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2000 Supreme(Del) 259

High Court Of Delhi
PRAKASH SHARMA - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 11637 of 1998
Decided On : 03/03/2000

Advocates Appeared:
A.SALVAN, GIRISH AGRAWAL, MONIKA SHARMA

Headnote:Arbitration Act, 1940 - Section 30 & 33 — Objection to arbitration award filed with delay — Amendment of objection sought to introduce objection about denial of interest by the arbitrator on the basis of the law prevailing at that time — Amendment allowed to ensure that justice is done as where patent illegality exist it is the duty of the court to correct the same.

VIKRAMAJITSEN J.

( 1 ) THE facts relevant for the disposal of this petition are not in dispute. An Award was published wherein two claims were partly allowed, one was fully allowed and two were rejected. Out of a total claim of Rs. 8. 79. 085. 00 a sum of Rs. 2,11,820. 61 was granted by the Arbitrator. The 1st claim was for Rs. 2,94,309. 00 as the amount due in the Final Bill, towards work done but not paid. The finding was that this was partly justified to the extent of Rs. 1,20,775. 25. The next was for the refund of the Security Deposit of Rs. 84. 776. 00 which was found to be fully justified. The third claim for Rs. 5,00,000. 00 , towards damages for work executed beyond the stipulated date of completion was rejected as being unjustified The fourth claim for Rs. 2,00,000. 00 under Clause 10-C, was held to be partly justified to the extent of Rs. 6,279. 36. And the final claim was on account of pendente lite interest, which was fully disallowed. Three Counter Claims were also filed.

( 2 ) BOTH parties have filed Objections, IA No. 1344/90 being those of the Petitioner- Contractor. At the hearing before me, learned counsel for the Petitioner-Contractor made a statement that he was restricting his challenge only to the last Claim, wherein pendente lite interest had been rejected by the Arbitrator. Subsequent to the initial delay in filing the Objection being condoned in favour of the Contractor, 1. A. No. 11637/98 was filed on its behalf, for amendment of the Objection Petition No. 1344/ 89, so as to incorporate the grounds of misconduct for disallowing the claim for pendente lite interest.

( 3 ) THE findings of the Learned Arbitrator in this context are succinct and are spelled out in the following two sentences:

"claim No. 5:- The claim is for pendente lite interest. The claim is not justified in view of the latest judgments of the Supreme Court. "

( 4 ) THE present application for amendment has been strenuously contested by learned counsel for the Respondent on the grounds that it is barred by limitation. The argument is that the statutory period of thirty days for fiting Objections having expired, a right has accrued in favour of the Respondent which cannot now be altered to their detriment.

( 5 ) IN Lachhman Dass Vs. Ram Lal and Anr. , AIR 1989 SC 1923, a distinction has been observed between the powers of the Court under the sundry provisions of the Arbitration Act, Viz. Sections 30 and 33, on the one hand, and Section 14 on the other. In the objections fried under the former Sections, attention was drawn to the fact that the Award was hit by the prescoption of Section 49 of the Registration Act. The Award was unregistered even though it created rights in immovable property of a value exceeding Rs. 100. 00. It was held that despite that failure to take this Objection, the Court could take cognisance of this illegality under Section 17 and decline to make the Award the Rule of the Court since the failure to register the Award was per se sufficient reason to set it aside.

( 6 ) IN the case at hand the Arbitrator declined to award interest because of the decision of the Supreme Court at that time. Subsequently in the judgments delivered in Secretary, Irrigation Department, Government of Orissa and Ors. Vs. G. C. Roy, AIR 1992 SC 732 and in State oforissa Vs. B. N. Agarwalla 199t II AD S. C. 234, the powers of the Arbitrator to grant pendente lite interest was recognised. The submission of learned counsd for the Petitioner is that since the law, as laid down by the Supreme Court had changed between the period when the Award was published and when it came to be consoled as worthy of being made Rule of the Court, by the operation of Section 17 of the Arbitration Act. it should be remitted or set aside.

( 7 ) REFERENCE must also be made to-the decision of Division Bench of this. Court in the case of Rajender Prasad Sharma Vs Ashok Kumar Sharm and Ors. , 1996 (2) Arb. LR. 362 where the following observations were made: "we are no















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