JUDGMENT
Vijender Jain, J.
(1) The petitioner filed the petition under Sections 14, 17 and 29 of the Arbitration Act read with Section 3 of the Interest Act for making the award rule of the Court. Award was made by the Arbitrator, Mr.A P Paracer, Additional Director General (Retd.) C.P.W.D. on 23.12.1993. The respondent filed their objections against the award under Section 30 of the Arbitration Act. The Arbitrator entered the reference on 10.4.1987.
(2) Learned counsel for the respondent, Ms.Ansuya Salwan, has challenged the whole award. The main thrust of the argument of the learned counsel for the respondent, is to Claim No. 3 under the award. Ms.Salwan says that award of a sum of Rs. 1,12,185.40 paise to the petitioner-claimant on account of extra expenditure incurred towards rise in wages of labour for the quantum of work after the expiry of stipulated contract period was erroneous. She has contended that Arbitrator has completely ignored that under the provisions of the contract entered into between the parties, there was a provision for escalation in labour wages under Clause-10(c) of the contract and the said increase was payable only if there was no delay attributable on the part of the claimant-petitioner. She has also contended that the Arbitrator had no material before him to come to a conclusion that the labour element for execution of such work was 20%. She has also contended that when penalty had been imposed on the claimant in terms of Clause-2, Arbitrator had no jurisdiction to grant the award under Claim No.3. In support of her arguments, she has cited Bharat Furnishing Co. vs. Dda & anr. 1992(1) Arb.L.R.327, R S Rana Vs. Dda & anr. 1993(2) Arb.L.R.165 and Sudhir Brothers Vs. Dda 1995(2) Arb.L.R.437. Another challenge by learned counsel for the respondent is to Claim Nos. 5 and 6. She has contended that on one hand, the Arbitrator has awarded under Claim No. 3 for additional expenses towards escalation of cost of labour and still under Claim No. 5, i.e. rise in price of bricks and under the head Claim No. 6, i.e. rise in wages because of statutory notification, Arbitrator has awarded a sum of Rs. 25,000/= in favour of claimant thereby awarding increase in labour twice and on this score Arbitrator has misconducted the proceedings and, therefore, the award be set aside.
(3) Yet another objection, which has been raised by the learned counsel for the respondent, is with regard to the award of interest under Claim No. 12. Ms.Salwan has contended that as per Section 2(b) of the Interest Act pre-suit interest at the rate of 18% is not permissible. She has further contended that this is not the rate on which interest is payable by the nationalised bank. She has also contended that the Arbitrator was appointed on 30.3.1987, he entered into reference on 10.4.1987 and the grant of interest at the rate of 18% from 10.4.1986 till 10.4.1987 is unwarranted in law, that being too exorbitant.
(4) Another argument raised by the learned counsel for the respondent is with regard to rejection of counter-claim No. 2. However, at the time of addressing arguments, the learned counsel for the respondent was candid enough to point out that the judgment of this Court reported in Dda Vs. M/s Sudhir Brothers 1995 (2) Arb.L.R. 307 delivered by a Division Bench held that the Arbitrator acted without jurisdiction in going into the said question and that was not within the power of the Arbitrator. However, she wants this Court to hold that if respondent-DDA is to recover the amount on account of counter Claim No. 2, this Court may grant her liberty to do so and condone the delay, if any, in initiating the appropriate proceedings for recovery.
(5) On the other hand, Mr.Rajesh Lakhanpal, learned counsel appearing for the petitioner, has contended that the award is well-reasoned award. The Arbitrator was a former Additional Director General (Retd.) C.P.W.D. and was well-versed and experienced with the job and he understood all the mechanism of construction and the disputes, which were referred to him. Mr.Lakhanpal has further contended that the award of a sum of Rs. 1,12,185.40 paise on account of labour element under Claim No. 3 was in the nature of compensation and not a statutory increase as sought to have been made out by the respondent. He has further contended that this Claim pertained to escalation in cost of labour incurred in cost and wages of labour for the quantum of work executed after the expiry of stipulated contract period and, therefore, the Arbitrator held that the respondent was liable to compensate the claimant in this regard. Mr.Lakhanpal has also contended that knowledge and experience of the Arbitrator was enough to guide him to fix labour element at 20% and the respondent cannot question the wisdom and knowledge of the Arbitrator as he was well-versed with these kind of disputes and engineering work. In support of his contentions, he has cited, Mcd Vs. M/s Jagan Nath Ashok Kumar and anr. .
(6) Dealing with the argument of the learned counsel for the respondent with regard to Claim Nos. 5 and 6, i.e. rise in price of bricks and rise in wages of labour because of statutory notification, the Arbitrator while adjudicating Claim No. 5 has specifically mentioned that no opinion of the Superintending Engineer has been placed on record holding delay attributable to the claimant-petitioner and on that account increase in price of bricks which came into force by virtue of statutory rules and notification was not payable to the claimant-petitioner, what is of importance is to note whether statutory increase in price of bricks had come into force during the period of contract, if the statutory increase in the price of bricks has come into force during the operation of contract period then there is no question of applicability of Clause-10(c) of the agreement. Similar is the contention of the learned counsel for the petitioner with regard to Claim No. 6. Mr.Lakhanpal has contended that award of Claim No. 6 on account of rise in wages of labour on account of statutory notification is with regard to quantum of work executed within the stipulated contract period and that is how the Arbitrator has awarded a sum of Rs. 25,000/= on this head.
(7) Coming to Claim No. 12, i.e. with regard to interest at the rate of 18% p.a., Mr.Lakhanpal has contended that the Arbitrator had jurisdiction to award pre-suit, pendente lite as well as future interest and his power is neither circumspect nor controlled by Interest Act.
(8) I have heard the submissions of the learned counsel appearing for both the parties at length. As regards, Claim No. 3, which has been granted by the Arbitrator in favour of the petitioner-claimant is on account of additional expenses towards escalation of cost of materials/labour, administrative expenses, watch and ward, staff, equipment, plant because of prolongation of work……..damages. The said claim was for Rs. 4,30,900/=. The Arbitrator has rejected other claims of the claimant and has awarded labour element, i.e. on account of rise in wages of labour for the quantum of work executed after the expiry of stipulated contract period. As the award under Claim NO. 3 is in relation to the extra expenditure incurred on rise of wages of labour for the quantum of work executed after the expiry of stipulated contract period, the authority cited by the learned counsel for the respondent Bharat Furnishing Co. Vs. Dda & anr.’s case (supra) would not be applicable. Bharat Furnishing Co. Vs. Dda & anr’s (supra) admittedly was the case where the minimum wages were enhanced after lapse of the period fixed for execution of the work and the appellant was found guilty of delay in execution and, therefore, the Court held that the Arbitrator had no jurisdiction to award enhanced wages. In the present case, this amount has been awarded by the Arbitrator on account of extra expenditure incurred on account of rise in wages of labour for the quantum of work executed after the expiry of stipulated contract period. I find force in the arguments of the learned counsel for the petitioner that it is in the nature of compensation for the extra expenditure incurred by the petitioner-claimant as the work was executed after the expiry of stipulated contract period. The argument of the learned counsel for the respondent that labour component at 20% is too high, is also devoid of any force. Mr.Lakhanpal has further contended that for the new works, the respondent themselves are now taking the labour components in the contract to be 25%. The argument of the learned counsel for the petitioner is also supported by the view taken by the Apex Court in Mcd Vs. M/s Jagan Nath Ashok Kumar and anr.’s case (supra).
(9) Similarly, I am in complete agreement with the argument advanced by the learned counsel for the petitioner regarding Claim Nos. 5 and 6. Claim No. 5 is with regard to rise in price of bricks because of statutory notification. Claim No. 6 is also on account of rise in wages of labour on account of statutory notification. Both these increases are statutory and have come into force during the contract period itself, that being so, the Arbitrator was fully justified in awarding these Claims under heads No. 5 and 6, i.e for Rs. 25,165/= and Rs. 25,000/= respectively. Therefore, the authority cited by the learned counsel for the respondent, Bharat Furnishing Co. Vs. Dda & anr. (supra), has no applicability to the facts of this case.
(10) With regard to award of interest at the rate of 18% p.a., there cannot be any dispute with regard to award of pendente lite and future interest which the Arbitrator has awarded. Ms.Salwan has raised serious dispute with regard to award of interest from 10.4.1986 till 10.4.1987 @ 18% p.a. on the ground that grant of interest at 18% p.a. is too exorbitant and cannot be granted by the Arbitrator in terms of Section 2(b) of the Interest Act. Ms.Salwan says that the normal interest which can be accrued on a deposit of nationalised bank would not be more than 12%. There is some force in the argument of learned counsel for the respondent. As award of pre-suit interest @ 18% p.a. is on higher side, I modify the award under this head to the extent that interest from 10.4.1996 till 10.4.1987 shall be calculated at the rate of 12% p.a.
(11) That brings this Court to counter Claim No. 2, Which in any case, in view of Dda Vs. M/s Sudhir Brother’s case (supra), the Arbitrator had no jurisdiction to adjudicate upon the counter-claim. However, I do not find myself in agreement with the submissions made by the learned counsel appearing for the respondent that leave be granted to the respondent and delay in filing any appropriate proceedings for recovery be condoned in these proceedings in view of the decision of the Division Bench of this Court in Dda Vs. M/s Sudhir Brother’s case (supra) that direction was issued in the peculiar facts and circumstances of that case. I do not see any merit in the other objections of the respondent. Objections of the respondent are dismissed. Award with the modification in calculation of interest at the rate of 12% as pre-suit interest is made rule of the Court. The petitioner shall be entitled to interest at the rate of 18% p.a. from the date of decree till its realisation.