Case: Delhi Development Authority Vs. M/s R.S. Sharma &amp; Co., New Delhi

and statutory provisions, particularly, Section 34(2) of the Act, let us consider whether the Arbitrator as well as the Division Bench of the High Court were justified in granting the Award in respect of Claim Nos.1-3 and additional Claim Nos. 1-3 of the claimant or the appellant-DDA has made out a case for setting aside the Award in respect of those claims with reference to the terms of the Agreement duly executed by both parties. 14) The main dispute relates to extra cartage that is, stone brought from Nooh, Haryana. It is the stand of the claimant that apart from the Agreement dated 18.4.1990, both parties were agreed to abide by the conditions mentioned in the letter dated 10.4.1990 of the claimant - M/s R.S. Sharma & Co. to the Chief Engineer (WZ), DDA, Vikas Minar, New Delhi. In paragraph 6 of the said letter, it was stated as under: "6. We will use Delhi Quartz stone as per CPWD specifications and specifications mentioned in the tender documents. This condition has been accepted by the Department in the case of 1st lowest tenderer for this work." 15) It is stated by the learned counsel appearing for the claimant that since the DDA has not approved Delhi Quartz stone which was not as per CPWD specifications and specifications mentioned in the tender document, stones were brought from Nooh, Haryana which satisfied those specifications. As rightly pointed out by the learned ASG appearing for DDA, there is no specific clause in the terms of agreement for extra cartage for bringing stones from elsewhere. In this regard, the appellant heavily relied on clause 3.16 of the Agreement which reads as under: "3.16 - The collection and stacking of material shall include all leads. The rates quoted by the contractor shall hold good irrespective of the source from which the material are brought so long as they conform to the specifications. The closure of particular quarry will not entitle the contractor to any revision in the rates." 16) The perusal of the Award of the Arbitrator as well as the judgment of the Division Bench clearly shows that they did not advert to the above clause 3.16. It is relevant to point out that the extra cartage has been awarded by the Arbitrator without adverting to clause 3.16 of the Agreement, hence, the learned single Judge was wholly justified in partially setting aside the Award in respect of the claims with respect to the extra cartage. We also perused the pleadings and evidence placed on record pertaining to Claim Nos. 1-3 and additional Claim Nos. 1-3. As rightly observed by the learned single Judge, there was no material on record to substantiate the case of the claimant, viz., DDA had insisted upon the claimant for using the stone aggregates brought from Nooh in Haryana. In those circumstances and of the fact that the terms and conditions of the Agreement are binding on both the parties, in the absence of specific clause with regard to payment of extra cartage and in view of clause 3.16, the respondent-claimant cannot claim extra cartage @ Rs.30/- per cubic meter on the ground of extra lead involved in bringing the stone aggregates from Nooh in Haryana. The Division Bench like the Arbitrator proceeded on the sole basis that DDA had compelled the claimant-Company from bringing the stone aggregates from Nooh in Haryana and committed an error in affirming the erroneous conclusion arrived at by the Arbitrator insofar as the additional claims are concerned. As rightly pointed out by the learned Additional Solicitor General, the Division Bench proceeded on an erroneous premise that the appellant-DDA has nowhere stipulated where the stone was to be brought from. It is true that DDA had given certain specifications required to be conformed. Further, the cost of the work was irrespective of the source or lead from where the stone was brought. The award is completely silent on the relevant clause viz. clause 3.16 of the Agreement which makes it clear that the contractor is wholly responsible for all the extra leads. In fact, the Arbitrator has given no reason whatsoever so far as the rate claimed for the extra lead by the claimant and has verbatim accepted the claim without giving any justification for the same. We are satisfied that this is an error apparent on the face of the record as well as contrary to the terms of the Agreement.17) For the sake of brevity, we point out that in terms of clause 3.16 of the Contract, it is the responsibility of the Contractor to collect and stock the material and the rates quoted by him including all leads irrespective of the source from where the material was brought. However, if DDA had refused to accept the stone aggregate brought to site by the contractor from a quarry in Delhi and insisted upon bringing the material from Nooh quarry, Haryana, the Contractor will be entitled to the extra lead for bringing the said material from Nooh. As rightly pointed out by learned counsel for the appellant, in the present case, there is nothing on record to show that the Department had insisted upon bringing the stone aggregate only from Nooh. Hence, the contractor will not be entitled to the increased rates for extra lead. Without a specific request or additional clause, the Arbitrator in respect of Claim Nos. 1-3 and additional Claim Nos. 1-3 proceeded on the wrong assumption that the Department had insisted upon the use of stone aggregate to be brought from Nooh, hence, the learned single Judge is perfectly right in holding that there is an error apparent on the face of the Award and the Award is liable to be set aside. As stated earlier, the Arbitrator has ignored clause 3.16 of the contract and made a departure from the contract while granting relief in respect of Claim Nos. 1-3 and additional Claim Nos. 1-3 and the same, in our view, cannot be sustained.18) Under these circumstances, we

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

Explanation:
1[ds]The perusal of the Award of the Arbitrator as well as the judgment of the Division Bench clearly shows that they did not advert to the above clause 3.16. It is relevant to point out that the extra cartage has been awarded by the Arbitrator without adverting to clause 3.16 of the Agreement, hence, the learned single Judge was wholly justified in partially setting aside the Award in respect of the claims with respect to the extra cartage. We also perused the pleadings and evidence placed on record pertaining to Claim Nos. 1-3 and additional Claim Nos. 1-3. As rightly observed by the learned single Judge, there was no material on record to substantiate the case of the claimant, viz., DDA had insisted upon the claimant for using the stone aggregates brought from Nooh in Haryana. In those circumstances and of the fact that the terms and conditions of the Agreement are binding on both the parties, in the absence of specific clause with regard to payment of extra cartage and in view of clause 3.16, the respondent-claimant cannot claim extra cartage @ Rs.30/- per cubic meter on the ground of extra lead involved in bringing the stone aggregates from Nooh in Haryana. The Division Bench like the Arbitrator proceeded on the sole basis that DDA had compelled the claimant-Company from bringing the stone aggregates from Nooh in Haryana and committed an error in affirming the erroneous conclusion arrived at by the Arbitrator insofar as the additional claims are concerned. As rightly pointed out by the learned Additional Solicitor General, the Division Bench proceeded on an erroneous premise that the appellant-DDA has nowhere stipulated where the stone was to be brought from. It is true that DDA had given certain specifications required to be conformed. Further, the cost of the work was irrespective of the source or lead from where the stone was brought. The award is completely silent on the relevant clause viz. clause 3.16 of the Agreement which makes it clear that the contractor is wholly responsible for all the extra leads. In fact, the Arbitrator has given no reason whatsoever so far as the rate claimed for the extra lead by the claimant and has verbatim accepted the claim without giving any justification for the same. We are satisfied that this is an error apparent on the face of the record as well as contrary to the terms of the Agreement.17) For the sake of brevity, we point out that in terms of clause 3.16 of the Contract, it is the responsibility of the Contractor to collect and stock the material and the rates quoted by him including all leads irrespective of the source from where the material was brought. However, if DDA had refused to accept the stone aggregate brought to site by the contractor from a quarry in Delhi and insisted upon bringing the material from Nooh quarry, Haryana, the Contractor will be entitled to the extra lead for bringing the said material from Nooh. As rightly pointed out by learned counsel for the appellant, in the present case, there is nothing on record to show that the Department had insisted upon bringing the stone aggregate only from Nooh. Hence, the contractor will not be entitled to the increased rates for extra lead. Without a specific request or additional clause, the Arbitrator in respect of Claim Nos. 1-3 and additional Claim Nos. 1-3 proceeded on the wrong assumption that the Department had insisted upon the use of stone aggregate to be brought from Nooh, hence, the learned single Judge is perfectly right in holding that there is an error apparent on the face of the Award and the Award is liable to be set aside. As stated earlier, the Arbitrator has ignored clause 3.16 of the contract and made a departure from the contract while granting relief in respect of Claim Nos. 1-3 and additional Claim Nos. 1-3 and the same, in our view, cannot be sustained.