Delhi Cantt. Board vs Quarts Control Communication and System

Valmiki J Mehta, J.—The challenge by means of this First Appeal u/s 39 of the Arbitration and Conciliation Act, 1940 is to the impugned order of the Court below dated 8.3.2001 which dismissed objections of the Appellant herein filed u/s 30 and 33 of the Act to the Award.

The disputes between the parties pertain to work orders awarded to the Respondent by the Appellant pertaining to repairs of electrification of different CF properties and for which purpose a contract was entered into between the parties on 20.7.1987. On disputes and differences having arisen, the Respondent invoked arbitration proceedings and filed its claims before the Arbitrator who published his Award dated 27.5.98, awarding certain claims.

The dispute between the parties so far as the present appeal is concerned, pertains to claim Nos. 2, 3 and 4.

Claim No. 2 was the claim for payment with respect to the value of work done under work order No. 5(ii). The Respondent/contractor claimed a sum of Rs. 22,594.35 against the original quotation of Rs. 16,000/-. The work was actually done for which the bill was submitted as per measurement for Rs. 22,594.35. The defence of the Appellant was that the work was defective and therefore payment was not to be made to the Respondent. In this regard, the Arbitrator has observed that he directed the Appellant to produce the list of specific defects/incomplete work and the concerned measurement book/site order book, but the same were not produced. The Arbitrator therefore held that since the Appellant could not produce any document to prove that the defects existed and work was done by any other agency, an amount of Rs. 21,000/- was awarded to the Respondent. The Arbitrator has arrived at a finding of fact and unless the finding of fact is perverse, a Court hearing objections cannot interfere with the Award. I do not find any perversity in view of the failure of the Respondent to point out the defects and also file the measurement books.

Claim No. 3 was the claim for the balance amount of the work done for work order No. 5(iii). The Arbitrator has observed that total payments made against the bill amount of Rs. 1,69,152.35 was Rs. 1,22,638.35, The original value of the work order was Rs. 1,48,000/-. Once again the Arbitrator while dealing with this claim has observed that the Respondent could not produce the measurement book to show the measurements recorded and could not also prove by any documentary evidence, alleged expenses incurred for rectifying the defects, though the same were directed to be produced for consideration by the Arbitrator. Considering all the facts, the Arbitrator allowed deduction of Rs. 6,000/- from the balance amount and accordingly awarded a sum of Rs. 40,514/- to the Respondent. Once again this is a finding of fact and I feel that in fact the Arbitrator has been liberal towards the Appellant because in spite of defects being not proved, yet, a sum of Rs. 6,000/- was directed to be deducted. There is therefore no perversity in the Award with respect to this claim No. 3 for this Court to interfere with the same and that too in appeal against an order dismissing the objections.

Claim No. 4 was the claim with respect to value of the work order No. 5(iv) for Rs. 55,000/-. The original value of the work order was Rs. 52,186.36. Even with regard to this claim, the Arbitrator has noted that the relevant measurement book was not produced stating that the same is misplaced. The Appellant also could not produce any expense vouchers to show incurring of costs for rectifying the defects. The Arbitrator referred to the fact that he had already allowed deduction from claim No. 3 for Rs. 6,000/- and accordingly he allowed a deduction of Rs. 2,000/- with respect to claim No. 4. Once again this finding of fact need not be interfered with as there is no perversity in the same.

I may note that the Arbitration was conducted by the Superintendent Engineer, who is a technical person, and such technical persons are allowed certain leeway as they are normally conversant with such type of works.

Though the impugned order does not discuss the claim as this Court had done, I note that the impugned order refers to the fact that a Court hearing objections does not sit in an appeal over the Award and it is not possible to substitute the Court''s evaluation for the conclusions of the fact as arrived at by the Arbitrator. This is a correct position of law.

Though, the counsel for the Appellant has not argued one issue, I find that the issue of interest granted by the Award at 16% per annum simple from 1.3.1989 is an aspect which requires interference. The Supreme Court in its recent chain of judgments in Rajendra Construction Company Vs. Maharashtra Housing and Area Development Authority and Others, , McDermott International Inc. Vs. Burn Standard Co. Ltd. and Others, , Rajasthan State Road Transport Corpn. Vs. Indag Rubber Ltd., , Krishna Bhagya Jala Nigam Ltd. Vs. G. Harischandra Reddy and Another, and State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd (2009) 3 A.LR 140 (SC) has mandated the Courts to reduce the high rates of interest, accordingly, in the facts and circumstance of the case, I direct that instead of interest at 16% per annum, interest should be awarded at 10% per annum simple. I however clarify that since the Respondent has already been harassed and has not received the amount under the Award which has been passed over 13 years back, accordingly, the concession in rate of interest by reducing the interest from 16% to 10% per annum simple will only operate, if payment under today''s judgment is made by the Appellant to the Respondent within a period of 3 months from today. In case this payment is not made in this period of three months then considering that the Respondent has been very patiently waiting for payment of its amount from 1998, the interest will otherwise continue to be 16% per annum simple as directed by the Award.

The appeal is accordingly disposed of in terms of the above observations.

Trial Court record be sent back.