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2002 Supreme(Del) 171

High Court Of Delhi
SURESH KUMAR JAIN - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 02/06/2002

The court's jurisdiction in arbitration proceedings is limited, and an award can only be set aside if there is no evidence to support the conclusion or if the award is based on an erroneous legal proposition.

Headnote:

Arbitration Act - Construction Contract - The court upheld the arbitration award, finding that the objections raised by the DDA were without substance. The arbitrator had given cogent reasons for the amounts awarded, and the court did not find any error or perversity in the award. The court modified the interest awarded to a lower rate and made the award rule of the court.

Fact of the Case:

Disputes arose between the petitioner and the DDA during the construction of Janta flats. The petitioner invoked the arbitration clause, and the sole arbitrator made an award. The DDA filed objections against the award.

Finding of the Court:

The court found the objections raised by the DDA to be without substance and upheld the arbitration award. The court modified the interest awarded to a lower rate and made the award rule of the court.

Issues: The issues framed were whether the award made by the arbitrator is liable to be set aside and the relief sought by the parties.

Ratio Decidendi: The court's jurisdiction in these proceedings is limited, and an award can only be set aside if there is no evidence to support the conclusion or if the award is based on an erroneous legal proposition. The court does not sit in appeal over the award and review the reasons given by the arbitrator.

Final Decision: The court modified the interest awarded to a lower rate and made the award rule of the court. The suit and the application were disposed of accordingly, with no order as to costs.

D. K. JAIN

( 1 ) THESE are objections by respondent No. 1-the delhi Development Authority (for short, the DDA) under sections 30 and 33 of the Arbitration Act against the award made and published by Shri A. L. Garg, the sole arbitrator, on 18/09/1992. A contract for construction of 276 Janta flats at Pocket F, Pitampura was awarded to the petitioner by the DDA. However, during the course of execution of the contract, certain disputes arose between the parties. On the petitioner invoking the arbitration clause, contained in the agreement, the engineer Member, DDA, the persona designata, appointed the above named arbitrator as the sole arbitrator to determine the disputes/claims raised by the petitioner/contractor. After hearing the parties, the learned arbitrator made and published the award on 18/09/1992. On contractor s filing petition under section 14 of the Arbitration Act, 1940, the arbitrator filed the award and notice of filing of award was issued to the parties, pursuant whereto the DDA has filed the objections (IA No. 344/94 ).

( 2 ) ON the pleadings of the parties, the following issues were framed:

1. Whether the Award dated 18-9-1992 made and published by Shri A. L. Garg, the sole Arbitrator is liable to be set aside on the grounds set out in the objections?

2. Relief. Keeping in view the nature of the objections, parties had agreed that further evidence in the case was not necessary and the record of the arbitration was to be read in evidence while disposing of the objections.

THE award is mainly challenged on the ground that some of the amounts have been awarded either without giving any reasons or basis therefor or reliance has been placed on a wrong clause of the agreement. Insofar as claim No. 1 (a), pertaining to short measurements is concerned, it is stated that no reasons for the award of a sum of Rs. 2,709. 00 have been given. The amount awarded on account of difference in rates of extra items is challenged on the ground that the rates had to be applied in terms of clause 12 (2) and not in terms of clause 12 (3) of the agreement, which provides for application of daily schedule of rates. It is also alleged that certain amounts have been awarded despite arbitrator s own finding that no supporting evidence had been adduced by the claimant with regard to the rates claimed. In its reply, the contractor has denied the allegations and it is stated that all claims made by the contractor were supported by evidence, which has been duly considered by the Arbitrator and the objections are untenable. I have heard learned counsel for the parties, who have taken me through the award and the arbitration proceedings.

( 3 ) IT is well settled by now that the jurisdiction of the court in these proceedings is very limited and an award can be set aside only if it is apparent from the face of the award that there is no evidence to support the conclusion or if the award is based on any legal proposition, which is erroneous. In these proceedings, the court does not sit in appeal over the award and review the reasons given by the arbitrator. Having carefully perused the arbitrator s record and the award in the light of the above broad principles, I am of the view that the objections raised by the DDA are without any substance. The learned arbitrator has given cogent reasons while awarding amounts against each of the claims. The major part of the award is with regard to either the short measurements or difference in rates of substituted items. Clause 12 of the agreement provides the procedure for fixation of rates for extra/substituted items. As observed by the arbitrator, rates for similar items were not available in the agreement and, therefore, the rates had to be determined in terms of clause 12 (iii ). It was a matter of details and merits, to be decided by the arbitrator, which he has done. It cannot be said that the rates applied by the arbitrator are without any basis. I do not find either any error on the face of the award or


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