O.M.P. 457/2003 Page 1 of 4 #F-49 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. 457/2003 MUNICIPAL CORPORATION OF DELHI ..... Petitioner Through Mr. Gaurang Kanth, Advocate versus M/S. ENGINEERING DEVELOPMENT AND ANR. ..... Respondents Through: Ms. Anusuya Salwan, Advocate for R-1 % Date of Decision : May 06, 2010 CORAM: HON'BLE MR. JUSTICE MANMOHAN 1. Whether the Reporters of local papers may be allowed to see the judgment? No. 2. To be referred to the Reporter or not? No. 3. Whether the judgment should be reported in the Digest? No. J U D G M E N T MANMOHAN, J (ORAL) 1. Mr. Gaurang Kanth, Advocate, today appears for petitioner- objector and states that due to compelling personal reasons, he could not appear yesterday. He further states that for his non appearance, no official of respondent-MCD is responsible. Keeping in view the aforesaid explanation, the order dated 5th May, 2010 directing the Law Officer of respondent-MCD to appear personally, is recalled and his personal presence is dispensed with. O.M.P. 457/2003 Page 2 of 4 2. Present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act, 1996”) challenging the arbitral Award dated 14th July, 2003 passed by Mr. C.M. Vij, Sole Arbitrator. 3. Mr. Kanth impugns the arbitral Award insofar as it awards Claims No. 1(b), 1(e) and 6. He submits that respondent-claimant is not entitled to any compensation on account of reinforcement of RCC work including straightening, cutting and bending etc. inasmuch as the same is covered by a Correction Slip issued by CPWD in the year 1990. 4. Mr. Kanth further submits that the Arbitrator has erroneously awarded Claim No. 6 without there being any pleading in the claim petition with regard to exact break up of expenses actually incurred by respondent-claimant. 5. Mr. Kanth lastly states that the rate of interest awarded by the Arbitrator is usurious and excessive. 6. Having heard the parties, I am of the view that the scope of interference by this Court with an arbitral award under Section 34(2) of Act, 1996 is extremely limited. Supreme Court in Delhi Development Authority Vs. R.S. Sharma and Company, New Delhi reported in (2008) 13 SCC 80, after referring to a catena of judgments including Oil & Natural Gas Corporation Ltd. Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. reported in (2003) 5 SCC 705 has held that an arbitral award is open to interference by a court under Section 34(2) of O.M.P. 457/2003 Page 3 of 4 the Act, 1996 if it is contrary to either the substantive provisions of law or the contractual provisions and/or is opposed to public policy. 7. I am of the opinion that Claim No. 1(b) could not be awarded by the Arbitrator in view of the Correction Slip issued by the CPWD in the year 1990. In fact, in M/s. Anant Raj Agencies Vs. D.D.A. & Anr. reported in MANU/DE/3153/2009 I had disallowed a similar claim on the ground that it was contrary to the contractual provision. Consequently, the impugned award to the extent it directs petitioner- objector to pay Rs. 1,02,637/- against Claim No. 1(b) is set aside. 8. As far as Claim No. 6 is concerned, I am of the opinion that even in a civil suit there is a distinction between pleading and proof. In pleading only, the facts germane to the claim and its cause of action have to be stated. Proof of the claim has to be given subsequently. In the present case, I find that respondent-claimant had pleaded the basis of its claim for on site and off site overheads. Subsequently, during the arbitral proceedings, respondent-claimant had produced its salary register clearly showing the break up of the overheads that it had incurred under the said claim. In any event, the Arbitrator has given cogent reasons for award of the said claim and the same calls for no interference under Section 34 proceedings. 9. As far as the award of interest is concerned, I deem it appropriate to reduce the rate of interest in all the claims to 9% per annum simple interest for all the periods including post award till the date of payment. O.M.P. 457/2003 Page 4 of 4 The Supreme Court in Rajendra Construction Co. Vs. Maharashtra Housing & Area Development Authority and Ors. reported in (2005) 6 SCC 678; McDermott International Inc.’s case (supra) and Rajasthan State Road Transport Corporation Vs. Indag Rubber Ltd. reported in (2006) 7 SCC 700 had reduced the rate of interest. 10. With the aforesaid observations, impugned Award is modified to the extent that Claim No. 1(b) is set aside, Claim No. 1(e) to the extent it awards interest on the amount awarded under Claim No. 1(b) is also set aside and rate of interest is reduced to 9% per annum simple interest for all periods in all the claims. MANMOHAN,J MAY 06, 2010 rn