Naresh Kumar Gupta v. Vice Chairman, Delhi Development Authority

MUKUNDAKAM SHARMA, J.

(1) DISPUTES having arisen between the parties during the course of the execution of the contract, the same were referred to the sole arbitrator in terms of clause 25 of agreement, which is the arbitration clause. The arbitrator so appointed by the persona designata entered into the reference, received evidence adduced by the parties and thereafter by his order dated 25. 8,1993 made and published his award whereby he allowed four claims of the petitioner, Being aggrieved by the said award, the respondent herein filed an objection under Sections 30 and 33 of the Arbitration Act, The petitioner entered appearance and has prayed that the award be made a rule of the court.

(2) I have heard the counsel appearing for the parties and have also perused the records. There are altogether seven claims raised by the petitioner before the arbitrator out of which the arbitrator has allowed four claims and rejected the other three claims. A preliminary objection was raised by the respondent before the arbitrator regarding maintainability of the claims on the ground that the said claims are barred by limitation in view of arbitration agreement, namely, clause 25 of the agreement, The said preliminary objection was considered by the arbitrator and he has given his reasons for coming to the conclusion that the said claims are not barred by limitation. According to the learned arbitrator, all the claims preferred by the petitioner in his letter dated 21. 10. 1991 and referred to the sole arbitrator are not time barred and well within limitation and, therefore, he has jurisdiction, the arbitrator has recorded his reasons, which I find to be cogent. Even otherwise the plea of limitation, which is raised by the respondent, is baseless in view of the amendment made in Section 28 of the contract Act. In this connection reference may also be made to the decision of this court in M/s Hindustan Construction corporation Vs. Delhi Development authority reported in 77 (1999) DLT 165 and also of the Supreme Court in National insurance Company Ltd. Vs. Sujir ganesh Nayak and Co. (1997) 4 SCC 366 wherein similar objection raised was rejected. It was held that such a plea is not available to the respondent overriding the plea of limitation, as prescribed under the limitation act. Accordingly, the objection filed by the respondent as against the aforesaid award of the arbitrator is rejected.

(3) SO far claim No. 1 is concerned, the same is a claim of the petitioner for payment of an amount of Rs. 69,000/- on account of final bill payment. The arbitrator examined the aforesaid claim and upon perusal of the records, found that an amount of Rs. 52,466, 70p was illegally withheld by the respondent. It was held by the arbitrator that the said withholding of payment due and payable to the petitioner was unjustified and arbitrary. After having arrived at the aforesaid conclusion, the arbitrator has awarded a sum of Rs. 52,466, 70p. On perusal of the records, i find that out of the aforesaid amount, an amount of Rs. 41,301, 70p was admittedly due and p'ayable for payment to the petitioner. Similarly an amount of Rs. 5159/-and Rs. 4,000/- were withheld for security deposit recovery. The said amount withheld by the respondent was found to be arbitrary and, therefore, I find no reason to interfere with the award passed by the arbitrator with a further direction that the respondent shall also issue IT. deduction certificate to the petitioner for an amount of Rs. 2226/- which was deducted towards IT. recovery, which is found to be justified. The objection in respect of the aforesaid claim accordingly stands rejected.

(4) THE next claim, which was allowed by the arbitrator, was claim No. 3, which was partly allowed by the arbitrator. An amount of rs. 46,000/- was claimed by the petitioner, which was claimed on the ground that the same is payable under clause 10 (c). The arbitrator considered the aforesaid claim and held that there was statutory increase in labour wages in view of government notifications and, therefore, such statutory increase in labour wages should be paid to the petitioner accordingly, an award of Rs. 44,500- was made in favour of the petitioner.

(5) IT is an admitted position that during the period in question, there was statutory increase in labour wages, which was required to be paid by the respondent to the petitioner in terms of agreement under clause 10 (c) of the agreement and, therefore, the aforesaid claim was rightly allowed by the arbitrator and no interference Is called for as against the aforesaid award of the arbitrator.

(6) SO far claim No. 4 is concerned, the same is a claim for payment of Rs. 1,33,500/- as extra payment for the work executed for laying pipes etc. An amount of Rs. 82,364/-was awarded by the arbitrator. It is clear from the award of the arbitrator that the claim of the petitioner was only partly allowed after considering the evidence on record. The said award was given by the arbitrator upon appreciation of the evidence on record and on coming to the clear conclusions that the petitioner has carried out extra work for which the petitioner is required to be paid in accordance with the terms and conditions of the agreement. The said award also, therefore, does not call for any interference of this court.

(7) THE next objection, which is raised by the respondent, is in respect of the award passed by the arbitrator in claim No. 6. The said claim was on account of delay in execution of the work for which extra expenditure was incurred on establishment, staff and machinery against which the petitioner claimed a payment of Rs. 1,57,500/ -. The arbitrator, after considering the records and on appreciation thereof, awarded only an amount of Rs. 46,000/- holding that since the petitioner had to engage watch and ward staff and other staff like site engineer etc. , therefore, the expenditure made on that count should be paid by the respondent to the petitioner in accordance with the terms and conditions of the contract. Detailed reasons are given by the arbitrator for arriving at the aforesaid conclusion, which are found to be cogent.

(8) IN that view of the matter I am not inclined to interfere with the award passed by the arbitrator. The arbitrator has also awarded interest @ 18% per annum from the date of entering upon the reference. It is pointed out by the counsel appearing for the respondent that the arbitrator should not have awarded 18% interest for the pre-suit period. In this connection reference may be made to the decision of the Supreme Court in Executive engineer, Dhenkanal Minor Irrigation division Vs. N. C. Budharaj (2001) 2 SCC 721. In view of the aforesaid position, the arbitrator has the power to grant interest even for pre reference period also. However, considering the facts of the case the interest for the aforesaid period i. e. from 6. 10. 1990 to 25. 5. 1992 is reduced to 9% per annum whereas for the pendente lite and future interest i. e. upto the date of the decree, the rate of interest as awarded by the arbitrator is maintained. The objections stand disposed of in the aforesaid manner. The award of the arbitrator is made a rule of the court subject to the aforesaid modifications. A decree sheet shall be drawn up in accordance with law.