Delhi Development Authority vs S. Lall and Co.

Sanjay Kishan Kaul, J.—The petitioner was awarded the contract by the respondent-DDA for construction of Convenient Shopping Centre at Pushpanjali Enclave, Pitampura, Block D, New Delhi in pursuance to agreement No. 32/EC/ND-5/88-89. Disputes arose between the parties and in view of clause 25 of the terms and conditions of the agreement, providing for settlement of disputes by arbitration. Shri Om Prakash was appointed as the Sole Arbitrator by the Engineer-Member, DDA vide a letter bearing No.EM-2(145)91/ARBN 2766-70. The arbitrator made and published the award dated 08.01.1999. The respondent-DDA aggrieved by the same has filed the present objections.

This petition has been filed u/s 34 of the Arbitration and Conciliation Act, 1996. Learned counsel for the parties agree that it is actually the earlier act being Indian Arbitration Act, 1940 (hereinafter referred to as, ''the said Act'') which would apply to the present petition and thus these objections should be treated as having been filed u/s 30 of the said Act.

Learned counsel for the petitioner referred to each of the claims to substantiate his plea that the arbitrator has not correctly appreciated the evidence on record and has come to an erroneous conclusion.

4.In my considered view such a plea would not fall within the scope of Section 30 the said Act. It is not for this court to interfere with an award merely because the court would come to a different conclusion on the material available before the arbitrator and it is only when the award is perverse that an interference would be called for as held by the Division Bench of this court in DDA v. Bhagat Construction Co. (P) Ltd. and Anr., 2004 (3) Arb. LR 481. The Supreme Court has in fact held that in the absence of an award being absurd, reasonableness is not a matter to be considered by the court as appraisement of evidence by an arbitrator is not ordinarily a matter for the court. Food Corporation of India Vs. Joginderpal Mohinderpal, and Gujarat Water Supply and Sewerage Board Vs. Unique Erectors (Gujarat) (P) Ltd. and Another, So long as the view taken by an arbitrator is plausible though perhaps not the only correct view, the award cannot be examined by the court as stated in Sudarsan Trading Co. Vs. Government of Kerala and Another, . It may further be noted that it is not for this court to sit as a court of appeal analyzing each claim on merits and until and unless the objections fall with the parameters of Section 30 of the said Act, the award would not call for an interference. The Supreme Court in Arosan Enterprices Ltd. v. Union of India and Anr; 1999 (3) ArbLR 310 has further held that the common phraseology error apparent on the face of the record would not mean and imply closer scrutiny of merits of documents and material on record.

In view of the aforesaid, only very limited aspects of the award in question need to be examined.

Learned counsel for the petitioner submits that in claim no.3 the award under clause 10C has been made not only for the time period of the contract, but even for the extended period of the contract. I find no infirmity with the said procedure as clause 10C envisages such a position.

Learned counsel for the petitioner contends that there is an overlapping element in claim No. 3 and claim No. 5. Claim No. 5 relates to damages due to escalation because of rise in cost of material. This claim is based on the fact that the work had to be completed within six months from the date of start of the work on 12.01.1989. The stipulated date for completion was 11.07.1989 while the work was actually completed on 11.09.1990 with a delay 14 months. The work was held to be delayed due to various hindrances from the side of the Department. It has been held by the arbitrator that no delay is attributable to the petitioner and thus there was no breach of obligations on the part of the petitioner. It is in view thereof that the amount has been awarded. Increase in wages of labour through the extended period of contract was awarded under Clause 10C and that aspect has been taken into consideration in the operative portion of the award dealing with the claim in question and only balance amount has been awarded.

The last aspect raised is in respect of interest. The arbitrator himself has granted interest at the rate of 12 per cent per annum which is a reasonable rate of interest taking into consideration the prevailing rates of interest at the relevant period of time.

I find no merits in the objections.

Dismissed.