M. S. A. Siddiqui,j.

( 1 ) BY the agreement No. 5/ee/sed/87-88 dated 30. 9. 1987, the petitioner was awarded the work of construction of cement concrete paths and pavements in pocket-C, SFS Houses, Section-F, Sarita Vihar, Delhi. As per the agreement, the work was to start on 10. 10. 1987 and was to be completed on or before 9. 2. 1988. However, the work could not be started within the stipulated period and the contract was rescinded on 21. 3. 1988. Disputes and differences between the parties in respect of the contract in question were REFERRED TO the arbitrator, who gave his award on 30. 4. 1992. On 27. 4. 1993, the arbitrator Mr. A. L. Garg filed his award. Notice of filing of the award was given to the parties. The respondent DDA filed objections under Sections 30/33 of the Arbitration Act against the award, which have been opposed by the petitioner.

( 2 ) THE objections of the DDA having been opposed, the following issues were framed:

1. Whether the award is liable to be set aside on the grounds of objections raised by the respondent in the objection petition?

2. Relief and costs.

(CLAIM No. 1 and counter claim No. 1)

( 3 ) WHILE claimant contractor claimed refund of earnest money amounting to Rs. 20,000. 00 , the respondent DDA preferred a counter claim of Rs. 1 lac on account of forfeiture of the earnest money. The arbitrator rejected the counter claim but allowed the contractor s claim on the following grounds:-

A) Although, it was mentioned in Clause 2 (a) of the agreement that "the site for the work was available", but the clear site for the work was not made available till 9. 2. 1988, i. e. the date for completion of the contract;

B) After expiry of the period stipulated in the agreement, no time was mutually agreed between the parties for completion of the contract. Thus, the time was not kept as essence of the contract;

C) The work awarded to the contractor could not be completed because of non-fulfilment of obligation in respect of making available the clear site by the DDA for starting the work in terms of the contract. Thus, the DDA was not justified in rescinding the contract and forfeiting the earnest money.

( 4 ) IT is undisputed that as per agreement the work was to start on 10. 10. 1987 and was to be completed on or before 9. 2. 1988; that the work could not be started within the stipulated period and the contract was repudiated on 21. 3. 1988. After repudiation of the contract, contractor s earnest money amounting to Rs. 20,000. 00 was forfeited by the DDA. It is also undisputed that although, it was mentioned in the agreement in question that the site was available for starting the work but the actual site was not made available to the contractor on the date of the commencement of the contract.

( 5 ) LEARNED counsel for the DDA submitted that as per clause 2 of the agreement lime was the essence of the contract and as the contractor had failed to start work within the stipulated period, respondent was justified in forfeiting the earnest money on the ground of breach of the contract. According to the learned counsel, the arbitrator has committed a patent illegality in holding that Clause 2 of the agreement was not applicable as the time was not the essence of the contract. He further contended that the finding recorded by the arbitrator on the question of breach of contract by the respondent DDA is also erroneous and so award given by the arbitrator on the claim No. 1 is not sustainable in law. In my opinion, the submissions of the learned counsel deserve to be repelled as I do not find that the contractor had committed breach of the contract. It was stated in para No. 2 (iv) of the objections filed against the award that clear site for work was made available to the contractor on 23. 12. 1987 and the drawings for the work were supplied to him on 26. 12. 1987. This clearly shows that the time was not the essence of the contract as the DDA could not make available the clear site and the drawings to the contracto

Click Here to Read the rest of this document