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1995 Supreme(Del) 95

High Court Of Delhi
SUDHIR BROTHERS - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 201A of 1993
Decided On : 01/27/1995

Advocates Appeared:
ANSUYA SALVAN, Harish Malhotra

The arbitrator does not have jurisdiction to adjudicate upon matters that are excluded from the purview of arbitration under the terms of the contract.

Headnote:

ARBITRATION - JURISDICTION - FINALITY OF SUPERINTENDING ENGINEER'S DECISION - CLAUSES 2 AND 10C OF THE CONTRACT - AWARD SET ASIDE AS WITHOUT JURISDICTION.

Fact of the Case:

A dispute arose between the petitioner and the respondent DDA regarding the construction of 396 LIG DUs at Pitampura Pocket-W (Poorvi) including internal service. The arbitrator appointed by the court published the award on 26.12.1992. The respondent DDA filed objections to the award, which were contested by the petitioner.

Finding of the Court:

The court found that the arbitrator had assumed jurisdiction over matters that were not capable of being referred to arbitration or adjudicated upon by the arbitrator, and in doing so, the arbitrator had acted in excess of his jurisdiction. The court also found that the arbitrator had travelled beyond the terms of the agreement, ignoring its terms and conditions, and that the award was vitiated by errors apparent on the face of the award.

Issues: 1. Whether the arbitrator had jurisdiction to adjudicate upon the claims and counterclaims that were the subject matter of the dispute. 2. Whether the arbitrator had acted in excess of his jurisdiction by assuming jurisdiction over matters that were not capable of being referred to arbitration or adjudicated upon by the arbitrator. 3. Whether the arbitrator had travelled beyond the terms of the agreement, ignoring its terms and conditions. 4. Whether the award was vitiated by errors apparent on the face of the award.

Ratio Decidendi: 1. The court held that the arbitrator did not have jurisdiction to adjudicate upon the claims and counterclaims that were the subject matter of the dispute because the matters were excluded from the purview of arbitration under clauses 2 and 10c of the contract. 2. The court held that the arbitrator had acted in excess of his jurisdiction by assuming jurisdiction over matters that were not capable of being referred to arbitration or adjudicated upon by the arbitrator. 3. The court held that the arbitrator had travelled beyond the terms of the agreement, ignoring its terms and conditions. 4. The court held that the award was vitiated by errors apparent on the face of the award.

Final Decision: The court set aside the award made by the arbitrator on claims No. 1(c), 1(d), claim No. 7, and counterclaim No. 7 as without jurisdiction and having been rendered adjudged contrary to the terms of the contract and, touching such claims as were excluded from the purview of arbitration. The contractor's claims No. 1(c), 1(d), and 7 were excluded from the award and shall be treated to have been rejected. Counterclaim No. 1 preferred by the respondent shall be deemed to have been upheld by the arbitrator. Rest of the award is maintained. The award as modified is made a rule of the court. The awarded amount to either party shall carry interest at the rate of @ 12% p. a. from the date of the decree till realization.

R. C. Lahoti

( 1 ) THIS is a petition under Sections 14 and 17 of the Arbitration Act.

( 2 ) THE petitioner was awarded the work of construction of 396 LIG DUs at Pitampura Pocket-W (Poorvi) including internal service for which an agreement No. 24/ee/cdi/80-81 was executed between the parties. Disputes arose between the parties. In accordance with the order dated 11. 2. 1991 based in OMP 96/88 the respondent No. 2 was appointed as an arbitrator. The award has been published on 26. 12. 1992. The save having been filed in the court, the respondent DDA has submitted several objections in writing. The objections have been contested by filing a reply by the petitioner who has supported the award on all counts.

( 3 ) THERE were ten claims made by the petitioner. There were five counter claims and two additional claims made by the DDA. On all the heads the findings of the Arbitrator are in favour of the petitioner.

( 4 ) THE substance of the objections preferred by the respondent DDA is that the arbitrator has assumed jurisdiction over such matters as were not capable of either being referred to arbitration or of being adjudicated upon by the arbitrator and in doing so the arbitrator has acted in excess of his jurisdiction ; that the arbitrator has travelled beyond the terms of the agreement, ignoring its terms and conditions ; and that the award is vitiated by errors apparent on the face of the award. Each of the objections raised by the respondent DDA shall be dealt with item-wise.

( 5 ) THE Arbitrator has along with his award filed his record consisting of 14 volumes. Parties have not adduced any evidence. The learned counsel for the parties have tried to sbubstantiate their respective pleas by making extensive reference to the proceedings and record or the arbitrator, the correctness, whereof has not been disputed.

( 6 ) FOUR items of dispute can be taken up for consideration together. These are claims No. 1c, ID and 7 preferred by the petitioner and counterclaim No. 1 preferred by the respondent. I may briefly notice the claims counter-claim (as each of them was preferred), the award made by the arbitrator on these items and the gist of reasonings adopted by him. I extract and reproduce from the award the beads of claims and findings as recorded : Claim No. 1 (C ). Balance payment of Labour 10c Rs. 30,657. 54. Stipulated date of completion Was 15. 1. 1982. Since this statutory like was effective from 1. 3. 1982 as per the circular of the Chief Engineer DDA, the same was payable if the delay in completion was not attributable to the claimant. Award In this case. the total amount of labour (10c) on the rate approved by Delhi Administration comes to Rs. 65,214. 69 as per Ex. C-143. Since the respondent had already released payment of Rs. 34,557,15, the balance amount of Rs. 30,657. 54 is still payable to the claimant. I find that since the delay was attributable to the respondent, the balance amount of Rs. 30,657. 54 is liable to be paid. Accordingly 1 award Rs. 30,657. 54 in favour of the claimant. Claim No. l (d ). The payment under bricks (10c) Rs. 86,601. Award The claimants state that there was a hike in the price of bricks. The respondent agreed that there was a hike in the price of bricks and as per their own calculations the amount payable on this account was Rs. 86,601. But since according to the respondents, the delay was on the part of the claimants, the claimants were not entitled to any payment on this account. As I have held elsewhere that the delay in the case was entirely attributable to the respondents, I hold the claimants arc entitled to Rs. 86,601 on account of bricks 10-C. Counter-claim No. 1 : Respondent claim for Rs. 4,44,629 at 10% amount put into tender under clause 11 of the agreement. Award Since the present claim has been duly referred for arbitration, I have acquired jurisdiction to adjudicate upon the same. Time was not maintained of the essence of the contract. Clause 2 becomes inoperative. As the de

































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