Delhi High Court
Continental Construction Limited vs Food Corporation Of India And Ors. on 4 January, 2002
Equivalent citations: 2002IIIAD(DELHI)995, AIR2003DELHI32, AIR 2003 DELHI 32, (2002) 49 ARBILR 192
JUDGMENT V.S. Aggarwal, J.
1. By this common judgment both the suits mentioned above can conveniently be disposed, since the question involved by and larger in both the petitions are identical. Therefore, they are being taken up together. Facts are being mentioned from Suit No. 3078-A/96.
2. M/s Continental Construction Ltd. (for short the applicant) seeks the award of the arbitrator to be made a rule of the court and for a decree in terms of the award to be passed. The applicant contends that he does not wish to file any objection to the award dated 15.12.1996. In pursuance of the notice having been issued the objector (the Food Corporation of India) has filed the objections. The award is purported to be assailed on various grounds to be considered hereinafter. Needless to state that in the reply filed all the objections and the pleas raised are being controverter.
3. On 22nd March, 1999 this court had framed the following issues:-
1. Whether the impugned award is liable to be set aside for the reasons stated in the objections?
2. Relief, if any?
4. Issue No. 1: The evidence had been lead by affidavits filed by the parties.
5. Before proceedings further it would be appropriate to consider the nature of the award and the reasons given by the learned arbitrator. The learned arbitrator refers to thee facts which led to the disputes between the parties. An agreement was arrived at and three works at Moga, Jagraon and Mandi Gobindgarh which were to be finished on 10th October, 1977 were assigned. The sites were handed over only on 29th February, 1980 at Moga, 31st March, 1980 at Jagraon and 4th December, 1979 at Mandi Gobindgarh. The claimants had urged that despite nine years after taking over the works and gainfully using the silos, the objectors have failed to settle the final bill and claim the balance amount. It had also been claimed that the objectors have not settled the bill for the extra item, substituted items, price variations etc. The claims as such regarding items numbering 11 had been disputed and when the matter was referred by this court to the learned arbitrator it is not disputed that this court had further directed that the arbitrator could consider if the claim was within time or not. The arbitrator had framed the issues and with respect to the plea of the objectors as to whether the claim is barred by time, the learned arbitrator with respect to the contention that the applicant did not seek the arbitration within time in terms of clause 12.1 held that the procedure contemplated under 12.1 could only be adopted during the course of the work and not thereafter. It was further held that the Engineers had failed to do their duty and had left the site and no useful purpose would have been served by referring the matter to the Engineer and therefore,e the contention of the objectors that the arbitration had not been claimed within time was rejected. As regards the claim being otherwise time barred reference was made to the adhoc payment of Rs. 1 lakh and findings returned were that the claim is within time. With respect to the dispute as to who was responsible for delay the arbitrator found that there was delay on the part of the objectors in release of the construction drawings. As regards non-availability of the steel it was noted that there was non-availability of quantity and quality of steel. The objector themselves permitted the use of different type of steel. It was further held that number of drawings were revised and parties were equally responsible in this regard for delay. The arbitrator also considered as to whether time was the essence of the contract and concluded that the time was put at larger and question of imposing liquidated damages did not arise. Thereupon different items were considered with respect to the claims laid by the applicants and allowing some of them, the award had been passed against the objectors to the tune of Rs. 25,91,801.76 with interest at the rate of 10% p.a. in favor of the applicant and against the respondents. The counter claim of the objectors had been rejected.
6. Keeping in view the aforesaid facts learned counsel for the objectors at the outset urged that the findings of the arbitrator with respect to the claim being within time or seeking arbitration were barred by time. This particular argument necessarily must have its two limbs. This is for the reason that it is one thing to say that claim is within time as per the Limitation Act and another thing that the right to claim arbitration as per contract not within time.
7. It would be appropriate to take up the latter part of the argument in the first instance. Clause 12.1 pertain to settlement of dispute and pertaining to the arbitration. Same is being reproduced below for the sake of facility:
12(i) - SETTLEMENT OF DISPUTES (ARBITRATION) Notwithstanding any provision to the contrary in these general conditions, if any dispute or difference/of any kind whatsoever shall arise between the Corporation or the Engineer and the Contractor in connection with or arising out of the contract or the carrying out of the work (whether during the progress of the work or after their completion and whether before or after the termination, abandonment or breach of the contract) it shall in the first place be referred to and settled by the Engineer, who within a period of 90 days after being requested by either party to do so, shall give written notice of his decision to the Corporation and the Contractor. Save as hereinafter, provided such decision in respect of every matter so referred shall be final and binding upon the Corporation and the Contractor until the completion of the work and shall forthwith be given effect to by the Contractor who shall proceed with the work with all the diligence, whether he or the Corporation requires arbitration as hereinafter provided or not. If the Engineer has given written notice of the decision to the Corporation and the Contractor and no claim to arbitration has been communicated to him by either the Corporation or the Contractor within a period of 90 days from receipt of such notice, the said decision shall remain final and binding upon the Corporation and the Contractor. If the Engineer shall fail to give notice of his decision aforesaid within a period of 90 days after being requested as aforesaid or if either the Corporation or the Contractor be dissatisfied with any such decision then and in any such case either the Corporation or the Contractor may within 90 days after receiving notice of such decision or within 90 days after the expiration of the first named period of 90 days (as the case may be) require that the matter or matters in dispute be referred to arbitration as hereinafter provided. All disputes or differences in respect of which the decision (if any) of the Engineer has not become final and binding as aforesaid shall be referred to two arbitrators, one to be appointed by the Corporation dn one by the Contractor or in the case of the said arbitrators not agreeing, then to the award of an umpire to be appointed by the said arbitrators pursuant to and so as with regard to the mode and consequence of the reference and in all other respects of conform to the provisions of the Indian Arbitration Act, 1940 (Act No. 10 of 1940) or rules made there under of any re-enactment or statutory modification thereof for the time being in force provided however that the umpire will be appointed in writing before entering on the reference.
The said arbitrators or umpire shall have full power to open up, review and revise any decision, opinion, direction, certificate or valuation of the Engineer and neither party shall be limited in the proceedings before such arbitrators and umpire to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision. No decision given by the Engineer in accordance with the foregoing provisions shall disquality him from being called on any matter whatsoever relevant to the dispute or difference referred to the arbitrators or umpire as aforesaid. The arbitrators or umpire shall not enter on the reference until after the completion or alleged completion of the work unless with the written consent of the Corporation and the Contractor provided always:
a. that such reference may be opened before such completion or alleged completion in respect of withholding by the Engineer of any certificate or the withholding of any portion of the Security Deposit to which the Contractor claims in accordance with the conditions set out in the Clause 8.2.
b. That the giving of a certificate of completion under Clause 9.6 hereof shall not be a condition precedent to the opening of any such reference.
8. It is on the strength of the said agreement between the parties that on behalf of the objectors it was eloquently pointed that the learned arbitrator was patently in error in recording that this clause could be pressed into service only during the course of work and not thereafter. So far as this particular contention is concerned it must be held to be meritorious. The language of the agreement referred to above i.e. Clause 12.1 clearly reveal that if disputes arise between the parties they have to be referred in accordance with the said agreement for arbitration. If does not in any way mention that such disputes could be referred to arbitration only during the course of the work that was being carried and not thereafter. If this was so then after the work had been completed question of pressing Clause 12.1 pertaining to the arbitration would not arise. The findings of the learned arbitrator to the contrary therefore are patently erroneous and would not stand scrutiny.
9. As per the Clause 12.1, of the agreement between the parties in the first place the claimant had to refer the matter to the Engineer who within a period of 90 days will decide the said matter and thereafter if written notice had been given within the time stipulated above one could seek for the arbitration. The court is specifically not mentioning other aspects of the same which is not relevant. It is not in controversy that a notice had been served by the applicant. But the objection is that within the stipulated period the arbitration was not claimed and their relief during the arbitration.
10. In the first instance it was pointed that in terms of Section 28 of the Contract Act such a clause which restricts the period of limitation would be invalid. Reliance on behalf of the applicant was placed on Section 28 of the Contract Act as amended by the Indian Contract Act (Amendment Act), 1996 (Act one of 1997). The provision of Section 28 are being reproduced below for the sake of facility:
28. Agreements in restraint of legal proceedings, void. Every agreement,--
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or
(b) Which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights;
is void to that extent.
Saving of contract to refer to arbitration dispute that may arise.
Exception 1. This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.
Saving of contract to refer questions that have already arisen.
Exception 2. Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration.
11. Section 28 of the Contract Act as reproduced above was introduced on the recommendation of the Law Commission in order to remove the anomalies created by the earlier Act. The position of law settled before the amendment was that Section 28 would invalidate only a clause in an agreement which restricts a party from enforcing his right absolutely or which limits the time within which he may enforce his right. Section 28 before the amendment does not come into operation when contractual term spell out an extension of a right of a party to sue or spell out the discharge of a party from the liabilities. It is true that the argument of the applicants learned counsel as per the amended provisions of section 28 of the Act would come to his rescue but the snag in the argument is that Section 28 of the Contract Act as amended is not retrospective in its operation. The present contract between the parties had been arrived at before the amendment and even the work executed before that. Consequently the provisions of the amended provisions of Section 28 of the Contract Act will not have a role to play, so far as the present dispute is concerned. In that view of the matter the said argument so much thought of will be of little avail.
12. In the present case in hand as per Clause 12.1 as pointed out above the dispute had to be in the first place to be referred and settled by the Engineer who within a period of 90 days after being requested has to give a written notice of his decision to the applicant. If the Engineer had given a written notice to the applicant or to the objector and no claim to arbitration is communicated to the Engineer within 90 days then such decision of the Engineer has to become final. If the Engineer fails to give his decision within 90 days after being requested or if either party is dis-satisfied with such a decision then from date of the receipt of the same the matter can be referred to the arbitration. As already referred to above the applicant had served notice but there was no decision communicated by the engineer. It is worthwhile to mention that under Clause 1(a)(iv) of the General Conditions of Contract the engineer has been defined to be one appointed by the Corporation and notified in writing to the contract to act as engineer for the purposes of the contract. The attention of the court has not been drawn to any such order in writing communicated to the applicant as to who is to be the engineer after a specified date.
13. Not only that the arbitration has returned findings that the engineers had abandoned the site on 1.3.1981. The objectors did not inform the claimant/applicant that engineer had abandoned the site. No replacement was provided. The claim of the objector that in fact engineers were doing their duty for purposes of the present controversy is of little avail. This is for the reason that the arbitrator returned a finding of fact that the engineers had abandoned the site and had left the site. Reply to the notice even was not sent and once that was so no useful purpose would have bene served by taking up the matter in this regard. This indeed is a finding of fact arrived at by the arbitrator and can hardly be described to be erroneous because there is precious little to show that engineers had not abandoned the site or there was an engineer as defined to be notified referred to above. Consequently that was the position the conclusion are obvious in terms that the said clause pertaining to the notice and position of the engineer had become redundant.
14. There is another way of looking at the mat ter. As already referred to above this controversy had been referred by the court to the arbitrator. The learned arbitrator had thereupon returned a finding. Even if the said finding is pertaining to a question of law, this court would be bound by the general principles for interfering in awards as in case of a decision on the question of law. Reference can well be made with advantage to the decision of the Supreme Court in the case of Tarapore & company v. Cochin Shipyard Ltd. and Anr. . The Supreme court held that when specific question of law is referred to the arbitration including the one touching upon the jurisdiction the said decision would be binding:
"....Therefore on principle it appears distinctly clear that when a specific question of law is referred to an arbitrator for his decision including the one touching upon the jurisdiction of the arbitrator, the decision of the arbitrator would be binding on both the parties and it would not be open to any of the two parties to wriggle out of it by contending that the arbitrator cannot clutch at or confer jurisdiction upon himself by misconstruing the arbitration agreement."
15. Thereupon further conclusions were drawn:
".....This decision is an authority for the proposition that where the parties specifically agree to refer a specific question of law for the decision of the arbitrator, and agree to be bound by it, the Court cannot set aside the award on the ground of an error of law apparent on the face of it even though the decision of the arbitrator may not accord with the law as understood by the court. I on the other hand,the question of law is incidentally decided by the arbitrator, it is not enough to oust the jurisdiction of the court to set aside the award on the ground that there is an error apparent on the face of the award."
16. This being the position of law it must follow that this court would not be competent to interfere because the finding is not totally erroneous or based on any material on the record. The same fact is decision of the Supreme Court in the case of Himachal Pradesh State Electricity Board v. R.J. Shah & Co. . It was held that when arbitrator is required to construe a contract then merely because another view may be possible will not permit the court to interfere. The Supreme Court held :
"From the aforesaid decisions of this court, and the last one in particular, it is clear that when the arbitrator is required to construe a contract then merely because another view may be possible the court would not be justified in construing the contract in a different manner and then to set aside the award by observing that the arbitrator has exceeded the jurisdiction in making the award"
17. Thereafter the findings were further written:
Even if the arbitrators construed the terms of the contract incorrectly it cannot be said that the award was in excess of their jurisdiction. Their jurisdiction clearly was to construe the terms of the contract and their decision thereon is final and binding on the parties."
18. As already referred to above in the present case the arbitrator had been called upon and permitted by this court to decide if the same is within time or not. The arbitrator had considered and returned finding considering the contract. The law will not permit therefore this court to interfere particularly when as already pointed above re-mentioned at the risk of repetition said finding is not erroneous.
19. Confronted with that position it had been urged vehemently that in any case the claim was not within time because it had not been laid within three years the contract having been completed.
20. At the outset it would be appropriate to refer to the decision of the Supreme Court in the case of Inder Singh Rekhi v. Delhi Development Authority, . The Supreme Court held that the period of limitation with respect to the claim has to be computed from the date claim is associated and payment is denied. In other words, if the matter is still under consideration the period of limitation cannot be termed to have commenced.
21. What is the position herein? Reference can well be made to Clause 8.3 of the General Conditions of Contract. It provides that when final bill has been prepared Engineer shall give 15 days notice to the contractor to counter sign the bill. The contractor has to sign the bill within 15 days or intimate in writing his intention disputing a particular detail. In case of disputes he has to submit within 30 days a comprehensive list of disputed items.
22. In the present case the objectors themselves vide the letter of 16/18th August, 1984 had stated that final bills of the contractor can be prepared with joint efforts. It was followed by another letter of the objectors of 18/19 April, 1984 referring to finalising of the bill. It is patent that bills had not been finalised till then and therefore to state that limitation would start running when the bills as such were submitted would not be correct because there was no denial on behalf of the objectors.
23. In addition to that it has to be remembered that adhoc payment of Rs. 1 lakh was made by the objectors on 13th March, 1985. There was a controversy raised as to whether there were three contracts of one between the parties. The applicant had only asked for one tender but admittedly three separate agreements were entered into with respect to the three places where the contract had to be performed, namely at Moga, Jagraon and Mandi Gobindgarh. However, it was always described as contracts C-22. It can therefore only be taken that there was only one contract but three agreements flowing from it. Adhoc payment of Rs. 1 lakhs was made on 13.3.1985 which only indicates that it was made with respect to the contract that was assigned and not with respect to any specific agreement. Once payment has been made may be adhoc then it is a part payment or acknowledging a particular fact. Once it is so the limitation period would be extended and in any case from that date i.e. 13th March, 1985 when Rs. 1 lakh was paid it is within time. It must therefore be held that the claim of the applicant cannot be described to be barred by time.
24. As regards the other disputes at the outset one may mention the position in law about as to under what circumstances the court would be competent to interfere.
25. The Supreme Court in the case of Allen Berry & Co. Private Ltd. v. The Union of India in unambiguous terms held that the award can only be set aside when there is an error apparent on the face of the record and even if the arbitrator commits the mistake either in law or in fact which does not appear on the face of the record, the court will not interfere. The findings of the Supreme Court are:
"....The rule thus is that as the parties choose their own arbitrator to be the Judge in the dispute between them, they cannot, when the award is good on the face of it, objector to the decision either upon the law or the facts....."
26. A Division Bench of this court in the case of Delhi Development Authority v. Uppal Engineering Construction Co., New Delhi, had also in similar terms held that when the arbitrator had passed a speaking award the court cannot re-examine the reasons and look into the reasonableness of the same. The court has no jurisdiction to investigate on the merit of the case and re-appraise the evidence. Similarly in the case of Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar and Anr. the Supreme Court enunciated the position in law in following words:-
6. In this case the reasons given by the arbitrator are cogent and based on materials on record. In Stround's Judicial Dictionary, Fourth Edition, page 2258 states that it would be unreasonable to expect an exact definition of the word 'reasonable". Reason Varies in its conclusions according to the idiosyncrasy of he individual, and the times and circumstances in which he thinks. The reasoning which built up the old scholastic logic sounds now like the jungling of a child's toy. But mankind must be satisfied with the reasonableness within reach; and in cases not covered by authority, the verdict of a jury or the decision of a judge sitting as a jury usually determines what is "reasonable" in each particular case. The word "reasonable" has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know.
See the observations, in Re a Solicitor, 1945 KB 368 at p. 371 of the report.
7. After all an arbitrator as a Judge in the words of Benjamin N. Cardozo, has to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to "the primordial necessity of order in the social life".
8. Indeed reading the award of the arbitrator, one would say that he acted reasonably and rationally.
27. In other words, it was held that if the award is reasonable and is a speaking award the court would be reluctant to interfere or re-appraise the evidence.
28. Another leading case on the subject is the decision rendered by the Supreme Court in the case of Sudarsan Trading Co. v. The Govt. of Kerala and Anr., . In an identical manner the Supreme Court again held .... Furthermore, in any event, reasonableness of the reasons given by the arbitrator cannot be challenged.
Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task f being a judge on the evidence before the arbitrator. See the observations of this Court in Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar .
29. Similarly in the case of Food Corporation of India v. Joginderpal Mohinderpal and Anr., the findings returned were:
7. When power came to the East India Company, they framed Regulations in exercise of the power vested in them by the British Government. Some of these Regulations were touching arbitration. Bachawat gives description of the evolution of the Arbitration Act, 1940. Therefore, arbitration as a mode for settlement of disputes between the parties, has a tradition in India. It has a social purpose to fulfill today. it has a great urgency today when there has been an explosion of litigations in the courts of law established by the sovereign power. New rights created, or awareness of these rights, the erosion of faith in the intrinsic sense of fairness of men, all the factors which block our courts, the courts are full of litigations, which are pending for long time. Therefore, it should be the endeavor of those who are interested in the administration of justice to help settlement by arbitration, if possible. It has also a social efficacy being the decision by the consent of the parties. It has greater scope of acceptance today when there is a certain erosion of faith in view of the failure to appreciating the functions of the courts of law. It has also the advantage of not quickness of decision but of simplicity of procedure. But in proceedings of arbitration there must be adherence to justice, equity, law and fair play in actions. However, the proceedings of arbitration must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the dispute and create confidence of the people for whose benefit these processes are resorted to. it is, therefore, the function of courts of law to oversee that the arbitration act within the norms of justice. Once they do so and the award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. It is in this perspective that one should view the scope and limit of correction by the court of an award made by the arbitrator. We should make the law of arbitration simple, less technical and more responsible to actual realities of the situations but must be responsive to the canone of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties, but by creating sense that justice appears to have been done. Sections 30 and 33 of the Act provide for the grounds on which an award of the arbitrator can be set aside. These were mainly, until recent changes made by statutory laws in England, in consonance with the English principles of Common Law as adopted in India. So far as the material of the present purpose is concerned, an award of the arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the Act. It is necessary to find whether the arbitrator has misconducted himself or the proceedings legally in the sense whether the arbitrator has gone contrary to the terms of reference between the parties or whether the arbitrator has committed any error of law apparent on the face of the award. It is necessary to emphasis that these are grounds for setting aside the award but these are separate and distinct grounds. Halsbury's Law of England Vol. 2, 4th Edn., para 623 reiterates that an arbitrator's award may be set aside for error of law appearing on the face of it. Though this jurisdiction is not to be lightly exercised,the award can also be set aside if, inter alia, the arbitrator has misconducted himself or the proceedings. It is difficult to give an exhaustive definition what may amount to misconduct on the part of the arbitrator. This is discussed in Halsbury's Law England (supra). It is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or law, and whether or not his findings of fact are supported by evidence. See the observations of Russel on Arbitration, 20th Edn., page 422.
30. Lastly it would be appropriate to refer to the recent decision of the Supreme Court in the case of Arosan Enterprises Ltd. v. Union of India and Anr. . The Supreme Court after scanning through the various earlier decisions held:
"36. Be it noted that by reason of a long catena of cases, it is now a well-settled principle of law that reappraisal of evidence by the court is not permissible and as a mater of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under Section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons, the interference would still be not available within the jurisdiction of the court unless of course, there exist a total perversity in the award of the judgment is based on a wrong proposition of law. In the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award.
The common phraseology "error apparent on the face of the record" does not itself, however, mean and imply closer scrutiny of the merits of documents and materials on record. The court as a matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined....."
31. The principle of law therefore that emerges from the aforesaid is that when there is a speaking award indeed the court can see the reasons that have been recorded by the arbitrator. Ordinarily it would be reluctant to re-appraise evidence but if the award is erroneous and no other view is possible, the court will not hesitate to set aside the same. If two vies are possible then merely because even if Court thinks otherwise it will not set aside the award.
32. Pertaining to the merits of the matter the main controversy in this regard was as to whether the applicant or the objector were responsible for delay in the completion of the work and whether the objector could impose liquidated damages and further if time was the essence of the contract or not. The brief reasoning of the learned arbitrator in this regard has already been referred to above. The precise findings in this regard with respect to release of the construction of the drawings in imposition of liquidated damages therefore need not be reproduced all over again. Suffice to say that the learned arbitrator found that the set of drawings had to be handed over to the contractor immediately after signing of the contract. Only 43 out of 101 drawings were supplied and not the rest and therefore there was delay in completion of the work. It was further recorded that though the work had to be completed in October 1977 a number of drawings were revised in 1978 and even in 1979. Additional extra work was ordered in 1978-79 and consequently it was held that both the parties were responsible for cause of delay. So far as the applicant is concerned delay was also occurring because of non-availability of certain items.
33. The General Conditions co-related with the contract with respect to the drawings and specifications besides other reads:-
"a After signing the contract, the contractor will be given free of charge two prints of all contract drawings and revisions thereto. The contractor shall make a this own expense any additional copies he requires. One copy of the drawings furnished to the contractor as aforesaid shall be kept by the contractor at the site and the same shall be at all reasonable times be available for inspection and use by the Manger Engineering (Projects), the Engineer and the Engineer's representative and by any other person authorised by the Engineer in writing....."
34. This fact is not in dispute therefore that the drawings had to be handed over to the applicant/contractor soon after signing of the contract. It was not disputed that all the drawings had not been handed over the thee contractor. The argument that if drawing are not furnished immediately time would be ceased to be the essence of the contract indeed runs counter to the very basis of the said argument. The providing of the drawings is the very basic factor to be provided before any construction can be completed. In the absence of the proper drawings proper construction even cannot be done. Therefore the argument that material should have been provided to show that any activity was held up for lack of drawing must be rejected. So far as supply of certain material is concerned, Clause 5.1 of the General Conditions reads:-
The Contract shall be solely responsible for the procurement of all materials including steel and cement or to obtain any import or other license or permit required for the fulfillment of the Contract. The grant by the Corporation of a quota certificate or permit required under the law for distribution or acquisition of any commodity or any other form of assistance in the procurement of the material aforesaid or any attempt to render assistance in the matter aforesaid, shall not be construed as admission on the part of the Corporation that the material covered by such license or permit or quota certificate is available or constitute an undertaking or assurance on the part of the Corporation for the procurement or the timely availability of the same. But, if by reason of any, such assistance as aforesaid, the contractor obtains any material at less than it's tendered price as shown in Schedule-B appended to volume II, the cost of the works, payable under this contract shall be reduced correspondingly, and the extent of such reduction shall be determined by the Engineer where decision shall be final and binding on the contractor.
35. It is recorded by the arbitrator and it is a finding of fact that it was for the contractor applicant to find certain material like cement etc. Therefore delay occurred because of non-availability of the same. All the same it was the responsibility of the applicant. The fact therefore established clearly supports that the findings of the arbitrator cannot be taken to be erroneous that parties were responsible for delay in this regard.
36. As regards the controversy if time was the essence of the contract the arbitrator found that non-availability of drawings in accordance with contract and revision of drawings at a late stage and also ordering the extra items as late as 1978-79, it must be taken that time for completion of the work had been set at large. This findings of the learned arbitrator have been assailed that it was the applicant who had been asking for the extension of time and every time the same was extended it had been pointed that the contractor is not relieved of his relevant obligation and time as such was fixed and consequently time remained as the essence of the contract. In other words, each extension so granted was with a rider. Co-related with the same is also a plea as to whether liquidated damages could be imposed or not.
37. It must be stated that learned counsel for the objector was in a position to assail the findings but before coming to that it can well be noted that vide the letter of Howe India Pvt. Ltd. dt. 5th May, 1980 addressed to the applicant it was pointed that certificates of completion regarding the work at Moga, Mandi Gobindgarh and Jagraon were enclosed and that these certificates were being issued without prejudice to the engineers right to take action as found necessary if verticality of slipformed walls is found beyond the tolerance as per the contract. Similar is the letter of 13th July, 1978 written by the objector to Howe India Pvt. Ltd. in which it was insisted that time was essence of contract and relevant portion of the same reads:-
The work of Superstructure for Silos and Head House & foundation and Superstructure for bagging platforms, truck receiving pit etc. at Moga, Jagraon and Mandi Gobindgarh was awarded on 28.12.1976 to M/s. Continental Construction Pvt. Ltd. As per contract the work was required to be completed on 10.10.77. The time and date stipulated in the contract for the completion of the work is of the essence of the contract and contractor was required to complete the work in all respects in time. The completion of the work has been badly delayed by the contractor. As per Clause 10 of the contract (Vol. I) liquidated damage for delay are payable to the Corporation by the Contractor, without prejudice to other rights and remedies the corporation may have against the contractor. The Corporation may grant an extension of time for the completion of the work in case the timely completion of the work is delayed by force majeure, beyond contractors control. But it is obligatory on the part of the contractor that within 10 days after the occurrence of a case of force majeure but before the expiry of the stipulated date of completion, he shall inform the Engineer in writing that he considers himself entitled to an extension of the time limit.
38. Reference can then also be made to the letter of the objector of 7th February, 1983 addressed to the applicant in which extension of time was granted up to 29th February, 1980 with a levy of liquidated damages of 5% of the contract price for a delay of 356 days and without liquidated damages for delay of 515 days. The said letter is also being reproduced below for the sake of convenience:
"Dear Sir, I am directed to convey the approval of the competent authority for the extension of time in regard to the above said work to M/s Continental Construction (P) Ltd., up to 29.2.80 with a levy of liquidated damages @ 5% on contract price for a delay of 356 days and without levy of liquidated damages for the delay of 515 days.
This has reference to your letter no. R-194 (93)/1386 dated 28.2.80, written to M/s HIPPI-New Delhi with a copy to us among others, on the above cited subject.
Yours faithfully sd/-
Deputy Manager (E/H)
39. Similar is the letter of 30th October, 1984 on the record besides the earlier letter of 2nd September, 1978 written by the objector to the applicant that liquidated damages could be imposed because of delay in completion of the work. Attention of the Court has further been drawn to identical other letters.
40. On the strength of these letters it has been urged that time remained the essence of the contract. The time was extended and the right to liquidate damages was never put to an end. In the first instance, it must be taken note of that time was extended more often than once. The drawings were supplied late and additional work was called upon to be done. When such is the situation then extension of time can well be described to be an ideal formality and the arbitrator in this regard was right in concluding that time was set at large. In addition to that one cannot ignore the fact that the findings have been recorded by the learned arbitrator based on certain facts. Even if two views are possible which are apparent in the present case this court will not interfere because in that view it cannot be stated that there is any error apparent on the face of the record. Even if the scale weighs a little more towards the objectors side still legally the court is not competent to go into the detailed scrutiny and set aside the award. The eloquent argument in this regard must fail.
41. It was further urged that there was no justification for imposition of the interest at 10% p.a. as has been imposed by the learned arbitrator. But in the facts of the present case the said finding cannot be taken to be without merit. When for 16 years payment has not been made and the findings have ben returned in favor of the applicant indeed there is no ground to interfere in the discretion so exercised allowing the interest at the rate of 10% p.a. on the principal amount.
42. As regards suit no. 128-A/97 it was pointed that there has been a double payment amounting to Rs. 47,000/-. But before the learned arbitrator no such objection has been raised and, therefore, the objector is not entitled to rake up this contention all over again in court.
43. For these reasons objections must fail and are dismissed. The award is made a rule of the court and decree in terms of the award is passed. The applicant would be entitled to interest at the rate of 10% p.a. from the date of the filing of the petition till the final payment in both the suits is made.