Case: Associate Builders Vs. Delhi Development Authority

increase claimed or reduction available and shall allow inspection of the same by a duly authorised representative of Delhi Development Authority and further shall, at the request of the Engineer-in-Charge furnish, verified in such a manner as the Engineer-in-Charge may require. Any document, so kept and such other information as the Engineer-in-Charge may require.The contractor shall, within a reasonable time of his becoming aware of any alteration in the prices of any such materials and/ or wages of labour give notice thereof to the Engineer-in- Charge stating that the same is given in pursuance to the condition together with all information relating thereto which he may be in a position to supply." Clause 22 reads as follows: "All sums payable by way of compensations under any of these conditions shall be, considered as reasonable compensation to be applied to this use of Delhi Development Authority without reference to the actual loss or damage sustained, and whether or not any damage shall have been sustained.Specifications and Conditions:1. The contractor must get acquainted with the proposed site for the works and study specifications and conditions carefully before tendering. The work shall be executed as per programme approved by the Engineer-in-Charge. If part of site is not available for any reasons or there is some unavoidable delay in supply of materials stipulated by the Departments, the programme of construction shall be modified accordingly and the contractor shall have no claim for any extras or compensation on this account." 24. Clause 10C concerns itself with the price of material incorporated in the works or wage or labour increases. It has been seen that claims 9, 10 and 11 have nothing to do with either of the aforesaid subjects. In seeking to apply this clause to claim 15, the simple answer is that this clause will not apply when a claim for damages is made. Further, the Arbitrator considered this clause in detail and only awarded amounts under this clause in excess of 10 percent as required by the clause when it came to awarding amounts under claims 2, 3 and 4, which fell within the ambit of clause 10C. The DDA in the appeal before the Division Bench correctly gave up any challenge to these claims as has been recorded in paragraph 4 of the order under appeal. 25. The Arbitrator has dealt with this clause in detail and has construed and applied the same correctly while dealing with claims 2, 3 and 4 and has obviously not applied the said clause to claims 9, 10, 11 and 15 as no occasion for applying the same arose. The award cannot be faulted on this ground. 26. Also, so far as clause 22 is concerned, the DDA did not raise any argument based on this clause before the learned Arbitrator. However, it must in fairness be stated that it was argued before the learned Single Judge. In para 15 of his judgment, the learned Judge sets the clause out and then follows a judgment of the High Court of Delhi in Kochhar Construction Works v. DDA & Anr., (1998) 2 Arb. LR 209. Apart from the fact that a learned Single Judge of the same court is bound by a previous judgment of a Single Judge, the conclusion of the learned Single Judge that if the appellant is at fault and the contract is prolonged for an inordinate period of time, it cannot be said that the respondents cannot be compensated for the same is correct. Besides, this point was not urged before the Division Bench and must be taken to be given up. Mr. Sharan cited Harsha Constructions v. Union of India & Ors., (2014) 9 SCC 246 to say that in respect of excepted matters, no arbitration is possible, and that this being a jurisdictional point, he should be allowed to raise it before us. Unfortunately for Mr. Sharan, the clause does not operate automatically. It only operates if an objection is taken stating that part of the site is not available for any reason. Nowhere has the DDA stated which part of the site is not available for any reason. Further, the learned Single Judges reason for rejecting an argument based on this clause also commends itself to us as the object of this clause is that no claim for extras should be granted only if there is an unavoidable delay. We have seen that the delay was entirely avoidable and caused solely by the DDA itself. 27. One more point needs to be noted. An argument was made before the learned Single Judge that there has been a duplication of claims awarded. The learned Judge dealt with this argument as follows: "18. Learned counsel for the petitioner in respect of ground P, once again makes a reference to the issue that there is overlapping of the claim. I am unable to accept the submission made by the learned counsel. The consequence of delay may have more than one ramifications including the cost of material the supervision required at the site, the inability of the contractor to utilise the manpower at some other place, the inability of the contractor to make, profits from some other contract by utilisation of the same resources. All these aspects are liable to be considered. The Arbitrator has considered the claims separately and has dealt with, claims 9, 10, 11 & 15 together. Claims 12 & 13 have been thereafter dealt with on the same principles since it was found that it was not the respondent, who was responsible for the delay for a period of 25 months beyond the stipulated condition of 9 months.19. There is thus no question of overlapping in different heads and the grievance of the petitioner is rejected." 28. The Single Judge is clearly right. We have gone through all the 15 claims supplied to us and we find that none of these claims are in fact overlapping. They are all contained under separate heads. This argument, therefore, must also fail. 29.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Thus, the award pertaining to Claim Nos. 9, 10, 11 and 15 is liable to be sent aside and it is so set aside. We need not therefore take corrective action on the apparent error i.e. the learned Arbitrator has worked out the claim on the original contract value of Rs. 87,66,678/-, of course by reducing it by 15%, but ignoring that final work executed was only in sum offor the reasons given by the Arbitrator, that 20% hike in the balance work done after the contract stipulated period i.e. benefit to be granted under this head for work done in sum of Rs.37,02,066/- and accepting the sum of Rs.7,20,000/- being the resultant figure, subtracting Rs.1,62,862.50, the figure arrived at isagain, the Division Bench has interfered wrongly with the arbitral award on several counts. It had no business to enter into a pure question of fact to set aside the Arbitrator for having applied a formula of 20 months instead of 25 months. Though this would inure in favour of the appellant, it is clear that the appellant did not file any cross objection on this score. Also, it is extremely curious that the Division Bench found that an adjustment would have to be made with claims awarded under claims 2, 3 and 4 which are entirely separate and independent claims and have nothing to do with claims 12 and 13. The formula then applied by the Division Bench was that it would itself do "rough and ready justice". We are at a complete loss to understand how this can be done by any court under the jurisdiction exercised under Section 34 of the Arbitration Act. As has been held above, the expression "justice" when it comes to setting aside an award under the public policy ground can only mean that an award shocks the conscience of the court. It cannot possibly include what the court thinks is unjust on the facts of a case for which it then seeks to substitute its view for the Arbitrators view and does what it considers to be "justice". With great respect to the Division Bench, the whole approach to setting aside arbitral awards is incorrect. The Division Bench has lost sight of the fact that it is not a first appellate court and cannot interfere with errors ofArbitrator has dealt with this clause in detail and has construed and applied the same correctly while dealing with claims 2, 3 and 4 and has obviously not applied the said clause to claims 9, 10, 11 and 15 as no occasion for applying the same arose. The award cannot be faulted on thisso far as clause 22 is concerned, the DDA did not raise any argument based on this clause before the learned Arbitrator. However, it must in fairness be stated that it was argued before the learned Single Judge. In para 15 of his judgment, the learned Judge sets the clause out and then follows a judgment of the High Court of Delhi in Kochhar Construction Works v. DDA & Anr., (1998) 2 Arb. LR 209. Apart from the fact that a learned Single Judge of the same court is bound by a previous judgment of a Single Judge, the conclusion of the learned Single Judge that if the appellant is at fault and the contract is prolonged for an inordinate period of time, it cannot be said that the respondents cannot be compensated for the same is correct. Besides, this point was not urged before the Division Bench and must be taken to be given up. Mr. Sharan cited Harsha Constructions v. Union of India & Ors., (2014) 9 SCC 246  to say that in respect of excepted matters, no arbitration is possible, and that this being a jurisdictional point, he should be allowed to raise it before us. Unfortunately for Mr. Sharan, the clause does not operate automatically. It only operates if an objection is taken stating that part of the site is not available for any reason. Nowhere has the DDA stated which part of the site is not available for any reason. Further, the learned Single Judges reason for rejecting an argument based on this clause also commends itself to us as the object of this clause is that no claim for extras should be granted only if there is an unavoidable delay. We have seen that the delay was entirely avoidable and caused solely by the DDAis thus no question of overlapping in different heads and the grievance of the petitioner isSingle Judge is clearly right. We have gone through all the 15 claims supplied to us and we find that none of these claims are in fact overlapping. They are all contained under separate heads. This argument, therefore, must also fail.