Delhi High Court
Delhi Development Authority vs M/S. Sudhir Brothers on 15 December, 1994
Equivalent citations: 57(1995)DLT474, 1995(32)DRJ366
Author: M. J. Rao
Bench: M.J. Rao
JUDGMENT M. J. Rao, C.J.
Admitted.
1. So far as the claim relating to the levy of Rs. 5,69,473/- towards compensation against the contractor is concerned, the contention of the appellant is that the Arbitrator could not have done into the said question on merits as it was an excluded item on which the decision of the Engineer is final and, therefore, that part of the award has to be set aside. The item relates to recovery of compensation from the contractor on account of delay.
2. In this case the point arises in a novel fashion. The concerned engineer authorised to determine the question whether the contractor was liable to pay compensation had, in fact, decided that such compensation was payable by the contractor. That was a decision of the officer in favor of the D.D.A. This appears to be borne out by the decision contained in the officer's letter dated 20.5.1985 (referred to under Counter Claim No. 1 of the appellant/D.D.A.). There was no need for D.D.A. to ask the Arbitrator to include it in the award. But unfortunately, the D.D.A. applied before the Arbitrator to have the said amount included in the award. If the D.D.A. tried to recover it outside the award, there would have been no difficulty. Instead the D.D.A. included the said amount in their Counter Claim No. 1 and requested the Arbitrator to make it part of the award.
3. The D.D.A. in its counter-claim "..... It is prayed that the learned Arbitrator may kindly award the same amount in favor of the respondent." When such a request was made on behalf of the D.D.A. the contractor took advantage of the same and submitted an argument on merits before the Arbitrator that the compensation could not be levied at all and the concerned engineer was wrong in finding the contractor quality and liable to pay compensation. The Arbitrator, who thought he had jurisdiction to go into merits of the question, then decided that the contractor was not at fault and the compensation was not payable. There after the D.D.A. filed objections stating that the Arbitrator could not have gone into the merits of the levy of compensation by the concerned engineer. The learned Single Judge did not go into this question at all, but made the Award a Rule of the court the Arbitrator having already deleted the above amount of Rs. 5,99,473/-, on merits.
4. Our attention has been drawn to the arbitration clause and also the relevant clause which relates to exclusion of certain matters from the purview of arbitration. The relevant clause 2 in the arbitration agreement deals with the question of compensation and directs that the concerned engineer should decide this question and his decision is final. The arbitration clause opens with the words "Unless otherwise provided". In view of this language, it is obvious from the decision of the Supreme Court in Vishwanath Sood v. Union of India and another , that the Arbitrator could not have gone into the merits of the levy of compensation by the engineer. In that view of the matter, the D.D.A. ought not to have requested the Arbitrator to include the said amount in the arbitration award. We are told by the counsel for the appellant/D.D.A. the Arbitrator was in fact informed that he could not go into the matter on merits. In any event, the D.D.A. committed a blunder in requesting. Arbitrator to formally include the above said amount as part of the award. Taking advantage of the said request, the contractor argued the question of levy on merits and obtained a decision from the Arbitrator in his favor.
5. We, therefore, find that the entire procedure adopted by both the parties was totally unwarranted. If the D.D.A. considered that it was entitled to the recovery of Rs. 5,69,473/- outside the arbitration, it could have taken such steps as it thought necessary instead of asking the Arbitrator to include the said amount in the award. The contractor was also wrong in taking advantage of the same and asking the Arbitrator to give a finding on the merits of the claim. The Arbitrator acted totally without jurisdiction in going into the said question and deleting the said item of counter claim for Rs. 5,69,473/- and holding that the contractor not liable for payment of compensation. That was not within the power of the Arbitrator. In view of the said unfortunate events, we have no option but to set aside that part of the award of the Arbitrator wherein he has gone into the merits of the decision of the Superintending Engineer and had come to the conclusion that the sum of Rs. 4,69,743/- was not payable by the contract. The validity of the levy of compensation is therefore taken out from the award.
6. It will, therefore, be for the D.D.A. to seek to recover the said amount of Rs. 5,69,743/- in whatever manner it is open to it and in case any such proceedings are taken, it will be open to the contractor to raise all defenses that may be open to him in law to contend that the levy is bad. In case, the D.D.A. seeks to recover the said amount of compensation from the contractor it will be open to the contractor to file a suit and raise all such contentions as he may deem it. We make it clear that the question of limitation will not be raised by either of the parties, in view of the above unfortunate procedure adopted by both parties.
7. Learned counsel for the appellant wanted to contend that the learned Arbitrator had not gone into the other objection filed by the D.D.A. in detail. We find from the grounds of appeal preferred by the D.D.A. that except for the question of compensation of Rs. 5,69,743/-, there is no specific ground in regard to any other ground mentioned in the objections.
8. In view of the absence of specific grounds in the ground of appeal, we are not inclined to permit the appellant/D.D.A. to rate up all other issues.
The appeal fails and is dismissed except to the extent indicated above.
9. Appeal partly allowed.