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2001 Supreme(Del) 1713

High Court Of Delhi
MUNSHI RAM AND ASSOCIATES PRIVATE LIMITED - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 1012A of 1995
Decided On : 12/07/2001

Advocates Appeared:
ANUSUYA SALWAN, D.Maitra

Headnote:Arbitration Act, 1940 - Sections 30 & 33 — Objections — Unless, award suffer from the vice of perversity or unsound legal or factual findings or is beyond the terms of the agreement, it should ordinarily be not disturbed — Objections with regard to certain claim not substantially dealt by the arbitrator and misconducted himself — Award set-aside to that effect.

       Held:

       In a reasoned award, the Arbitrator is expected to deal with substantial objections raised by the parties and not to conveniently avoid or omit reference to those objections. At first instance, the Arbitrator was required to see whether the items in question were agreed to be paid or not or whether those . items come within the ambit of Clause 25-6 or not. Until and unless, the Arbitrator had first given the finding that the items not initially paid were agreed to be paid by the respondent, the stage of allowing the claim in respect of items in question could not have reached.

       The aforesaid facts show that the Arbitrator has not only misconduct himself legally but on factual matrix a/so and thereforee the award in respect of this claim is not sustainable and is set aside.

J. D. Kapoor

( 1 ) THE award dated 31. 3. 1995 is sought to be made rule of the court. It has been assailed and challenged by the respondent-DDA on multifarious grounds.

( 2 ) UNTIL and unless, award suffers from the vices of perversity or unsound legal or factual finding or is beyond the terms of the agreement, it should ordinarily be not disturbed as the court does not sit in appeal nor is it required to re-appreciate or re-assess the evidence or material on record. Even if erroneous view has been taken by the Arbitrator, the award is not liable to be set aside.

( 3 ) PROCEEDING on the aforesaid premise, I set to discuss the objections filed by the respondent. Claim no. 1 is towards balance payment of final bill. According to the claimant, although the work was completed on 5/4/1989, the final bill was not prepared. Ultimately, claimant prepared their own final bill on 3/1/1992 claiming sum of Rs. 6 ,67,254. 43. The final bill included the substituted and extra items.

( 4 ) THE main objection raised by Ms. Anusuya Salwan, learned counsel for respondent no. 1 is that the Arbitrator has gone beyond the terms of the agreement and has therefore erred in law in allowing this claim particularly in view of the fact that there was reduction in the final bill approved by the Superintending Engineer and was therefore an excepted matter under clause 25-B of the agreement. Clause 25. B provides as under:-

"the decision of SE regarding the quantum of reduction as well as justification thereof in respect of rates for sub-standard work which may be decided to be accepted will be final and would not be open to arbitration. "

( 5 ) APART from this, Ms. Salwan has also contended that since the claimant had accepted all the payments without any protest during the currency of the contract, the dispute raised by the petitioner-claimant did not come under the purview of the contract. However, this contention of the respondent was repelled by the Arbitrator in view of the statement of respondent no. 1 that under the sub-head "items not initially paid though agreed to be paid" were never agreed by the respondent. Further observations of the Arbitrator in this regard are as under:-

"in respect of the Final Bill including substituted and Extra items, the Respondents have prepared on 23. 9. 1994, a minus bill for an amount of (-) 10,289/ -. In respect of items not initially paid, though agreed to be paid, the wording of the items has been examined and their costs determined. In respect of item no:6. 1 "tee Iron frames for doors, windows and ventilators, the scattered nature of concrete for the hold fasts is to be measured under concrete and the scattered nature of shuttering is to be measured under shuttering. In respect of "sand filling in plinth with J. Sand and supply of bitumen in Agtt. items 2. 4 and 8. 4", the arguments of the Executive Engineer are accepted. In respect of "cutting and straightening of steel bars and bottom tie in agtt item No"6. 1" the argument of the claimant is accepted with slight reduction in rate. The total works out to Rs. 1,40,105. 15 only against rs. 2,51,018. 67 worked out by the Claimant in page C-61/20 of Folder NO:3. "

( 6 ) PERUSAL of the record shows that the respondent raised specific objection that the reduction and deduction has been approved by the Superintending Engineer under clause 25-B of the agreement and therefore is not within the purview of the Arbitrator. Still the Arbitrator conveniently did not deal with this objection and proceeded with the merits of the matter.

( 7 ) WHILE defending findings of the Arbitrator, mr. D. Moitra, learned counsel for the petitioner-claimant has contended that unless and until respondent serves notice upon the claimant bringing out the particulars of sub-standard work done by the claimant as required by clause 14 of the contract, the decision of the Supdt. Engineer with regard to reduction and deduction does not come within the ambit of excepted matter. Clause 14 reads as und























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