High Court Of Delhi
K.R.ANAND - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 1222 of 1992
Decided On : 03/17/1997
ARBITRATION - AWARD - INTEREST - CLAIM FOR INTEREST ON ILLEGALLY WITHHELD AMOUNT - AWARDED BY ARBITRATOR - NO ERROR - AWARD UPHELD.
Fact of the Case:
Petitioner filed a petition under Sections 14, 17, and 29 of the Arbitration Act to make an award a Rule of the Court. Respondent No. 1 filed an objection under Sections 30 and 33 of the Arbitration Act against the award. The main objections were raised against the award passed by the Arbitrator in respect of Claims No. 2, 4, and 5.
Finding of the Court:
The court upheld the award passed by the Arbitrator in respect of Claim Nos. 2 and 5. However, the court set aside the award passed by the Arbitrator in respect of Claim No. 4.
Issues: 1. Whether the Arbitrator was justified in allowing pre-suit interest when there was no specific claim in respect of the same? 2. Whether the Arbitrator committed an error apparent on the face of the records by allowing an amount in favor of the petitioner in his award for extra work without written instructions from the respondent? 3. Whether the Arbitrator had the discretion to allow costs for the arbitration proceedings?
Ratio Decidendi: 1. The Arbitrator has the discretion to grant interest in favor of the petitioner, and the court will not interfere with the discretion exercised by the Arbitrator. 2. The Arbitrator committed an error apparent on the face of the record in awarding an amount in respect of Claim No. 4 contrary to the specific stipulations in the agreement regarding payment for extra work only when there is written instructions from the Engineer-in-Charge. 3. The Arbitrator has the discretion to allow costs for the arbitration proceedings.
Final Decision: The objection filed by the respondent No. 1 was partly allowed. The award passed by the Arbitrator in respect of Claim No. 4 was set aside. The award passed by the Arbitrator in respect of Claim Nos. 2 and 5 were upheld. The award was made a Rule of the Court to the extent indicated in the order.
( 1 ) THIS is a petition under Sections 14,17 and 29 of the Arbitration Act filed by the petitioner praying for making the award a Rule of the Court. Subsequent to the tiling of this petition, notice was issued by this Court to the Arbitrator directing him to file the award alongwith the records of tile arbitration proceedings. In terms of the said order passed by this Court, the Arbitrator filed the award in this Court alongwith the records of the arbitration proceedings, on receipt of which, notices were issued to the parties intimating them about the filing of the award.
( 2 ) THE respondent No. 1 tiled an objection in that Court under Sections 30 and 33 of the Arbitration Act, against the award which was registered as 1. A. No. 11741 / 1992 The petitioner, however, did not file any objection as against the award and prayed that the coward be made a Rule of the Court.
( 3 ) IN the objection filed by the respondent No. 1, objections have been mainly raised as against the award passed by the Arbitrator in respect of Claims No. 2,4 and 5.
( 4 ) I have heard the learned Counsel appearing for the parties and I propose to dispose of the objections filed by the respondent No. 1 by that order.
( 5 ) CLAIM No. 2 : This claim relates to award of interest of Rs. 25,000. 00 by the Arbitrator. Claim No. 2 originally related to claim of the petitioner for a sum of Rs. 20,00 ( ). 00 on account ot wrong recovery made in the final bills. However, subsequently the respondent No. 1 returned the recovered amount of Rs, 20,000. 00 to the petitioners.
THE Arbitrator, however, while considering the aforesaid claim held that the recovi. ry made by the respondent No. 1 in respect of the aforesaid amount of Rs. 20,000. 00 was arbitrary and incorrect and the petitioners were deprived of the use of the money and, therefore, they are entitled to be paid interest tor the period the money was withheld wrongly, that is, from 20. 6. 1990 to 8. 5. 1991. The said interest has been assessed by the Arbitrator at Rs. 2,000. 00 , which he has awarded under the present award. The learned Counsel appearing for the respondent No. 1 submitted that the Arbitrator was not justified in allowing pre-suit interest when there was no specific claim in respect of the same. However, on perusal of Claim No. 3 claimed by the petitioner before the Arbitrator, it appears that the petitioner claimed interest on their claims I and 2 till the date of their payment. The Arbitrator, however, did not grant interest under Claim No. 3, as interest was awarded under this claim. Under those circumstances, it is apparent that the petitioner did claim interest on the amount of Rs. 20,000. 00 which was illegally withheld by the respondent No. 1. The Arbitrator having exercised his discretion to grant interest in favour oi the petitioner, I am not inclined to interfere with the aforesaid discretion exercised by the Arbitrator and, therefore, the said award awarding Rs. 2,000. 00 as interest on the illegally withheld amount is upheld.
( 6 ) CLAINT No. 4 : This claim of the petitioner relates to claim of Rs. 6,07,152. 72 on account of extra work involved in items 2 and 3. The Arbitrator after hearing; the parties and on consideration of the records of the case awarded a sum ot Rs. 1,13,382/ as against the aforesaid claim of the petitioner. The learned Counsel appearing for the respondent No. 1 submitted that since there was no written instructions from the respondent No. 1 to carry out the extra work in respect of which the petitioner have claimed the aforesaid amount, the Arbitrator committed an error apparent on the face of the records by allowing the aforesaid amount in favour of the petitioner in his award. In support of her submission, the learned Counsel relied upon the decision of that Court in K. C. Goyal and Co. v. Delhi Development Authority and Another, reported in 1994 (2) Arbitration Law Reporter Page 115. The learned Counsel appearing for the petitioner on th
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