KRISHNA CONSTRUCTION CO Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) The petitioner, Krishna Construction Company, has filed the present petition under Sections 14& 17 of the Arbitration Act, 1940 (hereinafter referred to as the 'Act') for notice to respondent No. 2 (Shri S.S. Kaimal, Sole Arbitrator) to file his award dated 24.11. 1992. The petitioner is a partnership firm carrying on business of building contractor. On tenders invited by respondentNo. 1, Delhi Development Authority, the petitioner submitted his tender for the work styled as '1200 MIG Houses Pkt. GH-14 in the Zone G-17 at Paschim Vihar including water supply, sanitary installation & internal development of land SH: C/O 192 MIG Houses Group IV. The tender was accepted by respondent No. 1 at 56% above the estimated cost together with rebates offered. The agreement included an arbitration clause as Clause No. 25. On account of certain differences arising between the parties, the petitioner sought a reference to the Arbitrator. The petitioner moved a petition under Section 20 of the Act which was registered as Suit No. 3417-A/1990. Respondent No. 1, however, appointed respondent No. 2 as the Sole Arbitrator vide the letter dated 23.1.1991. The Arbitrator entered into reference on 7.2,1991 and finally made his award on 24.11.1992. The petitioner prays for the filing of the award and passing a decree in terms of the award. The award is then presented to the Court. On receiving the notice of filing of the award objections are made by respondent No. 1 under Sections 30 & 33 of the Act. The same has been registered as IA No. 3773/1994. The objections in brief are as under: Although the objections are long the only point raised at the time of argument is that the Arbitrator's award gives no reasons. Admittedly the Arbitrator was required to give reasons as required by the arbitration clause. It is alleged that the Arbitrator has only mentioned the contentions of the parties and has come to his conclusions without assigning any reasons for arriving at those conclusions. It is pointed out that under item No. 4 at page 4 of the award, the Arbitrator has granted more than what is claimed without giving any reasons for doing so. In item No. 6 at page 4. respondent No. 1 is asked to pay Rs. 16,661.26 which comprise the claim of Rs. 10,6807- and the percentage of the contractor, i.e., Rs. 5,980.96. It is alleged that the contractor's percentage was included in the amount claimed, i.e., Rs. 16,680.30, and to this extent there is an error apparent and, therefore, the award needs to be set aside. Item No. 9 at the bottom of page 4 is the claim for Rs. 36,721.59 for ready mixed paint, woodwork and steel work. It is pointed out that what is awarded is much more, i.e., Rs.57,285.68, which is again an error apparent and without giving sufficient reasons and, therefore, to be set aside. Similarly it is pointed out that there is discrepancy between the claim and award in various other items and the Arbitrator has not given any reasons for doing so. On coming to claim as per Annexure D at page 6 of the award, the Arbitrator has found the claim to be partially justified and has directed respondent No. 1 to pay Rs. 42,654.80 without disclosing how he has arrived at this figure. Similarly, it is alleged that how figure of Rs. 79,330/- in claim 3 at page 9 and how a figure of Rs. 2,03,959.87 in claim No. 4 have been arrived at has not been explained. The award on claim No. 8 also allegedly suffering from similar defect.

(2.) The claimant, however, refutes all these contentions and says that the award is valid and that reasons have been given for the award. Learned Counsel for the claimant has taken me through the award and has shown that the award actually gives reasons although the same may not have been given in the language that we find in the judgments written by the Courts. In the first place, the admitted position is that the Arbitrator was entitled to enhancement @ 56% and this enhancement is mentioned in various items. Since this was an agreed term between the parties, the Arbitrator has added the enhancement without actually referring to the document in which that enhancement is mentioned. This cannot be said to be something done without any reasons or to be an error apparent on the face of the record making it perverse. Before reading item No. 4 one has to read item No. 3. The Arbitrator has referred to the payment of lintel band which he finds should be paid under agreement under item Nos. 3.2(a) to (d) and not as an extra item. Therefore, there is no dispute regarding the quantity and rates and thus he finds the claim justified to the extent of Rs. 21,516.13. The clauses of the agreement between the parties are available on record. These are contained in the form of Percentage Rate Tender & Contract for Works, General Rules and Directions. The description of the item at 3.2 is as under: <FRM>JUDGEMENT_612_DLT130_2006Html1.htm</FRM> Reinforced cement concrete work in vertical and horizontal find individually or forming box louvers, bands and facias including finishing and plastering and exposed surface with cement mortar 1:3 (lcement:3fine sand pf. Thickness not exceeding 6 mm to give a smooth and even surface but excluding the cost of 1:2:4 (lcement:2 coarse sand:6 graded stone agg. 12.5 mm. Nominal size). <FRM>JUDGEMENT_612_DLT130_2006Html2.htm</FRM>

(3.) The items 'bands' is found by the Arbitrator to include lintel bands and the Arbitrator says in item No. 3 that the lintel bands are covered by item Nos. 3.2 (a) to (d) and not as an extra item. The Arbitrator has then given calculations, which are as under: <FRM>JUDGEMENT_612_DLT130_2006Html3.htm</FRM>