* HIGH COURT OF DELHI: NEW DELHI
% Judgment decided on: 22.09.2011
+ OMP No.675/2008
EXECUTIVE ENGINEER CD-II, NCET OF DELHI
..... Petitioner
Through: Mr. V.K. Tandon, Adv.
Versus
SHRI SYAM LAL GOVERNMENT CONTRACTOR
..... Respondent
Through: Ms. Abha Malhotra, Adv.
Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH
1. Whether the Reporters of local papers may
be allowed to see the judgment?
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported Yes
in the Digest?
MANMOHAN SINGH, J. (Oral)
1. By this order, I shall dispose of the present petition filed by the
petitioner under Section 34 of the Arbitration and Conciliation Act, 1996.
The facts of the case, as averred in the petition are that vide agreement
No.EE-II/Acs/Agt. No.16/99.2000 the petitioner had appointed the
respondent contractor for the construction of supplementary drain, sub work,
excavation, disposal of excavated material/earth and the amount agreed
between the parties for the said work was Rs.26,96,408/-. The dates
OMP No.675/2008 Page No.1 of 5
stipulated of the start and completion of the work, were 09.12.1999 and
08.03.2001 respectively.
2. Thereafter, certain disputes arose between the parties due to
which arbitration proceedings were initiated between the parties and Shri
Ashok Khurana was appointed as the sole arbitrator to adjudicate upon the
disputes between the parties.
3. After having various hearings the learned arbitrator passed the
impugned award dated 04.08.2008 wherein the respondent was awarded
Rs.6,12,000/- in respect of claim No.1 and claim No.22 which were dealt
together by him, claim No.1 was regarding non preparation of correct
account of earth work and claim No.22 was regarding breach of clause 29 of
the contract. Against claim No.3 which was regarding unauthorized with
holding of the amount from extra item No.6 a sum of Rs.1,22,000/- was
awarded. In respect of claim No.4 which was regarding unauthorized with
holding of the amount for the damage of lining /pitching a sum of Rs.90,000/-
was awarded. Claim No.7 was regarding unauthorized with holding of the
due amount for the works executed at the Shalimar Bagh site of DDA a sum
of Rs.2,53,135/- was awarded. Rs.5,95,000/- were awarded against claim
No.17 which was regarding non-payment of due amount under clause 10 CC
of clauses of the contract and in respect of claim No.25 interest @ 8.5% p.a.
was awarded by the learned arbitrator on account of interest for delay of
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payments.
4. The petitioner, feeling aggrieved by the said award dated
04.08.2008 filed the present petition/objection praying that the award dated
04.08.2008 be set aside to extent of the claims made by the respondent.
According to the petitioner, the arbitrator failed to appreciate the detailed
reply filed by the petitioner and that the respondent had not completed the
work assigned to him.
5. In the reply filed on behalf of the respondent it is stated that the
High Court cannot exercise appellate jurisdiction over the award of the
arbitrator as there is nothing in the award to show that the arbitrator has
acted contrary to the public policy or in breach of substantive provisions of
law. The award passed by the learned arbitrator is a well reasoned award and
the same has been passed after considering all the issues between the parties
and is within the substantive provisions of law and was passes in terms of the
contract.
6. The law on the issue raised by the petitioner in its objections filed
under Section 34 is quite settled. The following are the few decisions
which are directly applying to the facts of the present case :
(a) In the case of Indu Engineering & Textiles Ltd. v. Delhi
Development Authority; AIR 2001 SC 2668, the Supreme Court observed as
under:
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“This Court, while dealing with the power of courts to interfere
with an award passed by arbitrator, had consistently laid stress
on the position that an arbitrator is a Judge appointed by the
parties and as such the award passed by him is not to be lightly
interfered with. In the case on hand the only question that arose
for consideration was whether the appellant was entitled to claim
the enhanced price of hard coke for the quantity supplied by it to
the respondent. Under the contract a specific quantity of the
material was to be supplied during the period fixed under the
agreement. Right from the beginning while submitting the tender
the appellant had included a price escalation clause in which it
was stipulated that any escalation of the price after submission
of the tender will entitle the supplier to claim higher price from
the other party. This clause was subsequently revised only to the
effect that the price escalation will be applicable when there is
statutory enhancement in the price of the commodity. No dispute
was raised before the arbitrator or the court that the escalated
price claimed by the appellant was not the statutorily enhanced
price of hard coke. It was also not in dispute that even accepting
the appellant’s claim for escalated price of the commodity, it was
entitled to the claim only in respect of a part of the quantity
supplied and not the entire quantity. In these circumstances, the
arbitrator had not attached importance to the non-mention of the
enhanced price of hard coke in course of negotiations between
the parties. The view taken by the arbitrator, in the
circumstances of the case, was a plausible one and the same
could not be said to be suffering from any manifest error on the
face of the award or wholly improbable or perverse one. As such
it was not open to the court to interfere with the award within the
statutory limitations laid down in Section 30 of the Act. The
single Judge, therefore, rightly declined to interfere with the
award passed by the arbitrator and made it rule of the court.”
(b) In the case of Oil and Natural Gas Corporation Ltd. v. SAW
Pipes Ltd.; AIR 2003 SC 2629, the Supreme Court observed as under:
“It cannot be disputed that for construction of the contract, it is
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settled law that the intention of the parties is to be gathered from
the words used in the agreement. If words are unambiguous and
are used after full understanding of their meaning by experts, it
would be difficult to gather their intention different from the
language used in the agreement. If upon a reading of the
document as a whole, it can fairly be deduced from the words
actually used therein that the parties had agreed on a particular
term, there is nothing in law which prevents them from setting up
that term. Further, in construing a contract, the Court must look
at the words used in the contract unless they are such that one
may suspect that they do not convey the intention correctly. If
the words are clear, there is very little the court can do about it.”
7. In view of the above said settled law and coupled with the fact
that the arbitrator has given a complete answer to all the points raised by the
parties, there is no reason given by the petitioner to interfere with the award.
Therefore, the objections, filed by the petitioner under Section 34 of the
Arbitration and Conciliation Act, 1996 to set aside the award, are dismissed.
No costs.
8. The amount deposited by the petitioner with the Registrar General
of this Court in terms of order dated 20.03.2009 be released to the
respondent by the Registry.
MANMOHAN SINGH, J
SEPTEMBER 22, 2011
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