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1998 Supreme(Bom) 89

BOMBAY HIGH COURT
S.S. Nijjar, J.
MUNICIPAL CORPORATION OF GREATER BOMBAY - PETITIONER
v.
KULKARNI & CO. - RESPONDENT
Arbitration Petition No. 265 of 1995 (In Award No. 31 of 1995),
Decided on: February 11, 1998

Advocates appeared:
Sh. R.D. Dhanukar, Sh. A.J. Bhor & Smt. A.H. Chheda, Advocates, for the Petitioner.
Sh. N.G. Thakkar & Sh. Bhadra Dalal, Advocates, for the Respondent.

A party who approaches the court for relief must come to the court with clean hands.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - LIMITATION - INTEREST - FINAL BILL - MEASUREMENT - GENERAL CONDITIONS OF CONTRACT - INTERPRETATION - CLEAN HANDS DOCTRINE - PUBLIC AUTHORITY - MUNICIPAL CORPORATION.

Fact of the Case:

The petitioner, Municipal Corporation of Greater Bombay, sought to set aside an arbitration award dated January 17, 1995, made by a sole arbitrator, on the grounds that it was barred by limitation, that interest was wrongly awarded, and that the arbitrator erred in interpreting the General Conditions of Contract.

Finding of the Court:

The court found that the claim was not barred by limitation, that the arbitrator did not err in awarding interest, and that the arbitrator's interpretation of the General Conditions of Contract was reasonable.

Issues: 1. Whether the claim was barred by limitation. 2. Whether interest was wrongly awarded. 3. Whether the arbitrator erred in interpreting the General Conditions of Contract.

Ratio Decidendi: 1. The court held that the claim was not barred by limitation because the petitioners had made it impossible for the respondents to submit the final bill, and that the arbitrator had evidence to support his finding that the claim was within time. 2. The court held that the arbitrator did not err in awarding interest because the interest was not excessive or unconscionable, and because the petitioners had been singularly remis in not making payment to the respondents. 3. The court held that the arbitrator's interpretation of the General Conditions of Contract was reasonable, and that the petitioners had not come to court with clean hands because they had failed to disclose vital documents in their petition.

Final Decision: The petition was dismissed with costs, and a decree was entered in terms of the award with interest at the rate of 18% from the date of the decree till payment/realisation.

ORDER (ORAL)

S.S. Nijjar, J. (Oral) - The prayer in this petition filed under Section 30 of the Arbitration Act, 1940 is for setting aside the award No. 31 of the 1995, made by the sole Arbitrator on 17th January, 1995.

2. The petitioner is the Municipal Corporation of Greater Bombay. The Respondents are engineers and contractors who has carried out the work of construction of a school building at D.N. Nagar. Andheri (West). The respondents submitted their tender for the contract work on 30th March, 1982. The tender was accepted and the work order was issued on 23rd November, 1982, in favour of the respondents. The work was to be commenced on 29th November, 1982 and was to be completed within 17 months i.e., on or before 28th April, 1984. The work, in fact was completed on 1st June, 1986. Necessary extensions were sanctioned to the respondents by the competent authority of the petitions. The school building was handed over to the petitioners on 5th September, 1986. According to the petitioners, after completion of the contract work and after the school building was handed over to the petitioner, the respondents requested payment for their outstanding by their letter dated 11th October, 1986. In this letter, the respondents stated that the amount due and payable was approximately Rs. 10 lacs. The petitioners repeatedly requested the respondents to submit the rate analysis in respect of extra and other items in the contract work. Despite repeated requests by the petitioners, the respondents failed and neglected to submit the rate analysis in respect of the said items. The terms and conditions of the contract are governed by "the General Conditions of Contract for Civil Works" (hereinafter referred to as "the General Conditions". According to the petitioners, under Clause 88 of the General Conditions, it was incumbent upon the respondents to prepare and submit the final bill within a period of three months from the date of completion of the contract. This condition was not complied by the respondents. It is the admitted case of the parties that the contract was completed on 1st June, 1986 and that the school building was handed over on 5th September, 1986. In view of the above facts, it is stated in the petition that it was incumbent upon the respondent to submit their final bill on or before 1st September, 1986 or in any event, on or before 5th December, 1986. The respondents submitted the final bill on 1st September, 1992 i.e., after about six years after the completion of the contract. Under the said final bill a sum of Rs. 71,23,268.80 and interest has been claimed. In the letter dated 11th October, 1986, the respondent had themselves stated that claim is approximately Rs. 10 lacs. The respondents are claiming the enhanced/increased amount by seeking to claim interest for a period of six years (from 1986 to 1992). It was the respondents, who have delayed the submission of the final till. By their letter dated 28th October, 1992, the respondent claimed payment on the basis of the said final bill. In this letter, for the first time, it is stated by the respondent that the final bill ought to have been prepared by the petitioners. This plea according to the petitioners is false and in any event, totally contrary to the provisions of condition 88 of the General Conditions. Disputes and differences arose between the parties. The respondents, therefore, sought to refer the dispute to the Municipal Commissioner under Condition 96 of the General Conditions, by their letter dated 13th November, 1992. Again contrary to the provisions of condition 96, no details or particulars were furnished to the Municipal Commissioner to apply his mind effectively to the claim made by the respondents. The Municipal Commissioner rejected the claims put forward by the respondents. Therefore, invoking the provisions of condition 97 of the General Conditions, the respondent claim to refer the matter to the arbitration. The respondents by their letter dat















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