Judgment:
M.K. Sharma, J.
(1) The petitioners entered into an agreement with the respondent No. 1 for construction of 544 Mig houses in Pocket 'C' & 'D' in Sector 18, Rohini. The said agreement contained a clause being Clause 25 for resolution of disputes and differences between the parties through arbitration.
(2) Disputes having arisen between the parties to the contract in respect of the aforesaid agreement, the Engineer Member in terms of Clause 25 of the agreement appointed respondent No. 2 to act as a Sole Arbitrator. The Arbitrator entered into the reference before whom the parties filed documentary evidence. After hearing the parties at length and on consideration of the documentary evidence, the respondent No. 2 published his award on 28.12.1993. The petitioners accordingly filed the present petition in this Court seeking a direction to the respondent No. 2 to file the award dated 28.12.1993 Along with the records of the arbitration proceedings and also for making the award a rule of the Court.
(3) Notice of the aforesaid petition was issued to the respondent No. 1, upon service of which the respondent No. 1 filed an objection ageist the aforesaid award which was registered as I.A. 3974/1994. Ms. Salwan appearing for the respondent No. 1 through her lengthy arguments supported the objections raised in the objection petition. I have also heard the learned Counsel appearing for the petitioners.
(4) In respect of Claim No. 1, the main objection of the respondent No. 1 appears to be against the award passed by the Arbitrator in respect of parts (B), (C) & (D) thereof. The Arbitrator rejected the claim of the petitioners in respect of part (A) of Claim No. 1 and no objection has been filed by the petitioner in respect of the said claim and, thereforee, there is no occasion for me to deal with the said claim.
(5) In respect of parts (B) & (C) of the petitioners' claim No. 1, the Arbitrator has awarded a sum of Rs. 4,21,398.00 including interest @ 12% per annum with effect from 14.9.1988 to 5.5.1992. thereforee, the interest part in respect of the aforesaid claim as awarded by the Arbitrator comes to a total amount of Rs. 1,28,598 .00 . The balance amount of Rs. 2,92,800.00 is towards the actual claim. The petitioners' claimed for idleness of machinery and establishments due to lapses on the part of the respondent No. 1 regarding delay in giving the decision for issue of structural drawings and approval of services of sewerage and water supply. The claim of the petitioners in respect of the aforesaid are set out in Exs. P-31 /1 and P-31 /2 which was sent to the respondent No. 1 on 14.9.1988. The Arbitrator on consideration of the evidence on record found that there was in fact delay caused by the respondent No. 1 in giving the decisions for issue of structural drawings and approval of services of sewerage and water supply. Since the machineries of the petitioners had to be kept idle and the establishment had to be maintained by retaining staffs etc. because of non-availability of the aforesaid services from the respondent No. 1, the Arbitrator held that the petitioners are entitled to an amount of Rs. 2,92,800 .00 for idleness of the machinery and establishment in terms of Exs. P-31 /1 and P-31 /2. The aforesaid award is based on reasons and no valid objection could be taken as against the aforesaid award.
(6) However, in respect of the award passed by the Arbitrator granting simple interest @ 12% per annum with effect from 14.9.1988 to 5.5.1992, the learned Counsel appearing for the respondent No. 1 submitted that the same relates to grant of interest for the pre-suit period which was actually the subject matter in Clause No. 10. In the said claim, the petitioners claimed pre-suit pendente lite and future interest @ 18% per annum and the Arbitrator has awarded pendente lite interest @ 15% with effect from 5.5.1992 till the date of publishing the award.
(7) My attention was also drawn to the statement of claims of the petitioners filed before the Arbitrator in which the petitioners claimed for pre-suit interest from 27.8.1991 to the date when the Arbitrator entered upon the reference. On consideration of the statement of claims of the petitioners, it is crystal clear that the Arbitrator has granted interest to the petitioners @ 12% per annum from a date prior to what was claimed in the statement of claims. thereforee, granting of interest by the Arbitrator @ 12% per annum from 14.9.1988 to 26.8.1991 is apparently an error on the face of the records. thereforee, the award passed by the Arbitrator granting interest @ 12% per annum with effect from 14.9.1988 to 26.8.1991 stands set aside and the award stands modified to the extent indicated above. In other words, the petitioners shall be entitled to interest on the amount of Rs. 2,92,800.00 at simple interest of 12% per annum with effect from 27.8.1991 to 5.5.1992. With the aforesaid modification, the award passed by the Arbitrator against this claim is upheld.
(8) Next claim as against which the objection has been filed by the respondent No. I relates to claim No. 1 part (D) in respect of which the Arbitrator has awarded Rs. 69,765.00 . From the statement of claims filed by the petitioners in respect of the aforesaid claim, it is found that the aforesaid claim was in respect of the loss of profitability of the petitioners due to prolongation of the contract. My attention was drawn to Ex. P-33/1 and Ex. P-33/2 on the basis of which the aforesaid claim was raised by the petitioners before the respondent No. 1.
(9) On perusal of the said Exhibits, it appears that the petitioners claimed for losses and damages on account of idle T&P; establishment etc. and for loss of profit. In respect of the aforesaid claim raised before the respondent No. 1, and negated by the respondent No. 1, claim came to be raised before the Arbitrator. For idle machineries and establishment, the Arbitrator has awarded a sum of Rs. 2,92,800.00 in respect of claim No. 1 Part (B) & (C). While awarding Rs. 69,765.00 against the present claim No. 1 Part (D), the Arbitrator has stated that the petitioner is entitled to 2% overhead office expenses on this account. Since already the Arbitrator has awarded an amount of Rs. 2,92,800.00 for idleness of machinery and establishment, in my considered opinion, awarding another amount on the said account twice over cannot be held to be justified.
(10) In this connection, reference may also be made to the decision of the 196 Supreme Court in Union of India v. Jain Associates reported in (1984) 4 Scc 665. In that decision, while answering the question whether the Umpire had committed misconduct in making the award, the Supreme Court held that claims Nos. 11 and 12 for damages and loss of profit being founded on the breach of contract and Section 73 encompassing both the claims as damages, the Umpire awarded mechanically different amounts on each claim. In view of the said fact, the Supreme Court held that there was non-application of the mind of the Arbitrator and the said award giving damages twice over was set aside. In my considered opinion, the ratio of the aforesaid decision of the Supreme Court squarely applies to the facts of the presentawardawarding2%overheadofficeexpensesamountingtoRs.69,765.00 for maintaining the office.
(11) The learned Counsel appearing for the petitioners, however, stated that the present award was based on a claim for off the site expenses incurred by the petitioners. In order to appreciate the contention raised by the learned Counsel for the petitioners, I have gone through the claims of the petitioners as well as Ex. P- 33/1 and Ex. P-33/2 to which reference has been made by the Arbitrator while awarding the aforesaid amount in respect of this claim. In Exs. P-33/1 and P-33/ 2, the petitioners have claimed for compensation of losses on account of T&P; establishment under Section 73 of the Contract Act claiming all losses and damages on account of idle T&P; establishment etc. and also for loss of profit. For loss of profit, no amount has been awarded by the Arbitrator, but in respect of office expenses, which also relates to establishment, 2% overhead amounting to Rs. 69,765.00 has been awarded. There appears to be no claim raised by the petitioners in respect of the claim off the site and accordingly the award granted by the Arbitrator in respect of this claim appears to be an error on the face of the records. Accordingly, I set aside the said award.
(12) In respect of claim Nos. 3 and 4, no objection has been raised by the respondent No. 1 and the said award stands upheld.
(13) In respect of claim No. 5, objection has been raised by the respondent No. I against the award passed by the Arbitrator awarding Rs. 39,003.32 to the petitioner on account of refund of rebate deducted without ensuring payment of final bill within the prescribed period. The Arbitrator has recorded reasons for awarding the aforesaid amount and no error is found in respect of the said award. The same accordingly is upheld.
(14) No objection has been filed by the respondent No. 1 in respect of claims Nos. 6,7 and 8. Accordingly, the awards passed therein in respect of the said claims are upheld.
(15) In respect of claim No. 9 as against the claim of the petitioners to the extent of Rs. 56,309.46, the Arbitrator has awarded the claim in full to the petitioners after considering the records of the case and has given reasons for his conclusions. The thought process of the Arbitrator is also indicated in the award. No error apparent on the face of the records is found on scrutiny thereof and accordingly the same is upheld.
(16) Claim No. 10 relates to payment of interest to the petitioners in respect of its claim for pre-suit pendente lite and future interest as against which the Arbitrator awarded the pendente lite interest @ 15% per annum with effect from 5.5.1992 till the date of publishing the award on all the claims except claim No. 1. No error apparent on the fact of the records is found on the same as well. The Arbitrator is competent and has the discretion to grant pendente lite interest and the said discretion having been exercised by the Arbitrator, the said award cannot be held to be, in any manner, illegal.
(17) In the result, the objection filed by the respondent No. 1 stands partly allowed and the award of the Arbitrator is upheld with modifications as indicated above against the claim No. 1 Parts (A) & (B). The award of the Arbitrator in respect of the said claim to the extent of Rs. 2,92,800.00 is upheld and simple interest @ 12% per annum with effect from 27.8.1991 to 5.5.1992 is upheld. However, the grant of simple interest on the aforesaid amount @ 12% per annum from 14.9.1988 to 26.8.1991 stands set aside and to that extent, award stands modified and the award passed against claim No. 1 Part (D) stands set aside. The award passed by the Arbitrator with the aforesaid modification is made a rule of the Court. In addition, the petitioners shall be entitled to interest @ 15% per annum from the date of the decree till realisation in terms of Section 29 of the Arbitration Act. No cost.