MOHAN CONSTRUCTION Vs. UOI

JUDGEMENT

(1.) BY way of the present order, this Court proposes to dispose of the objections filed by the objector UOI against an award dated 29.6.1995. The disputes adjudicated upon by the learned Arbitrator arise out of a contract entered into between the objector UOI and the petitioner contractor for the work of construction of Camp Jail, Phase II at Tihar Jail, Delhi including the development works in respect of which, a contract was executed between the parties on 28.11.1980. In the course of executing the work, as disputes and differences arose between the parties, the petitioner contractor invoked the arbitration clause contained in the contract. As a result, the respondent appointed an Arbitrator to adjudicate the disputes between the parties. The Arbitrator entered upon reference on 29.4.1991. The petitioner contractor raised 10 claims against the objector UOI, whereas the objector UOI raised 17 counter claims. After considering the respective claims and counter claims of the parties, the learned Arbitrator directed the objector UOI to pay the petitioner contractor a sum of Rs. 2,59,376/- plus interest, as awarded against claim no.9 after adjusting certain recoveries directed to be made against the petitioner contractor. Aggrieved by the aforesaid award, the objector UOI has filed the present objections.

(2.) COUNSEL for the objector UOI states that the Arbitrator has misconducted the proceedings by not giving any finding on counter claim no.8 and holding that the Arbitrator has no power to go into the levy of compensation under Clause 2 of the agreement. It is stated that the Superintendent Engineer had directed the petitioner contractor to pay a sum of Rs. 4,39,641/- to the objector UOI and that while rendering the award, the aforesaid amount ought to have been directed to be paid by the petitioner contractor to the objector UOI or adjusted against the balance payment. The aforesaid objection is devoid of merits as it is the settled position that levy of compensation cannot be a subject matter of arbitration (Refer DDA v. M/s Sudhir Brothers 1995 2 ALR 359). The said fact was duly noticed by the Arbitrator at page 4 of the award. The aforesaid objection is, therefore liable to be rejected.

(3.) WHILE dealing with the aforesaid preliminary objection raised by the objector UOI in this regard, the learned Arbitrator observed in the award that vide office order dated 5.5.1988, the Director General (Works), CPWD had already approved the re-constitution of the petitioner firm and agreed to the petitioner firm taking over the assets and liabilities of the old firm. The submission of the petitioner contractor to the effect that the Director General (Works), CPWD gave his approval to the re-constitution so that the old firm could be dissolved, was also noticed. After taking note of the aforesaid submissions to the effect that approval was granted by the Director General (Works), CPWD on