Pandit Construction Company v. Delhi Development Authority & Ors.

V.S Aggarwal, J.:— Shri R.L Bhakru had been appointed as the sole Arbitrator. He had entered upon reference on 19.05.1992 and published the Award dated 17.09.1993 Petitioner Pandit Construction Co. has filed the present petition under Section 14 of the Arbitration Act for directing the Arbitrator to file the Award and for a decree to be passed in terms of the same.

2. In pursuance of the notice having been issued the Delhi Development Authority respondent has filed the objections invoking Sections 30 and 33 of the Arbitration Act. It has been alleged that one of the preliminary objections was that claim was time barred because it was not raised within 30 days in terms of Clause 7 of the agreement. It has further been alleged that another preliminary objection raised was vide letter dated 14th October, 1991 the petitioner had given an undertaking not to claim anything extra due to delayed finalisation of the bill and the final bill was accepted towards full and final payment. The Arbitrator wrongly concluded that undertaking had been given without any consideration or free consent. Furthermore the Award is assailed with respect to different claims to be taken up hereinafter. In the reply filed the petitioner contests the claim asserting that the Arbitrator had found that the running account bill and the final bill were prepared by the objectors themselves. As a general practice also objectors have taken upon themselves the responsibility of preparing running account bills. Once the final bill is prepared obviously Clause 7 of the agreement is not relevant. It is further stated that the Arbitrator rightly concluded that the undertaking purported to have been given by the petitioner was of little consequence because huge amount of the petitioner had since been blocked. The assertions of the objector with respect to certain claims have also been controverted. On 07.02.1995 this Court framed the following issues :

(1) Whether the Award made and published by the Arbitrator is liable to be set aside, on the basis of the objections taken in this application ?

(2) Relief.

3. On 17.02.1995 itself the parties have stated that they do not intend to lead any evidence and proceedings before the Arbitrator may be read as evidence.

4. Issue No. 1 : Learned counsel for the objector in the first instance urged that the Arbitrator was totally in error in coming to the conclusion that the undertaking given by the petitioner was without free will or consideration. Strong reliance was placed on the undertaking of the petitioner/claimants in this regard. But the findings of the Arbitrator cannot be lost sight of. He has recorded that work was completed on 31.01.1990 The final bill had been prepared within six months. This was being delayed in spite of the letters of the petitioner/claimants. The huge amount of the petitioner's were blocked. It was only after such an undertaking was obtained that bill was cleared within two weeks. The Arbitrator noted that the said undertaking was without consideration and free consent.

5. The findings of fact so recorded must be described as meritorious. Not only the Arbitrator is a final tribunal pertaining to the findings of fact but otherwise also the said finding cannot be described to be erroneous to prompt the Court to interfere. If undue pressure as has been noticed above, has been exerted that the pending bill shall be cleared only when such an undertaking is given then necessarily it cannot be taken to be with free consent of the applicant. The plea so much thought of on behalf of the objectors must fail.

6. As regards the plea that claims are barred by time, the Arbitrator noted that final bills were prepared by the objectors themselves. It was prepared on 30.10.1991 as Ex. R9 (before the Arbitrator). The disputes were referred by the claimant to the competent authority on 07.01.1992 With this being the position the claim must be taken to be within time.

7. The findings with respect to different claims of the applicant have also been challenged. Under Claim No. 1 the applicant had demanded Rs. 38,600.45 towards the refund of rebate against regular monthly payments while the Arbitrator had awarded Rs. 26,257. The grievance is that the Arbitrator had not given details as to how this amount has been arrived at. The Arbitrator is also stated to have not appreciated Ex. R1 which created an estoppel against the petitioner as based on the said document because the bill was prepared after two weeks. Perusal of the Award shows that it had been noted. The bills were prepared by the objectors themselves from time to time. The Arbitrator noted that there was no evidence to show that objectors had intention to insist on different practice. Only part payments were made. The objectors had failed to make regular monthly payment and in that backdrop the Arbitrator awarded the amount of Rs. 26,257.

8. It is a settled principle that Court will not re-appraise the evidence as if it was a Court of appeal unless the findings are totally erroneous or no other view point is possible, as has been alleged by the objector. Otherwise the Court would be reluctant to set aside such an Award. Identical is the position herein and as a result thereto this particular contention with respect to Claim No. 1 must fail.

9. Under Claim No. 2 the petitioner claimed Rs. 38,600.45 on account of refund of rebate towards payment of final bill unlawfully recovered against the final bill. The Arbitrator awarded Rs. 34,063. Once again it is alleged that no reasons as such have been recorded. Perusal of the Award of course has another version to state. The Arbitrator has recorded the reasons and held that objector had failed to pay the final bill for the undisputed items within six months. There is no ground consequently to interfere in this regard.

10. Pertaining to Claim No. 3, the petitioner claimed Rs. 2,825.75 on account of refund of penal rate recovery. The Arbitrator has allowed the amount. The grievance of the objector is that he had overlooked Clause 42 between the parties under which this recovery was effected. The Arbitrator on the contrary had held that there was no evidence to show any misuse or pilferage of material or any loss incurred by the objectors. Keeping in view of this fact the Court finds no reason to interfere in the said finding of fact.

11. As regards Claim No. 4 which was for Rs. 1,04,000 on account of amount unlawfully recovered in the final bill. The Arbitrator has found that the claim relates to deduction made in the final bill asserting various defects and deficiencies in certain items of work. The objector before the Arbitrator had taken the plea that defects and deficiencies had been intimated to the claimants from time to time and they were not rectified. The Arbitrator found that some of defendants had been intimated during the progress of the work but no formal notice required under Clause 14 of the agreement had been issued. He also recorded a finding that completion certificate recorded by respondents on 31.01.1990 as per the contract and there were no apparent defects except certain deficiencies. After taking out the unjustified recoveries made the Arbitrator recorded that Rs. 86,739 were due. To urge that Clause 14 has not been properly appreciated would be pricking holes without reason in a finding arrived at on basis of the evidence. The Court finds no reason, therefore, to interfere.

12. Reverting back to Claim No. 5 which was for Rs. 30,000 on account of extra work executed. The record reveals that the Arbitrator awarded Rs. 29,970. This is because the extra item of making moulded nozing and 150 mm MS sheet had been executed. He found that the entries had been deleted without recording any reasons. The Arbitrator found that moulded nozing is payable extra. The contention raised that no reasons have been recorded, therefore, is neither here nor making any ground for interference. The said objection must also fail because it is not supported by any other material for the Court to interfere.

13. As regards Claim No. 6, the claim was for Rs. 3,00,000 on account of short/less/under payment under Clause 10CC of the agreement due to improper and arbitrary method/mode. Once the additional amount on account of escalation has been done under Clause 10CC there is little ground for interference.

14. Similarly for Claim No. 7 the Arbitrator allowed Rs. 1,15,000 on account of loss/damages. The Arbitrator had only allowed Rs. 19,938 @ 7½% for unexecuted portion of the work. This has been done after looking into material on the record and thus there is no ground.

15. Learned counsel further pointed that so far as Claim No. 10 is concerned, the Arbitrator has wrongly awarded Rs. 3,90,410 on account of extra work executed and for which payment had not been made. The Arbitrator has recorded on appreciation of the facts that para 3.11 of the specifications and conditions is not applicable. There was no material to show that any drawing showing ornamental grills was available for inspection. The provision for ornamental grills for entire quantity of work was not contemplated. In that view of the matter the said amount was rightly allowed. The last dispute raised was with respect to Claim No. 11. On account of losses/damages due to increase in price of material, idle labour and due to prolongation of contract by 41 months. The applicant's version was that delay in completion was various lapses, default and acts of omission and commission of the objector. Since it was a work done for which there was increase in the price of the material, idle labour etc. In the absence of any legal bar to which the attention of the Court was drawn, it must be held that the amount was rightly allowed with little scope for interference.

16. For these reasons the Award is made a rule of the Court and decree in terms of the Award is passed.