JUDGMENT
Sanjay Kishan Kaul, J.
IA No. 985/2002 (under Section 30 and 33 of the Arbitration Act, 1940)
1. The respondent No. 1, M/s. Unitech Limited was awarded the contract in respect of construction of the factory complex of M/s. Jay Vinyl Limited at Daruhera. The respondent entered into a further construction contract with the petitioner on 25.3.1994 in terms whereof a part of the work to be done by respondent No. 1 was assigned to the petitioner. Disputes and differences arose between the parties resulting in proceedings under Section 20 of the Indian Arbitration Act, 1940 (hereinafter referred to as the said Act) and by an order dated 24.10.1997, Shri Gulzar Singh, Retired Chief Engineer, CPWD was appointed as the Arbitrator. The Arbitrator made and published his award dated 27.5.2000. The respondent aggrieved by the same has filed the objections under Sections 30 and 33 of the said Act.
2. Learned counsel for the petitioner contends that counter claim No. 2 of the petitioner has been wrongly rejected by the Arbitrator. The counter claim relates to an amount of Rs. 10 lakh withheld by M/s. Jay Vinyl Limited. The respondent in turn withheld an amount of Rs. 5 lakh payable to the petitioner.
3. The Arbitrator on examination of the evidence found that the delay could not be attributed to the petitioner. The Arbitrator thereafter proceeded to hold that the Contract between the petitioner and respondent No. 1 was a distinct sub- contract with its own terms and conditions and liabilities and thus the petitioner was responsible only to respondent No. 1 for timely completion of the contract. A finding has been arrived that the closure of the Contract was with mutual understanding and agreement without reservation by any other party after meeting between the parties. Thus the claim for liquidated damages has been disallowed.
4. Learned counsel for respondent sought to contend by reference to the Agreement between the parties more specifically Clause 20(d) that the Contracts being back to back Contracts, the provisions of the Contract between respondent No. 1 and M/s. Jay Vinyl would ipso facto apply to the Contract between the petitioner and respondent No. 1. The said Clause reads as under:
(d) Any other terms and conditions not specifically covered in these documents shall be same as provided in the contract between M/s. Unitech Limited and M/s. Jay Vinyl Ltd.
5. A reading of the aforesaid clause shows that it is only in the eventuality of any particular term and condition not being specifically covered as per the Agreement between the petitioner and respondent No. 1 dated 25.3.1994 that the terms and conditions of the Contract between respondent No. 1 and M/s. Jay Vinyl Limited was to apply. The rights and obligations of the petitioner were defined in this Agreement dated 25.3.1994 and once the petitioner was found not at fault or in breach of the obligations, merely because M/s. Jay Vinyl Limited has withheld some amount from respondent No. 1 on account of liquidated damages could be no reason for respondent No. 1 to withhold the amount from the petitioner.
6. Learned counsel sought to refer to the treaties of Markanda on Building and Engineering Contracts (First Edition) where it has been observed as under:
Where a sub-contractor expressly contracts to be bound by the terms of a principal contract, provisions as to retention money will be applied to him proportionately in the ratio that his contract bears to the whole contract. (Geary, Walker and Co. Ltd. v. Lawrence and Son (1960) Hudson’s BC, 4th Ed., p. 382, CA.)
7. As a general proposition there is no dispute in this behalf but the same would not apply in the present case as the contract dated 25.3.1994 between the petitioner and respondent No. 1 is distinct and separate. I thus find no merit in this objection.
8. The second point sought to be canvassed by the learned Counsel for the petitioner is in respect of claim No. 4. The petitioner claimed amount @ 15,000/- per month for eight months on account of idle establishment staff totalling to Rs. 1,20,000/-. The Arbitrator has awarded a sum of Rs. 40,000/-. Learned counsel for respondent No. 1 sought to contend that this claim ought not to have been allowed since the Arbitrator himself had disallowed claim No. 7 for Rs. 19 lakh for losses suffered due to various breaches committed by respondent No. 1. It was thus contended that since no breaches were found there could be no amount attributed as per claim No. 4 to respondent No. 1.
9. I am unable to accept the plea as even while recording evidence in respect of claim No. 7, it has been observed as under:
I find that there was no specific delay or alleged breaches which could substantially affect the performance, except the inadequacy of resources to execute the work on all fronts.
10. The Arbitrator found that the petitioner was required to keep their staff up to 31.5.1994 but the presence of the Engineer and Supervisor was required only occasionally to co-relate the joint measurements of the work done by the petitioner and thus partially allowed the claim. The same does not call for any interference.
11. The last aspect raised by the learned Counsel for respondent No. 1 is in respect of claim No. 1, which has been made for a sum of Rs. 14,01,031/- on account of work done but not paid. In this behalf learned Counsel for respondent No. 1 contends that both the parties had agreed to the amount payable to the petitioner after recoveries as per R-6, which amounted to Rs. 4,18,054/-. It was submitted that it was not open to the Arbitrator to have awarded a higher amount on this account. Thus it was not open to the Arbitrator to have added back recoveries or amounts of items held back. In addition it was contended that the amount awarded by the Arbitrator of Rs. 15,62,236/- could not have been awarded since the same is more than the amount claimed by the petitioner. The reference was made to Arbitration proceedings arising from Section 20 of the said Act and thus no amount higher than what had been originally claimed could have been awarded.
12. Learned counsel for the petitioner could not seriously dispute the proposition that it was not within the jurisdiction of the Arbitrator to have awarded a higher amount than what was claimed though he sought to contend that actually the amount awarded was in fact due to the petitioner.
13. Learned counsel for the petitioner has drawn the attention of this Court to Annexure R-6 itself from the record to point out that the same did not amount to a final settlement. A perusal of R-6 shows that the petitioner has accepted and counter signed at the two gross amount figures. The total amount thus accepted is Rs. 14,13,285/- which is the amount claimed by the petitioner in arbitration proceedings. The respondent has thereafter made certain deductions by setting out such deductions on the same page, but they have not been counter signed by the petitioner. It may also be noted that even in respect of certain certified amounts the endorsement made is ‘measurement pending. Accepted’.
14. In view thereof it cannot be said that R-6 amounts to a final settlement of the claim of the petitioner. All that R-6 can be read is for fixing the final amount which has been accepted by the petitioner and which is the claim made in the petition. The arbitrator while examining this claim has thus observed on examination of R-6, the petitioner was found to have objected to certain recoveries made in the statements such as recovery of bore well amount, recovery of LD and recovery made for trusses. These are the deductions in R-6 which have not been counter-signed by the petitioner. The plea of learned Counsel for the respondent that R-6 was the final amount can thus not be accepted.
15. In view thereof the application is partly allowed to the extent that the award under claim No. 1 stands modified from Rs. 15,62,236/- to 14,01,031/-.
CS (OS) No. 1454A/2000
16. In view of I.A. No. 985/2002 having been disposed of, the award dated 27.5.2000 of the sole arbitrator Shri Gulzar Singh is made rule of the Court with the modification that the amount in respect of claim No. 1 stands reduced from Rs. 15,62,236/- to 14,01,031/-. The plaintiff shall also be entitled to interest from the date of decree till the date of realization on the principal amount @ 9 % per annum. In case the decreetal amount is paid within 60 days, the respondent shall not be liable to pay future interest. Parties are directed to bear their own costs. Decree-sheet be drawn up accordingly.