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Madan Lal Maggon v/s Delhi Development Authority

Company & Directors' Information:- MADAN DEVELOPMENT PVT LTD [Strike Off] CIN = U45203WB1979PTC032311

    Interim Application Appeal No. 10332 of 1997, Suit Appeal No. 902-A of 1997

    Decided On, 14 November 2000

    At, High Court of Delhi


    For the Appearing Parties: Rajesh Lakhanpal, Sangita Bharti, Advocates.

Judgment Text


(1) THESE are objections by the petitioner to the Award dated 3rd of April, 1997, made by Shri Suresh Mehta, the Arbitrator under Sections 30 and 33 of the Arbitration Act, 1940.

(2) THE claim arose in reference to contract which was awarded to the petitioner/claimant by respondent No. 1 on 29. 3. 1985 for the execution of the work of "construction of 120 Houses Cat. II SFS in Block C-3, Janakpuri, New Delhi". Disputes arose between the parties and in accordance with the Arbitration Clause No. 25, the disputes were referred to an Arbitrator to be appointed by the Engineering Member, DDA, Delhi. Accordingly, Shri Suresh Mehta, Superintending Engineer (Arbn.)/dda, DDA Office Complex, Motia Khan, Pahar Ganj, New Delhi, respondent No. 2 herein/was appointed as the Sole Arbitrator. The Arbitrator awarded an amount of Rs. 2,71,221. 95 only out of a total claim of Rs. 10. 00 lacs. The DDA has filed its usual, routine objections to the award which are under consideration in the present petition.

(3) THE following claims were withdrawn by the claimant/petitioner:

" (i) Claim No. 6

(ii) Claim No. 16

(iii) Claim No. 19 and

(iv) Claim No. 20.


(4) IN respect of the following claims nil amount were awarded to the claimant/ petitioner and the claims consequently rejected:

" (i) Claim No. 4 (ii) Claim No. 7 (iii) Claim No. 9 and (iv) Claim No. 10. "

(5) AS far as Claim No. 1 is concerned, it is a claim of Rs. 76309. 46 towards withheld rebate of regular monthly payment. The Arbitrator examined the respective pleas of the respondent/objector as per Annexure D and F and held the petitioner's claim to be justified for Rs. 34,526. 43. The plea of the DDA is that the above claim is contrary to Clause 8 of the contract which reads as follows :

"a bill shall be submitted by the contractor each month on or before the date fixed by the Engineer-in-Charge for all work executed in the previous month, and the Engineer-in-Charge shall take or cause to be taken the requisite measurements for the purpose of having the same verified, and the claim, as far as admissible, adjusted as far as possible before the expiry of ten days from the presentation of the bill. If the contractor does not submit the bill within the time fixed as aforesaid, the Engineer-in-Charge may depute within seven days of the date fixed as aforesaid, as subordinate to measure up the said work in the presence of the contractor whose counter signature to the measurement list will be sufficient warrant, and the Engineer-in-Charge may prepare a bill from such list. "

(6) IT is clear that the Clause 8 requires the bill to be submitted by the claimants. However, Clause 8 also requires that the Engineer-in-Charge has to fix a date for submission of the monthly bill. No such date has been averred or proved to have been fixed by the DDA. In light of the non-fixation of date of submission of the monthly bill no reliance can be placed by the DDA on Clause 8. Consequently objection to Claim No. 1 has to fail.

(7) CLAIM No, 2 was in respect of refund of Rs. 76,809. 46 unjustifiably recovered on account of rebate towards finalisation of bill. The claim is based on the fact that the actual date of completion was 6. 9. 1988, the final bill should have been paid within six months of the completion of the work and the final bill was in fact paid after a lapse of more than 4 years on 31. 3. 1993. Consequently according to the claimant the respondent is not entitled to recover the rebate. The respondent's plea was that no bill was submitted by the claimant as per Clause 8 of the Agreement. Clause 8 cannot be relied on by the DDA in view of the reasoning given in respect of Claim No. 1. The Arbitrator found that the payment of final bill was delayed by more than 4 years and the Arbitrator thus found the DDA was not entitled to retain the rebate and claimant was entitled to Rs. 76,809. 46. Similar reasoning has been applied by the Arbitrator to grant the refund in respect of Claim No. 3 for Rs. 76,809. 46, unjustifiably recovered towards release of security deposit. Thus the objections to Claim Nos. 2 and 3 must fail.

(8) CLAIM No. 5 is in respect of refund of Rs. 65,000. 00 for balance payment due under Clause 10cc was held justified for only Rs. 5,310. 00 and no serious challenge was raised to this claim by DDA and the objection to this claim is thus dismissed.

(9) INSOFAR as Claim No. 8 is concerned it was for refund of Rs. 52,757. 00 on account of short payment in relation to item of finishing walls with water proofing cement. The Arbitrator after going through the pleadings applied the ISI Code and found that only 25 per cent extra was required to be paid and not 50 per cent and only awarded Rs. 24,570. 50 for Claim No. 8. No legal or other infirmity has been demonstrated by the Objector/ DDA in respect of this finding of the Arbitrator and the objection to Claim No. 8 therefore, fails.

(10) CLAIM No. 18was in respect of Rs. 20,000. 00for cost while providing unions for fixation of GI pipes. After going through the pleadings of the parties, it was found by the Arbitrator that as the unions were required to connect two GI pipes, unions are required to be paid separately and as such claimant petitioner's claim was found justified only to the extent of Rs. 7,200. 00 which was the amount awarded for Claim No. 18. This finding also is unassailable and the objection to Claim No. 18 therefore, fails.

(11) INSOFAR as Claim No. 21 is concerned, damages were claimed by the petitioner/claimant in the sum of Rs. 2. 00 lacs. It was stated by the claimant that even though the stipulated date of completion was 7. 7. 1986, the work was actually completed on 9. 6. 1988 and completion of work was delayed on account of various failures at the behest of the respondent and during the execution the claimant was subjected to infructuous expenses towards establishment. The respondent contended that the delay was on behalf of the claimant. It was submitted on behalf of the claimant that since extension of time was granted without levy of compensation by the Competent Authority, the claimant was entitled to claim compensation. The Arbitrator considered the fact that the date of start of work was 8. 4. 1985 and foundation drawings were already supplied but the work was not completed. The Arbitrator also considered the fact that the claimant had not produced books of accounts, payment vouchers and attendance register. After going through the pleadings the Arbitrator found that the work was originally scheduled to be completed on 7. 7. 1986 but the work was completed in fact on 9. 6. 1988 and the extension of time was granted by the Competent Authority without levy of compensation, the respondent-DDA was held responsible for the breach of contract and accordingly the claimant was awarded a sum of only Rs. 2,000. 00 per month for - 23 months amounting to Rs. 46,000. 00. Therefore, in respect of Claim No. 21 out of a claim for Rs. 2. 00 lacs only a sum of Rs. 46,000. 00 was granted.

(12) IN view of the fact that the Arbitrator recorded an unchallenged finding that the respondent-DDA themselves granted the extension of time without levy of compensation, it has not been shown by the respondent-DDA how this portion of impugned award is bad in law or beyond jurisdiction.

(13) THE reliance placed by the learned Counsel for the respondent-DDA on a decision of this Court, reported as Ishwar Singh 6- Sons v. DDA, 53 (1994) DLT 508, to contend that Arbitrator had no jurisdiction to award any sum on account of extension of time, is not justified. In the present case the extension of time has been granted by the respondent-DDA without levy of compensation and in this view of the matter the aforesaid judgment would not apply to the facts of the present case because under the aforesaid judgment relied upon by the DDA, there was no. extension of time without levy of compensation. Therefore, the respondent's objection as to Claim No. 21 is dismissed and accordingly the Award in respect of Claim No. 21 is upheld.

(14) CLAIM No. 22 relates to grant of interest @ 22% per annum on the amount of claims. After going through the pleadings. Arbitrator found the claimant's claim justified only to extent of simple interest @ 12% per annum from the date of reference, i. e. , 27. 6. 1994 to the date of the award and further interest @ 18% per annum from the date of award to date of payment or decree. The respondent-DDA/ objector submits that since the awarded amount is not acceptable to it there is no question of payment of interest. In my view 12% and 18% interest are fair rates of interest in respect of claims which were found to be justified and do not call for interference by this Court.

(15). The above objections, preferred by the respondent-DDA to the aforesaid claims are thus factual in nature and do not fall within the limited scope

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of challenge to the Arbitrator's award and are duly covered by the law laid down by this Court in the judgment of S. K. Jain v. DDA and Another in Suit No. 1671-A/92 and I. A. 43/ 93, which was pronounced on 18th of April, 2000. Accordingly, these objections, preferred by the respondent-DDA are dismissed. (16) THE Award dated 3rd of April, 1997 is thus made a Rule of the Court. (17) INTEREST awarded by the Arbitrator on the awarded amount from the date of reference, i. e. , with effect from 27. 6. 1994 till the date of decree be paid within three months from today. If the amount due under the Award is paid within 3 months from today, the Award shall not carry any future interest. However, if the payment is not made within three months from today, the awarded amount shall carry future interest at the rate of 18% per annum from the date of decree till realization. There shall be no orders as to costs. Decree sheet be drawn up accordingly. Suit and I. A. are accordingly disposed of.