HARINDER ANAND Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) By this order, objections filed by the respondent/DDA under Sections 30 and 33 of the Arbitration Act, 1940 against the award dated 6.8.1993, made and published by Shri R.C. Malhotra, Sole Arbitrator appointed by the respondent/DDA are being disposed of. The award is a reasoned one. Counsel for the parties agreed that the objections filed by the respondent/DDA as well as the reply thereto and the arbitral record be treated as evidence for the purposes of disposal of these objections. With the consent of the parties, the case was fixed for arguments on 3.11.1999 for 15.11.1999.

(2.) I have heard the learned counsel for the defendant in support of objections. Learned counsel first urged that the award directing refund of security deposit was liable to be set aside as it suffered from an apparent error inasmuch as the arbitrator had proceeded on the basis that it was not open to DDA to rescind the contract once the time has been set at large. Learned counsel in this regard relied on State of Maharashtra and another Vs. Digambar Balwant Kulkarni 1979 Volume-III Supreme Court Reports. In the cited case, it was held that:- Time was of the essence only in the sence that if the plaintiff completed it within the original period of one year, he would not be liable to pay any compensation but in case he over stepped that limit he would have to compensate for every day of delay and that the right to rescission would accrue only when compensation due exceeded the amount of the security deposit or the plaintiff abandoned the work. Till the time it was rescinded, the contract was iforce."

(3.) On a perusal of the award in respect of claim No. 1, I find that though the arbitrator has noted the submission of the petitioner that recission of the contract by DDA was bad since time had elapsed and had been set at large. Hence security deposit could not have been forfeited. However, this is not the only basis on which the arbitrator had reached the conclusion that forfeiture was bad. He had appraised the evidence and reached the conclusion that defendant was in breach. Arbitrator has specifically recorded the finding that in view of the respondents own defaults and failure to fulfil the contractual obligations, the recission of the contract by the respondent was not justifiable. The award directing refund of security deposit is therefore based on the recission of the contract, which has been found to be unjustifiable by the arbitrator on merits. In this view of the matter objection of the learned counsel is devoid of merit and is rejected.