AARKEY ENGG CO Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) In response to the tender invited by the respondent-DDA, the work for construction of certain LIG houses at Hastal was awarded to the petitioner vide agreement No. 8/EE/WD-9/DDA-88-89. The stipulated date of commencement of work was 9.7.1988 and the same was to be completed on 8.10.1989. On 7.1.1989, the respondent-DDA rescinded the contract. Consequent upon some disputes having arisen between the parties, the matter was referred to the arbitration in terms of the arbitration agreement. The Arbitrator published his award of 28.8.1992.

(2.) While the petitioner filed an application for making the award a rule of the Court, the respondent-DDA has filed objections under section 30 and 33 of the Arbitration Act against the award. The respondent is mainly aggrieved by the rejection of counter-claim No. 2 and award on claim No. 3 preferred by the petitioner. Learned Counsel for the respondent contended that in view of Clause (2) of the agreement, the Arbitrator has no jurisdiction to deal with th,e question of compensation leviable under Clause (2), as the same was in the exclusive domain of the S.E. Strong reliance was placed on the decisions rendered in Sudhir Bros. v. DDA, 1995 (2) ALR 437 and P.C. Corporation v. Chief Administrator Dandkamaya Project, AIR 1991 SC 957. It needs to be high lighted that similar arguments were considered and rejected in the case of Vikas Engineering Co. v. DDA, 1995 (1) A.D. 1408. The decision in Sudhir Bros v. DDA, and P.C. Corporation v. Chief Administrator, Dandkarnaya Project (supra), are distinguishable on facts and their ratio decident does not govern a case like in hand. It is significant to mention that the Arbitrator had observed that the respondent-DDA has committed a breach of the contract by rescinding the same without fulfilling their obligation to hand over foundation drawing, etc. The petitioner preferred a claim of Rs. 10,43,557.00 before the Arbitrator. The Arbitrator reduced the claim of Rs. l,13,000.00 . It would be useful to extract reasons assigned by the Arbitrator for partly allowing the claim No. 3 as under;

(3.) In my opinion, the Arbitrator has assigned valid reasons for awarding the said compensation and the same cannot be found fault with. The respondent preferred a counter-claim of Rs. 10,43,557.00 . On account of compensation levied on the claimant under Clause (2) of the agreement the Arbitrator has held that levy of compensation under Clause (2) of the agreement was wholly unjustified inasmuch as the respondent had committed a breach of the contract by rescinding it without fulfilling their obligations in terms of the agreement. In my opinion, rejection of the said counter-claim by the Arbitrator does not suffer from any legal infirmity.