Delhi District Court
Union Of India vs M/S Rama Contractor on 16 February, 2015
ID No.02401C0500922013
IN THE COURT OF SHRI DR. VIJAY KUMAR DAHIYA, ADDL.
DISTRICT JUDGE (CENTRAL07), TIS HAZARI COURTS : DELHI.
Suit No.56/2013
Union of India,
Through Executive Engineer,
M431, PWD, Govt. Of NCT of Delhi,
D2/1314, Kidwai Nagar (East)
New Delhi - 110 023. ............Petitioner
Versus
M/s Rama Contractor,
B155, Surya Nagar,
Ghaziabad (U.P.) ...........Respondent
Date of Institution : 28.03.2013
Date when the case reserved for order : 16.02.2015
Date of Order : 16.02.2015
O R D E R
1. By this order I shall dispose of the petition filed by the petitioner under section 34 of the Arbitration and Conciliation Act, 1996 (the Act) for setting aside the impugned award dated 17.11.2012 (the award) passed by Sh. Prem Prakash, Ld. Sole Arbitrator, the respondent no.2 in favour of respondent Pankaj Jain.
2. Brief facts relevant for the disposal of the present petition are that the claimant/respondent was awarded a contract in the year 2006 for 1/12 Union of India vs. Rama Contractor construction of 84 Lawyers Chambers through letter dated 23.03.2006. The estimated cost of the contract was Rs.3,27,94,368/ and the tender cost of construction was Rs.4,13,40,646/. The time allowed for construction of the work was 21 months which was started from 02.04.2006 and to be completed till 01.01.2008. But the actual work was completed on 29.09.2007. The work was to commence from 10th day of issuance of letter dated 23.03.2006 and the respondent/claimant was also supposed to file performance guarantee within 07 days. Thereafter at the request of claimant/respondent, the petitioner requested Executive Engineer through letter dated 20.04.2006 to provide electricity connection to the respondent. There was a delay in the work w.e.f. 02.04.2006 to 30.04.2006 on account of stone laying ceremony. But the claimant/respondent was obliged to make the good for delay as per clause 5.2 of the agreement. The bills were filed by the respondent and paid on 31.03.2008 but thereafter the respondent/claimant raised a dispute and matter was referred to the sole arbitrator. The Ld. Arbitrator passed the award. Being aggrieved by the impugned award, the petitioner filed the present petition.
3. Notice to this petition was issued to the respondent who filed reply stating therein that all the objections as raised in this petition are outside the purview of 34 of Arbitration and Conciliation Act and petitioner want this court to reapprise oral and documentary evidence led by the parties, which is impermissible in law. The award is not in conflict with the public policy of India. Petitioner got the work executed of the value of Rs.5,38,83,989/ as per the bill prepared by the 2/12 Union of India vs. Rama Contractor petitioner. Thus the date of commencing of the work was 01.05.2006 as the petition himself admitted that the site could not be handed over to the respondent/claimant on or before 01.05.2006. The claim no.1 has been rightly decided in favour of the respondent/claimant. Claim no.3 was revised by the claimant/respondent to the tune of Rs. 3,30,025.79. Item no.1 of the claim no.3 has been rightly decided by the Ld. Arbitrator but so called objections has no basis at all and deserved to be rejected. In the same manner, amount under item no.8 and 19 of claim no.3 has been rightly awarded and the objections made by the petitioner are frivolous and deserved to be rejected. The claim no.4 and 5 whereby interest has been awarded to the claimant/respondent are rightly decided by the Ld.Arbitrator. The arbitrator has awarded interest as per the mandate of law laid down by the superior court. These objections are frivolous and deserves to be rejected.
4. Claimant/respondent filed the claim before the arbitrator and he was awarded contract of construction of 84 Lawyers Chambers and Ld. Executive Engineer through letter dated 10.04.2006 informed that the date of start of the work was 02.04.2006 and the site was available to the respondent on 01.05.2006 as pointed out in the letter dated 05.05.2006 (Ex.C5) by the Executive Engineer. The Executive Engineer through letter dated 11.05.2006 Ex. C6 informed the claimant/respondent that boundary wall coming in the alignment of the lawyer's chamber has been dismantled and debris removed on 09.05.2006. Therefore, the claimant is entitled for bonus in terms of 3/12 Union of India vs. Rama Contractor clause 2 A. The claimant submitted the rates analysis in respect of the following items namely:
"1) Marble stone slab 16 mm thick in risers of steps skirting dado & pillars laid on 12 mm average thick cement mortar 1:3 (1 cement: 3 coarse sand) jointed with grey cement slurry including rubbing and polishing complete.
a) Udaipur green marble 16 mm thick."
"2) Marble stone flooring with 16 mm thick marble stone over 20 mm (average) thick bases of cement mortar 1:4 (1 cement: 4 coarse sand) laid & jointed with grey cement slurry including polishing complete.
a) Udaipur green marble 16 mm thick."
5. The petitioner during the course of execution of the work and even after completion did not dispute the rates analysis in respect of items No.1(a) and 2(a). The items were accordingly executed to the satisfaction of petitioner. The quantum of work executed was measured by the petitioner. It is stated that there is no disputed with regard to the quantum of work executed and payable by the petitioner to the claimant/respondent. However, the petitioner long after completion of the work made the payment at the reduced rates. It is stated that as the petitioner required the 'claimant to execute the further extra items, the claimant/respondent accordingly submitted the rate analysis in respect of various items with the letter dated 15.05.2007. The respondent long after completion of the work reduced the rates from the payable rates as shown in the claim statement. The petitioner during the course of execution of the work and even after 4/12 Union of India vs. Rama Contractor completion did not dispute the rates analysis in respect of these items.
The items were accordingly executed to the satisfaction of petitioner. In respect of extra items No.23 & 24, the rates analysis were submitted through the letter dated 28.06.2007. The respondent during the course of execution of the work and even after completion did not disputed the rates analysis in respect of items No.23 & 24. The items were accordingly executed to the satisfaction of petitioner. The claimant stated that the petitioner during the course of execution of the work required further extra items to be executed. Accordingly, the rates analysis in respect of the items No.5(a), 5(b), 8 & 19, as detailed in claim statement, were submitted by the claimant. The petitioner during the course of execution of the work even after completion did not disputed the rates analysis respect of these items. The claimant/respondent further submitted that in respect of the items i.e. item no.17.1 (deviated items) the agreement quantity deviated considerably. In the agreement the quantity provided is 376 Kg. whereas the petitioner got executed the quantity of 5934.83 kg. The agreement provides for deviation limit of 30% after adding the quantity of deviation limit, the claimant/respondent was required to execute the quantity of 488.80 kg (Agreement Quantity + Deviated Quantity) at the agreement rates. The actual quantity executed and recored in the MB is 5934.83 Kg. As the quantity started deviating, the claimant with the letter dated 4.8.2007 (Exhibit C12) submitted the rate analysis of Rs.302.97 per kg. The claimant is entitled for the payment at the rate submitted by them.
6. The petitioner/nonclaimant filed counter claim statement and 5/12 Union of India vs. Rama Contractor submitted that the date of agreement was 02.04.2006 and date of completion as per agreement was 01.01.2008 and the actual date of completion was 29.09.2007. The petitioner allowed all preconstructional and mobilization activities to the claimant immediately and also started the work. There were some delays due to hindrances in the work between 02.04.2006 to 30.04.2006 but the claimant/respondent was under obligation to make good the delay as per clause5.02, P19 of the agreement. The claimant never extended the stipulated the date of completion i.e., 01.01.2008. So far as the claim no.3 is concerned, it is further stated in the counterclaim that a claim of Rs.10,00,940/ for less payment in 13 extra items. The claim under clause 3 was revised by the claimant to the tune of Rs. 3,03,025.89 paise. The claimant did not raise any objection at the time of calculation. Therefore, the contentions of the claimant/respondent is not correct. The petitioner has sanctioned extra/substituted/deviated items and the amount has been paid to the claimant. Analysis of rates given to the claimant/respondent was not acceptable to the petitioner and the same were not payable. Claimant/respondent accepted the payment as full and final settlement towards the work done by him. Therefore, after payment of bill as full and final claimant is estopped from raising any further claim. The claimant has claimed for item no.1 under claim 3 @ Rs. 1653.05/sqm for marble stone slab 16mm in Udaipur green marble quantity executed in 18.32 sqm and the petitioner has sanctioned an amount of Rs.869.79 per sqm. Labour charges for item of 30 mm thick marble skirting work for item no.2 of claim 3 marble stone flooring with 16mm thick of Udaipur green 6/12 Union of India vs. Rama Contractor marble was for Rs.269.38 sqm for which the rate Rs.918.66 per sqm was sanctioned. Other items under claim no.3 were paid as per law. For item no.8 of claim no.3 for stone work for wall lining was sanctioned by the petitioner for Rs.160.35 per sqm. For item No.19 of claim no.3 for quantity of 7675.04 kg was sanctioned by the petitioner for Rs.11.10 per kg. The claim No.4 and 5 are for interest for which claimant is not entitled. The Ld. Arbitrator after going through claim and counter claim statement of the petitioner passed the impugned award and the petitioner has filed petition against the impugned award passed by the sole Arbitrator on the following grounds:
i) that the award passed by the Ld. Arbitrator is beyond the terms of the submissions of reference to the Arbitrator. The matter is beyond the scope of jurisdiction of the Arbitrator. That the award passed by the Ld. Arbitrator is against the law of India and the public policy of India.
ii) that the claim no.1 regarding payment of bonus of Rs.4,79,066/ is against the terms & conditions of contract. The work was to be completed within 21 months which was to be reckoned in terms of letter dated 23.03.2006. The date of contract was never extended and it was 02.04.2006, the date when the contract was sanctioned in favor of the claimant and the claim of the claimant was rightly counted for a period of 03 months 01 day, therefore, the finding of Ld.Arbitrator is illegal.
iii) so far as the item no.1 under claim no.3 is concerned, the same has been wrongly considered by the Ld. Arbitrator by applying wrong principles of law.
7/12 Union of India vs. Rama Contractor
iv) that the claimant/respondent under item 8 of claim no.3 has been wrongly assessed by the Ld. Arbitrator. The petitioner sanctioned @ Rs.160/ per sqm for doing stone work which has been assessed by the Ld.Arbitrator @ 340 sqm, on the basis of the arbitratory criteria for fixing the same.
v) that the Ld. Arbitrator has wrongly assessed the claim regarding item no.19 of claim no.3 holding that the rate of 50 micron powder coating as @ Rs.14.44 per kg.
vi) that the Ld. Arbitrator was wrongly assessed claim no.s4 and 5 as claimed.
7. In response to the notice, the respondent no. 2 filed the arbitration record. I have heard the ld. Counsels for the parties and have perused the material available on record including the arbitration record and have considered rival contentions made on behalf of the parties .
8. It may be noted that the claim no.1 has been determined by the Ld. Arbitrator in favor of the claimant/respondent and it has been observed that work started w.e.f., 01.05.2006 and the applicant/respondent is entitled for bonus for 04 months 01 day. The date of start of work was stipulated as 02.04.2006 or the date of handing over of worksite in terms of the letter dated 10.04.2006 issued by the petitioner. The contention of the petitioner is that the date of completion was never extended beyond 02.04.2006. The stipulated period for completion of work was 21 months. The only contentions of the petitioner is that date of start of work is 02.04.2006 and it was never extended, so claimant is not entitled for bonus. But the date of start is 01.05.2006 and even the letter issued by the 8/12 Union of India vs. Rama Contractor Executive Engineer of petitioner on 12.11.2007 depicts the stipulated date of start work as 01.05.2006 and stipulated date of completion as 31.01.2008. Therefore, admittedly the work was commenced on 01.05.2008 and it was completed well before the date fixed for completion by 4 months & 1 day, so the respondent/claimant has been rightly held entitled to this amount of bonus by the Ld. Arbitrator. Otherwise also, this is also a finding of the fact and this court is not supposed to interfere when the findings of the facts unless it is totally perverse, in addition to it, this objection is not falling within the purview of section 34 of Arbitration & Conciliation Act.
9. So far as objection regarding item no.1 of claim no. 3 regarding marble 16 mm thick in risers with Udaipur green marble quantity executed for 18.32 sqm is concerned, it may be noted that the petitioner/non claimant sanctioned the bill @ Rs.869.79 per sqm. The Ld. Arbitrator rightly determined rate of this item no.1 in terms of the agreement and awarded the rate @ Rs.1,284.13 per sqm of this item. This finding of fact has also been recorded by the Ld.Arbitrator after appreciating the oral and documentary evidence and these finding of fact cannot be interfered while dealing with the objection under section 34 of Arbitration & Conciliation Act.
10. As far as the objection, regarding item no.8 and 19 under claim no.3 of the award is concerned, it is relevant to note that under item no.8 of claim no.3, the claimant had demanded the rate of stone work for wall running etc (veneer in small sizes/patti windows/doors sills/lintals/Jambs etc) at the rate of Rs. 641.41/ per sq. mtr. but petitioner sanctioned the rate for this item at the rate of Rs. 160.36/ 9/12 Union of India vs. Rama Contractor per sq. mtr. But ld. Arbirator neither agreed with 100% increase in the cost of this items claimed by the claimant/respondent nor with the increase of 25% as sanctioned by the petitioner, therefore Ld. Arbitrator assessed the rate as Rs. 340/ per sq mtr., which cannot be termed as unreasonable in the facts and circumstance of the present case. Therefore, the criteria by the Ld. Arbitrator for fixing this rate of item no.8 of claim no.3 is finding of fact which cannot be interfered under section 34 of the Arbitration & Conciliation Act.
11. In the same manner, Ld. Arbitrator under item no.19 of claim no.3 has calculated the rate of Anodising AC15 @ Rs.32/kg and calculated rate of anodising AC25 @ Rs.20/Kg and further calculated rate of 50 micron powder coating @ Rs.14.44/Kg. The fixing of rate of item no.19 of claim no.3 by the Ld. Arbitrator after appreciating the oral and documentary evidence, therefore, is finding of fact, which cannot be interfered by this court under section 34 of the Arbitration & Conciliation Act.
12. As far as the objection regarding raising of disputes by the claimant after getting payment of bills is concerned, the same is liable to be rejected as the claimant/respondent was entitled to raise disputed after payment of bills to in terms of law laid down by Hon'ble Supreme Court in civil appeal no. 1735/2006 titled Durga Charan Rautray Vs. State of Orissa.
13. So far as other objections are concerned, they are formal in nature that arbitrator has acted beyond the scope of his authority and award is against the public policy and law of India but Ld. Counsel for the plaintiff failed to point out any ground as to how the award is against 10/12 Union of India vs. Rama Contractor Law of India as well as public policy of India. Therefore, these objections deserve to be rejected and are hereby rejected.
14. It has been contended on behalf of the petitioner that, no interest upon the payment was to be given. The arbitrator, therefore, has ignored the mandate of Superior Court that terms and conditions of the contract cannot be ignored by the arbitrator while adjudicating upon the case. It is further contended that the relevant clause of the agreement dealing with the payment to be made to the respondent do not incorporate any clause for payment of any interest, the arbitrator has reached beyond his jurisdiction and awarded the interest vide impugned award. On the other hand, ld counsel for the respondent has stated that there was no bar for awarding interest as per the mandate of the superior courts which empower the arbitrator to award interest.
15. I have gone through the agreement, which deals with the terms and conditions of the payment to be made to the respondent herein by the petitioner. From the bare perusal of the agreement, it is clear that there was no specific bar for awarding any interest upon the delayed payment if such eventually ever arose. in Sree Kamatchi Amman Constructions Vs. Divisional Railways Manager (works) (2010) 8 SCC 767, the apex court held that arbitrator is empowered to award interest for the prereference period, pendentelite and future period till the payment. So is the ratio of case law relied upon by the respondent. The respondent/claimant was forced to undergo several losses on account of delayed payments. The arbitrator was well within his power and jurisdiction to award interest and so was the mandate of superior court also. However, whether the quantum of interest awarded is fair 11/12 Union of India vs. Rama Contractor or not, is a domain in which this court cannot interfere.
16. From the above discussions, I find no infirmity in the impugned award.
Therefore, the present suit is devoid of merits and hence, dismissed.
17. No order as to cost.
18. File be consigned to Record Room.
ANNOUNCED IN THE OPEN COURT On 16th Day of February, 2015.
(DR. VIJAY KUMAR DAHIYA)
ADJ(CENTRAL07)/DELHI
16.02.2015
12/12 Union of India vs. Rama Contractor