Delhi High Court
M/S. Prominent Electric Works vs Delhi Development Authority & Ors. on 6 November, 2009
Author: Valmiki J.Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ C.S. (OS) No. 674-A/1997
6th November, 2009.
M/S. PROMINENT ELECTRIC WORKS ..Petitioner
Through: Mr. Vivekanand, Advocate.
VERSUS
DELHI DEVELOPMENT AUTHORITY & ORS. ...Respondents
Through: Ms. Amita Singh, Advocate
CORAM:
HON‟BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be allowed to see
the judgment?
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
%
JUDGMENT (ORAL)
I.A. No.252/1998 and CS(OS) No.674A/1997
1. These are the objections filed by the petitioner under Sections 30 and 33 of the Arbitration Act, 1940 against the Award dated 14.3.1997. The award arises on account of the disputes which arose between the parties with respect to the work of construction of C.S(OS)No.674A/1997 Page 1 410 Janta Houses for harijans and landless persons at Peera Garhi, New Delhi.
2. The facts of this case are that the work was awarded to the petitioner vide letter dated 14.9.1983 which prescribed the stipulated date of completion as 24.9.1983. Since the work could not be completed even well after 24.9.1983, the work in question was broken up with respect to the balance work which was of the amount of Rs.33,292/-. For this balance work of Rs.33,292/-, a supplementary agreement dated 31.8.1988 was entered into between the parties which prescribed the period for completion of work to be nine months. The work was however completed on 20.3.1993.
3. The counsel for the objector/petitioner has challenged the award whereby his claims filed in 1994 have been dismissed as being time barred, because claims filed were with respect to the main contract dated 14.9.1983 and which was already closed when the supplementary agreement dated 31.8.1988 was entered into between the parties. The counsel for the objector has referred to the agreement dated 31.8.1988 which uses instead of word „closure‟, the C.S(OS)No.674A/1997 Page 2 expression "provisional closure". The counsel for the objector therefore contended that all the disputes under the original agreement dated 14.9.1983 continued to survive right till the end when the balance work under the supplementary agreement was ultimately completed on 20.3.1993. The counsel for the objector/petitioner has also very heavily relied upon the final bill dated 18.1.1994. The counsel relying on this final bill has pointed out that this is a consolidated bill for work done both as per the original agreement as also the supplementary agreement. He has further referred to the fact that in the supplementary agreement dated 31.8.1988 there is no date mentioned for completion of work under the contract dated 14.9.1983. Per contra the counsel for the non-objector, however, urges that two views are possible for this expression „provisional closure‟ as used in the letter dated 31.8.1988. She has further urged that one of the acceptable views can certainly be as held by the Arbitrator that the original contract was closed whereby the claims under the same ought to have been filed when the same was closed in 1988 and not in 1994 and only the balance work remained to be performed by means of the fresh agreement titled as supplementary C.S(OS)No.674A/1997 Page 3 agreement thereby nothing remained to be done under the original agreement, and this Court while hearing objections under Sections 30 and 33, has repeatedly held that it will not interfere with the Award if two views are possible. Consequently, the Arbitrator having taken one view which shows that the first contract was closed when the supplementary agreement was signed on 31.8.1988, claims had to be filed within three years from that date so far as the claims under the first contract and which admittedly was not done. It was, therefore, urged that the conclusion on the issue of limitation as held by the Arbitrator, therefore, is clearly justified.
4. I feel that the contention of the objector is correct and merits acceptance. In the final bill dated 18.1.1994, there is a specific mention of the actual date of completion of work, which was not mentioned in the Supplementary Agreement dated 31.8.1988, and, which final bill is with reference not only to the original agreement of 1983 but also for the supplementary agreement dated 31.8.1988. This final bill also while referring to both the contracts mentions the date of closure not as the date of the supplementary agreement dated C.S(OS)No.674A/1997 Page 4 31.8.1988 but 20.3.1993 which is inclusive of the work completed after the supplementary agreement dated 31.8.1988. A reference to the final bill and the entries contained therein does definitely show that it was a consolidated bill for both the agreements and since it was a consolidated bill for both the contracts, it refers to payments made under the first contract also. Consequently the Arbitrator so far as having determined the issue that the claims for the agreement which began in 1983 are barred by limitation does not appear to be correct considering the fact of this admitted document being the final bill. The Arbitrator has while arriving at the conclusion that the claims are barred by limitation has referred to the supplementary agreement which is the document earlier in point of time dated 31.8.1988, but has not referred to the vital, crucial and admitted later document being the final bill dated 18.1.1994. By not considering this most relevant document, the Arbitrator has mis-conducted himself and the proceedings as per K.P Poulose Vs. State of Kerala, (1975)2SCC 326. How the parties understand the terms of a contract is best understood by their actions in terms of such a contract (vide Godhra Electricity Company Vs. State of Gujrat, AIR 1975 SC32). I consequently hold C.S(OS)No.674A/1997 Page 5 that the findings of the Arbitrator of the claims being time barred are illegal and hence liable to be set aside. The objections are therefore allowed, though for the record only, as the objections have to be ultimately dismissed as held by me later in this judgment.
5. The issue which now I have to consider is what to do in a very old case like the present one where the contract is more than 26 years old and work under which contract was duly completed more than 16 years from today. Once the issue of limitation is decided in favour of the petitioner/objector, and it is held that the Arbitrator was not justified in dismissing the claims on the ground that the same were barred by the limitation, the issue is that while hearing objections under Sections 30 and 33 of the Arbitration Act, 1940 is it necessary for the Court to necessarily remit the matter back to the Arbitrator for redetermination or can the Court look into the merits of the disputes itself for arriving at a final decision itself . I am of the opinion that in a particular case where detailed and lengthy arguments on many issues are required, many documents are to be looked into, detailed evidence has to be considered, that case may be a case where the C.S(OS)No.674A/1997 Page 6 matter may have to be remitted, but, is it so required also in such a case where it is obvious from the facts as pleaded and the evidence as led that remission would serve no purpose inasmuch as the conclusions which are to be arrived at are obvious from the arbitration record. I am of the firm opinion that this Court can, in such a latter scenario, the Court can as well look into the issue with respect to the merits of the claims which are made since not much time is to be taken for arriving at a decision on those issues. Every civil court has inherent power under Section 151 CPC to do justice and I, therefore, invoke this power in the facts and circumstances of this case. Accordingly, in view of the fact of the pendency of these disputes since the last over 16 years and the objections itself having been filed in the year 1997 i.e. more than 12 years back and the state of the pleadings and evidence as led before the Arbitrator, I have persuaded myself to look into the issue as regards the merits of the claims which were made by the claimant before the Arbitrator. Long pendency of litigation itself is a prejudice which ought to be addressed.
C.S(OS)No.674A/1997 Page 7
6. The main claims which have been rejected by the Arbitrator, for the main contract of the value of Rs.3,89,688/- and the supplementary agreement of the value of Rs.33,292/-, are disproportionately high when compared to the value of the contracts. Some of the claims are:- a claim of Rs.5,00,000/- for loss on account of overheads at site; at head office; alongwith loss and profits due to prolongation of the contract, a claim of Rs.3,15,000/- as damages on account of idle labour and staff due to prolongation of work, a claim of Rs.1,25,000/- on account of increase in cost of material and labour and so on. On looking at all these claims as per the claim petition, I enquired from the counsel for the objector that what is the break-up of these claims because no break-up of the same as relatable to which contract i.e. they pertain to the period of the original contract period or the supplementary contract period and considering type/nature of the claims whether they have been effectively broken up for the two different periods and in what manner each of these claims is established and proved before the Arbitrator. The counsel for the objector in this regard has been very fair in stating that there is no break up available in the claim petition with regard to the different C.S(OS)No.674A/1997 Page 8 heads of claims or otherwise. The counsel for the objector said that the claims are conjoint claims for the complete period right from the work being awarded in 1983 till the same was completed in 1993. The next question then posed by me to the counsel for the objector is how and in what manner these claims have been substantiated by filing of the requisite evidence before the Arbitrator if the same have to be allowed. To this, the counsel says that arbitrators are experts in the field and no evidence is required and consequently, such claims can be regularly allowed by the Arbitrator.
7. I do not agree at all with the contention which has been urged by counsel for the objector. Surely, mere statements contained in the statement of facts or pleadings without being supported by evidence cannot mean that in spite of the same having not been proved as required by the doctrine of discharge of onus on balance of probabilities, leave alone to the complete conviction of the Arbitrator, yet such status can still entitle the contractor/claimant to the damages as claimed. This argument urged by the objector is against all cannons of justice, equity, law and the principle of burden/discharge of proof.
C.S(OS)No.674A/1997 Page 9 No doubt burden of proof in a civil case is on balance of probabilities but surely some reasonable amount of evidence has to be there on the basis of which an Arbitrator can make an honest guess work for allowing the claims. It is not an argument available to the contractor/claimant to say that on the basis of very tennuous and almost non existent evidence, the Arbitrator is entitled to make a guess work merely because he is allegedly an expert in the field being an Engineer. The Arbitrator being an engineer cannot mean that basic minimum requirements of the Evidence Act have to be thrown to the winds when huge monetary liability by the Award can be fastened on to the opposite party. Surely basic and fundamental principles of Evidence Act, 1872 are applicable even to arbitration proceedings. I find that, and which could not be at all rebutted by the objector, that there is no evidence as available before the Arbitrator to discharge the onus of proof as required in a civil case. The claimant has therefore miserably failed to discharge the onus, which he has to, in order to succeed in establishing the claims. The claims, therefore, as filed are clearly liable to be dismissed.
C.S(OS)No.674A/1997 Page 10
8. Accordingly, though the objection petition is allowed for the purpose of record in that it is held that the Arbitrator was not justified in holding the claims to be beyond limitation, however, having examined the merits of the matter with respect to the claims which were made before the Arbitrator, and the other details including the evidence. I am of the opinion that objection petition is liable to be dismissed and it is not required that the matter should be remitted to the Arbitrator for fresh consideration. Accordingly, the objection petition is dismissed and the Award is made the rule of the Court.
9. At this stage, the counsel for the objector has relied upon Union of India Vs. Madhya Pradesh Export Corporation Ltd. 1998(suppl.) Arb.LR. 618 to contend that this Court should not decide the issue on merits. I find that the said judgment is only with respect to modification or correction of the Award and not with respect to the fact whether if on account of delays caused by long pendency of cases and the lack of evidence a Court cannot and shall not look into the case on merits and it is necessary that an exercise in C.S(OS)No.674A/1997 Page 11 futility should and ought to be resorted to by referring the matter back to the Arbitrator though the same will serve no purpose because the claims in no circumstances are at all proved as the onus to prove the claims has not even been the least bit discharged.
The Supreme Court in the Constitution Bench case reported as Padma Sundra Rao Vs. State of Tamil Nadu 2002(3)SCC 533 has held that the ratio of a case has to be read with reference to the facts of each particular case and even a single fact which is different may make a difference to the ratio. Thus on the facts of the present case I do not find the judgment cited by the Objector is applicable.
10. Ordinarily, I would have imposed costs for disposal of the objections, however, since objections are for the purpose of record qua the issue of limitation allowed, but since ultimately the objections are being dismissed because I am not remitting back to the Arbitrator, I am not imposing costs in the matter and leave the parties to bear their own costs.
VALMIKI J.MEHTA, J
November 6, 2009
Ne
C.S(OS)No.674A/1997 Page 12