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1996 Supreme(Del) 841

High Court Of Delhi
AJAY CONSTRUCTION COMPANY - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 10/17/1996

Headnote:Arbitration Act 1940 - Section 30 & 33 — Award — Petition sought making of rule of the court — Responded filed application for setting aside the award and pleaded award suffers from lack of reasons — Held : Due to lack of reasons award is liable to be set aside to that extent. Award is made rule of the court except expenses of overhead tank. Decree for remaining amount passed.

Anil Dev Singh, J.

( 1 ) THE Arbitrator Mr. G. R. Hingorani made and published the award on February 17, 1989 in the matter of arbitration between the petitioner Ajay Construction Company and respondent-DDA in regard to the work, namely "construction of 168 MIG Houses at Bodella Pocket CG - I". While the petitioner prays for making the award a rule of the Court, the first respondent has filed an application, being I. A. 1840/90, under sections 30 and 33 of the Arbitration Act for setting aside the same. The facts giving rise to this matter are as follows:-

( 2 ) THE petitioner and first respondent entered into a contract with regard to the above said work. Certain disputes arose between the parties whereupon Engineer Member, DDA appointed second respondent to adjudicate the same. The following relevant dates and data are not in dispute:-

1. Date of tender - November 14, 1979. 2. Date of acceptance - February 22, 1980. 3. Date of commencement - March 2, 1980. 4. Period of completion - 12 months. 5. Stipulated date of completion as per agreement - February 2, 1981. 6. Actual date of completion - June 30, 1982.

( 3 ) LEARNED counsel appearing for the first respondent has assailed some of the findings of the Arbitrator pertaining to claims No. 1,2,3,5,6,8,10 and 14 on the ground that the same suffer from lack of reasons. He submitted that the Arbitrator was bound to give reasons as clause 25 of the agrement and the letter of the Engineer Member referring the disputes for adjudication required the Arbitrator to give a reasoned award.

( 4 ) UNDER these claims the arbitrator has dealt with the following matters relating to -

(1) Penal recoveries of cement, steel and C. I. pipes; (2) Additional measurements recorded after the preparation of the final bill; (3) Overhead tank; (4) Lugs; (5) Clause 10-C of the agreement.

( 5 ) BEFORE I deal with each of the matters it is important to note that in respect of the aforesaid claims the arbitrator has awarded a sum of Rs. 2,54,617. 00 out of which a sum of Rs. 1,34,623. 00 is in respect of the amount payable under the final bill with regard to which there is no controversy. The details of Rs. 1,34,623. 00 are as follows :- Rs. 59,29,283. 00 value of the work done including 10-C payments minus Rs. 57,46,298. 00 , amount paid to the contractor, minus Rs. 48,902. 00 , cost of material due from the contractor. Regarding each of the matters :-

(1) The first respondent had proposed penal recoveries for cement, steel and C. I. pipes from the aforesaid amount as according to it the petitioner used the said materials in excess of the required quantities. The Arbitrator rejected the claim of the first respondent for the reasons that it had not adduced any documentry evidence and the material being in the joint custody of the contractor and the department, it had to be presumed that all the material was consumed for bonafide use in the work. Learned counsel appearing for the first respondent contended that the Arbitrator has not given any plausible reasons for rejecting the plea of the first respondent. This submission of the learned counsel is not well founded. As already pointed out, the Arbitrator has spelt out the reasons for rejecting the plea of the first respondent and since the above said reasons are relevant, no fault can be found with them. Accordingly, the submission of the learned counsel for the first respondent is rejected. (2) The Arbitrator has awarded a sum of Rs. 39,862. 00 in favour of petitioner on the ground that after preparation of final bill some additional measurements had been recorded by the department and as per these the value of the work for which the petitioner is required to be paid works out to be Rs. 39,862. 00. The award of the Arbitrator on this count has not been contested by learned counsel for the first respondent. (3) The main grievance of the first respondent is with regard to the award of the Arbitrator pertaining to overhead tanks, on which account the Arbitrator h








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