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1997 Supreme(Del) 502

High Court Of Delhi
POLO SINGH AND COMPANY - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 212A of 1993
Decided On : 05/30/1997

Advocates Appeared:
A.SALVAN, S.K.MITTAL

Headnote:Arbitration Act 1940 - Section 30 — Setting aside of award — Agreement — Construction of houses — Recession of contract — Failed to execute work — Breaches of agreement — Award published — Resolved in favor of petitioner — Defendant pleaded material facts not considered — Non-application of mind — Partly set aside — Remitted for fresh determination.

Anil Dev Singh, J.

( 1 ) THE Arbitrator, Mr. H. P. Patel, made and published his award on the 26th of December, 1992, in respect of disputes and differences arising between the parties relating to the work of construction of 356, SFS houses, category II, at Madipur, Pocket-III and SH construction of 132 numbers SFS houses category-II, at Madipur, Pocket-III, GR-II. While this award has been challenged by the respondent-UOI under Section 30 of the Arbitration Act by means of I. A. No. 2997 of 1994 (in Suit No. 473/93), the petitioner has filed an application, being Suit No. 212 of 1993, for making the award a rule of the court. The facts leading to the instant suit lie in a narrow campass. The word in question was awarded to the petitioner on the 7th of March, 1989. The estimated cost of the work was Rs. 1,23,06,150. 00 and the tendered amount was Rs. 1,48,28,910. 00. The stipulated date for the commencement of the work was 17th of March, 1989, and the same was required to be completed within 15 months, that is to say on or before the 16th of June, 1990. The work, however, did not commence which led to recession of the contract by the respondent on 21st August, 1989. In this regard the stand of the petitioner was :

(1) The respondent committed fundamental breach of contract in not handing over the site on the 7th of March, 1989, when the work was awarded to the petitioner; (2) on the date of the award of the work viz. 7th of March, 1989, the piling work, which was being executed by another contractor, was incomplete and this is borne out from the fact that after that date upto the 1st of May, 1989 more than one thousand bags of cement were consumed by the piling contractor; (3) the piling work was defective which prevented the petitioner from raising construction; (4) defects in the piling work were brought to the notice of the respondent through sketches and photographs but were not rectified; (5) It was keen to start the work which is reflected by the fact that it constructed a godown for the storage of cement at site, undertook the boring of a tube well, drew a water sample from the same and sent it to the Shriram Institute for Industrial Research for analysis, paid a sum of Rs. 1,810. 00 to DESU on the 11th of April, 1989 for obtaining an electric connection collected cement, bricks and iron rods, etc. Due to the non availability of site and defective piling work the petitioner could not proceed with the work despite the fact that the petitioner had taken requisite steps for proceeding with the same; (6) The termination of the contract was illegal as the delay in the commencement of the work was attributable to the respondent;

ON the other hand the stand of the respondent was that the petitioner had no intention to execute the work from the very beginning even though the site for 11. 5 blocks was handed over on the stipulated date for the commencement of the work, viz. , 17th March, 1989, followed by the handing over of 2. 5 blocks on the 11th April, 1989, and the balance 2. 5 blocks on the 25th of April, 1989. Thus substantial portion of the site was available to the petitioner for proceeding with the work but the petitioner committed breach of the agreement and did not commence the work. The piling foundation work carried out by the other contractor did not suffer from any major defects which is evident from the fact that minor rectifications were required for which purpose only 16 bags of cement were consumed as per the following details :

ON the 4th of July, 1989 - 10 bags 5th of July, 1989 - 3 bags 6th of July, 1989 - 3 bags Since the petitioner failed to execute the work and was merely making excuses with a view to cover up its breaches of the agreement, the work was rescinded by the respondent on the 21st of August, 1989, after service of a notice to the petitioner dated 12th of July, 1989 and the same was got executed through another agency.

THE Arbitrator by his award made and published on 26th December, 1992 resolved







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