DELHI DEVELOPMENT AUTHORITY Vs. S S JETELY

JUDGEMENT

(1.) These are objections preferred under Section 34 of the Arbitration and Conciliation Act, 1996 to the award dated 23.01.2009 and the corrigendum dated 03.02.2009 made by Shri S.S. Jain, Sole Arbitrator. The parties had entered into a contract whereunder the Respondent-contractor had undertaken to construct Surbathing Ghat at downstream site of Wazirabad barrage on bank of river Yamuna, vide award letter dated 01.05.1995. The stipulated date of start of work was 11.05.1995 and the stipulated date of completion was 10.08.1996. The period of execution of the work under the contract was 15 months. A formal agreement was executed between the parties on 04.05.1995. Admittedly, the Respondent-contractor executed about 44.7% of the work. The contract was rescinded by the Petitioner on 29.05.1998. Disputes arose between the parties as the Petitioner claimed that the Respondent was responsible for the delays and non-execution of the work. The Petitioner sought to effect recoveries by levying compensation under Clause 2 of the contract of Rs. 37,38,790. On the other hand, the Respondent alleged breach of contract by the Petitioner and the termination of the contract as illegal. The Respondent raised various claims under different heads.

(2.) The Petitioner filed Civil Suit No. CS(OS) No. 161/2000 to claim the amount of Rs. 37,38,790. The said suit was contested by the Respondent herein, and the Respondent also preferred a counter claim for about Rs. 89 Lakhs. The Petitioner filed another suit being CS(OS) No. 941/2001 claiming an amount of Rs. 1,04,78,947/-, being the amount allegedly recoverable from the Respondent for getting the work done at the risk and cost of the Respondent. On an application moved by the Respondent under Section 89 Civil Procedure Code, this Court vide order dated 23.05.2007 referred the matter to arbitration, and appointed Shri S.S. Jain, Retd. Superintending Engineer (Arbitration), DDA, as the Arbitrator. The Petitioner, Delhi Development Authority was the claimant and the contractor M/s. S. S. Jetley was the counter claimant. The learned Arbitrator has rendered his award whereby he has partially allowed the counter claims made by the Respondent-contractor, and disallowed the claims of the Petitioner towards compensation under Clause 2 and the claim for recovery of risk-cum-cost amount.

(3.) The learned Arbitrator firstly considered the issue whether the Petitioner claimant was entitled to levy compensation under Clause 2 of the agreement to the tune of Rs. 37,38,790/- along with interest at the rate of 18% per annum. The right of the Petitioner to levy compensation could arise only if it were established that there was delay in execution of the work, for which the Respondent-contractor was responsible. Consequently, the learned Arbitrator considered the said issue and returned a finding that the Petitioner was responsible for a fundamental breach of the contract inasmuch, as, the Petitioner failed to provide the drawings without which the Respondent could not have carried out the works.