Hindustan Construction Corpn. Ltd. Vs. Delhi Development Authority - Court Judgment

Excerpt:
arbitration act, 1940.sections 30 & 33 - objections to award--arbitrator is the sole judge of the quality and quantity of evidence and it is not open to the court to take upon itself the task of being a judge of the evidence before the arbitrator--the conclusion that dda was responsible for the delay in execution of the work is essentially a finding of fact which cannot be interfered in these proceedings. the arbitrator himself was a technical person being retired director general of works, cpwd and therefore, he can make assessment on the basis of his knowledge and experience--finding of the arbitrator allowing the refund of security deposit holding that the recoveries imposed by the dda were unjustified, are not open to review in these proceedings--objections rejected.arbitration act, 1940.sections 30 & 33 - objections to award--while considering the objections under sections 30 and 33, the award cannot be interfered unless it is against some settled principles of law or is based on no-evidence at all or is patently perverse--if there are two equally possible or plausible view on the basis of material on record and the arbitrator takes one view, it will not be open to the court to set aside the award just because it is inclined to take a different view in the matter. - - @12% and @10%. 7. it is, by now, well settled proposition of law that while considering the objections under sections 30 and 33 of the arbitration act, the award cannot be interfered unless it is against some settled principles of law or is based on no-evidence at all or is patently perverse. 36. be it noted that by reason of a long catena of cases, it is now a well settled principle of law that reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by-the court to reappraise the evidence is unknown to a proceeding under section 30 of the arbitration act. in the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award. it is also, by now, well settled that an arbitrator is not a conciliator and his duty is to decide the disputes submitted to him according to the legal rights of the parties and not according to what he may consider to be fair and reasonable. it would be difficult the courts to either exhaustively define the word 'misconduct' or likewise enumerate the line of cases in which alone interference either could maintain purity of standards and preserve full faith and credit as well as to inspite confidence in alternate dispute redressal method of arbitration, when on the face of the award it is shown to be based upon a proposition of law which is unsound or findings recorded which are absurd or so unreasonable and irrational hat no reasonable or right-thinking person or authority could have reasonably come to such a conclusion on the basis of the materials on record or the governing position of law to interfere.o.p. dwivedi, j.1. the petitioner, m/s. hindustan construction corporation, was awarded the work of development of land within g-8 vide agreement no. 63/ee/hdvii/81-82 by the respondent-dda. on disputes having arisen between the parties, the matter was referred for arbitration and shri v.r. vaish, retired director general of works, cpwd was appointed as sole arbitrator.2. after receiving the claims/counter-claims raised by the parties, learned arbitrator made an award dated 29th august, 1992 for rs. 1,29,276 along with interest @ 12% per annum in favour of the claimant-m/s. hindustan construction corporation. on award being filed, the suit was registered as cs(os)4587/1992 whereupon dda-respondent has filed objections 30 & 33 of the arbitration act, 1940 which was registered as ia no. 4168/1993 to which reply has been filed by the petitioner.3. vide order dated 6th december, 1994 this court had framed the following issues:1. whether the award is liable to be set aside in view of the objections filed by the dda?2. relief.4. the parties have filed their affidavits by way of evidence.5. i have heard learned counsel for the parties and perused the records.6. the stipulated date of start for the work was 2nd november, 1981 and stipulated date of completion was 1st november, 1982. the work was actually completed on 30th april, 1985. dda's objections are confined to award made against claims no. 4, 8, 9, 10 and 12. claim no. 4 related to 50% hike in the contract rate for the work executed from october, 1984 onwards. the claim was for rs. 1,91,275 but the arbitrator awarded a sum of rs. 55,000 only observing that respondent-dda was responsible for delay in execution of the work. claim no. 8 was for rs. 2,640 only on account of cost of 24 cub. mtr. 20 mm stone ballast which was taken away by the objector's je, hd-iv. the arbitrator awarded the entire amount of rs. 2,640 under this claim in favour of the claimant with the observation that claimant had informed the respondent on 3rd october, 1983 that 24 cub. mtrs of ballast had been removed by shri j.n. singh, je, hd-iv but no action was taken by the respondent-dda. claim no. 9 for rs. 1,11,660 was on account of overhead expenses for the work remaining standstill for one year and five months due to breach committed by the respondent-dda. under this claim, the arbitrator awarded a sum of rs. 30,000 only towards expenses incurred by the claimant on staff employed during the said period from april, 1983 to september, 1984 when the work remained suspended. according to the arbitrator, there was delay on the part of the dda in giving decisions and designs. claim no. 10 was for rs. 26,333 on account of refund of security deposit. according to the claimant, the work was completed long time back and even the extension of time was given without levy of compensation. as such there was no justification for the respondent/dda for not releasing the bank guarantee. learned arbitrator allowed this claim in toto holding that withholding of bank guarantee on account of unjustified recoveries was improper. claim no. 12 was for 18% pendenti lite and future interest against which the arbitrator had awarded only 12% interest per annum till the date of payment or decree, whichever is earlier. in addition, claimant was awarded 10% interest on the security deposit of rs. 26,333 for the period from 15th june, 1987 to 29th august, 1992 i.e. date of the award. respondent's contention is that award in respect of claim no. 4 is based on no-evidence at all. likewise award under claim nos. 8 and 9 was not supported by any evidence. as regards the refund of security deposit under claim no. 10, respondent's contention is that arbitrator had wrongly rejected the recoveries made by the dda. as regards the award of interest @ 10% under claim no. 12 respondent's contention is that there is duplication of interest on the security deposit of rs. 26,333. respondent's plea is that interest on security deposit of rs. 26,333 has been awarded twice i.e. @ 12% and @ 10%.7. it is, by now, well settled proposition of law that while considering the objections under sections 30 and 33 of the arbitration act, the award cannot be interfered unless it is against some settled principles of law or is based on no-evidence at all or is patently perverse. if there are two equally possible or plausible view on the basis of material on record and the arbitrator takes one view, it will not be open to the court to set aside the award just because it is inclined to take a different view in the matter. reference in this connection may be had to the decision in the case of arosan enterprises ltd. v. union of india and anr. : (1999) 9 scc 449 wherein the supreme court has observed in para 36 and 37 as under:36. be it noted that by reason of a long catena of cases, it is now a well settled principle of law that reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by-the court to reappraise the evidence is unknown to a proceeding under section 30 of the arbitration act. in the event of there being no reasons in the award, question of interference of the court would not arise at all. in the event, however, there are reasons, the interference would still be not available within the jurisdiction of the court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law; in the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award.37. the common phraseology 'error apparent on the face of the record' does not itself, however, mean and imply closer scrutiny of the merits of the documents and materials on record. the court as a matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. if the view of the arbitrator is possible view the award or the reasoning contained therein cannot be examined....8. more recently, in the case of sikkim subba associates v. state of sikkim (2000) 5 scc 629, the supreme court has observed as under:it is also, by now, well settled that an arbitrator is not a conciliator and his duty is to decide the disputes submitted to him according to the legal rights of the parties and not according to what he may consider to be fair and reasonable. an arbitrator was held not entitled to ignore the law or misapply it and he cannot also act arbitraily, irrationally, capriciously or independently of the contract (see rajasthan state mines and minerals ltd. v. eastern engg. enterprises). if there are two equally possible or plausible views or interpretations...it was considered to be legitimate for the arbitrator to accept one or the other of the available interpretations. it would be difficult the courts to either exhaustively define the word 'misconduct' or likewise enumerate the line of cases in which alone interference either could maintain purity of standards and preserve full faith and credit as well as to inspite confidence in alternate dispute redressal method of arbitration, when on the face of the award it is shown to be based upon a proposition of law which is unsound or findings recorded which are absurd or so unreasonable and irrational hat no reasonable or right-thinking person or authority could have reasonably come to such a conclusion on the basis of the materials on record or the governing position of law to interfere....9. similar view has been taken by the supreme court in various cases viz., state of rajasthan v. puri construction pvt. ltd. : (1994) 6 scc 485 and indu engineering and textile ltd. v. dda : (2001) 5 scc 691 : 2001 (59) drj 481 sc). in municipal corporation of delhi v. jagan nath ashok kumar and anr. : air 1987 sc p. 2316, the apex court categorically held that the arbitrator is the sole judge of the quality and quantity of evidence and it is not open to the court to take upon itself the task of being a judge of the evidence before the arbitrator.10. the findings recorded by the arbitrator under claims no. 4 and 9 to the effect that dda was responsible for the delay in execution of the work is essentially a finding of fact which cannot be interfered in these proceedings. the arbitrator himself was a technical person being retired director general of works, cpwd and, therefore, he can make assessment on the basis of his knowledge and experience. such award cannot be interfered just because there was no specific evidence. such estimates made by the arbitrators on the basis of their knowledge and experience in their field have been upheld in the various cases. reference in this connection may also be made to c. lal gupta v. delhi development authority and anr. : 2000 iad (delhi) 37 : 2000 (52) drj 12; hans construction co. v. dda and anr. : 2001 iii ad (delhi) 661 : 2001 (59) drj 38 and kochar construction works v. dda and anr. : 2000 iv ad (delhi) 479 : 2000 (52) drj 755.11. finding of the arbitrator allowing the refund of security deposit holding that the recoveries imposed by the dda were unjustified, are not open to review in these proceedings. it is not the case of the objector/dda that any particular finding of the arbitrator is contrary to any settled proposition of law. once the arbitrator holds that there was breach on the part of the dda/objector, question of detention of earnest money doest not arise. 2002 iv ad (delhi) 18012. the arguments on behalf of the dda that there was duplication of interest on security deposit of rs. 26,333 is also devoid of merits. it may be noted here that on other claims, the arbitrator awarded only future interest but in the case of security deposit, interest has been awarded prior to the date of award also because security deposit had become refundable long back.13. learned counsel for the dda has relied upon the decision in the case of college of vocational studies v. s.s. jaitely air 1987 delhi 134 in support of his contention that award should contain reasons showing nexus between material on record and the conclusions arrived at by the arbitrator. in this case, a perusal of the award shows that the award contains ample indications of thought process of arbitrator. in the case of mcd (supra), the supreme court has observed that reasonableness of the reasons given by the arbitrator in making the award cannot be challenged unless they are patently perverse.14. having considered the respective submissions made by learned counsel for the parties and materials on record, i am of the considered view that award dated 29th august, 1992 made by shri v.r. vaish, retired director general of works, cpwd is legally sound and call for no interference. in the result, objections under sections 30 and 33 of the arbitration act filed by the dda being ia no 4168/1993 are hereby dismissed. award is made rule of the court. let the decree sheet be drawn accordingly.suit & application stand disposed of.