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1993 Supreme(Del) 153

High Court Of Delhi
R.S.RANA - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 2017 of 1991
Decided On : 03/09/1993

Advocates Appeared:
ANUSUYA SALWAN, N.K.Handa

The arbitrator has exceeded his jurisdiction and has committed an error apparent on the face of the award by ignoring the terms of the contract and not giving reasons for his decision.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - ERROR APPARENT ON THE FACE OF THE AWARD - ARBITRATOR EXCEEDING JURISDICTION - ARBITRATOR IGNORING TERMS OF CONTRACT - ARBITRATOR NOT GIVING REASONS FOR AWARD.

Fact of the Case:

The petitioner was awarded the balance work of construction of parking and widening of existing roads phase II Asian Games Village Complex. Disputes between the contractor/petitioner and the D.D.A./respondent were referred to Mr. Hnarasi Das, for adjudication. The arbitrator gave the award on 20th June, 1991. The award and the proceedings were filed by the arbitrator. The objections to the award were filed on behalf of the respondent and issues were framed. The petitioner appeared in person and submitted that he does not want to press his objections to the award and wants to withdraw his objections. Permission was granted to the petitioner to withdraw his objections. The Court is required to deal with the objections to the award filed by the respondent/D.D.A.

Finding of the Court:

The arbitrator has clearly misconducted himself in decreeing claim No. 7 of the petitioner. The award to that extent is liable to be set aside. The arbitrator has ignored the terms of the contract and has exceeded his jurisdiction in decreeing claims No. 9 and 11 of the petitioner. The award to the extent of claims No. 9 and 11 is set aside. The arbitrator ought to have given reasons for awarding damages against claims 9 and 11. The award to the extent of counter claim No. 1 is set aside because the arbitrator has given no reasons while awarding Rs. 100.00 to the respondent to be paid by the claimant. The award with respect to claims nos. 7, 9 to 11, additional claims No. 1 to 3 and counter-claim No. 1 are set aside and the award with respect to the remaining clauses is made rule of the Court.

Issues: Whether the arbitrator has exceeded his jurisdiction in decreeing claim No. 7 of the petitioner? Whether the arbitrator has ignored the terms of the contract and has exceeded his jurisdiction in decreeing claims No. 9 and 11 of the petitioner? Whether the arbitrator ought to have given reasons for awarding damages against claims 9 and 11? Whether the award to the extent of counter claim No. 1 is bad because the arbitrator has given no reasons while awarding Rs. 100.00 to the respondent to be paid by the claimant?

Ratio Decidendi: The arbitrator has exceeded his jurisdiction in decreeing claim No. 7 of the petitioner because the decision of the Engineer is final and binding under Clause 10-C of the agreement. The arbitrator has ignored the terms of the contract and has exceeded his jurisdiction in decreeing claims No. 9 and 11 of the petitioner because the site was to be given to the petitioner in stages and the delay in supplying the drawings and giving directions/decisions in time is clearly attributable to the respondent. The arbitrator ought to have given reasons for awarding damages against claims 9 and 11 because the error is apparent on the face of the record. The award to the extent of counter claim No. 1 is bad because the arbitrator has given no reasons while awarding Rs. 100.00 to the respondent to be paid by the claimant.

Final Decision: The award with respect to claims nos. 7, 9 to 11, additional claims No. 1 to 3 and counter-claim No. 1 are set aside and the award with respect to the remaining clauses is made rule of the Court. The award regarding claim Nos. 7, 9 to 11, additional claims 1 to 3 and counter claim No. 1, are remitted back to the arbitrator for his decision in accordance with law.

Dalveer Bhandari

( 1 ) THE petitioner was awarded the balancework of construction of parking and widening of existing roads phase II atasian Games Village Complex vide agreement NO. 10/pe/agd and DDA/81-82.

( 2 ) THE disputes between the contractor/petitioner and the D. D. A. /respondent were referred to Mr. Hnarasi Das, for adjudication. Thearbitrator gave the award on 20th June, 1991. The award and the proceedings were filed by the arbitrator. The abjections to the award were filed onbehalf of the respondent and immediately thereafter issues were framed andparties in pursuance of the Court s directions filed the evidence by way ofaffidavit.

( 3 ) ON 18/02/1993, when the matter was listed for finaldisposal, the petitioner appeared in person and submitted that he does notwant to press his objections to the award and wants to withdraw his objections. Accordingly, the permission was granted to the petitioner to withdrawhis objections.

( 4 ) NOW, the Court is required to deal with the objections to theaward filed by the respondent/d. D. A.

( 5 ) THE learned Counsel for the respondent submitted that the claimno. 7 is contrary to the provisions of the agreement entered into between theparties and deserves to be set aside. The claim was for increase in labourwages under Clause 10-C of the agreement It was submitted by the learnedcounsel appearing for the respondent that the claimant was not entitled forincrease in labour wages as delay in the execution of contract was attributedto the contractor by the Chief Project Engineer. Under Clause 10-C of theagreement, the decision of the Engineer is final. Clause 10-C of the agreement reads as under :

"if during the progress of the works, the price of any materialincorporated in the works (not being a material supplied from theengineer-in charge s stores in accordance with Clause 10 hereof)and/or wages of labour increase as a direct result of the coming intoforce of any fresh law. or statutory rule or order (but not due toany changes in sales taxes.) and such increase exceed ten per cent ofthe price and/or wages prevailing at the time of receipt of the tenderfor the work, and contractor thereupon necessarily and properlypays in respect of the material (incorporated in the work) such increased price and/or in respect of labour engaged on the executionof the work such increased wages, then the amount of the contractshall accordingly be varied provided always that any increase so payable is not. in the opinion of the Engineer (whose decision shall befinal and binding) attributable to delay tn the execution of the contract within the control of the contractor. . . (Emphasis added ).

BARE reading of the said clause clearly reveals that the opinion of theengineer regarding determination of delay in execution of the contract shallbe final and binding and the arbitrator was not justified in sitting in appealon the decision of the arbitrator,

( 6 ) THE petitioner who appeared in person has filed reply to theobjections filed by the respondent against the award. In the reply, it hasbeen submitted that the arbitrator had committed no error in making theaward and the same be made rule of the Court. The petitioner submittedthat the arbitrator was justified in decreeing his claim in respect of claimno. 7. The respondent on the other hand has mentioned that because ofclause 10-C of the agreement, the petitioner was not entitled to the decree ofhis claim No. 7. The Project Engineer in his letter dated 6/04/1984 hasattributed delay in execution of the contract to the petitioner. According toclause 10-C of the agreement, the decision of the Engineer is final and binding. Furthermore, when delay has been attributed to the contractor; thenaccording to the said Clause 10-C, the petitioner is not entitled to any increase in wages of labour. The learned Counsel for the respondent insupport of her arguments, placed reliance on M/s. Bharat Furnishing Co. v. Delhi Development Authority and Another, 1991 (4) D. L. 335. I






























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