Delhi High Court
Bhartiya Construction Co. vs Chairman, Delhi Development Authority on 8 August, 1997
Equivalent citations: 1997VAD(DELHI)883, 1997(2)ARBLR369(DELHI), 68(1997)DLT520, 1997(42)DRJ768
Author: K. Ramamoorthy
Bench: K. Ramamoorthy
JUDGMENT K. Ramamoorthy, J.
(1) The Claimant M/s Bhartiya Construction Co. (hereinafter called as the Contractor) was entrusted with the work of construction of 504 S.F.S. Cat.II Houses at Sukh Dev Vihar by the Delhi Development Authority (hereinafter called as the Objector). The disputes arose between the parties and they were referred to Mr. V.R. Vaish, arbitrator, who is a retired Director General of Cpwd to adjudicate upon the disputes by Engineer Member of the Objector vide letter dated 10.01.1985. The arbitrator passed the award on 31.10.1988.
(2) The period given for completing the construction was 12 months. The date fixed for commencement of the work was 13.06.1982. To begin with, site was handed over to the Contractor on 12.09.1982. It was noticed by the arbitrator that "piles of the last block and grade beam were completed and handed over for further work to the Claimant only on 08.12.1983. This mean about one and half years after the date of start as per the contract." Besides the above, the work was stopped in or about the quarter of 1984 and the Claimant was directed to resume the work on 23.01.1984 on the specific understanding that the Dda would enter into fresh contract. That was not done. Action was sought to be taken by the Objector under Clause 12 and the contractor resumed the work and it was completed.
(3) The objector has challenged the award with reference to Claim No.5 and counter claims 2, 3, 4, 6 and 7.
(4) Mr. V.K. Sharma, learned counsel for the objector and Mr. D.P. Sharma learned counsel for the Contractor argued the matter with skill and ability having complete grip on the facts and they had rendered great assistance to me in coming to a decision in this case.
(5) Mr. V.K. Sharma, learned counsel for the Objector formulated the following; (i) the award is vague, details of the figures are not given as to how the percentage has been fixed by the learned arbitrator for the value of the work (ii) the award is contrary to the terms of the contract.
(6) Per contra the learned counsel for the Contractor Mr. D.P. Sharma submitted that the arbitrator is the retired Director General of Cpwd and well qualified Engineer and he had taken into account all aspects of the case as an expert in the field and has given reasons for rejecting the claims of the Contractor and awarding a few claims and rejecting the counter claims of the DDA. On the question of award being made rule of the court, Mr. D.P. Sharma learned counsel for the Contractor contended that such an award is not void and it is in accordance with law and it cannot be found fault by the Objector.
(7) Learned counsel Mr. D.P. Sharma relied upon the decision of Division Bench of this Court reported in FAO(os) 157 of 1994 Delhi Development Authority Vs. M/s Hans Construction Co. wherein the Division Bench dealt with such a contention and observed in the following manner:
Even so, we shall go into claims 12 and 7. So far as claim number 12 is concerned, the learned counsel for appellant raised a contention that the Arbitrator had not awarded any specific amount under this claim but had left the question of computation or calculation to be made by the respondent. This, by itself, in our opinion, does not warrant interference. The arbitrator had given a finding that the respondent was entitled to 10% over the work done after 03.07.83 excluding the cost of the materials issued by the department and actually used in the work done after 02.07.83. This principle was laid down as a guide for computation. There is no absolute rule that the award must specify the actual amount payable to the claimant. If the award does not specify the actual amount, the award cannot be said to be not a reasoned award. As long as the method of computation or arriving at the actual is indicated, the award cannot be treated as an award without reasons. Apart from that, under clause 10 of the agreement the Arbitrator has held that the delay in the supply of cement, Gi pipes and steel are minor delays in this case and no compensation would be admissible on that account. However, the delay in the supply of shutters is a main delay of almost 11 months and this would certainly have affected the work of the contractor. In any case the delay in the issue of the structural drawings of various floors from 04.07.82 to 25.04.83 would result in a major setback in the progress of the work. Due to delays in drawings the arbitrator has held that the claimant is entitled to 10% over the value of work done beyond 03.03.83, excluding the cost of materials issued by the department and actually used in the work done after 02.07.83. We are therefore, of the view that the objections against the award under claim No. 12 are baseless.
He also referred to the judgment of the Calcutta High Court reported in ÿU.M Chowdhury Vs. Jiban Krishna Air 1922 Cal. 447. The Calcutta High Court held "where the awards did not specify the amounts, which had to be paid is not sufficient ground for remitting the awards, if the arbitrator has given the rule for calculating the amounts to be paid". The learned counsel also relied upon the judgment of the Mian Nathu and another Vs. Abdul Ghani Air 1930 Lahore 22 wherein it was held "the mere fact that an amount is not actually ascertained or calculated by the arbnitrators, is not a sufficient justification for holding the award uncertain, for the principle does apply that, that is sufficiently certain, which can be made certain". Learned counsel also referred to the decision of the Calcutta High Court in Manindra Nath Mandal and Ors Vs. Mahananda Roy and ors. 15 Calcutta Law Journal 360 wherein it is held " that the award was in accordance with law if the arbitrator had given rules for calculating the amount for giving money to pay without stating the result of such calculation the award is sufficient the certain on the principle that, that is sufficient certain which can be made certain. The same principle has been followed by the Calcutta High Court in ÿUnion of India Vs. M.L. Dalmiya & Co. Ltd. . In the light of these principles the arguments of Mr. D.P. Sharma is correct and I find that the award is not vague.
(8) Before going through the merits of the claims of the parties I would also like to refer to the authorities cited by the learned counsel about the principle to be applied in this case. Regarding the assessment of compensation of clause 2 argument by Mr. V.K. Sharma for the objector was that and that is within the province of the objector and once the compensation is determined under clause 2 that cannot be the subject matter of adjudication by the arbitrator. Mr. V.K. Sharma, learned counsel for the DDA/Objector relied upon the judgment of Division Bench of this Court reported in D.D.A. Vs. Sudhir Brothers . The Division Bench dealt with the levy of Rs.5,69,473.00 towards compensation on the basis of the Engineer's decision under clause 2 of the contract. Such a decision was made on 15.12.1994. There was no need for the Dda to ask the arbitrator to include in the award. The Division Bench proceeded to say that the Dda should apply before the arbitrator to have the said amount included in the award. That was how the arbitrator came to decide this question. The Division Bench held: We, find that the entire procedure adopted by both the parties was totally unwarranted. If the Dda considered that it was entitled to the recovery of Rs. 5,69,473.00 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. 5,69,743.00 was not payable by the contractor. The validity of the levy of compensation is therefore taken out from the award.
ITwill, therefore, be for the Dda 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 opened to him in law to contend that the levy is bad. In case, the Dda 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 fit. 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.
It may be noticed that the Division Bench had decided on the facts of that case and the parties did not argue before the Division Bench on the scope of the power of the Engineer levying compensation within the meaning of clause 2 of the contract. Therefore, the Division Bench does not lay down any ratio which could be followed and applied to the facts and circumstances of this case. Mr. V.K. Sharma learned counsel for the Objector relied upon the judgment of the Supreme Court reported in The New India Civil Erectors (P) Ltd. Vs., Oil & Natural Gas Corporation Jt 1997 (2) S.C 633. In the case before the Supreme Court the Ongc had entrusted the work to the Appellant. The Appellant commenced construction but could not complete even in the extended period andtherefore, the Ongc terminated the contract and got the work done through another agency. Disputes having arisen between the parties were referred for a decision of the two arbitrators. The arbitrators decided that the Appellant was entitled to a net amount of Rs. 67,82,620.00 . The Ongc filed the objections which were rejected by the Single Judge of the Bombay High Court. That decision of the Single Judge was partly reversed by the Division Bench of the Bombay High Court. The Ongc challenged the the judgment of the Division Bench of the Bombay High Court in respect of award on claims 1, 4, 6, 9 and 13 in the Supreme Court. For the purpose of present discussion what is relevant is only the decision on claim No. 9. Dealing with this the Supreme Court held: CLAIMNo. 9: The appellant claimed an amount of Rs. 32,21,099.89 under this head, against which the arbitrators have awarded a sum of Rs. 16,31,425.00 . The above claim was made on account of escalation in the cost of construction during the period subsequent to the expiry of the original contract period. The appellant's claim on this account was resisted by the respondent-corporation with reference to and on the basis of the stipulation in the corporations' acceptance letter dated 10th January, 1985 which stated clearly that " the above price is firm and is not subject to any escalation under whatsoever ground till the completion of the work". The Division Bench has held, and in our opinion rightly, that in the face of the said express stipulation between the parties, the appellant could not have claimed any amount on account of escalation in the cost of construction carried on by him after the expiry of the original contract period. The aforesaid stipulation provides clearly that there shall be no escalation on any ground whatsoever and the said prohibition is effective till the completion of the work. The learned arbitrators, could not therefore have awarded any amount on the ground that the appellant must have incurred extra expense in carrying out the construction after the expiry of the original contract period. The aforesaid stipulation between the arbitrators. We are of the opinion that the learned Single Judge was not right in to the original contract period and does not operate thereafter. Merely because the time was made the essence of the contract and the work was contemplated to be completed within 15 months, it does not follow that the aforesaid stipulation was confined to the original contract period. This is not a case of the arbitrators construing the agreement. It is a clear case of the arbitrators acting contrary to the specific stipulation/condition contained in the agreement between the parties. We, therefore, affirm the decision of the Division Bench on this count as well claim No.9.
(9) What is to be noticed is that the aforesaid stipulation provides clearly that there shall be no escalation on any ground whatsoever till the completion of the work. Therefore, the decision in each case would depend upon the terms and conditions of the contract.
(10) Mr. V.K. Sharma learned counsel for the Objector relied upon the judgment reported in ÿIshwar Singh & Sons Vs. D.D.A. 1994 Ii Ad (Delhi) 477 where My Lord Mr. Justice Vijender Jain held that once the petitioner had agreed to have a specific clause like one in this contract he will not be entitled to claim of damages and the arbitrator would be guilty of misconduct if contrary to the specific provision of the contract any sum is awarded under the head. The learned Judge referred to clause 1 of the Specifications and Conditions which is as follows: The Contractor must get acquainted with the proposed site for the works and study specification and conditions carefully before tendering. The work shall be executed as per programme approved by the Engineer-in-charge. If part of site is not available for any reason or there is some unavoidable delay in supply of material stipulated by the Department, the programme of construction shall be modified accordingly and the contractor shall have no claim for any extras of compensation on this account.
The learned Judge referred to the judgment reported in Government of Kerala and another Vs. V.P. Jolly , a decision of this court in Suit No. 2185 of 1987 decided on 20th July 1990 in Continental Construction Co. Ltd. Vs. State of Madhya Pradesh . The learned Judge distinguished the judgment of the Supreme Court in Food Corporation of India Vs. Joginderpal Mohinderpal and Anr. . The learned Judge also referred to clause 10 of the agreement which is in the following terms: "Stores supplied by Delhi Development Authority. If the specifications or schedule of items provided for the use of any special materials to be supplied from Engineer-in-Charge's stores or it is required that the contractor shall use certain stores to be provided by the Engineer-in-Charge as shown in the schedule of materials hereto annexed the contractor shall be bound to procure and shall be supplied such materials and stores as are from time to time required to be used by him or the purposes of the contractor only and the value of the full quantity of materials and stores so supplied at the rates or deducted from any sums then due, or thereafter to become due to the contractor under the contract, or proceeds of sale thereof if the same is held in Government securities, the same or a sufficient portion thereof being supplied to the contractor shall remain the absolute property of Delhi Development Authority and shall not be at all times open to inspection by the Engineer-in-Charge at a place directed by him, by a notice in writing shall not be entitled to return any such materials unless with such consent, and shall have no claim for compensation on account of any such materials. Provided that the contractor shall in no case be entitled to any compensation or damages on account of any delay in supply or non-supply thereof all or any such materials and stores. Provided further that the Delhi Development Authority within the Scheduled time for completion of the work or 50 per cent thereof (scheduled time plus 6 months if the time of completion of the work exceeds 12 months) but if a part only of the materials has been supplied within the aforesaid period then the contractor shall be bound to do so much of the work as may be possible with the materials and stores supplied in the aforesaid period. For the completion of the rest of the work the contractor shall be entitled to such extension of time as may be determined by the Engineer-in- Charge whose decision in this regard shall be final".
The learned Judge ultimately rested his decision on the premise that the agreement specifically prohibits the claims of the damages on account of the delay. My Lord Mr. Justice Vijender Jain had occasion to consider this case reported in Sunder Lal Khatri Vs. Delhi Development Authority in 1994 Vol. 56 page 21. In this case the learned Judge noticed the fact in the following words:
"Assailing the Award under Claim Nos 3 and 4, Ms. Salwan has argued that the Arbitrator cannot in law award any claim under Clause-10C of the Agreement as that would be squarely hit by Clause -2 of the Agreement. In the objections filed by the respondent the finding of the Arbitrator on this claim has been assailed stating inter alia that the bulk of flats had been completed during 1986 and the rectification of the defects was done upto January 1988 and the Arbitrator has failed to appreciate that if the defects had been got rectified by the respondent, respondent was entitled to claim for the amount spent by it for carrying out of the rectification of the defects and the Arbitrator has failed to consider the said materials and documents and, therefore, the award is vitiated. However, in `Ground-J' of the objections application, the stand of the respondent on claim under Clause -10C of the agreement is as under:-
"The award in any case is contrary to Clause -3 whereunder the decision of the Engineer-in-Charge that the petitioner failed to execute the work within the stipulated time is final and binding".
Learned counsel for the respondent has argued that the Superintending Engineer has determined compensation in terms of Clause -2 of the Agreement on account of work not done in the stipulated period of contract, the adjudication of compensation by Superintending Engineer, whose decision is final and binding, therefore, arbitrator had no jurisdiction to award any claim under Clause -10C of the agreement. In support of her arguments, she has cited the case of R.S. Rana Vs. Dda 1993 (2) Alr 165 and M/s Bharat Furnishing Co. Vs. Dda & Anr 1991 (4) Delhi Lawyer 35. The submission urged before me by the learned counsel for the respondent on the face of it is devoid of any force. Clause -10C specifically provides that if during the progress of work the price of any material incorporated in the works, and/or wages of labour increases as direct result of law coming into force of any fresh law, or statutory rule or order shall according by varied. The only exception is that if in the opinion of Superintending Engineer (Whose decision shall be final and binding) delay in the execution of the contract is attributable to the contractor or within the control of the contractor. Whereas, Clause -2 provides that the time allowed for carrying out the work shall be strictly observed by the Contractor and shall be deemed to be essence of the contract and if the same is not done with due diligence the contractor shall be entitled to pay compensation fixed by Superintending Engineer, DDA".
The learned Judge referring to Ishwar Singh's case distinguished the case by stating that the sum awarded by the arbitrator is on account of the fact that the duration of the work was prolonged because of non-fulfillment of the obligation on the part of the respondent. The learned judge dealing with the argument on behalf of the Dda held: The respondent also relied on the case of Continental Construction Vs. State of Madhya Pradesh . While interpreting Clause 3.3.15 specifically in the case of Continental Construction Co. which prohibited any compensation to the contractor in the absence of contractor having submitted the claim in writing to the Engineer-in-Charge within one month of the cause of such claim occuring. The Supreme Court held that Arbitrator is not a conciliator and connote ignore the law or misapply it in order to do what he thinks is just and reasonable. In the case before me there is no such clause of the Agreement which prohibits the award of compensation on account of delay attributable on the part of the respondent.
The learned Judge proceeded to observe:
To make good his proposition, he relied upon the case of M/s Salwan Construction Co. Vs. Uoi Ilr 1977 (2) Delhi 748 in which it was held: "THEbuilders' claim was that the Government was in breach of the contract. They were entitled to stop the work. Instead they went on with the work and did not treat it as a repudiation of the contract. The measure of damages is that loss of profit arising out of the reduced profitability or added expenses of the work carried out and completed by the builders. Where the contractor treats the breach as partial and continues the work, the most usual circumstances which give rise to claims are delay in giving the contractor possession of the site or in the supply of drawings, or suspension of the work caused by some act or omission of the employer and a consequent increase of expenses in the performance of the works; and the contractor may be able to recover damages delay caused by the employer, notwithstanding that an extension of time for completion has been granted in respect of such delay".
I shall have to deal with this case again when I consider the scope of the jurisdiction of this court under Section 30 of the Arbitration Act, 1940.
(11) The learned counsel for the Contractor Mr. D.P. Sharma relied upon the passage in Hudson's Building and Engineering Contracts. tenth Edition page 645. The opinion of the author is given in the illustrations in the following manner:
(1)A contract provided that "in the event of any alterations......being required, the engineer shall allow such an extension of time as he shall think adequate". Extra works were ordered, but no reference was made to extension of time. After the contract completion date, the architect, for the first time, deducted penalties from the sum due on an interim certificate, and thereafter continued to do so. Later still, he ordered further extra works, again without reference to extension of time. The contractors sued to recover the deducted penalties. Held, that even if the failure to deduct until the first deduction amounted to an extension of time up to that date, it was too late, since the power should have been exercised at the time of ordering the extras, and the contractors could recover: Anderson Vs. Tuapeka County Council (1900).
2)A contract provided that "it shall be lawful for the engineer....... to grant from time to time and at any time or times...... such extension of time for completion....... and that either prospectively or retrospectively, and to assign such other time or times for completion as to him may appear reasonable". The engineer's decision under this clause was to be final. The contractor completed in July, and in November the engineer granted an extension of time till February, and certified liquidated damages as due accordingly, Held, on the construction of the contract as a whole, and having regard to the words "to assign such other time...... for completion, the contract contemplated exercise of the power within a reasonable time of the cause of delay having ceased to operate, the exercise of the power came too late, and the liquidated damages could not be recovered by the employer: Miller Vs. London Country Council (1934).
Bearing in mind the principle, I shall now proceed to deal with the award of the Arbitrator.
(12) On Claim No. 5, the Claimant has claimed revision for the rates for the work to be executed in terms of market rate of to days rates accepted by Dda after 1983 for similar type of work. The arbitrator had directed the payment at the rate of 10% over the agreement with reference to the work done in 1983 and 35% over the scheduled rates with reference to the work done in 1986. In the objection petition one would expect the Dda to mention in great detail the nature of the work entrusted to the Contractor, the date of commencement of the work on what date site was handed over to the Contractor, if there was any delay, what was the cause for the delay, if there was any prolongation the period, how did it occur and when was the construction completed by the contractor and what was the payment made on the basis of the bill prepared by the Dda and how the Dda was justified in objecting to the award with reference to particular facts. General allegations are made in the objection petition challenging the award. The objection is in the following terms:
That the finding of the Arbitrator with respect to Claim No. 5 is erroneous on the face of it and errors of judgment are apparent on the face of it. The claim before the Arbitrator under claim No.5 was as follows: "Initial claim claimed revision of the rates for the work to be executed in terms of market rate of today's rate accepted by Dda after 1983 for similar type of work which was later on specified for a sum of Rs. 45 lakhs and was later on modified to Rs. 75 lakhs and as such under Claim No.5 the contractor claimed a sum of Rs. 75 lakhs on account of difference in market rates.
However, Arbitrator has given a vague and evasive award in respect of the said claim and has simply directed respondent No.1 to make payment to the claimant after 13.6.83, 10% over the agreement amount and for 16 additional dwelling units in blocks 34, 36, 37 and 38 after 01.02.86, 35% extra rate over the agreement. One cannot find from the said award as to how much amount the arbitrator has awarded. Furthermore, the contractor under the said Claim claimed increase in rates after 1983, whereas the arbitrator has exceeded his jurisdiction by awarding increase in rates after 13.6.83, that means that what was not even prayed for by the contractor, has been awarded by the arbitrator, which clearly shows the keen interest of the arbitrator in the contract.
IT is further submitted that the finding of the arbitrator with respect to claim No.5 are perverse on the face of it as the learned arbitrator had only held while discussing he issues of delay that there was delay with respect to handing over of the first block of initial three months and further delays were made attributable to the contractor, but the arbitrator only on account of initial delay of three months period has awarded the difference in rates from 13.06.83, while completely ignoring this aspect that the initial delay of three months cannot give license to the contractor to delay the work unreasonably for a sufficiently long period.
The arbitrator while awarding damages on account of delay in handing over the site has acted contrary to the terms of the agreement as, as per the specifications of Cpwd, the contractor was required to acquaint with the site and study the specifications and conditions carefully before tendering. It was further agreed that the work will be executed as per the programme approved by the Engineer in charge, but if a part is not handed over and if there is delay in handing over the part the programme shall be modified accordingly and the contractor shall not have any claim for extra or compensation on this account. In view of the said specific provisions in the agreement there was a clear cut bar in awarding any compensation on account of supplying the site in parts or on account of any delay in handing over the site and as such by awarding it the arbitrator has acted contrary to the terms and conditions between the parties and has misconducted himself and the entire proceedings.
The arbitrator has, in fact, ignored the material evidence which was placed on record that the contractor was not in a position to complete the work even on the site which were delivered to him in time and as such any delay in execution of the work on site which was available to the contractor could not be made attributable to the Department and as such merely because one of the two blocks were not given in time, the arbitrator had no authority or jurisdiction to award the increase in rates for the entire work which was being executed on other sites, which were delivered in time within the stipulated period of contract. By doing so, the Arbitrator has misconducted himself and the entire proceedings.
Furthermore, arbitrator has failed to draw rationale nexus between the amount awarded and the loss alleged to have been suffered. The arbitrator has failed to appreciate that no evidence was led by the contractor in this regard that the contractor had suffered any such loss. The award with respect to claim No.5 is otherwise vague, evasive and lacking in material particulars.
(13) The arbitrator who is an Engineer having experience in the field for several decades had taken into account all aspects of the matter and has given reasons for his conclusion. He had adverted to delay in eight phases and considered each one of them. The arbitrator held:
This claim is revised vide letter No. EM2 (80)83/Arbn/7838-41 dt. 22.07.85 from the Engineer Member Dda as following:
"Claimants have specified amount of Rs. 45 lakhs in respect of claim No.5 referred". Again the Engineer Member Dda in his letter No EM2(80)/83Arbn./12576-79 dt. 24.11.87 revised this claim as following:- "Claimant claims revision of the amount of their revised claim No.5 from Rs. 45 lakhs to Rs. 75 lakhs".
The case of the claimant is as following: There were several breaches of the contract by the respondent and this delayed the progress of work. Due to this prolongation of work there was considerable rise in cost of materials and labour. there had been fundamental breach of contract due to delay in handing over the site and there have been breaches of reciprocal promises which has resulted in the delay in the execution of the work. The claimant had, therefore, claimed that after the date of completion of the work he should be paid the market rate.
The case of the respondent is as following: Although there was initially some delay in handing over the site of the work, but the initial delay did not mean that the claimant had a right to delay the work indefinitely. The claimant has failed to give sufficient material to justify his claim for damages. Moreover, under clause 10 of the agreement it has been specifically provided that due to the delay in the supply of materials like cement etc. the claimant cannot claim any compensation as the specific clause says " shall in no case claim compensation". The parties had specifically agreed to this term and if there was any delay of more than 50% days in supply of materials as provided in the contract, the claimant could have refused to do the balance work but he continued to do the work and he has waived his right.
Following are the delays which have been brought out by the claimant in his submissions.
1.Delay in handing over site.
2.Delay in drawings and designs.
3.Delay in supply of cement, steel and other materials.
4.Hinderance due to delay in filling earth.
5.Delay in payment.
6.Delay in taking decisions -
A)For the construction of 16 flats, B)In supplying the list of the manufacturers of flush doors.
7.Change in specifications.
8.Delay in taking measurements.
The delays which have been pointed out by the claimant have been carefully examined by me in the light of the oral and written submissions of both the parties. My findings are as following:-
1.Delay in handing over site: There was delay in handing over of the site by the respondent. Although the work had been awarded to the claimnt, but the work of pile foundations for these buildings had not been started and the first block after providing the piles and casting of grade beams was handed over to the claimant only on 12.09.1982, although the date of start of work was 13.06.82. Piles of the last block and grade beam were completed and handed over for further work to the claimant only on 08.12.83. This means about 11 years after the date of start as per the agreement. This delay was a fundamental breach of the contract and the respondent is responsible for it.
2.Delay in issue of drawings and designs: The claimant has contended that the drawings/designs were not given to him till 3.8.84 and were handed over to him by 4/84. The case of the respondent is that all the drawings were given to him initially before the start of work. The statement of the claimant that these were not given to him till 4/84 is wrong as he could not have done work till 4/84 worth Rs. 51,33,347 without drawings and designs. The other important factor in this connection is that these houses which were given to the claimant for construction were exactly of the same design as were being constructed in the neighbourhood by another contractor. It cannot be believed that when drawings and designs were available to the neighbouring contractor, these could not be issued to the claimant. Moreover, the first letter written by the Claimant complaining about the non-receipt of designs is dated 15.5.83 (C32) and this also refers only to drawings/designs of water supply and sanitary works. This relates to external development. As such the claimant has failed to prove that the work was delayed due to non issue of drawings and designs.
3.Delay in supply of cement, steel and other materials: An examination of the cement and steel registers has shown that there was some delay in giving cement and steel and other materials, but there was no major delay.
4.Hinderance due to delay in filling of earth: The claimant in his letter dt. 17.11.82 (C17) has stated that he has started doing earth filling in the blocks. Moreover, in his letter dated 19.2.84 (C173) he has stated that he has completed filling of earth in 20 blocks. The claimant has failed to prove that there was any delay in the execution of the work due to the filling of earth.
5.Delay in payments: The payments have been made by the respondent according to the agreement rates and as per the extra and substituted items admissible under the agreement. The claimant had been demanding the market rates for the work done by him right from the beginning even for work done during the agreement period and certainly the respondent could not pay him the market rates. As such, the claimant has failed to establish that there was delay in making payments.
6.Delay in taking decisions A)16 Flats IT is true that there was considerable delay in allocating the work of 16 flats to the claimant. The work awarded to the claimant was for D.Us and 16 D.Us were left out because of high tension wires passing over it. After the high tension wires were removed, the respondent called fresh tenders for this work and in negotiations the claimant offered a rate lower than the lowest.
On verbal orders of Executive Engineer of the respondent, the claimant started the work on 23.10.84 on these 16 DUs on the understanding that a separate agreement will be signed. After the work reached the lintel level, the work was stopped by respondent. On 24.10.85, the respondent issued orders asking the claimant to do the work of 16 Addl. DUs under Clause 12 of the agreement. The Claimant sent a number of letters of protest to the respondent. The respondent, however, issued a notice on 3.2.86 to the claimant that action under clause 3 of the agreement will be taken if work on Additional 16 DUs is not completed in time. Under this pressure the claimant started the work under protest pending settlement of rate by arbitrator.
The respondent was not justified in pressing the claimant to do this work in 1985/86 under Clause 12, long after original period of completion was over.
b) Delay in supply of list of manufacturers of flush doors: The claimant had asked for the list of the manufacturers of flush doors only on 17.8.84 and it was supplied soon thereafter. As such, there was initial delay by the claimant itself in asking for this information and respondent cannot be blamed for the same.
7.Change in specifications There were some changes in the specifications, but these were well within the powers of the respondent as per the terms of the agreement. The claimant has failed to prove that due to chnges in specifications there was any delay in the execution of the work.
8.Delay in taking measurements: The claimant has failed to prove that there was any delay in the execution of the work due to delay in taking measurements.
Form the above it will be seen that there was delay of the respondent in handing over the initial site and also delay in the construction of 16 flats (within 2 blocks) which resulted in the delay in the completion of other 4 connected blocks.
After the various blocks were handed over to the claimant after completion of grade beams, the progress of the work of the claimant was very slow. This has been highlighted by the respondent in his various letters. In September 1982 blocks were handed over which meant 4 quarters on the ground floor and 8 quarters on the upper floors. Till 23.3.83, 13 blocks had been handed over which meant 26 quarters on the ground floor and more than 50 quarters on the upper floors. Taking into consideration the fact that no foundation work was to be done by the claimant because of the pile foundations, the work over the grade beams could start immediately after a particular block was handed over. The progress in these 13 blocks should have been quite substantial till 12.6.83, the date of completion as per the agreement. However, for the various bills that have been paid it is seen that the following payments had been made: No. of Bill Date of payment Gross bill Secured advance 1st R/A 12.11.1982 4,79,306.20 + 4,79,306.20 IInd R/A 18.12.1982 4,87,727.50 + 4,87,727.50 IIIR/A 21.01.1983 2,90,777.00 + 1,38,525.40 IVR/A 05.03.1983 2,54,528.00 - 13,526.25 VR/A 13.04.1983 3,72,257.00 - 35,402.75 VIR/A 13.05.1983 2,31,910.75 - 29,883.40 VIIR/A 18.06.1983 1,44,226.25 - 3,646.15 Form the above statement it will be seen that in the first 2 bills, paid in Nov. and Dec. only secured advance was given and work, if any, must have been negligible. Even in the 3rd bill the total value of the work done and paid was only Rs. 2,90,777 - 1,38,522 = Rs. 1,52,252.00 . This shows that from Sep. 82 till end of middle of Jan. 83 the total value of the work done was Rs. 1,52,252.00 only, although during this period he had progressively the following blocks:- Date Block No 12.09.1982 20 13.09.1982 21 21.10.1982 33 17.11.1982 22 18.12.1982 31 21.12.1982 32 Evening subsequent months the progress is slow as the total value of the work done till June/83 as reflected from the bills paid, is only Rs. 12,47,630. This is exclusive of the secured advance. This has also been highlighted in a number of letters written by the respondent to the claimant pointing out slow progress of work.
I, hold that there was fundamental breach on the part of the respondent due to the delay in handing over site and due to the delay in taking decision regarding 16 flats which resulted in stopping work in 4 other blocks. Therefore, the claimant is entitled to increase in rates based on the prevailing rates in Dec. 83, when the last block was handed over and he is also entitled to rates for the balance work on 01.02.86 of the 16 quarters and of 4 blocks on basis of the prevailing rates in Feb. 1986.
The claimant had initially asked that from 13.06.83, the date of completion/agreement he will be charging 115% over the 1977 Schedule of Rates as against the tender rate of 84% above the 1977 Schedule. Subsequently, he changed his stand and asked for market rates based on 1981 schedule of rates. The evidence produced regarding the rates by both the parties has been examined and I consider that for all the work that has been executed by the Claimant after 13.06.1983 he should be paid 10% over the agreement amount.
Form the total value of work done by the Claimant, the payment made for work done plus secured advance as in Vii R/A bill on 18.6.83 be deducted and on the balance gross amount 10% extra be paid. However, if rates for any extra items has been worked out on market rate value of those items be also deducted. Cost of material issued is not to be deducted for applying this percentage. For the balance total value of work done on 16 Add DUs and the quarters in block No 34A, 36, 37 and 38, after 1.2.86, 35% be added on the amount of agreement rates plus rate of extra items except those extra items which had been sanctioned on basis of market rates.
The arbitrator had also noticed as seen above about the stoppage of work by the Dda and directions issued to the Contractor to resume the work and how 60 dwelling units had to be left and how the Contractor was forced to complete the work on the basis of the power exercised by the Dda under Clause 12 of the agreement. The arbitrator being an Engineer had also considered the schedule of rates in 1977 and also the schedule of rates on the basis of which the work was given by the Dda to the other parties. The arbitrator called upon the Dda on 23.12.1993 to provide the list of work awarded during the period between 1983 to 1986 to show the schedule of rates adopted by the DDA. The list of awarded work is as follows: List Of Award Of Works 1. Name of work C/o 528, houses under Sfs Cat.III & Scatter sheds at Paschimpuri C-17 South of District Centre. Sub-Head C/0 96 houses under Sfs CAT.III & scooter shed group II. Estimated cost: 7611139.00 Accepted percentage 41.80% above Dsr 1981. Date of award-16.8.84 Agency M/s Hans Construction Co. Issue Rates Of MATERIALS: Cement Rs. 1370 Per Mt Tor steel Rs. 4750 Per Mt Mild Steel Rs. 4450 Per Mt C.I. Pipes a) 100 mm Rs.80.10/M b) 75 mm Rs.71.30/M c) 50 mm Rs.37.20/M G.I. Pipes a) 15 mm Rs.12.50/M b) 20 mm Rs.15.50/M 2. Name of work C/o 1200 Mig Houses Pocket GH-14 in the Zone G-17, at Paschim Vihar including water supply sanitary installations & internal development of land. Sub-Head C/o 128 Mig Houses Gr. III. Accepted percentage 51.23% above; Dsr 81. Date of award 2.5.85 Agency M/s Madan Construction Co. Issue Rates Of Materials Cement Rs. 1100.00 per Mt Tor Steel Rs. 5930.00 per Mt Mild steel Rs. 4450.00 per Mt G.I. Pipes a) 100 mm Rs. 80.10/M b) 75 mm Rs. 71.30/M c) 50 mm Rs. 37.20/M G.I. Pipes a) 15 mm Rs. 14.00/M b) 20 mm Rs. 17.50/M 3. Name of Work C/o 1140 Sfs houses under CAT.II at Paschimpuri GH- 13 Zone G-17 area including internal development. Sub Head 160 DU's Gr. Iii Agency M/s Anant Raj Agencies Accepted percent 55.55% above;DSR 1981 Date of award 25.11.1985 Issue Rates Of Materials Cement Rs. 1100.00 per Mt Tor Steel Rs. 6361.00 per Mt Mild steel Rs. 4450.00 per Mt G.I. Pipes a) 100 mm Rs. 80.10/M b) 75 mm Rs. 71.30/M c) 50 mm Rs. 37.20/M G.I. Pipes a) 15 mm Rs. 16.00/M b) 20 mm Rs. 20.00/M C.I. Pipes a) 150 mm Rs. 207/M Class La b) 200 mm Rs. 307/M Pvc Pipe 110 mm Rs. 40/M 4. Name of Work C/o Houses under Sfs at Sarita Vihar (Madanpur Khadar). Sub Head Group Iv Pocket A: C/o 112, Nos. Cat.III DU's 84 Nos CAT.II DUs 140 Nos. & Scooter garages building work including internal development internal water supply and sanitary installations etc. complete. Agency M/s Polo Singh & Co. Accepted % 48.98% above;DSR 1981 Date of award 27.09.1984 Issue Rates Of Materials Cement Rs. 1370.00 per Mt Tor Steel Rs. 64750- per Mt Mild steel Rs. 4450.00 per Mt G.I. Pipes a) 100 mm Rs. 80.10/M b) 75 mm Rs. 71.30/M c) 50 mm Rs. 37.20/M G.I. Pipes a) 15 mm Rs. 12.50/M b) 20 mm Rs. 15.50/M On the basis of the materials made available to him and also taking into account the delay on the part of the Dda the arbitrator had fixed 10% over the agreement amount for the work done in 1983 and for the balance of work done on 16 additional dwelling units on the quarters and block Nos 34A, 36, 37 and 38, 35% on the amount of agreement.
(14) In arriving at this conclusion on this claim the arbitrator had observed that there was fundamental breaches on the part of the Dda due to delay in handing over site and due to the delay in taking decision regarding 16 flats which resulted in stopping work in 4 other blocks. For the purpose of deciding this claim the delay which went to root of the matter was referred to by the arbitrator. The learned counsel for the Dda Mr. V.K. Sharma, at this stage made an attempt to show that the arbitrator had not given cogent reasons, according to him while deciding Counter claim No.3 at page 10 of the award the Arbitrator had stated in the following: A Swill be seen from my findings in case of claim No. 5 of the claimant, there have been delays on the part of both the parties.
FROMthis, Mr. V.K. Sharma contended that the arbitrator had now found that there had been delay on the part of both the sides and therefore, for the purpose of deciding claim No.5 in favour of the Claimant the arbitrator had found that delay was attributable only to the DDA. Learned counsel had not kept the difference maintained by the arbitrator in dealing with Claim No.5 and counter claim No.3. According to the arbitrator the delay that is mentioned by him in counter claim No.3 was only relevant for the purpose of considering that claim and while considering claim No.5, the arbitrator had to consider for the purpose of fixing the rates, the delay on the part of the DDA. Therefore, if we consider two observations of the arbitrator in their proper perspective the arbitrator could be seen to have maintained the difference under which he was making the observations. I do not find any contradiction in the reasoning given by the arbitrator. There is absolutely no merit in the objection petition and I have no hesitation in confirming this part of the award.
(15) So far as Counter Claim No.2 is concerned, a sum of Rs. 41,000.00 was claimed by the DDA. The objection in this behalf is that the findings of the arbitrator are erroneous and the Contractor has not produced the receipts. The arbitrator has given the following reasoning:
The case of respondent is that as per clause 10E of the agreement, the contractor had to return at least 90% of the empty cement bags to the authorised dealer and its receipt submitted to the respondent. The claimant in his letter has submitted proof of giving the required number of bags to the bags collecting agent.
As the number of bags required had been returned to the bag collecting agent, there is no justification for this recovery. The claim of the respondent is rejected.
Ido not find any error in the reasoning given by the arbitrator and this part of the award is confirmed.
(16) In Counter claim No.3 the respondent claims Rs. 17,23,191.00 on account of rise in price of cement and steel. This was rejected by the arbitrator. In the objection petition it is stated: That the finding of the arbitrator with respect to counter claim No.3 is erroneous on the face of it and the errors of judgment are apparent on the face of it and finding is perverse, as on the one hand the arbitrator holds that the contractor did delay the execution of the work, yet the Arbitrator has not granted increase in the price of cement and steel to the department. The arbitrator has failed to appreciate that the claim was with respect to increase in price of cement and steel which price respondent No.1 was charging from his other contractors. The arbitrator has thus committed legal misconduct by merging the said claim with levy of compensation as provided in clause 2.
The objection is made by stating that there is absolutely no substance in the petition and the arbitrator had considered all the material placed before him. The arbitrator dealt with this aspect in the following manner:
A Swill be seen from my findings in case of claim No.5 of the claimant, there have been delays on the part of both the parties. There is no justification for the respondent to ask for the market prices of cement and steel when the issue rates of both had been fixed in the agreement. Moreover, he could only claim compensation under Clause 2 and could not recover any amount under this claim for increase in prices of cement and steel. Therefore, the claim of the respondent is rejected.
Ido not find any infirmity in the reasoning given by the arbitrator in counter claim No.3, therefore, this part of the award is confirmed.
(17) In Counter Claim No.4 the respondent claimed a sum of Rs. 4,32,000.00 on account of damages. Here also no details has been given by the Dda and from casual objection taken by the Dda that is in the following manner: That the finding with respect to counter claim No.4 is erroneous on the face of it and errors of judgment are apparent on the face of it. It is submitted that on the one hand the Arbitrator agreed that there was delay on the part of the contractor but has rejected the claim only on the ground that initial delay was of the department, which proposition of law is totally erroneous on the face of it.
This is traversed by the Contractor. The Arbitrator has given the following reasoning: This amount has been increased by the Engineer Member vide his letter No EM2 (80)/Arbn/4155-59 dt. 11.4.88 to Rs. 7,80,000.00.
The case of the respondent is that the respondent had to pay interest to the registered persons on account of the delay in the completion of the houses by the claimant and, therefore, he has claimed 7 interest for 3 years. The arguments of the claimant are similar to those in case of counter claim No.3.
This claim is a remote claim and in view of clause 2 of the agreement this is beyond the total amount that can be recovered as compensation from the claimant. Moreover, as per my findings against claim No.5 of the claimant, there was delay on the part of the respondent and he committed a fundamental breach by delay in handing over the site. Therefore, he cannot claim interest on the deposits of the allottees of the flats.
THEclaim of the respondent is rejected.
I accept the reasoning to be correct and in accordance with law. Therefore, I confirm this part of the award.
(18) On counter claim No.6, the respondent claimed a sum of Rs. 5,59,665.00 under clause 2 of the agreement. According to the Dda the contractor did not complete the work in time. Therefore, Superintending Engineer has decided to impose levy of Rs. 5,59,665.00 and therefore, the arbitrator ought not to have gone through this question because it would come under the excepted clause.
CLAUSE2 of the agreement reads as follows: The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be of the essence of the contract on the part of the contractor and shall be reckoned from the Tenth Day after the date on which the order to commence the work is issued to contractor. The work shall throughout the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as compensation an amount equal to one percent or such smaller amount as the Superintending Engineer Delhi Development Authority (whose decision in writing shall be final) may decide on the amount of the estimated cost of the whole work as shown in the tender, for every day that the work remains uncommenced or unfinished, after the proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bound in all cases in which the time allowed for any work exceeds, one month (save for special jobs) to complete one-eighth of the whole of the work before one-forth of the whole time allowed under the contract has elapsed; three-eight of the work, before one half of such time has elapsed, and three- fourth of the work, before three-fourth of such time has elapsed. However, for special jobs if a time-schedule has been submitted by the Contractor and the same has been accepted by the Engineer-in- Charge, the contractor shall comply with the said time-schedule. In the event of the contractor failing to comply with this condition, he shall liable to pay as compensation on amount equal to one percent or such small amount as the Superintending Engineer Delhi Development Authority whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete; provided always that the entire amount of compensation to be paid under the provisions of this clause shall not exceed ten percent, on the estimated cost of the work as shown in the tender.
(19) In the objection petition, it is stated as follows: That the findings of the arbitrator with respect to counter claim No.6 thereby rejecting the claim of respondent No.1 with respect to compensation levied under Clause 2 of the agreement are erroneous on the face of it and errors of judgment are apparent on the face of it.
The arbitrator has failed to appreciate that levy of compensation was under the exclusive authority of the Superintending Engineer and the decision taken by the Superintending Engineer was final and was not liable to be questioned in arbitration proceedings and was covered under excepted category of arbitration agreement. The arbitrator had been required to see whether there was compensation levied by the Superintending Engineer in writing or not and if it was so, the Arbitrator had no authority to interfere into the said finding of the Superintending Engineer as the same is against the terms of the agreement. The arbitrator by rejecting the said claim has misconducted himself and the entire proceedings and has acted against the provisions of clause 2 of the agreement.
What has happened is that decision was taken three years after the matter was referred to for arbitration to levy compensation under clause 2. The Superintending Engineer vide its letter dated 24.02.1988 levied compensation. On this aspect of the case Mr. V.K. Sharma, learned counsel for the Dda relied upon ÿD.D.A. Vs. Sudhir Brothers the relevant portion of which I had already extracted. As I had pointed out above, the Division Bench had not considered the scope of clause 2 and on facts the Division Bench was proceeded on the basis concession by both the parties that clause 2 was applicable to the facts of the case. Reading of the clause 2 would show that compensation could be levied only as per the parameters laid down therein. The Arbitrator had expressed his view in the following terms: The case of the respondent is that as per clause 2 of the agreement, the contractor has not completed the work in time. Hence he is liable to pay Rs. 5,59,665.00 as penalty on account of delay in completion of the work.
The case of the claimant is that various breaches were committed by the respondent and that has delayed the completion of the work and as such no compensation is leviable from him.
The reasons of the delay in completion of the work have been examined by me in detail under claim No.5 of the clamant. There was a fundamental breach on the part of the respondent in delaying the handing over of the site. On account of this breach and on account of the provisions of the agreement, time was not the essence of the contract. Moreover, the respondent stopped the work of the construction of some of the blocks in 1985 and allowed this to be restarted only in 1986. Moreover, in 1985 he allotted the claimant the work of 16 additional quarters under this agreement. All these factors show that time was not considered as essence of the contract.
Moreover, levying the compensation, no show cause notice was given to the claimant. This claim of compensation was referred to arbitrator by the Engineer Member in his letter No. EM2(80)/83/Arbn./4023-26 dated 26.04.85. The actual compensation has been levied by the S.E. in his letter No. F22(11)81/EE(p)/CV/VVL VI/583-59 dated 24.2.88.
As such the dispute regarding compensation under clause 2 had been referred to arbitration even before the Superintending Engineer had taken a decision to levy the compensation.
Taking all these factors into consideration the respondent has no case to levy compensation. The claim of the respondent is rejected.
MR.V.K. Sharma learned counsel for the Dda submitted that this is contrary to the judgment of the Division Bench and, therefore, the claim should be taken out of the purview of the arbitration. He also submitted simply because the Dda had invited the arbitrator to decide the question, it cannot be said that the arbitrator could proceed to adjudicate upon this claim. Mr. V.K. Sharma further submitted that on facts, clause 2, is applicable to this case and the Superintending Engineer had acted in accordance with clause 2. I am afraid the arguments cannot be accepted. The public authority like Dda is expected to act in accordance with the contract and having failed to act cannot project the case without mentioning the facts completely in the objection petition which alone can make the court to appreciate the position. I am unable to accept the arguments of the learned counsel for the DDA. Accordingly, I confirm this part of the award passed by the arbitrator.
(20) On counter claim No. 7 the respondent claimed a sum of Rs. 60,000.00 in respect of cost of arbitration proceedings. The arbitrator has fixed his total fees Rs.18,750.00 + Rs. 2875.00 of incidental charges. The arbitrator directed each party to pay a sum of Rs. 10,812.50. I do not see any reason to interfere with this part of the award. The award had been passed by the experienced person chosen by the party and I am convinced that he has given cogent reasons for arriving at the conclusion and in the objection petition also no particulars worth mentioning are given. Under the circumstances, I respectfully follow the reasoning of My Lord Hon'ble Mr. Justice Vijender Jain. The learned Judge following the dictum of Lord Denning had observed in the case reported in ÿSunder Lal Khatri Vs. Delhi Development Authority which is as follows:
EVENotherwise, I would like to mention what Lord Denning said about evaluating of evidence by the arbitrator.
The weight of evidence and the inferences from it are essentially matters for the Arbitrator. I do not think that the award of Arbitrators should be challenged or upset on the ground that there was not sufficient evidence or that it was too tenuous or the like. One of the very reasons for going to arbitration is to get rid of technical rules of evidence and so forth.... questions of evidence are essentially matters for the Arbitrator and not matters for the court. ( G.K.N. Centrax Gears Ltd. Vs. Matbro Ltd. (1976) 2 Lloyd's Rep. 555(575).
The learned Judge has also followed the dictum laid down by the Supreme Court reported in ÿMunicipal Corporation of Delhi Vs. M/s Jagan Nath Ashok Kumar and Anr wherein the Court held:
"In this case, there was no violation of any principles of natural justice. It is not a case where the Arbitrator has refused cogent and material factors to be taken into consideration. The award cannot be said to be vitiated by non- reception of material or non-consideration of the relevant aspects of the matter. Appraisement of evidence by the Arbitrator is ordinarily never a matter which the court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence. In the instant case, there was no evidence of violation of any principle of natural justice. The arbitrator in our opinion is sole Judge of the quality as well as quantity of evidence and it will not be for this Court to take upon itself the task of being a Judge of the evidence before the Arbitrator. It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the Arbitrator but that by itself is no ground in our view for setting aside the award of an arbitrator. The learned Judge observed in para 12:
In the present case, the Arbitrator, who was chosen a person who, was presumably, an expert or well-versed in civil engineering. The Arbitrator was selected by the agreement of the parties and the selection of a Chief Engineer shows that the parties wanted to appoint a person who was an expert in the line. An award made by such a person should not, therefore, be lightly interfered with. I am also supported in my view by M/s Hind Builders Vs. Uoi in which Supreme Court held as under: "This may be right or wrong but this is also a plausible view. Unfortunately, this was an aspect not urged before or considered by, the Arbitrators. There was no evidence before the Arbitrators or material adduced before the Court as to the nature of these operations. It is difficult to say, by merely reading the terms of contract that the Arbitrators have erroneously interpreted the terms of the contract. It is not without significance that the departmental officers did not dispute the rate of the claim. Equally, the Arbitrators were experienced engineers and would not have passed, what is now said to be, an astounding claim without though. It is difficult to assume that all these persons have overlooked that the contractor had already been paid at Rs.18 under item 4.09 (a) especially when it is so stated on the face of the claim. This therefore, is not a case where the Arbitrators can be said to have ignored or particular interpretation of certain clauses of the contract on which two views are possible. This case certainly cannot be brought under the principle that the Arbitrators have ex facie exceeded the authority or jurisdiction conferred on them by the contract. At worst, what can be said is that they may have committed an error in deciding the issue referred to them but the error is not apparent on the face of the award even if the contract is read as part of it both because the Arbitrators have not given their reasoning and because the view taken by them of the relevant terms of the contract cannot be said to be clearly erroneous. In a matter on which the contract is open to two equally plausible interpretations, it is legitimate for the Arbitrators to accept one or the other of the available interpretations and, even if the court may think that the other view is preferable, the Court will not and should not interfere".
The supreme Court has laid down the dictum in the case reported in State of Rajasthan Vs. Puri Construction Company .
Therefore, do not find any reason to interfere with the award passed by the arbitrator. Accordingly, the award is confirmed and is made rule of the court.
Theta shall pay interest on the amount determined @ 12% per annum from the date of the award till the date of realisation.
The office shall prepare the decree in terms of the award.
The parties shall bear their own costs.