Manohar Singh Sahny and Co. Vs. Delhi Development Authority - Court Judgment

Excerpt:
the case questioned whether non-consideration of counter claims was proper within the framework of sections 14,17, 30 and 33 of the arbitration act, 1940 - the objections regarding the non adjudication of counter claims was raised in suit seeking the award to be made rule of the court - it was held that, arbitrator ought to had adjudicated upon the counter claims - thus new arbitrator was appointed to adjudicate upon counter claims of the respondent - further, there was no merit in the other contentions of the respondent - thus, same was made the rule of the court - - ansuya salwan, learned counsel appearing for the respondent/objector-dda, has contended that the award of the arbitrator is bad as the arbitrator has awarded a sum of rs. it was further contended before me that the arbitrator was retired chief engineer and was very well conversant with the kind of contract in which he was to adjudicate upon on the basis of material placed on record and the arbitrator has given his findings on the basis of record of the arbitration proceedings. 12. suit as well as objections applications stand disposed of.vijender jain, j.1. aggrieved by the award dated 21.10.1987, respondent-delhi development authority (for short 'dda') has preferred objections to the award.2. ms. ansuya salwan, learned counsel appearing for the respondent/objector-dda, has contended that the award of the arbitrator is bad as the arbitrator has awarded a sum of rs. 4,555/= towards a claim of rs. 2 lacs for payment under clause 10-c of the agreement under claim 'd'. next objection of the learned counsel for the objection-dda is with regard to amount withheld by the objector on account of part rates i.e. under claim no. f-3 for which the arbitrator has allowed a claim for rs. 4,70,550/=. learned counsel for the objector-dda has also contended that payment of a sum of rs. 50,192/= under claim no. f-4 i.e. extra/substituted items not paid was not proper as this item of work was not ordered by the respondent and contractor has done the same on his own sweet will. she further contended that the award under claim f-4 item no. 2 i.e. extra for plastering exterior walls of height more than 10 meters height was also not proper for which arbitrator has awarded a sum of rs. 9,427/=. next objection raised by the counsel for objector-dda is with regard to the award under claim no. f-5 i.e. amount withheld on account of alleged defects amounting to rs. 32,000/=. lastly, counsel for the objector-dda has also objected to the award of amount of rs. 70,000/= on account of deductions made from r.a. bills for excess cement consumption on the ground that as per clause 42(ii) of the agreement the recovery of excess consumption of cement beyond permissible limits was to be made as such action of withholding of excess cement consumption is justified.3. on the other hand, counsel for the petitioner-contract, mr. c.r. somasekhar, has contended that this court is neither a court of appeal nor will substitute its opinion for that of the arbitrator. it was further contended before me that the arbitrator was retired chief engineer and was very well conversant with the kind of contract in which he was to adjudicate upon on the basis of material placed on record and the arbitrator has given his findings on the basis of record of the arbitration proceedings. it was further contended by mr. somasekhar that award of the arbitrator is finding of fact and this court will not interfere with the same.4. i have given my careful consideration to the arguments advanced by learned counsel appearing for both the parties. let me deal with claim for an award of rs. 4,555/=. the claim was made by the contractor in view of increase of labour wages affected by delhi administration from 1.3.1982 to 1.6.1982. i do not see any justification in the submission of the learned counsel for the objector-dda. the arbitrator has only awarded a sum of rs. 4,555/= and has given his reasoning and allowed a sum of rs. 4,555/= for work done by the contractor after 24.4.1984. the second objection of the objector was to the award of rs. 4,70,550/= under claim no. f-3. the said claim has been awarded to the contractor as per details as given in annexure b attached with claimant's statement of facts. in spite of opportunity granted objector-dda did not given any supporting documents or details to justify for the part rates. even otherwise, this finding is finding of fact and this court will not substitute its own opinion for that of the arbitrator and there is no merit in the objection of the objector on this score also.5. the objection of the dda with regard to payment of rs. 50,192/= under claim no. f-4 is also without any merit. the arbitrator has recorded a reasoned finding after perusing the ex. c-11 dated 5.8.1983 which is a letter from the contractor informing the executive engineer of the respondents that he is executing the grooves as per his instructions and the total quantity comes to 25,096 meters. the contractor had demanded the rate of rs. 5.11/= per meter whereas the arbitrator has awarded rate of rs. 2/= per meter. there is no merit in the objection on this score also. there is no merit in the submissions of the learned counsel for the objector that the award of rs. 9,427/= on account of claim no. 4 under item no. 2 for plastering of exterior walls of height of more than 10 meters was wrong. the award is based on the specifications of c.p.w.d. which are applicable in such kind of contract.6. similarly, the objection of the objector with regard to award under claim no. f-5 amounting to rs. 32,000/= is also without any basis. the arbitrator has returned a specific finding that respondent has not given any specific details in support of the amount withheld nor they have issued any notice under clause 14 of the contract for rectification of the defects. this objection is also not sustainable. lastly, the objection of the objector with regard to award of an amount of rs. 70,000/= on account of deduction made from r.a. bills for excess cement consumption is also not tenable as the arbitrator has discussed in the award and has returned the finding that the respondent has withheld from running bills 12, 14, 15, 17 and 19 on account of excess consumption of cement and there is no provision in the contract for making such recovery from r.a. bills. i do not find any force in the arguments of the counsel for the objector that same was not permissible. all these objections are taken by the dda which relates to all issues of facts. supreme court in m/s. arosan enterprises v. uoi and anr., : air1999sc3804 held :-'in any event, the issues raised in the matter on merits relate to default, time being the essence, quantum of damages--these are all issues of fact, and the arbitrators are within their jurisdiction to decide the issue as they deem it fit--the courts have no right or authority to interdict an award on a factual issue and it is on this score the appellate court has gone totally wrong and thus exercised jurisdiction which it did not have. the exercise of jurisdiction is thus wholly unwarranted and the high court has thus exceeded its jurisdiction warranting interference by this court. as regards issues of fact as noticed above and the observations made hereinabove obtains support from a judgment of this court in the case of olympus superstructures pvt. ltd. v. meena vijay khetan : [1999]3scr490 .'7. another objection was raised by ms. salwan that arbitrator has not adjudicated the counter claims of the dda. i find force in the arguments of ms. salwan that counter claims of the dda have not been adjudicated upon by the arbitrator on the ground that there was no reference received from the engineer member, dda. in view of the letter written on 30.6.1980 by the engineer member, dda wherein the statements enclosed and counter claims of the department, if any, to follow were referred to the arbitrator and arbitrator ought to have adjudicated upon the counter claims. mr. somasekhar, learned counsel appearing for the petitioner/non-objector, fairly concedes that let the same be referred to a new arbitrator. to avoid any controversy, i direct that let counter claims, if any, of the respondent-dda be also adjudicated upon by the arbitrator. in the circumstances, i appoint justice j k mehra, a retired judge of this court, to adjudicate upon the counter claims of the respondent-dda. however, the arbitrator will confine himself of giving award on the basis of counter claims filed and whatever evidence available on the record in this regard. respondent shall not be permitted to file any fresh evidence with the arbitrator.8. the rest of the award is severable as i have discussed above there is no merit in other objections of the objector, thereforee, the same is made rule of the court. a decree in terms thereof be passed except in relation to what has been referred to now by this court to the newly appointed arbitrator.9. a direction is issued to the respondent to deposit the amount of the award already given by mr. g. hingorani within a period of four weeks with the registrar general of this court except the amount awarded under claim no. 'b', which is at page 5 of the award and claim no. f-10, at page-7 of the paper book as that shall depend on the decision of the newly appointed arbitrator after award is made on the counter-claims of the respondent. the amount to be deposited with the registrar general by the respondent will be deposited in a fixed deposit. the arbitrator shall only decide aforesaid claims on the basis of documents and pleadings filed on record.10. the record of the arbitration be sent to the newly appointed arbitrator and intimation of the appointment of the arbitrator be also sent to the arbitrator by the registry. the arbitrator will be free to fix his own fees.11. a direction is issued to the arbitrator to give award within four months.12. suit as well as objections applications stand disposed of.