JUDGMENT
M.S.A. Siddiqui, J.
1. By the agreement No. 5/EE/SED/87-88 dated 30.9.1987, the petitioner was awarded the work of construction of cement concrete paths and pavements in Pocket-C, SFS Houses, Section-F, Sarita Vihar, Delhi. As per the agreement, the work was to start on 10.10.1987 and was to be completed on or before 9.2.1988. However, the work could not be started within the stipulated period and the contract was rescinded on 21.3.1988. Disputes and differences between the parties in respect of the contract in question were referred to the Arbitrator, who gave his award on 30.4.1992. On 27.4.1993, the Arbitrator Mr. A.L. Garg filed his award. Notice of filing
of the award was given to the parties. The respondent DDA filed objections under Sections 30/33 of the Arbitration Act against the award, which have been opposed by the petitioner.
2. The objections of the DDA having been opposed, the following issues were framed:
1. Whether the award is liable to be set aside on the grounds of objections raised by the respondent in the objection petition?
2. Relief and costs.
(Claim No. 1 and Counter claim No. 1)
3. While claimant contractor claimed refund of earnest money amounting to Rs. 20,000/-, the respondent DDA preferred a counter claim of Rs. 1 lac on account of forfeiture of the earnest money. The Arbitrator rejected the counter claim but allowed the contractor’s claim on the following grounds:
(a) Although, it was mentioned in Clause 2(a) of the agreement that "the site for the work was available", but the clear site for the work was not made available till 9.2.1988, i.e. the date for completion of the contract; (b) After expiry of the period stipulated in the agreement, no time was mutually agreed between the parties for completion of the contract. Thus, the time was not kept as essence of the contract; (c) The work awarded to the contractor could not be completed because of non-fulfilment of obligation in respect of making available the clear site by the DDA for starting the work in terms of the contract. Thus, the DDA was not justified in rescinding the contract and forfeiting the earnest money.
4. It is undisputed that as per agreement the work was to start on 10.10.1987 and was to be completed on or before 9.2.1988; that the work could not be started within the stipulated period and the contract was repudiated on 21.3.1988. After repudiation of the contract, contractor’s earnest money amounting to Rs. 20,000/- was forfeited by the DDA. It is also undisputed that although, it was mentioned in the agreement in question that the site was available for starting the work but the actual site was not made available to the contractor on the date of the commencement of the contract.
5. Learned Counsel for the DDA submitted that as per Clause 2 of the agreement time was the essence of the contract and as the contractor had failed to start work within the stipulated period, respondent was justified in forfeiting the earnest money on the ground of breach of the contract. According to the learned Counsel, the Arbitrator has committed a patent illegality in holding that Clause 2 of the agreement was not applicable as the time was not the essence of the contract. He further contended that the finding recorded by the Arbitrator on the question of breach of contract by the respondent DDA is also erroneous and so award given by the Arbitrator on the claim No. 1 is not sustainable in law. In my opinion, the submissions of the learned Counsel deserve to be repelled as I do not find that the contractor had committed breach of the contract. It was stated in para No. 2(iv) of the objections filed against the award that clear site for work was made available to the contractor on 23.12.1987 and the drawings for the work were supplied to him on 26.12.1987. This clearly shows that the time was not the essence of the contract as the DDA could not make available the clear site and the
drawings to the contractor in terms of the con tract. In view of these facts Clause 2 of the agreement became inoperative Clause 2 would be applicable only when the time was the essence of the contract. In the instant case, since the dear site and the drawings of the construction were not made available to the contractor in terms of the contract, the question of executing the work by the contractor within the stipulated period did not arise. The Arbitrator has, therefore rightly held that the work awarded to the contractor could not be executed within the stipulated period because of non-fulfilment of obligations in respect of making available the clear site and drawings of the construction by the DDA. The DDA cannot take advantage of its own wrong when it self was instrumental by its conduct in delaying the execution of work. It is relevant to mention that the furnishing of security for due performance of the contract is a part of the contract. When security forms part of the contract, the party committing breach of the contract cannot demand performance thereof by the other party, and consequently cannot retain or forfeit the security money, deposited for performance of the contract. I find from the award that the Arbitrator has duly considered this aspect in the light of material placed before him and his award on the Claim No. 1 and the counter claim does not suffer from any legal infirmity.
Claim No. 2
6. The contractor preferred a claim of Rs. 1 lac on the ground that he had constructed huts for labourer, brought material and engaged labour for executing the contract and as the contract could not be executed due to non fulfillment of obligations by the DDA, he was entitled to receive the said amount from the DDA. The DDA resisted the claim contending that no such arrangements were made by the contractor. However, it was admitted that some labour was engaged by the contractor for levelling and dressing of the site of construction. On a consideration of the material available on record and the submissions made by the parties, the Arbitrator has awarded a sum of Rs. 5,000/- under the said claim. Learned Counsel for the DDA contended that as per Clause No. 1 of the contract, the contractor was not entitled to claim any compensation from the DDA in the event of the site being not made available by the DDA. According to the learned Counsel, the Arbitrator had no jurisdiction to award Rs. 5,000/- to the contractor under the Claim No. 2 as the alleged dispute was not covered by the contract. I do not find any merit in the said submissions of the learned Counsel. It is an admitted position that some labour was engaged by the contractor for levelling and dressing of the site of construction. As noticed earlier, on account of failure of the DDA to supply the drawings and to make available the clear site for execution of the work in terms of the contract, the contractor was prevented from performing his part of the agreement within the stipulated period, and as such he would be exonerated from the allegation of a breach of contract. Admittedly, the contractor had engaged some labour for executing the work. That being so, the contractor was entitled to compensation from the DDA for any loss which he sustained in consequence of the non-performance of the contract. In my opinion, the Arbitrator has not committed any illegality in awarding a sum of Rs. 5000/- to the contractor under the Claim No. 2.
Claim No. 3
7. The Arbitrator has awarded a sum of Rs. 64,900/- to the contractor by way of compensation for loss of profit. The DDA claimed compensation to the tune of Rs. 1,99,948/- on account of extra expenditure incurred by it in getting the work executed
at the cost of the contractor. The counter claim was rejected by the Arbitrator on the ground that the DDA had committed breach of the contract and as such there was no justification for repudiation of the contract by the DDA and getting the work executed at the cost of the contractor. As noticed earlier, the contractor was prevented from executing the work because of non-performance of its part of the contract by the DDA within the stipulated period. It is undisputed that execution of the work was to be completed on or before 9.2.1988 and that on 8.2.1988, the contractor had invoked the arbitration agreement. Thus, admittedly, the contract was repudiated by the DDA after invocation of the arbitration agreement by the contractor. In this view of the matter, the Arbitrator has rightly held that repudiation of the contract by the DDA was not valid and so the DDA was not entitled to recover any amount from the contractor by way of compensation. Consequently, the Arbitrator has not committed any illegality in rejecting the said counter claim of the DDA.
8. As regards the claim preferred by the contractor, it has to be borne in mind that where a breach of contract has been committed, the party not in default is entitled to recover damages or compensation for the loss which he or it suffered as consequence of the other party committing default. It is well settled that in awarding damages for breach of contract, the party not in default, should, so far as it can be done by money, be placed in the same position as he would have been in, if the contract had been performed. (Murlidhar v. Harishchandra, ). In the instant case, the Arbitrator has awarded a sum of Rs. 64,900/- by way of damages which resulted to the contractor from his having been prevented from making profit which would have accrued to him if the DDA had performed its part of the contract within the stipulated period. Thus, the award of damages for breach of the contract does not suffer from any legal infirmity.
9. As regards the interest, it is now well settled that the Arbitrator has the power to award interest pendente lite. (Secretary, Irrigation Deptt. Govt. of Orissa v. G.C. Rai) . Thus, the Arbitrator has not committed any illegality in awarding the interest.
10. For the foregoing reasons, objections contained in IA No. 6932/94 are dismissed. The award dated 30.4.1992 is made a Rule of the Court. The petitioner/contractor shall also be entitled to interest @12% from the date of the decree till realisation. A decree be drawn up accordingly. The award shall form part of the decree. No order as to costs.