Swadeshi Construction Co. Vs. Executive Engineer, Dttdc Ltd. - Court Judgment

SooperKanoon Citationsooperkanoon.com/711298
SubjectArbitration
CourtDelhi High Court
Decided OnOct-22-2009
Case NumberCS(OS) No. 395A/1997
Judge Valmiki J. Mehta, J.
Reported in164(2009)DLT344
ActsArbitration Act, 1940 - Sections 30 and 33
AppellantSwadeshi Construction Co.
RespondentExecutive Engineer, Dttdc Ltd.
Appellant AdvocateNon
Respondent Advocate Vikas Kumar, Adv. for Arvind Nayar, Adv.
Cases Referred and Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra
Excerpt:
- - 7727/97 in suit no395a/97 is the application/objections filed under sections 30 and 33 of the arbitration act, 1940 against the award of the sole arbitrator dated 27.11.1996. 2. the main argument which has been pressed by the counsel appearing for the objector is that the arbitrator failed to give hearing and did not allow any evidence to be led. i find that this objection is well merited.valmiki j. mehta, j.i.a. no. 7727/1997 in c.s.(os) no. 395a/19971. i.a. no. 7727/97 in suit no395a/97 is the application/objections filed under sections 30 and 33 of the arbitration act, 1940 against the award of the sole arbitrator dated 27.11.1996.2. the main argument which has been pressed by the counsel appearing for the objector is that the arbitrator failed to give hearing and did not allow any evidence to be led. this is averred in ground d in the i.a. when i put it to the counsel that whether an application was moved before the arbitrator as to whether any evidence is required to be lead or that the arbitrator is not giving hearing, the counsel replied in negative. i find that this ground is indeed very expansive and vague. it is not possible for the arbitrator, who is not present in the proceedings to defend himself with respect to such a ground. i do not find any merit in this ground because if this objection was legitimate, surely, immediately after the award was passed the objector should have moved before the arbitrator stating that adequate hearing was not given and opportunity for leading evidence was also not given. admittedly, this has not been done and therefore there is no basis to sustain this objection which is accordingly rejected. the counsel for the objector thereafter has argued that the award is against the terms of the contract between the parties, however, on the query from the court the counsel could not point out any specific violation of the terms of the contract or how the award in this behalf is perverse or how the award can be assailed. accordingly, this court is unable to accept this objection.3. that however takes me to the main objection which is pressed which pertains to the grant of interest @ 18% per annum by the arbitrator. i find that this objection is well merited. this is because in a consistent line of recent decisions of the supreme court, it has held that in view of the change in the economic scenario and the consistent fall in the rates of interest, the courts have to be circumspect and lower rate of interest should be awarded considering the changed scenario. these supreme court judgments are: rajendra construction co. v. maharashtra housing & area development authority and ors. : 2005 (6) 678, mcdermott international inc. v. burn standard co. ltd. and ors. : 2006 (11) scc 181, rajasthan state road transport corporation v. indag rubber ltd. : (2006) 7 scc 700 and krishna bhagya jala nigam ltd. v. g. harischandra : 2007 (2) scc 720. in this case the award is of the year 1996 i.e. more than about 13 years back. considering this long period of time and as per the ratio of the aforesaid judgments of the supreme court instead of interest @ 18% per annum, i in the facts and circumstances of the case, award interest @ 9% per annum simple and therefore the award will be for a sum of rs. 3,30,239/- with interest @ 9% per annum from 1.4.1995 till the date of payment. accordingly, this objection petition is partly allowed to the extent of interest. rest of the objections are dismissed. the award is accordingly made a rule of the court with the aforesaid amendment as to the rate of interest. since no one appeared on behalf of the non-objector, i do not think it fit to award any costs in these proceedings and therefore the parties are left to bear their own costs.c.s.(os) no. 395a/199.7in view of the order passed in i.a. no. 7727/1997, the suit also stands disposed of.
Judgment:

Valmiki J. Mehta, J.

I.A. No. 7727/1997 in C.S.(OS) No. 395A/1997

1. I.A. No. 7727/97 in Suit No395A/97 is the application/objections filed under Sections 30 and 33 of the Arbitration Act, 1940 against the award of the sole Arbitrator dated 27.11.1996.

2. The main argument which has been pressed by the counsel appearing for the objector is that the Arbitrator failed to give hearing and did not allow any evidence to be led. This is averred in ground D in the I.A. When I put it to the Counsel that whether an application was moved before the Arbitrator as to whether any evidence is required to be lead or that the Arbitrator is not giving hearing, the Counsel replied in negative. I find that this ground is indeed very expansive and vague. It is not possible for the Arbitrator, who is not present in the proceedings to defend himself with respect to such a ground. I do not find any merit in this ground because if this objection was legitimate, surely, immediately after the award was passed the objector should have moved before the Arbitrator stating that adequate hearing was not given and opportunity for leading evidence was also not given. Admittedly, this has not been done and therefore there is no basis to sustain this objection which is accordingly rejected. The Counsel for the objector thereafter has argued that the award is against the terms of the contract between the parties, however, on the query from the court the Counsel could not point out any specific violation of the terms of the contract or how the award in this behalf is perverse or how the award can be assailed. Accordingly, this Court is unable to accept this objection.

3. That however takes me to the main objection which is pressed which pertains to the grant of interest @ 18% per annum by the Arbitrator. I find that this objection is well merited. This is because in a consistent line of recent decisions of the Supreme Court, it has held that in view of the change in the economic scenario and the consistent fall in the rates of interest, the Courts have to be circumspect and lower rate of interest should be awarded considering the changed scenario. These Supreme Court judgments are: Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and Ors. : 2005 (6) 678, McDermott International Inc. v. Burn Standard Co. Ltd. and Ors. : 2006 (11) SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd. : (2006) 7 SCC 700 and Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra : 2007 (2) SCC 720. In this case the award is of the year 1996 i.e. more than about 13 years back. Considering this long period of time and as per the ratio of the aforesaid judgments of the Supreme Court instead of interest @ 18% per annum, I in the facts and circumstances of the case, award interest @ 9% per annum simple and therefore the award will be for a sum of Rs. 3,30,239/- with interest @ 9% per annum from 1.4.1995 till the date of payment. Accordingly, this objection petition is partly allowed to the extent of interest. Rest of the objections are dismissed. The award is accordingly made a rule of the Court with the aforesaid amendment as to the rate of interest. Since no one appeared on behalf of the non-objector, I do not think it fit to award any costs in these proceedings and therefore the parties are left to bear their own costs.

C.S.(OS) No. 395A/199.7

In view of the order passed in I.A. No. 7727/1997, the suit also stands disposed of.