Delhi High Court
Uttam Singh Dugal & Co. (P) Ltd. vs International Airport Authority Of ... on 9 March, 1993
Equivalent citations: 1993(30)DRJ294
Author: Dalveer Bhandari
Bench: Dalveer Bhandari
JUDGMENT Dalveer Bhandari, J.
(1) In pursuance of an agreement between the parties, the petitioner was given the work of construction of International Terminal and Cargo Terminal Project at Bombay Airport. SH: Apron for International Terminal Complex. The dispute regarding execution of the project was referred to the arbitrator in pursuance of the clause of arbitration in the agreement. The arbitrator gave his award on 2nd July, 1986. This court issued notice of filing of the award on 8th August, 1986.
(2) Mr. S.L. Watel, appeared for the petitioner and filed objections to the award. This court on 5th May, 1987 framed the following issues on the pleadings of the parties: (1) Whether the award is liable to be set aside on the grounds mentioned in the objection petition? (2) Relief.
(3) Counsel for the parties agreed that the record of the arbitration proceedings be read in evidence and they further agreed that the matter be decided on affidavits. Affidavits have been filed by the parties and parties have also filed written submissions.
(4) The brief facts which are imperative for the decision of this matter are briefly recapitulated as under:-
"CLAIM no. I is based on rates for the fill material (moorum) used in the formation of sub grade, for Rs.7,85,838.00 . The arbitrator allowed (he claim ofRs.7,85,838.00 in full."
(5) The learned counsel for the respondent has pointed out that even on the findings of the arbitrator in support of claim no. 1. the same is not tenable and error is apparent on the face of the record. For that purpose, the learned counsel has drawn the attention of the court to the following passages of the award of the arbitrator:
"(I)Both the parties are taking advantage of passage of time and getting wiser after the events. (ii) He has not relied upon the oral submissions of the parties but would rely on recorded documents and printed regulations presented by both sides on which there was no factual disagreement. (iii) That planning of the work had not been done in sufficient details prior to the Award of contract because of rugged and overgrown nature of the work site which led to variation in quantities, such variations were not unexpected as the claimant wanted learned arbitrator to believe. (iv) A new item of work was added to the contract which required fill material from accrued outside which was almost 100% Moorum (underlining supplied by the respondent), that material specified in the contract could be a mixture of up to 50% Moorum. (v) Respondent did not strictly follow the regulations as regards commencement of work without a fixed and agreed rate and also did not strictly follow clause 12 step by step to fix the rate itself. These were binding on both the parties."
(6) Despite such conclusion, the arbitrator has decreed the claim of the plaintiff to the tune of Rs.7,85,838.00 in toto.
(7) According to the learned counsel for the respondent, the arbitrator has not mentioned how he has arrived at the figure ofRs.7,85,838.00 which is exactly the same as claimed by the claimant. The arbitrator has not admitted or accepted and, therefore, he has not even referred to the method of even calculating the rates for the new item as given by the claimant.
(8) The plaintiff probably has adopted his own formula for calculating the rates. This is obvious from the language used by the arbitrator in the award. Para 7 is reproduced as under:-
"THEREFORE, I give preference to deviation of rate based on one or the rates already in the contract with omission of some part rather deviate based on a number of different rates with addition of some part from outside the scope of the contract."CLAIM NO. 1
(9) The adjudication of the dispute could not have been done on the basis of the personal preference by the arbitrator without indicating the same. The arbitrator has failed to consider the documents and the evidence led by the parties with regard to determination of the claim no. I of the petitioner. The arbitrator was under an obligation to give reasons for his award and failure to do so relating to the fact as to how he has arrived at a figure ofRs.7,85,838.00 , is an error on the face of the record and consequently the award to the extent of claim no. I is liable to be set aside. Claim N0. 3 (10) Claim no.3 is for the additional concrete actually used according to the site requirements whereas the payment has been made by the respondent only for thickness of 0.381, as specified in the contract and as per clause 25 of the detailed specification. The arbitrator has mentioned that as per agreed figures, 48.56 c.m. of extra quantity of concrete has been laid, which cannot be attributed to any deliberate or careless deviation of work by the claimant. The arbitrator has awarded Rs.50,868-22 to the petitioner with regard to claim no.3. While awarding this claim again the arbitrator has failed to give reasons as to how he has arrived at the figure of Rs.50,868.22. The award does not show the basis or the evidence considered by the arbitrator in arriving at this figure. In these circumstances, the award of the arbitrator of claim no.3 also is liable to be set aside. Claim NO.10 (11) Claim no. 10 is with regard to payment of increase in labour wages, due to an act of legislature. The arbitrator in his award says that as an arbitrary figure, I grant this claim fOrRs.l5,000.00 lump sum, The arbitrator while awarding this claim to the claimant has mentioned that, "in the absence of precise calculations based on a systematic application of various cost and price indices to the formulation accepted in the contract, it is not possible for me to accept the claim as now or to precisely calculate what should be granted to the claimant. In the absence of these, I can only base my decision on the fact that some increase has taken place due to State and Central government rules on wages and the claimant is entitled to some compensation. The arbitrator has given no reasons as to how he has arrived at this figure. This is a clear misconduct. The award to that extent is set aside. Claim N0.13 (12) Claim No.13 pertains to claim of interest. It would be pertinent to mention that the opening sentence of this award is as under:-
"(THIS claim is not listed by the respondent for arbitration but has arisen out of the earlier 12 claims.) Learned counsel for the respondent pointed out that the claimant has not preferred the interest as dispute, and consequently interest as a dispute was not referred to the arbitration at all. Consequently, the arbitrator did not have jurisdiction to award the interest prior to the date of reference. As far as legal position is concerned, the arbitrator has the power to grant pendente lite and future interest but in view of the findings of this court on earlier claims of the petitioner , findings of the arbitrator on the issue of interest also require reconsideration and are accordingly set aside."
(13) The award of the arbitrator to the extent of claim nos.l. 3 and 10 are set aside and award pertaining to remaining claims are made rule of the court. The arbitrator is directed to reconsider the aforesaid claims and give a reasoned award within the statutory period.
(14) In the peculiar facts and circumstances of the case, the parties are directed to bear their own costs. The Suit is accordingly disposed of.