld. Arbitrator has also illegally and unlawfully dismissed the application as filed by the petitioner U/s 16 of the A&C Act on false and frivolous ground holding that s the matter has been referred to the Arbitrator by the Hon'ble High Court of Delhi, hence, the said issue cannot be raised now before the Arbitrator. It is further submitted that the Hon'ble High Court never ever decided that there exists a valid written agreement, even otherwise at the stage of appointment of the arbitrator the issue of existence of the valid written agreement cannot be decided as has been held by the Hon'ble Apex Court in various judgments. Ld. Counsel for the petitioner has relied upon, Uttrakhand Purv Sainik Kalyan Nigam Ltd. Vs. Northern Coal Field Ltd., 2019(16) Scale 696; National Aluminum Corporation Ltd. Vs. Subash Infra Engineers Pvt. Ltd., 2919(8) SLT 437; A.C. Challappan Vs. K.A. Chaellappan, 2019(5) Raj 31; Chanda Cables Vs. Dakshim Haryana Bijli Vitran Nigam, 2019(4) Raj 210; Bharat Sanchar Nigam Ltd. Vs. Kavveri Telecom Products Ltd., 2010(7) Raj 1; Devinder Kumar Gupta Vs. Realogy Corporation & Anr., 2011(4) Raj 645 and Indeen Bio Power Ltd. Vs. Dalkia India Pvt. Ltd., 2013(4) Raj 395.
8. Ld. Counsel for the petitioner has submitted that the Ld. Arbitrator wrongly and illegally decided the question of limitation as raised by the petitioner herein and that the M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 4 of 21 respondent herein itself has stated in the claim petition that the work allegedly completed by him on 15.07.1992 but the claimant/respondent raised the dispute first time only on 20.05.1998. It is further submitted that the Ld. Arbitrator while passing the impugned award has wrongly held that the final bill was submitted by the claimant/respondent on 22.11.1995, hence the claim of the claimant/respondent is well within limitation. It is submitted that claimant/respondent has failed to prove on record that the alleged final bill was submitted on 22.11.1995 with the petitioner society, hence the impugned award is based upon assumptons and presumptions.
9. It is further submitted that the Ld. Arbitrator while passing the impugned award has failed to appreciate that the claimant/respondent while relying upon the alleged agreement has failed to comply with the terms and conditions of the said agreement itself. It is submitted that claimant/respondent had violated the provisons of the Clause 46 of the alleged Agreement and did not refer the disputes to the Architect first and directly approached to the court for appointment of the Arbitrator.
10. Ld. Counsel for the petitioner has further submitted that the claim petition as was filed by the claimant/respondent is claiming the relief on the basis of the alleged agreement dated 29.01.1986, however, the claimant/respondent is also challenging the clauses of the alleged agreement being disgusting and controversial as alleged in para no. 5.2 of the claim petition. It is further submitted that claimant/respondent has also not submitted the alleged 11th and 12th running bills in compliance to the clause 30 of the alleged agreement and no certificate was got issued by the claimant from the Architect with regard to the said bills.
M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 5 of 2111. It is submitted that the claimant had filed the claim petition beyond the alleged agreement and has wrongly claimed the escalation payment, retention money, lossess and damages due to the alleged prolongation of the contract interest per suit and pendent-lite and future interest @ 24% per annum which are not the part of the alleged agreement. Ld. Counsel for the petitioner has submitted that the Hon'ble Supreme Court of India in the matter of "Joyesh H. Pandya Vs. Subhtex India Ltd., reported as 2019(7) SLT 626 was pleased to hold that the Arbitrator cannot go beyond the claim at the agreement.
12. It is further submitted that the claim petition was bad for non-joinder of necessary parties. It is submitted that as per the alleged agreement each and every action was required to be taken in consultatoin and with the approval of the said Architect. It is further submitted that the Ld. Arbitrator failed to appreciate that the claimant had left the work incomplete in the year 1991 itself and thereafter the petitioner society got the work completed from outside agency and made the payment for the same. It is submitted that the society placed on record the details of such payment and bills. It is further submitted that the petitioner had also placed on record the minutes of the managing committee dated 27.03.1991 wherein the issue for non- completing the work by the claimant was discussed.
13. It is further submitted that the Ld. Arbitrator while passing the award, failed to consider that the claimant had made a false statement with regard to the delay of the civil work which is contrary to the documents placed on record and proved by the petitioner society vide letters dated 02.03.1988, 13.05.1988, 23.01.1989 and 23.03.1989 which are the letters to show that the M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 6 of 21 allotment of the flats in the complex of the society were started even prior to 1991 and the draw of lots of the flat was held on 08.02.1989 and the possession of the flats were handed over to the membres of the Society in July, 1989 itself. It is submitted that it is unimaginable that without completing the civil work the allotment of the flats was done by the office of the RCS, Delhi and the possession was also handed over to the members of the Society. It is argued that the petitioner society had also filed the list of members with date of possession of the flats. Even otherwise if there was any delay of any kind on the part of the Society, as alleged by the claimant, then as per Clause 22 of the alleged agreement then the architect was competent to extend the period for completion of the work and no such extenson was neither ever sought nor granted by the Architect.
14. It is further submitted that the Ld. Arbitrator erroneously came to the conclusion that the claimant had submitted the 11th and 12th RA Bill with the Society though there was no proof for the same and even otherwise it is unbelievable that the final bills were submitted by the claimant after expiry of the period of about 2-2/5 years from the alleged date of completion of the work.
15. Ld. Counsel for the petitioner has submitted that the Ld. Arbitrator has wrongly passed the award in favour of the claimant with regard to the work which was never ever awarded to the claimant. It is submitted that in the alleged agreement, the total units for which the work was to be completed by the claimant 206, however, the claimant sought the relief with regard to the completion of the work in 261 units. However, as per Clause 17 of the alleged agreement, a written direction is M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 7 of 21 required from the Architect for doing any addition, omission or variation and the claimant had not placed on record even a single document to show such variation/addition.
16. It is further submitted that the claimant at the time of filing the claim petition has concealed the material information from the Arbitrator, hence he was not entitled for any relief. It is submitted that the claimant has not disclosed to the Arbitrator that the 10th RA Bill of the claimant was sent back by the petitioner society and the Architect issued fresh certificate of payment of Rs.7,54,161/- only and the society in its meeting held on 27.09.1990 had decided to make the payment of Rs.5,54,161/- against the 10th RA Bill and had made the claimant was entitled only for a sum of Rs.3,27,029/- after deducting the amount of Rs.4,27,132/- as claimed in the total amount of Rs.7,54,161/- extra items which were not permissible.
17. It is further submitted that the Ld. Arbitrator illegally and erroneously did not consider the letter dated 10.10.2014 as written by the Architect wherein it was stated that there is no dispute between the Society and the Architect and as per their records they have not received the 11 th and 12th RA Bill from the claimant. Ld. Counsel for the petitioner has further submitted that the Ld. Arbitrator has failed to appreciate that the earnest money as was deposited by the claimant had been forfeited as per Clause 42 of the alleged agreement as the claimant failed to complete the work within the time stipulated.
18. It is submitted that the awarding of the interest @ 12% per annum in the Award is not only exorbitant but also beyond the clauses of the alleged agreement. Ld. Counsel for the petitioner has submitted that the impugned award is wrong and M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 8 of 21 has been passed without considering the evidence and documents as placed on record.
19. On the other hand, Shri Arjun Bhati, Ld. Counsel for the responent submitted that in the arbitration matter titled "M/s Budhiraja Electricals vs. Farmer's Co-operative Group Housing Society Ltd.", M/s Budhiraja Electricals was the Claimant and Farmer's Co-operative Group Housing Society Ltd. was the respondent. In the aforesaid arbitration, the Ld. Sole Arbitrator passed the final award dated 31.07.2018, whereby the Ld. Arbitrator allowed some of the claims made by the respondent herein in full and allowed some of its claims in part, while completely rejecting some of the claims made by the Respondent herein.
20. It is submitted that aggrieved by the rejection of some of its claims in full and some other claims in part by the Ld. Arbitrator, the respondent has preferred a separate petition U/s 34 of the A&C Act, 1996, bearing O.M.P. (Comm.) No. 26 of 2018, against the award dated 31.07.2018 passed by Ld. Sole Arbitrator, for partly setting aside/ modifying the same to the extent that the claims of the respondent herein were rejected by the Ld. Arbitrator. However, there are no legal grounds to interfere with arbitral award in so far as the claims of the respondent herein have been allowed by the Ld. Arbitrator. It is submitted that the following claims have been allowed by the Ld. Arbitrator in the following manner :
a) The Ld. Arbitrator awarded an amount of Rs.7,68,602/- to the Respondent under Claim No.1 as against its claim of Rs.11,09,463/- towards M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 9 of 21 amount due and payable against the 12th and Final Bill raised by the Respondent;
b) The Ld. Arbitrator allowed Claim No. 3 made by the Respondent for refund of Rs.1,50,000/- wrongfully retained by the Petitioner;
c) The Ld. Arbitrator allowed Claim No.5 made by the Respondent for pre-suit, pendent lite and future interest @ 12% per annum as opposed to 24% p.a. claimed by the Respondent.
21. The second preliminary issue raised by the petitioner was that M/s Garg & Associates, the architect for the subject work, was a necessary and proper party to the arbitral proceedings and ought to have been impleaded in the arbitral proceedings. It is submitted that the Ld. Arbitrator rightly rejected the said contention on the ground that it was the petitioner and answering respondent who were contracting parties and M/s Garg & Associates was not a contracting party to the contract in question. It is submitted that the Ld. Arbitrator held that M/s Garg & Associates was only appointed as an architect for the subject work. Even the disputes were only between the petitioner and the respondent and therefore, there was no question of impleadment of M/s Garg & Associates in the arbitral proceedings. In order to arrive at the said finding, the Ld. Arbitrator also placed reliance upon the judgment of the Hon'ble Supreme Court in S.N. Prasad v. Monnet Finance Ltd. & Ors, (2011) 1 SCC 320. It is submitted that the Ld. Arbitrator has dealt with the jurisdictional issue in the impugned final award. It is submitted that the aforesaid finding recorded by the Ld. M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 10 of 21 Arbitrator does not deserve to be interfered with in any manner whatsoever in the present proceedings.
22. The third preliminary contention raised by the petitioner was that the claims of the respondent were barred by limitation. The said contention of the Petitioner was repelled and rejected by the Ld. Arbitrator by finding that the period of limitation can be said to have commenced, at the earliest, only from the date of submission of Final Bill by the Claimant i.e. 22.11.1995. The Ld. Arbitrator found that the disputes were raised on 20.05.1998 i.e. within a period of 3 years of the date of submission of the Final Bill and were therefore well within the period of limitation. It is respectfully submitted that the aforesaid finding recorded by the Ld. Arbitrator does not deserve to be interfered with in any manner whatsoever in the present proceedings.
LEGAL STANDARD AS REGARDS SCOPE OF INTERFERENCE BY THE COURT
23. Sub-sections (1) and (2) of Section 34, as amended by the Arbitration and Conciliation (Amendment) Act, 2019, reads thus :
"34. Application for setting aside arbitral award. - (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by a Court only if -
(a) the party making the application establishes on the basis of the record of arbitral tribunal that -
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
or M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 11 of 21
(iv) the arbitral award deals with the dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that - (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India. Explanation 1. - For the avoidance of any doubt, it is clarified that what is in conflict with the public policy of India, only if, -
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian Law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2. - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian Law shall not entail a review on the merits of the dispute. (2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence."
24. It is well settled that following are the basic principles while exercising jurisdiction U/s 34 of A&C Act (i) The Arbitral tribunal is the final arbiter of the facts and the law. Ordinarily, conclusions of fact, or law, at which the arbitral tribunal arrives, are not amenable to interference under Section 34; (ii) This principle is subject to the following exceptions :- (a) M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 12 of 21 Where the conclusion of the arbitral tribunal, whether on facts or on law is perverse, it merits interference. Perversity, in such a case must be of such a degree that no reasonable man, conversant with the facts and the law, would arrive at such a decision (b) If the findings of the arbitral tribunal are contrary to the contract between the parties, the court is bound to interfere. This is, essentially, because the arbitral tribunal draws its jurisdiction from the contract, and is a creature thereof. The arbitral tribunal, cannot, therefore, arrive at a conclusion which militates against the terms of the contract between the parties, merely to do equity, or for any other reason (c) Similarly, if the conclusion of the arbitral tribunal is contrary to the law laid down by the Supreme Court, or any other binding judicial precedent, the court can interfere. This is because any conclusion, by the arbitral tribunal, which is contrary to the extant law, is treated as violative of public policy, which is a well settled ground for interference with the award; (iii) In other cases, as already noted above, ordinarily, interference with the arbitral award is to be scrupulously eschewed. Having elected to resolve their disputes by arbitration, the parties are ordinarily expected to defer to the decision of the arbitrator. Awards of arbitral tribunals cannot be likened with judgments of courts, which are susceptible to appeal. Else, the very raison d'etre of the establishment of the arbitral institution would stand defeated; (iv) The court is not, therefore, entitled to sit in appeal over the decision of the arbitral tribunal. Neither can the court re-appreciate the evidence, which has been appreciated by the arbitral tribunal. If, however, the arbitral tribunal ignores material evidence, that would amount to "perversity", which would invite interference under Section34. If all the evidence has M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 13 of 21 been examined by the arbitral tribunal, the court cannot interfere on the ground that the examination of the evidence, as undertaken by the arbitral tribunal, is not, to its mind, satisfactory or sufficient. Nor can the court substitute its own view for the view of the arbitral tribunal, on the ground that, in its perception, the view of the court is "better" or "more appropriate".
25. The aforenoted principles pertain to the scope of interference with arbitral awards, by courts, on merits. These are apart from the other well established grounds on which the court may interfere, such as misconduct by the arbitrator, bias or prejudice or conducting of the arbitral proceedings in violation of the principles of natural justice, to refer to a few.
26. The legal position is well settled that a broad distinction has to be maintained between the decisions which are perverse and those which are not and interference by the Court under Section 34(2)(b)(ii) does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. An award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. (MMTC Ltd. vs. Vedanta Ltd., AIR 2019 SC 1168; Union of India vs. Chenab Construction Company (Regd.), 2019 SCC OnLine Del 10515 and Ssangyong Engineering & Construction Co. Ltd. Vs. National Highways Authority of India (NHAI) - (2019)15SC C 131), Parsa Kente Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan Nigam M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 14 of 21 Limited, AIR2019 SC 2908; Patel Engineering Ltd. Vs. North Eastern Electric Power Corporation Ltd. (NEEPCO) 2020 SCC OnLine SC 466 and Anglo America Metallurgical Coal PTY Ltd . vs MMTC Ltd. 2020 SCC OnLine SC 1030).
27. On thoughtful consideration of the submissions advanced at bar by the Ld. counsels for the parties, in the light of aforenoted legal position, this Court finds no merits in the submissions advanced by the learned counsel for the petitioner.
28. This court finds that the present petition does not make out any grounds for interference with the arbitral award under Section 34 of A&C Act. This Court cannot sit in appeal over the award passed by Ld. Arbitrator by reassessing and re- appreciating the evidence which is wholly impressible as per settled tenets of law. The view taken by the Ld. Arbitrator after considering the material before him and after interpreting the provisions of agreement is a possible view and, therefore, the same does not warrants any interference.
29. The contention raised by the petitioner/Farmers Cooperative is that there was no written agreement between the parties and there was merely an oral agreement. This contention has been rejected by the Ld. Arbitrator. The application filed by the petitioner U/s 16(2) of the A&C Act had already been dismissed by the Ld. Arbitrator on 22.03.2014. However, the Ld. Arbitrator once again dealt with jurisdictional objection raised by the petitioner herein in the final award, thereby rejecting the said objections by giving detailed reasons. The Ld. Arbitrator rejected the contention of the petitioner regarding alleged lack of an arbitration agreement on the ground that once the Hon'ble High Court has constituted the Arbitral Tribunal to adjudicate the M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 15 of 21 disputes between the parties after deciding the jurisdictional issue, it is not open to the Arbitral Tribunal to ignore or attempt to get over the decision of the Hon'ble High Court in an application under S.16 of the Act. In order to arrive at the said finding, the Ld. Arbitrator relied upon the celebrated judgment of the Hon'ble Supreme Court in S.B.P. & Co. Vs. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618 and Durga Charan Rautray Vs. State of Orissa & Anr., AIR 2012 SC 442.
30. Ld. Arbitrator has dealt with the jurisdictional issue in detail in Para 14 to 25 of the impugned final award. The aforesaid finding recorded by the Ld. Arbitrator does not deserve to be interfered with, in the present proceedings. Ld. Arbitrator noted that claimant had referred to Clause 46 of the Agreement and in the order dated 07th February, 2001, it was noted that no reply was filed by the respondent to the petition and respondent no. 1 in response to notice dated 25.05.1998 did not gave name of Arbitrator as per Clause 46 of the Agreement within 30 days of the notice. It was further noted in para 18 of the award that after passing of the aforesaid order dated 7th February, 2001, the controversy seems to have been re-ignited and order dated 7 th December, 2001 came to be passed by the Hon'ble High Court of Delhi and the observations made therein was also reproduced. It was noted therein "that averments made in the petition were assailed on the ground that there was no written contract and no arbitration clause and it was observed that "taking into consideration that contract did contain arbitration clause and that respondent failed to appoint Arbitrator despite issuance of notice dated 20.05.1998, the petitioner is entitled to succeed."
M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 16 of 2131. Ld. Counsel for the petitioner has wrongly quoted the judgment 2019(16) Scale 696 titled as Uttrakhand Purv Sainik Kalyan Nigam Ltd. Vs. Northern Coal Field Ltd. The said case had been referred to show existence of agreement was to be decided by the Ld. Arbitrator, whereas perusal of the judgment shows that this judgment is rather against the submissions advanced by the Ld. Counsel for the petitioner. In this judgment, it has been clearly mentioned that in view of the legislative mandate contained in Section 11(6A), the court is now required only to examine the existence of arbitration agreement and all other preliminary or threshold issues are to be decided by the Ld. Arbitrator U/s 16 of the A&C Act, therefore, once Hon'ble High court had examined the existence of agreement, Arbitral Tribunal rightly held regarding existence of arbitration agreement had been decided by the Hon'ble High Court.
32. The next contention raised by the petitioner was that the claims of the respondent were barred by limitation. The said contention of the Petitioner was rejected by the Ld. Arbitrator by finding that the period of limitation can be said to have commenced, at the earliest, only from the date of submission of Final Bill by the Claimant i.e. 22.11.1995. The Ld. Arbitrator noted that petitioner herein had submitted that claimant had raised the dispute first time on 20.05.1998 which is much after the alleged date of completion of work on 15 th July, 1992 and that petitioner's contention was that claimant's cause of action arose when the work was completed and limitation for the claim should be calculated from the aforesaid date.
33. Ld. Arbitrator noted that petitioner seems to have overlooked the fact that the present agreement as in construction M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 17 of 21 contract in general contemplate a final certificate/bill after completion of the work. It is only after completion of the work that the claims are quantified in the form of final certificate or final bill and Clause 30 of the agreement between the parties, provides for a certificate of payment to be issued by the Architect after the work has been completed. It was further noted that it is not in dispute that no certificate of payment as per clause 30 of the Agreement had been issued by the Architect after completion of the work nor it had measured the work as per clause 25 of the Agreement.
34. The limitation for raising the claim seeking redress of the dispute qua the grievances of the claimant/respondent could at best be said to start on non-payment or non- consideration of the final bill, or at the earliest on the date of submission of such a final bill. The right to sue accrues when there is a dispute and the date when right to apply accrues. In support, judgments had been referred by the Ld. Arbitrator in para 31. The Ld. Arbitrator has dealt with and discussed in detail the issue of limitation in Para 30 to 32 of the award and finally concluded that since the dispute was raised on 20.05.1998 i.e. within a period of three years on the date of submission of the final bill, the same was evidently within time and the preliminary objection of the petitioner herein in this regard was rejected. The aforesaid finding recorded by the Ld. Arbitrator does not deserve to be interfered with in any manner whatsoever in the present proceedings.
35. Regarding other claims i.e. Measurement and certification of 11th and 12th bill and the contention of the Ld. M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 18 of 21 Counsel for the petitioner, Ld. Arbitrator failed to take into account the fact that the bill was to be certified by the architect and measurement might be taken, this court finds that the Ld. Arbitrator had considered and discussed the point in para 41 to 44 of the award and drew inference on the basis of factual matrix obtained on record. There is no scope of any intereference therein.
36. Now, the next contention raised by the Ld. Counsel for the petitioner was as regards the role of architect, M/s Garg & Associates, Ld. Arbitrator rightly noted that only parties to arbitration agreement could be referred to arbitration. After quoting the law laid down in S.N. Prasad Vs. Monnet Finance Ltd. & Ors., (2011) 1 SC 320, came to the conclusion in para 28 that there was no question of impleading Architect in the present arbitration proceedings and correctly rejected the contention of the petitioner herein. As regards, delay on the part of petitioner in getting the civil work completed has been dealt in by the Ld. Arbitrator in para 68 of the award. Ld. Arbitrator observed that petitioner herein failed to prove the delay was due to breach of the claimant alone and neither party had been able to conclusively prove that the delay was caused by breaches of the others. So no esclation payment was allowed to the claimant in the light of its inability to prove that delay in execution of the work was due to the breaches on the part of the petitioner.
37. As regards, Claim No. 3 for payment of retention money inter alia security money including earnest deposit for an amount of Rs.1,50,000/- is concerned, Ld. Arbitrator held that since the petitioner had failed to substantiate its allegation M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 19 of 21 regarding breach of contract by the claimant, the Ld. Arbitrator held that the aforesaid sum was due and payable by the petitioner to the respondent herein. Ld. Arbitrator has discussed the point in detail in para 66 to 69 of the award, which is not required to be reproduced.
38. Next contention as regards claim no. 4 i.e. losses and damages due to prolongation of contract for the delay attributable to the petitioner for an amount of Rs.2,11,349/-, Ld. Arbitrator found that since neither party had been able to provide sufficient evidence to pin the blame for the delay in the completion of work on the other. In the absence of proof of a breach of contract by the petitioner herein resulting in the prolongation of the contract, there was no question of awarding any overhead or damages to the claimant. This court finds no merits in the other grounds raised by the Ld. Counsel for the petitioner. The Ld. Tribunal is the master of the quantity and quality of evidence and this court cannot re-appreciate the evidence as desired by the Ld. Counsel for the petitioner.
39. As regards, the contention that claimant had to execute work of electrical installation in 206 flats and not 261 as alleged, para 44 and 45 have discussed the factual position as well as answer given by witness of petitioner herein (Q. No. 79 to 81 and Q. No. 149) and this court cannot substitute its own view as the view taken by the Ld. Arbitrator is a possible view. This court finds no patent illegality which goes to the roots of the matter.
40. This court finds no merits in the contentions of the Ld. Counsel for the petitioner that the awarding of the interest @ M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 20 of 21 12% per annum in the Award is not only exorbitant but also beyond the clauses of the alleged agreement. In para 75 of the Award, Ld. Arbitrator has discussed the legal position and this court finds that interest @ 12% per annum cannot be said to on a higher side in commercial transactions and would serve the ends of restitutive justice.
41. The award of the Arbitrator can be set aside only on the limited grounds and the award cannot be interfered with simply because another view is possible on the available materials. The Arbitrator is a Judge of choice of parties and this Court cannot set aside award even if the Court can come to different conclusion on the same facts. The Ld. Counsel for the petitioner has not pointed out any satisfactory ground covered strictly with the purview of Section 34 of A&C Act. It cannot also be said that the Award is against the fundamental policy of Indian law or perverse or has patent illegality which goes to the root of the matter. Therefore, the Award passed by the Ld. Arbitrator is not illegal or invalid and cannot be set aside.
42. In the result, this court finds no merits in the petition and no ground for interference is called in the award. Accordingly, this petition U/s 34 of A&C Act deserves to be dismissed. Order accordingly. No order as to costs. File be consigned to record room.
(Dictated and announced today i.e. on 05.04.2021) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Disttt., Saket, New Delhi M/s Budhi Raja Electricals Vs. Farmers Cooprative Group Housing Society Ltd. & Anr. Page 21 of 21