CDS GUJRAL Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) The petitioner filed the petition under Sections 14, 17 and 29 of the Arbitration Act read with Section 3 of the Interest Act for making the award rule of the Court. Award was made by the Arbitrator, Mr.A P Paracer, Additional Director General (Retd.) C.P.W.D. on 23.12.1993. The respondent filed their objections against the award under Section 30 of the Arbitration Act. The Arbitrator entered the reference on 10.4.1987.

(2.) Learned counsel for the respondent, Ms.Ansuya Salwan, has challenged the whole award. The main thrust of the argument of the learned counsel for the respondent, is to Claim No. 3 under the award. Ms.Salwan says that award of a sum of Rs. 1,12,185.40 paise to the petitioner-claimant on account of extra expenditure incurred towards rise in wages of labour for the quantum of work after the expiry of stipulated contract period was erroneous. She has contended that Arbitrator has completely ignored that under the provisions of the contract entered into between the parties, there was a provision for escalation in labour wages under Clause-10(c) of the contract and the said increase was payable only if there was no delay attributable on the part of the claimant-petitioner. She has also contended that the Arbitrator had no material before him to come to a conclusion that the labour element for execution of such work was 20%. She has also contended that when penalty had been imposed on the claimant in terms of Clause-2, Arbitrator had no jurisdiction to grant the award under Claim No.3. In support of her arguments, she has cited Bharat Furnishing Co. vs. DDA & anr. 1992(1) Arb.L.R.327, R S Rana Vs. DDA & anr. 1993(2) Arb.L.R.165 and Sudhir Brothers Vs. DDA 1995(2) Arb.L.R.437. Another challenge by learned counsel for the respondent is to Claim Nos. 5 and 6. She has contended that on one hand, the Arbitrator has awarded under Claim No. 3 for additional expenses towards escalation of cost of labour and still under Claim No. 5, i.e. rise in price of bricks and under the head Claim No. 6, i.e. rise in wages because of statutory notification, Arbitrator has awarded a sum of Rs. 25,000/= in favour of claimant thereby awarding increase in labour twice and on this score Arbitrator has misconducted the proceedings and, therefore, the award be set aside.

(3.) Yet another objection, which has been raised by the learned counsel for the respondent, is with regard to the award of interest under Claim No. 12. Ms.Salwan has contended that as per Section 2(b) of the Interest Act pre-suit interest at the rate of 18% is not permissible. She has further contended that this is not the rate on which interest is payable by the nationalised bank. She has also contended that the Arbitrator was appointed on 30.3.1987, he entered into reference on 10.4.1987 and the grant of interest at the rate of 18% from 10.4.1986 till 10.4.1987 is unwarranted in law, that being too exorbitant.