Delhi High Court
Delhi Development Authority vs Shri Prem Singh on 20 February, 2002
Equivalent citations: 2002IIIAD(DELHI)1096, 2003(1)ARBLR393(DELHI), 97(2002)DLT976
Author: Dalveer Bhandari
Bench: Dalveer Bhandari, Vikaramajit Sen
JUDGMENT Dalveer Bhandari, J.
1. This appeal is directed against the order passed by the learned Single Judge dated 4th December, 1995 in Suit No. 3670/1991. This Court issued notice to the respondent but he could not be served by the ordinary process and had to be served by publication. The order sheets indicated that even after service by publication the respondent has not been appearing. Today also neither the respondent nor his counsel is present.
2. The award was published by the Arbitrator on 2.11.1991 and objections to the award were preferred by the DDA/Appellant. Learned Arbitrator rejected all the counter claims being No. 1 to 8. The counter claims related to quality of workmanship or the materials used in the work as is clear from the nomenclature of these counter claims.
3. The Clause 14A of the Agreement between the parties provides that the decision of the Chief Project Engineer regarding the quantum of reduction as well as justification thereof in respect of rates of sub-standard work, which may be decided to be accepted will be final and not open for arbitration.
4. The counter claims thus related to a matter which was outside the purview of the arbitration and hence not arbitrable.
5. The objections were accordingly taken with regard to the part of the Award relating to various counter claims raised by the appellant which according to the appellant were not to be dealt with by the Arbitrator being outside the scope of the arbitration. The learned Single Judge by his judgment dated 4.12.1995 upheld the findings of the Arbitrator. The learned Judge made the award rule of the court and rejected the counter claims. The appellant placed reliance on the judgments of this Court reported in Dewan Suraj Parkash Chopra and Sons v. Delhi Development Authority and Anr. , 1991(1) Arbitration Law Reporter 366 and other case decided by the Division Bench of this Court in D.D.A. v. Sudhir Brothers , . After dealing with both the cases the learned Single Judge observed that so far as the facts of this case are concerned the above decisions are not relevant.
6. Mr. Verma, the learned counsel for the DDA submitted that the principles enunciated in the Division Bench case, Sudhir Brothers (supra) are applicable in toto to the facts of this case.
In both the aforesaid cases, reliance has been placed on the authoritative judgment of the Supreme Court in Vishwanath Sood v. Union of India , . Their Lordships of the Supreme Court in a case of similar nature observed:
" We are therefore inclined to hold that the opening part of Clause 25 clearly excludes matters like those mentioned in Clause 2 in respect of which any dispute is left to be decided by a higher official of the Department. Our conclusion, therefore, is that the question of awarding compensation under Clause 2 is outside the purview of the arbitrator and that the compensation, determined under Clause 2 either by the Engineer-in-charge or on further reference by the Superintending Engineer will not be capable of being called in question before the arbitrator."
8. Following the case of Vishwanath Sood (supra), the Division Bench of the court in Sudhir Brothers (supra) observed as under:
"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. 5,69,743 was not payable by the contractor. The validity of the levy of compensation is therefore, taken out from the award."
9. We have carefully perused the aforecited judgments of the Supreme Court and of this court. In our considered opinion the principle of law laid down in these judgments is fully applicable to the facts of this case.
10. In the instant case there is clear embargo on the powers of the Arbitrator to deal with the matters which were referred to the Arbitrator in the counter claims by the DDA. The Arbitrator derives his jurisdiction from the agreement. There is no doubt that the DDA has committed a blunder in referring these counter claims to the Arbitrator. We are clearly of the opinion that the Arbitrator did not have the jurisdiction to deal with the counter claims of the appellant. Therefore, to that extent the impugned award is liable to be set aside.
11. In the case in hand also the DDA had committed a blunder in requesting the Arbitrator to include counter claims and make it part of the award.
12. We are bound by the judgment of the Hon'ble Supreme Court in Vishwanath Sood (supra). It was not open to the learned Single Judge to take any other view. In these circumstances, we are constrained to set aside the judgment of the learned Single Judge to the extent of his award which relates to the counter claims filed by the appellant DDA.
13. It may be pertinent to mention that in the case of Sudhir Brothers (supra) the Court directed that the question of limitation will not be raised by the either of the parties. It has become imperative to give similar directions in this case.
14. We deem it appropriate to direct that it would be open for the DDA to recover the recover the amounts of counter claims in whatever manner it deems appropriate. In case any such proceedings are taken, it will also be open to the contractor to raise all the defenses that may be open to him in law to contended that the levy of counter claims is bad. In case the DDA decides to recover such amount of compensation from the contractor it would be open to the contractor to file a suit or take other steps or defenses in accordance with law.
15. In view of the extra-ordinary facts and circumstances of this case and following the aforesaid case we make it clear that either of the parties shall not rise the question of limitation.
16. The appeal is accordingly allowed but because of the blunder committed by the appellant DDA in referring excepted matters to the Arbitrator, we direct the appellant DDA to pay costs. Since no one appeared for the respondent therefore, we direct the appellant DDA to pay costs of Rs. 3,000/- to the Delhi Legal Services Authority within four weeks. Before we part with the case, we are constrained to observe that it is beyond our comprehension how the DDA is repeatedly referring excepted matters to the Arbitrators in different cases. The Vice Chairman, DDA is directed to look into the matter and take appropriate remedial steps without loss of anytime.
17. The appeal is accordingly disposed of