Delhi District Court
Executive Engineer vs Shri Vipin Kumar Sharma Contractors on 30 October, 2009
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IN THE COURT OF SHRI SURINDER S. RATHI:ADJ
ROOM NO.32:TIS HAZARI COURTS :DELHI
CS NO: 548/08/07
EXECUTIVE ENGINEER
CD VII I80 FC Depot
Rohini Office Complex
Sector 15, Delhi ........ Plaintiff
VS.
1. Shri Vipin Kumar Sharma Contractors
C175, Prashant Vihar,
Delhi85
2. Sh. Vikas Pahwa Advocate Arbitrator
R104, Greaqter Kailash Part I,
New Delhi48. ....... Respondents
DATE OF INSTITUTION : 01.11.2008
DATE OF FINAL HEARING : 26.10.2009
DATE OF FINAL ORDER : 30.10.2009
OBJECTION PETITION UNDER SECTION 34 OF THE ARBITRATION AND
CONCILIATION ACT, 1996 FOR SETTING ASIDE THE AWARD PASSED BY
THE LD. SOLE ARBITRATOR SHRI VIKAS PAHWA ON 6.6.07.
ORDER:
1. Video this order I shall dispose off the objection petition filed by objector petitioner u/s 34 of Arbitration and Conciliation Act 199 against the award dated 6.6.07 passed by Old. Sole Arbitrator.
contd/........
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2. Brief background of the matter is that petitioner objector invited tender for the work "dismantling and reconstruction of two lane bridge at RD1137 M of Banana Escape . Respondent herein also filed his bit and finally the work was awarded to him , An agreement dated 17.2.2003 was executed between the parties. As per the agreement , work was to be completed within the period of 9 months from 22.2.2003 to 21.11.2003. It is the case of the respondent that soon after the award of the work , he made preparation at the spot, arranged machineries and hired requisite engineers and other staff . However, the work could not be started owing to existence of several hindrances at the spot. Hindrances were of the nature that it was a running road and no separate space was provided for constructing alternate by lane apart from shifting of water manes , electric and telephone cables etc. Despite efforts made by the petitioner herein , hindrances could not be cleared and finally the awarded work was intended to be foreclosed video letter dated 27.11.2003 of petitioner addressed to respondent. The work was finally foreclosed in February'2004.
contd/........
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3. In terms of the agreement entered between the parties herein , respondent filed an application for appointment of arbitrator to the Chief Engineer , Irrigation and Flood Control for pressing his damages and claims on 14.7.2004. However, this request of the respondent was declined.
4. Thereafter respondent moved an application U/s 11 (6) of Arbitration and Conciliation Act before LD. District and Sessions Judge, and upon which vide order dated 17.2.2003 , Sh. Parveen Kumar, Ld. ADJ appointed Sh. Vikas Pawha Advocate as sole Arbitrator in the matter.
5. Ld. Arbitrator initiated proceedings on 5.2.2003 which was attended and contested by both the parties. After more than 20 hearings, Ld. Arbitrator passed the impugned award on 6.6.2007. In this award Ld. Arbitrator allowed the claim of the respondent to the tune of Rs. 3.12 lacs apart from interest @ 9% per annum. Breakup of this claim amount is Rs.67,309/ under the head expenses incurred on preliminary arrangements , Rs. 99,700/ under the head establishment expenses, Rs. 45000/ under the head of idle hours contd/........
4of machineries installed and Rs. 1 lac under the head of unearned profits.
6. Aggrieved by this award, petitioner herein filed this objection petition challenging the award .
7. I have heard arguments of LD. Counsel Sh. Narender Kumar Sharia advocate for objector and Ld. Counsel Sh. Sunil Kumar Jha advocate for respondent. I have also gone through the pleadings in the arbitration award.
8. Admittedly this was passed on 6.6.2007 while the objection herein were filed on 6.10.2007. The copy of the award was received by the objector on 22.6.07, consequently , after the delay of around 14 days after the expiry of statutory period of three months as provided in section 34 of Arbitration and Conciliation Act. Separate application for condoning the delay was moved disclosing therein that the delay occurred on account of appointment of government counsel on behalf of objector. Arbitration is supposed by LD. Counsel for respondent. But In the light of the reasons stated and the fact contd/........
5that the objections were filed within 30 days after expiry of stipulated period, the delay is condoned.
9. LD. Counsel for objector is challenging the award only on two counts . The first being that Ld. Arbitrator ought not have awarded interest to the respondent in the claim amount from 10.12.2002 i.e. date of initiation of tender and rather it should have been from 21.11.03 i.e. the date of completion of assigned work.
10.I find strength in this plea for the simple reason that it is just and logical. Admittedly the respondent contractor was supposed to receive the payment of his bill qua the work done only after completion of his work and not prior to even its initiation. Interest can be levied on an unpaid sum of money only after it becomes payable. In the case in hand the amount sought by the respondent in his claim petition from LD. Arbitrator can be said to have become payable only after the expiry of the work period. By no stretch of interpretation the amount sought can be said to be payable at the time of filing contd/........
6of tender. As such to this extent the award stands modified. Respondent shall be entitled to the interest from 21.11.2003 and not from 10.12.2002 as ordered by LD. Arbitrator.
11.The second objection raised is that even though as per clause 13 of bipartite agreement, respondent is not entitled to claim unearned profits.
12.For the sake of convenient clause 13 of the agreement / contract is produced herein under: CLAUSE 13 If at any time after acceptance of the tender Government shall decide to abandon or reduce the scope of the works for any reason whatsoever and hence not require the whole or any part of the works to be carried out, the EngineerinCharge shall give notice in writing to that effect to the contractor and the contractor shall act accordingly in the matter. The contractor shall have no claim to any payment of compensation or otherwise whatsoever, on account of any profit or advantage which he might have derived from the execution of the works in full but which he did not derive in consequence of the foreclosure of the whole or part of the works.
contd/........
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13.Plain reading of this clause shows that the work contract provided that the contractor shall not be entitled to unearned profits in case of any eventuality. As far as the execution and validity of the contract containing this clause is concerned, respondent has not assailed the same and has conceded that the cited agreement is binding on both the parties. As such by virtue of this clause, the findings of Ld. Arbitrator that respondent is entitled to Rs. 1 lac under the head "unearned profit" is bad and as such this part of the award is set aside.
14.Although couple of other miscellaneous objections were also raised in the objection petition but during the course of final arguments, LD. Counsel for petitioner restricted himself on the above two objections and he specifically waived the other objections.
15.It is apparent from the material available on record that after the work was awarded to him, respondent contractor made all the preparations necessary for execution of the award. It was the petitioner/objector only who failed to get contd/........
8the place clear so that the work could be executed. As such respondent contractor was rightfully entitled to be compensated on the expenditure incurred by him in the process.
16.Hence in view of the above discussion, the objection petition is hereby partially allowed to the extent that award stands modified to the effect that respondent would not be entitled Rs. 1 lac under the head "unearned profit"
and that he shall be entitled to interest we.f. 21.11.2003 and not w.e.f.10.12.2002. Petition stands disposed off accordingly and it be consigned to RR. Original Arbitration File be sent back.
ANNOUNCED AND DICTATED IN OPEN COURT ON 30.10.2009 ( SURINDER S. RATHI ) ADJ:DELHI 30.10.2009 contd/........9
CS NO: 548/08/07 EXECUTIVE ENGINEER Vs.
1. Shri Vipin Kumar Sharma Contractors
2. Sh. Vikas Pahwa Advocate Arbitrator 30.10.2009 Pr: LD. Proxy Counsels for both the parties Vide a separate order of the day objection petition is hereby partially allowed to the extent that award stands modified to the effect that respondent would not be entitled Rs. 1 lac under the head "unearned profit" and that he shall be entitled to interest w.e.f. 21.11.2003 and not w.e.f.10.12.2002. Petition stands disposed off accordingly and it be consigned to RR. Original Arbitration File be sent back.
( SURINDER S. RATHI ) ADJ:DELHI 30.10.2009 contd/........