DDA Vs. NARAINDAS R ISRANI

JUDGEMENT

(1.) THIS appeal under Section 39 of the Arbitration Act, 1940 arises out of an order dated 28th October, 2005 passed by a Single Judge of this Court whereby the objections raised by the appellant to the arbitral award have been rejected and the award made a rule of the Court with partial modification.

(2.) A contract for the construction of MIG Houses in Rohini Residential complex was awarded in favour of the claimant-respondent in terms of an agreement executed between the parties. The contacted works were, it appear, completed on 4th February, 1986 after a delay of nearly 5-1/2 months. Disputes between the parties in relation to the contract having arisen, the same were referred to the sole arbitration of Sh. S. C. Kapoor, chief Engineer (Retd.) who made and published his award on 30th december, 1999. Aggrieved by the Award, the appellant DDA filed objections before a Single Judge of this Court under section 30 and 33 of the Arbitration act, 1940. These objections were examined by the learned Single Judge who rejected the same except insofar as Claim no. 17 was concerned in respect of which the award was set aside with the modification that the claimant would be entitled to future interest @ 9% p. a. instead of 18% p. a. The present appeal calls in question the correctness of the said order.

(3.) APPEARING for the appellant Ms. Salwan strenuously argued that the award made by the arbitrator was contrary to the terms of the contract hence unsustainable. Relying upon two division bench decisions of this court in delhi Development Authority v. U. Kashyap 1999 (1) Arb. LR 88 and delhi Development Authority v. S. S. Jetley 2001 (1) Arb. LR 289, Ms. Salwan argued that the view taken by the learned single Judge in regard to the validity of the award qua Claim no. 22 made by the claimant was erroneous and deserved to be set aside. She submitted that since the arbitrator had rejected as not pressed Claim no. 9 made by the claimant in regard to the balance payment due under clause 10cc of the Agreement executed between the parties, any further or independent claim for payment of compensation on account of delayed completion of the work was wholly untenable. She argued that Clause 10cc of the agreement entirely governed the issue regarding the rights and obligations of the parties in the event of the completion of the contracted works getting delayed. The arbitrator as also the learned Single Judge had not according to the leaned counsel correctly appreciated the purpose underlying Clause 10cc of the agreement or the effect of rejection of Claim No. 9 for payment of any further damages arising out of the delayed completion of the work. Such a claim was, argued ms. Salwan, untenable in the absence of any material especially when it was based entirely on the wholesale price index which had already been taken into account by the appellant while giving effect to Clause 10cc of the agreement.