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[Cites 11, Cited by 0]

Delhi District Court

Sole Proprietor Of M/S Kumar ... vs Delhi Development Authority on 30 September, 2019

          IN THE COURT OF SH. SANJEEV JAIN,
      ADDITIONAL DISTRICT JUDGE­04, SOUTH­EAST,
              SAKET COURTS, NEW DELHI

Presiding Officer: Sh. Sanjeev Jain, ADJ­04
ARBTN NO. 21958/16                                                   Digitally
In the matter of:                                                    signed by
                                                                     SANJEEV JAIN
                                                       SANJEEV       Date:
                                                       JAIN          2019.09.30
SHRI BASANT KUMAR                                                    15:11:51
                                                                     +0530
Sole Proprietor of M/s Kumar Construction Co.
E­8, Milap Nagar,
Uttam Nagar,
New Delhi­110015
                                                        ..........Petitioner.
                          Vs.

1. DELHI DEVELOPMENT AUTHORITY
Through its

(i) Vice Chairman, Vikas Sadan,
INA, New Delhi­110026

(ii) The Executive Engineer South,
South West, Division No. 6,
Sector 5, Nursery, Dwarka,
New Delhi­110075                                     .........Respondents

2. SHRI D.V. RAGHAV
Superintending Engineer (Artbn.)
Delhi Devlopment Authority,
B2B, Janakpuri,
New Delhi­110058                           ........Non­Performing Party

Case No. 21958/16                                              Page 1 of 42
             BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR
 Date of institution                   :              13.10.2016
Date on which judgment was reserved   :              21.09.2019
Date of pronouncement of the judgment :              30.09.2019

                              JUDGMENT

1. This petition u/s 34 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'The Act'), has been filed by the petitioner namely Shri Basant Kumar for setting aside the Arbitration Award dated 15.07.2016 passed by the Sole Arbitrator Shri. D.V. Raghav, Superintendent Engineer (Arbitration), Delhi Development Authority, New Delhi, in Arbitration Agreement Number 16 (EE/SWD­6/DDA/2011­12).

1.1 The brief facts of the case are that petitioner Sh. Basant Kumar, sole proprietor of M/s Kumar Construction Company is the registered contractor of Delhi Development Authority (hereinafter referred to as 'DDA').

1.2 The disputes are with regard to the work of M/O Various Colonies at Dwarka Zone under Nazul A/C II SH: Improvement of water supply line of Sector 15, Pkt­ "B", J.J. Transit Camp, Dwarka, Phase­II, New Delhi in Agreement No. 16/EE/SWD­6/DDA/2011­12, which were awarded to the petitioner to the respondent no. 2.

Case No. 21958/16 Page 2 of 42

BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR 1.3 Petitioner quoted the lowest price amongst all contractors in respect of the tenders of above mentioned work orders and thereafter respondent no. 2 awarded the work to the petitioner vide letter dated 26.03.2012 and thereafter an agreement was executed between the parties. Soon after the award of work petitioner procured a large quantity of material at the site and the procurement includes the employment of chowkidar and munshis at the site.

1.4 Respondent no. 2 was under the obligation to provide clear site to the petitioner for execution of the work but respondent no. 2 failed to comply to clause 4 of the NIT which provides about the availability of the entire site. The petitioner requested respondent no. 2 to provide the clear site but nothing was done by respondent no. 2. As there was no possibility to commence work and the area being theft prone, it was suggested upon by both the Assistant Engineer and Junior Engineer to remove the pipes and other costly materials from the site. Before removing the material from the site, petitioner handed over the receipts obtained for the procurement of pipes to the officers of respondent no. 2 in terms of the agreement.

1.5 As per petitioner, the working circumstances at the site were such that there was no possibility of even commencing the work. When work was awarded to the petitioner there were elections in Case No. 21958/16 Page 3 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR Delhi, therefore, MCD took over the site and directed not to start work immediately. The MCD authorities had carried out the cement concrete work recently and the same was required to be dismantled, therefore, permission to demolish the same was necessary to be obtained from the MCD. These reasons were brought to the notice of respondent no. 2 by petitioner in letter dated 13.04.2012. The petitioner requested the respondent no. 2 to clear the hindrance in commencement of work. It is also stated by the petitioner that water supply pipes, which were to be replaced were rusted and the inhabitants of JJ Transit Camp, Dwarka, insisted that all the pipes be replaced with new pipes. The petitioner explained the inhabitants that he has no power to do it and only officers of DDA can do it. MCD officers refused to cut the trench on the newly laid cement concrete work, therefore, a permission was required for it. Vide letter dated 13.12.2014 the petitioner clarified that it was not possible to execute the work unless the hindrances explained were removed.

1.6 Vide letter dated 15.05.2012, petitioner informed the respondent no. 2 that he shall be removing the material from the site on 16.05.2012 and further if the site was made available he shall bring back the material within three days from the date of direction.

1.7 As per the case of the petitioner, respondent no. 2 Case No. 21958/16 Page 4 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR illegally terminated the contract. Petitioner has no option but to invoke the arbitration agreement. Consequently the notices were posted to Superintendent Engineer, DDA, in accordance with Arbitration Agreement (vide invoices dated 04.09.2012) through his advocate and the said instructions was issued by another notice dated 17.10.2012 to Chief Engineer (DWK Zone), DDA. Ultimately the dispute was referred to the Ld. Sole Arbitrator.

2. Respondents' Case:

2.1 As per the case of the respondents, claimant has not come with clean hands and his conduct being malafide and there was no reason for non­start of work. The maintainability of the claim of the petitioner was challanged in the preliminary objections. It was stated by the respondents that claimant has not submitted the progress chart and milestones as required as per clause 5.1 and 5.2 of the agreement. The workable hindrance free site was handed over to the claimant on 04.04.2012 which was duly taken over by the claimant without any protest or objection. It was further stated by respondents that the first scheduled item was demolishing the cement concrete road as the main work was for laying underground pipes and as per clause 23 of General Conditions of agreement, the claimant was responsible for obtaining of permissions from the MCD and police. However, the claimant did not even apply for the said permission. The claim of the Case No. 21958/16 Page 5 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR petitioner was also contested on the ground that to assist the claimant, the respondents have written a letter dated 06.06.2012 to the MCD requesting it to allow the claimant to cut the road, however, the claimant never pursued the matter with MCD. As per the clause 11 and 11.1 (a) of special conditions, claimant could not purchase and bring any material at the site unless samples thereof was approved by the Engineer in Chief. However, the claimant did not submit any such samples. The requirement of D.I. pipes could arise only after the road was cut, however, the same was never done, therefore, there was no need to bring the pipes at the site. As per the clause 8 of NIT the claimant was required to visit the site to check and ascertain all sort of problems which may come during the execution of work. As per clause 19, of all such conditions, the claimant was required to inform names of three specialized agencies but claimant had not done the same. It is alleged by respondents that claimant had deliberately not started the work and had just been taking wrong and false excuses. It was also stated by the respondents that show cause notice was issued to the claimant but still the claimant neither started the work nor gave any satisfactory reply to the show cause notice and, therefore, agreement was rightly and properly rescinded.

3. After perusal of record, following are the admitted facts between the parties:

Case No. 21958/16 Page 6 of 42
BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR
(a) Work was awarded to the claimant through Award letter dated 26.03.2012.
(b) Agreement dated 29.03.2012 was executed between the parties.
(c) Stipulated date of start and completion of the work were 05.04.2012 and 04.07.2012 respectively.
(d) Work was rescinded by the EE/SWD­6 vide his letter dated 11.02.2013.

4. I have heard the Ld. Counsels for the parties and carefully considered the Arbitrarl Award, material on record and written submissions.

5. Before adverting to the case on merits, it is significant to note that the parties to the arbitration proceedings have very limited scope to challenge the arbitration award. The Arbitration and Conciliation Act, 1996, provides very limited scope for setting aside the arbitrarl award. The aggrieved parties can challenge the arbitrarl award only on the grounds envisaged under Section 34 of the Arbitration and Conciliation Act, 1996. For the sake of convenience, the provisions of Section 34 of the Arbitration and Conciliation Act, 1996, is reproduced herewith:

"34. Application for setting aside arbitrarl award - (1) Case No. 21958/16 Page 7 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR Recourse to a Court against an arbitrarl award may be made only by an application for setting aside such award in accordance with sub­section (2) and sub­ section (3).
        (2)    An arbitrarl award may be set aside by the
        Court only if ­
        (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 arbitrarl proceedings or was otherwise unable to present his case; or
(iv) the arbitrarl award deals with a 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 arbitrarl award which contains decisions on matters not submitted to arbitration may be set aside; or Case No. 21958/16 Page 8 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR
(v) the composition of the arbitrarl tribunal or the arbitrarl 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 arbitrarl award is in conflict with the public policy of India.

Explanation - Without prejudice to the generality of sub­clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81.

The Arbitration and Conciliation (Amendment) Act, 2015 provides:

"18. In Section 34 of the Principal Act:­ (I) In sub­section (2), in clause (b), for the Explanation, the following Explanations shall be Case No. 21958/16 Page 9 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR substituted, namely:­
(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 India 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" (ii) after sub­ section (2) the following sub section shall be inserted, namely:­ "2(A) An arbitrarl 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 re­appreciation of evidence."

6. To add to this, in a land mark judgment rendered by the Case No. 21958/16 Page 10 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR Hon'ble Supreme Court of India reported in AIR 2015 SC 620 between Associate Builders Vs. Delhi Development Authority extends a wider scope to Section 34 of the Arbitration and Conciliation Act, 1996. Their Lordships have clearly mandated that:

"an extent of judicial intervention notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. (Section 5) It is important to note that, the 1996 Act was enacted to replace the 1940 Arbitration Act in order to provide for an arbitrarl procedure which is fair, efficient and capable of meeting the needs of Arbitration; also to provide that the tribunal gives reasons for an arbitrarl award; to ensure that the tribunal remains within the limits of its jurisdiction; and to minimize the supervisory roles of courts in the arbitrarl process.
Therefore, in our view, the phrase "public police of India" used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public Case No. 21958/16 Page 11 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term "public policy" in Renusagar case is required to be held that the award could be set aside if it is patently illegal. The result would be, award could be set aside if it is contrary to: 
        (a)    Fundamental policy of Indian Law; or
        (b)    The interest of India; or
        (c)    Justice or morality, or
        (d)    In addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.
103. Such patent illegality, however, must go to the root of the matter. The public policy, indisputably, should be unfair and unreasonable so as to shock the Case No. 21958/16 Page 12 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR conscience of the court. Where the Arbitrator, however, has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute would come within the purview of Section 34 of the Act.
35. Without meaning to exhaustively enumerate the purport of the expression "fundamental policy of Indian law", we may refer to three distinct and fundamental juristic principles that must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a court or other authority that affects the rights of a citizen or leads to any civil consequences, the court or authority concerned is bound to adopt what is in legal parlance called as "judicial approach" in the matter. The duty to adopt a judicial approach arises from the very nature of the power exercised by the court or the authority does not have to be separately or additionally enjoined upon the for a concerned. What must be remembered is that the importance of a judicial approach in judicial and quasi­judicial determination lies in the fact that so long as the court, Case No. 21958/16 Page 13 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR tribunal or the authority exercising powers that affect the rights or obligations of the parties before them shows fidelity to judicial approach, they cannot act in an arbitrary, capricious or whimsical manner. Judicial approach ensures that the authority acts bona fide and deals with the subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. Judicial approach in that sense acts as a check against flaws and faults that can render the decision of a court, tribunal or authority vulnerable to challenge. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where­
1. a finding is based on no evidence, or
2. an arbitrarl tribunal takes into account something irrelevant to the decision which is arrives at; or
3. ignores vital evidence in arriving at its decision. Such decision would necessarily be perverse.
A board distinction has, therefore, to be maintained between the decisions which are perverse Case No. 21958/16 Page 14 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with.
It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the Arbitrator on facts has necessarily to pass muster as the Arbitration is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitrarl award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score.
A Court does not sit in appeal over the award of an arbitrarl Tribunal by reassessing or re­appreciating the evidence. An award can be challenged only under the ground mentioned in Section 34(2) of the Act.
The third ground of public policy is, if an award Case No. 21958/16 Page 15 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR is against justice or morality. These are two different concepts in law. An award can be said to be against justice only when it shocks the conscience of the court. An illustration of this can be given. A claimant is content with restricting his claim, let us say to Rs.30 lakhs in a statement of claim before the Arbitrator and at no point does he seek to claim anything more. The arbitrarl award ultimately awards him 45 lakhs without an acceptable reason or justification. Obviously, this would shock the conscience of the court and the arbitrarl award would be liable to be set aside on the ground that it is contrary to "justice".

If the Arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be Case No. 21958/16 Page 16 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR determined outside and independent of what appears in the award. Such a jurisdictional error needs to be proved by evidence extrinsic to the award.

The Court while considering challenge to arbitrarl award does not sit in appeal over the findings and decision of the Arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding."

7. Properly guided by the law laid down in cases (Supra), now, it is to be seen that whether the impugned award is blatantly erroneous and based on irrelevant and unsustainable reasoning.

8. There were following 8 claims before the Ld. Arbitrator:

Claim no. 1: The claimant claim a sum of Rs.55,649.00 (Rupees Fifty Five Thousand Six Hundred Forty Nine), on account of non­refund of the earnest money.
Case No. 21958/16 Page 17 of 42
BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR Claim no. 2: The claimant claim a sum of Rs.55,649.00 (Rupees Fifty Five Thousand Six Hundred Forty Nine) on account of non­refund of Performance Guarantee.
Claim no. 3: The claimant claim a sum of Rs.20,000/­ (Rupees Twenty Thousand) on account of cost incurred in the establishment at the site of work due to non­execution of work.
Claim no. 4: The claimant claim a sum of Rs.75,000.00 (Rupees Seventy Five Thousand) on account of deployment of salaried staff i.e. an Engineer, Chaukidar and Munshi.
Claim no. 5: The claimant claim a sum of Rs. 6,000.00 (Rupees Six Thousand) on account of cost incurred on procurement and shifting of pipes.
Claim no. 6: The claimant claim a sum of Rs.86,000.00 (Rupees Eighty Six Thousand) on account of loss of profit.
Claim no. 7: The claimant claim a pre­suit, pendent­lite and future interest @ 10 % per annum on all the claims.
Case No. 21958/16 Page 18 of 42
BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR Claim no. 8: The claimant claim a sum of Rs. 25,000.00 (Rupees Twenty Five Thousand) on account of cost of proceedings.

9. The grounds to challenge the award are as follows:

A: The impugned award dated 15.07.2016 is beyond the scope of the submissions and evidence and, therefore, the same is erroneous and illegal.
B: The Arbitrator acted in perverse manner in adjudicating the arbitrarl disputes and issues pending before him. The Arbitrator ignored and misinterpreted the documentary and oral evidence.
C: The Witness of the petitioner has filed the number of documents before the Ld. Arbitrator which has been marked as Ex. C­1 to Ex. C­13. The said documents were considered by Ld. Arbitrator during hearing dated 07.08.2014 and subsequently instructions were issued by the Ld. Arbitrator to produce the original document for admission and denial of documents. The claimant produced the original documents and admission and denial of documents had taken place. The cross­ Case No. 21958/16 Page 19 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR examination of the claimant was conducted on 07.10.2014. The respondents alleged that Ex. C­6 was missing from the file. The Ld. Arbitrator has not given any time to the petitioner to argue facts and the claims and peruse the evidence.
D: That after the conclusion of the cross­examination, the proposed para wise discussion was fixed on 18.03.2016 & 22.03.2016. The Arbitrator cancelled the hearings fixed for 18.03.2016 and on 22.03.2016. The claimant moved an application u/s 29­A of Arbitration and Conciliation Act, 1996, to which no reply was filed by the respondents.

E: That the Arbitrator has to make and publish an award within six months and if more period is required then the Arbitrator shall obtain the consent of the parties to continue the proceedings but the matter in hand took over two years.

F: That the petitioner and the counsel was asked by the Arbitrator to leave the Arbitration venue and accordingly they left whereas counsel for the respondents on whose advice, usually the arbitrator would work, keep on sitting.

G: That the Arbitrator does not apply his own mind but only Case No. 21958/16 Page 20 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR acted upon the advice of the opposite counsel feeling that he is the advisor of the Arbitrator because he is counsel of the Respondent DDA.

H: That from the minutes, it is concluded that what the arbitrator did was opposed to substantial law of land and it was in violation of the Arbitration and Conciliation Act, 1996 and it was also opposed to the Public Policy of India.

I: That the phrase "Public Policy of India" has not been defined in the new act, hence, the expression "Public Policy of India"

which shall be given a meaning, which serve the scheme of the new act in general and purpose of section 34 in particular. In this context, the Russell on arbitration, 21 st edition paragraph 8­ 045 states as follows:
"Fraud or Contrary to public policy­ This irregularity contemplates a situation where either the award was obtained by the fraud or the way it was procured was contrary to public policy. The reference in the section to public policy is intended to cover circumstances which though not amounting to fraud would be similarly offensive. It reflects one of the grounds for the court Case No. 21958/16 Page 21 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR refusing to recognize or enforce a New York Convention Award."

The phrase "Public Policy" connotes that what is in the public good and in public interest while considering the concept of public policy. References to the following judgments were also given:

(i) Judgment decided by Hon'ble Supreme Court of India in Central England Water Transport Corporation ltd Vs Brojo Nath Ganguly (1986) 3­ SCC 156.
(ii) Judgment decided by Hon'ble Supreme Court of India in Renusagar Power Company Ltd.
(iii) Judgment decided by Hon'ble Supreme Court of India in Oil and Natural Gas Corporation Ltd., 2003 (2) RAJ­1 (SC).
(iv) Judgment decided by Hon'ble Supreme Court of India in ONGC Ltd vs Saw Pipes Ltd., 2003 (2) RAJ­1 (SC).

That award is, therefore, contrary to the Public Policy of India, the Hon'ble Court in Renu Sagar Power Company Ltd., has defined the public policy, used in section 34 with regard to an award, which is contrary to (i) Fundamental Policy of Indian Law; (ii) Interest of India; (iii) Justice or Morality.

Case No. 21958/16 Page 22 of 42

BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR The Petitioner has established that the award dated 15.07.2016 is against the fundamental policy of Indian law, or interest of India or morality, therefore, the award is liable to be set aside.

J: That the Arbitrator even though has ignored the submission made by the petitioner but has heard the opposite counsel on the said application and dictated the minutes, is a serious misconduct of the Arbitration Proceedings and himself.

K: That the Arbitrator has further made an incorrect and erroneous observation that the counsel for the petitioner has refused to make his submissions on the claims on 22.03.2016 although no time was left to the same.

L: That the Arbitrator did not permit the Petitioner to make the submissions. That the Arbitrator insisted upon filing of written submissions only.

10. The Petitioner has submitted that the record of Ld. Arbitrator would show number of irregularities which contemplates a situation where the award dated 15.07.2016 as made by Ld. Arbitrator is by playing fraud upon the petitioner. The award is, therefore, contrary to the public policy of India. One of the judgment cited Case No. 21958/16 Page 23 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR herein above is Renu Sagar Power Company Ltd. referred in support to his contention on the ground that award is contrary to the public policy.

11. Petitioner further alleges that on the first application dated 08.04.2016 before the Ld. Arbitrator, petitioner requested that he can only make the oral submissions but the Ld. Arbitrator did not permit the petitioner to advance the oral submissions and insisted upon furnishing the written arguments within a week. Further, the Ld. Arbitrator directed the petitioner to file a non­judicial stamp paper with a week for making and publishing the award.

12. That despite request made by the petitioner for opportunity to advance oral arguments, Ld. Arbitrator refused to permit the petitioner and stated that only written submissions be made whereas respondents' counsel was permitted to make the oral submissions which is violation of public policy of India and in violation of section 18 of Arbitration and Conciliation Act by not treating both the parties equally.

13. That findings of Ld. Arbitrator of claim no. 1 and 2 for refund of earnest money and performance guaranteed is without any reason. Ld. Arbitrator has not considered any reason given by Case No. 21958/16 Page 24 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR petitioner for delay in consignment of the work. The findings of Ld. Arbitrator is against the provisions of Arbitration Agreement.

14. That the date of completion of work was 04.06.2012 whereas contract was terminated on 11.12.2013. The time was not the essence of the contract. Therefore, termination of the contract was bad in law. Petitioner has made reference to a judgment of M/s Hind Construction Contractors Vs State of Maharashtra, AIR 1979 SC 720, wherein in para 8 of the judgment it was held that:

"Even where the parties have expressly provided that time is the essence of the contract such a stipulation has to be read along with other provisions may on construction of the contract, exclude the interference that the completion of the Work by a particular date was intended to be fundamental, for instance, if the contract were to include the clauses provided for the extension of time in certain contingencies or for the payment of fine and penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in such clauses would be construed as rendering, ineffective the express Case No. 21958/16 Page 25 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR provision relating to the time being the essence of the contract"

15. It was submitted by the petitioner that contract was already dead on the stipulated date of completion because no extension of time was granted by the respondents. Therefore, the contract was not alive when it was terminated. This point was raised by the petitioner when statement of facts was filed on 31.01.2014 but these facts have been ignored by Ld. Arbitrator.

16. I have carefully gone through the award dated 15.07.2016 passed by the Ld. Arbitrator. The perusal of award reveals that Ld. Arbitrator has discussed the details, the facts of the case, opportunities given to the parties, dates of hearings, the claims made by the parties, the briefs facts of the claimant's case, the submissions of the respondents, the admitted facts, the preliminary objections and all the eights issues / claims referred to Ld. Arbitrator. Ld. Arbitrator has given detail discussions of the facts and evidence and concluded that:

" There was no reason for the claimant to not to start the work after 17.04.2012 when the results were declared, whereas, the date of start of work was just 05.04.2012, Case No. 21958/16 Page 26 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR and there was ample time with the claimants to complete the work as the stipulated date of completion of the work was 04.07.2012."

17. In the opinion of the Ld. Arbitrator, there was no justifiable reasons for the claimant not to start the work and to come forward for respective claims. The careful perusal of the award and proceedings conducted by the Ld. Arbitrator reflects that ample opportunities were given to both the parties on due date of hearings to lead their evidence and to advance arguments. Ld. Arbitrator has given its findings with reasons on all the eight claims and thereafter rejected all the claims of the petitioner.

18. In this case the vital issues were whether there was any justifiable and genuine reason for the claimant for not to start the work and whether the recession of agreement was wrong and illegal. Another important question was, whether it was the respondents who were required to sort out the issue of hindrance. The relevant discussion of all these issues find place in the order of Ld. Arbitrator in detail in paragraph no. 2 to paragraph no. 28 which are reproduced herein below:

"2. The first reason mentioned by the claimants that the local inhabitants of the area did not allow them to start the Case No. 21958/16 Page 27 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR work unless and until they assured to changed the old pipes which have already been rusted. In this respect it becomes important to see Clause 8 of the NIT which is relied upon the Respondents and the contents are reproduced hereunder: ­ " 8. Intending tenders are advised to inspect and examine the site and its surroundings and satisfy themselves before submitting the tenders as to the nature of the ground and sub soil (so far as is practicable), the form and nature of the site, the means of access to the site, the accommodation they may require and in general shall themselves obtain all necessary information as to risks, contingencies and other circumstances which may influence or affect their tender. A tendered shall be deemed to have full knowledge of the site whether he inspects it or not and no extra charges consequent on any misunderstanding or otherwise shall be allowed. The tenderer shall be responsible for arranging and maintaining at his own cost all materials, tools and plants, water, electricity, access, facilities for workers Case No. 21958/16 Page 28 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR and all other services required for executing the work unless otherwise specifically provided for in the contract document. Submission of a tender by tenderer implies that he has read this notice and all other contract documents and has made himself aware of the scope and rates at which stores, tools and plant etc. will be issued to him by the Government and local conditions and other facts having bearing on the execution of the work."

3. The above clause of NIT clearly make it mandatory for every tenderer to submit the tender only after due diligence with respect to the execution of work. The aforesaid clause clearly states that the tenderer in general shall themselves obtain all necessary information as to risks, contingencies and other circumstances which may influence or affect their tender. The wording of the clause being quite clear can only mean that before submitting the tender, and it was mandatory required for the claimants to personally visit the site and enquire from the local inhabitants would definitely had told the claimant about their problems with respect to the old pipes and their intention of getting the entire pipes change.

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4. Even it is believed that the local inhabitants had not informed the claimants about their intentions, then also the said excuse does not seem to be genuine, because in his cross examination on 07.10.2014 claimants has stated that:

A: He had constructed a cement godown of dimensions 15' X 12' with height 10'.
B. No one had taken any objection for constructing the cement godown.
C. He had purchased and brought the D.I. Pipes at site but none had taken objection. D. He had not taken any permission for cutting the road.
E. When he tried to start the work in all the pockets viz. Pocket A, B, C, the local inhabitants alongwith the officials of MCD, who were working as Mates in MCD, restrained him from executing the work. F. He did not lodge any complaint either with local police or with the MCD. He did not even send any letter to the MCD intimating about the conduct of its mates.
G. He had not cut the road to start the work.
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5. It has been admitted by the claimants that they had neither obtained the permission to cut the road. If the claimants had not taken the permission to cut the road or nor had they actually cut the road then how could it be presumed that he had started the work and was restrained by the local inhabitants and MCD officials because the main work was to lay the underground water pipes which could not be done without cutting the road and even the first schedule item was to cut the CC road and when no one had taken any objection for constructing the cement godown and to bringing D.I. Pipes at site. It is further beyond imagination that MCD officials were always available at site, when the claimants had tried to start the work.

6. In any case when the claimants had not taken the permission to cut the road, the reason of taking objection by locals seems quick bleak and unbelievable.

7. It is common knowledge that for the problems like shortage or non availability of water etc. the people usually approach the local leaders and government officers at the first instance. Whereas, in the instant case Case No. 21958/16 Page 31 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR the claimants have not even alleged that the local people have ever written to the respondents or MCD or to the local councilor, who was in touch with the claimants as is clear from his letter dt. 30.04.2012 (exhibit C­8) wherein he had stated that it could not start the work because the area councilor had not given them the time for inauguration.

8. From the above statement of claimants in his cross­ examination it is clear that no one had restrained them from constructing the cement godown and bringing D.I. pipes at site. This seems to be quite strange because in his letter dated 30.04.2012 (exhibit C­8). The claimants have submitted that because of MCD elections, he could not start the work and then the claimants were restrained by the local inhabitants and MCD officials. However, while constructing the cement godown they were not restrained at all.

9. Here the cross­examination of the respondents witness Sh. Jagdish Prasad EE/SWD­6 held on 10.12.2005, become quite relevant because in questions no. 18 to 21 he actually tried to prove that there was no need for constructing the cement godown as neither there was any Case No. 21958/16 Page 32 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR condition to that effect in the Agreement nor the Respondents had asked them to do so. This is quite strange because the claimants in his cross examination had already stated that he had constructed a cement godown.

10. Here it is noted that during cross examination of Respondents witness on 10.12.2015 the claimants were personally present and when this Tribunal specifically asked him to show any document, whereby he had asked from the respondents about the location of the cement godown, the ld. Counsel for the claimants objected to the Tribunal's query and on his directions the claimants refused to answer the same.

11. The claimants submitted that to start the work he had brought the pipes at the site. The tribunal notes that one out of two bills of the D.I. Pipes (Exhibit C­13 colly) filed along with affidavit of evidence is of the date 09.09.2006, whereas the work was awarded to the claimants on 26.03.2012. In his cross examination on 20.05.2015. the claimants in reply to question no. 19 had admitted that the exhibit C­13 is a bill of pipes purchased by him in August 2006 and in reply to question no. 20 he admitted that the pipes brought by him through aforesaid bills. It means that Case No. 21958/16 Page 33 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR either the claimants had made a false statement and the bill produced by him was for the pipes already used in some other pipe work or the claimant intended to use the old pipes which were purchased by them almost 6 years prior to the date of award, which was totally against terms and conditions of the Agreement, especially clause 10 and 11.1 (a) of the Special Conditions of the agreement, which is provided for quality assurance and that before purchasing the material, the claimants were required to get the samples thereof to be approved from the engineer­ in­charge. This proves the wrong intentions of the claimants and disentitled them from any claim.

12. Lastly if the local people and MCD officials restrained the Claimants from executing the work, then it should have lodged a proper complaint against them in the office of the respondents or MCD or with the police authorities. However, the claimants have not done anything at all.

13. This Tribunal is of the considered view that since the Claimants had not obtained the permission to cut the road, therefore, he was rightly not allowed by the MCD officials to start the work and now the claimants is trying to shift his default on local residents.

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14. The second reason given by the claimant is that MCD officials did not allow him to cut the roads. In this respect clause 23 for the General Conditions of the Agreement is quite important, the contents of which are reproduced as below:­ "Any permission, if required from police authorities or other department for closing or cutting the road will be obtained by the Contractor at his own. He will have no claims for any financial loss or extension of time on this account."

15. Here once again the aforesaid cross­examination of the claimants witness becomes very relevant, because he has clearly admitted that they did not obtain the permission to cut the road.

16. The above clause makes it very clear that it was the claimants who alone were responsible for obtaining the permission to cut the road and were not entitled to any claim on that account.

17. Although claimants have submitted that it was the respondents who were responsible for road cutting Case No. 21958/16 Page 35 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR permission and even though the respondents had sent a letter to the MCD requesting to grant the permission, but that was done just to assist the claimants and could not in any manner to shift their liability upon the respondents. Therefore, the MCD officials might have rightly restrained them from cutting the road and, therefore, this reason has no merit.

18. The third reason given by the claimants was non­ sanctioning of extra item for dismantling of RCC. However, no dismantling of RCC work was required at the site, whereas, the dismantling of CC pavement was to be required and for the same, the necessary provision in the agreement had already been taken vide the first schedule item, contents of the same are reproduced as below:­ "Demolishing cement concrete manually / by mechanical means including disposal of material within 50 meters lead as per direction of engineer­in­charge"

19. It is clear from the aforesaid scheduled item no. 1 that the very first work required to be done was to demolish the cement concrete payment wherever required, therefore, there was no reason for the claimants to ask the respondents for sanctioning any extra item on that account Case No. 21958/16 Page 36 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR and hence this reason also did not have any merit, even if any extra item was to be required, clause 12 of Agreement takes care of rates for the extra items and Claimants could not refuse to execute work on that ground.

20. Further the claimants in his cross­examination held on 20.05.2015 vide Q. No. 1, and admitted that before submitting the tender, he had visited the site and there was a properly built up cement concrete road. He further admitted that the agreement includes the work of cutting and dismantling of the cement concrete roads for which he had even given the rates. Although, he denied that no road work had been done after he had submitted the tender.

21. The fourth reason mentioned by the claimants for not starting the work was the Municipal Elections. In this respect the Ld. Counsel for Respondents has submitted that schedule of Municipal Elections was fixed by the Election Commission and was published well in advance. The date of poll of Delhi Municipal Elections 2012 was 15.04.2012 and results were declared on 17.04.2012. Claimants being a citizen of Delhi is deemed to have knowledge of the elections even at the time of submitting the tender or atleast on the date of issue of award letter Case No. 21958/16 Page 37 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR dated 26.3.2012.

22. In his cross­examination on 20.05.2015 the claimants vide question no. 17 has admitted that neither the MCD nor Election Commission nor Local Police nor Area Councillor nor DDA had even given him any letter or written communication to stop the work.

23. The tribunal of the considered view that the claimant could not start the work, because of MCD elections as the knowledge of elections could not be denied by the claimants who is a responsible citizens of Delhi and since, the claimants despite of having knowledge of the MCD elections had accepted the work and they could not later allowed to take a U­turn just to say that they would or could not start the work because of the same.

24. Further, he was never instructed by any officer or a body to not to execute the work because of the MCD elections. It is also worth to note that the elections never stop the development works, rather it is a common knowledge that during and prior to elections the development works are given high importance and are to be taken up on priority basis.

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25. Lastly, after the election results was declared on 17.04.2012, the claimants could have started the work and may request for recording of hindrance on this ground for extension of time, however, the claimants did not start the work even thereafter the completion of elections, which clearly proves that the elections had not restrained the claimants from non­start of the work in any way. Therefore there was no reason for the claimants to not start the work after 17.04.2012 when the results were declared, whereas, the date of start of the work was just 05.04.2012, and there was ample time with the claimants to complete the work as the stipulated date of completion of the work was 04.07.2012.

26. The fifth reason taken by the claimants and mentioned by them in their letter dated 30.04.2012 (Exhibit C­8) that they could not start the work because the area councilor had not given him the time for inauguration. This reason again has no merit because the work was awarded by the respondents DDA and not by MCD and there is no clause in the agreement which require the inauguration of the work by an area councilor. In this respect cross­ Case No. 21958/16 Page 39 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR examination of the claimants held on 07.10.2014 is to be seen where in his reply to Q.59, he had admitted that he had never invited the local councilor for inauguration. Although he volunteered that department had invited the local councilor, but in reply to Q.60 he admitted that department did not give him any written intimation about the invitation to local councilor. In next reply he admitted about the invitation to local councilor. In next reply he admitted that department had never given him any particular date for inauguration of the work and then he admitted that as per the agreement there was no requirement of any specific inauguration, but he had taken this plea on its own. He also admitted that even MCD had also not given him any letter to not start the work.

27. This Tribunal is of the considered view that since neither there was any term and condition in the Agreement, which provide the inauguration of the work by any person nor any official information to the effect had been given to the claimants, therefore, there was no reason for the claimants to stop the start of the work. It is also noted that on one hand claimants said that he could not start the work because of MCD elections and on the other hand he said the local councilor was not giving him Case No. 21958/16 Page 40 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR time for inauguration which seems to be a contradictory statement. Hence, this reason also does not have any merit. From the above discussion, it is clear that there was no reason for the claimants to not start the work, therefore, is was proper and rightful for the Engineer­in­ charge to issue show­cause notice dated 13.12.2002 (Annexure R­7) to the claimants asking it to explain the reasons for not starting the work."

19. A careful consideration of the findings of the Ld. Arbitrator in paragraph no. 2 to paragraph no. 28 of the award makes it clear that Ld. Arbitrator has considered all respective submissions of both the parties including the documents and with reasons gave his findings that there was no reason for the claimant not to start the work. In my opinion, there is not reasonable ground to interfere in the said findings of Ld. Arbitrator.

20. As discussed above, the settled principal of law is that the court can not sit as the appellate forum over the proceedings of Ld. Arbitrator. The scope of for setting aside the award is limited to the grounds provided under section 34 of the Act, if in one or more grounds are made out to convince the court. In my opinion, the fair opportunity has been given by the Ld. Arbitrator to both the parties Case No. 21958/16 Page 41 of 42 BASANT KUMAR VS DELHI DEVELOPMENT AUTHORITY & ANR and the reasoned award has been passed. The civil court can not substitute its findings by re­assessing the evidence led before the Ld. Arbitrator. In my opinion, petitioner has failed to establish that award suffer from any perversely or illegality. In my opinion none of the grounds in petition is substantial to interfere in the findings of the Ld. Arbitrator. Therefore, the petition is hereby dismissed.

21. No order as to cost. File be consigned to the record room.

Pronounced in the open Court (Sanjeev Jain) on this 30th of September, 2019 Addl. District Judge­04, South­East, Saket Court, New Delhi.

The order contains 42 pages all checked and signed by me.

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