METRO ELECTRIC CO Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) [The petitioner entered into a contract with the D.D.A. for doing electric work at Interstate Bus Terminus at Delhi in 1970. Work was to be done in 11 months. It could not be finished due to slow progress of building work. Petitioner made 2 claims that due to rise in prices, his rates should be enhanced by 22% and that due to slow progress of building work, his labour remained idle and he should be allowed Rs 16,500.00. The matter was referred to arbitrator who awarded enhancement of rates by 18% and awarded Rs 800.00 for the other claim. Petitioner applied U/Ss. 14 and 17 for making award rule of the Court while respondent applied U/Ss. 30 and 33 for setting aside of the award. After narrating above facts, the judgement para 13 onwards is :

(2.) IT is submitted by the learned counsel for the respondent that from the very beginning, the Delhi Development Authority had been totally denying the claim of the contractor on the ground that the enchancement claimed was extra-contractual and that, increase, if any, was permissible only under clause 10(c) of the agreement, but that too in the event of the happening of certain contigencies. IT is submitted by Shri Keshav Dayal that at best the assertion of the contractor for the increase of contractual rate by 18% in the first instance and by 22% in the subsequent representations, amounted to an offer, which was never accepted by the petitioner. The original agreement, therefore, held good as no additional or subsequent agreement had been entered into between the parties. No doubt the prices had shown upward trend during the stipulated period of eleven months and even thereafter, but this did not modify the contract nor it brought about any change in its terms. If there had occasioned a decline in the prices and margin of profits had been higher than what was originally expected, the contract would not have been re-written or modified by bringing down the rates When an agreement is entered into, the contracting parties are always wide awake and are conscious of the risk involved due to unforseen circumstances.

(3.) DAMAGE cannot be granted by way of equity or for loss of profits. If any terms of the contract was infringed, in that event, the contractor had to quantify the damages as a result of the breach. In the present case, compensation in the shape of higher rate has been allowed for the work which was yet to be executed. In doing so, the Arbitrator had exceeded his jurisdiction and had thus misconducted himself. This is clearly apparent on the face of the award.