IN THE HIGH COURT OF DELHI AT NEW DELHI
HON’BLE MR. JUSTICE MOOL CHAND GARG
MUNICIPAL CORPORATION OF DELHI …. Appellant
Versus
M/s RAVI BUILDERS …. Respondent
FAO.No. 422/2005
Decided on : 29.03.2011
B) Arbitration and Conciliation Act, 1996, Section 34:- Interest payable on award amount divided into four periods pre-reference period, pending the arbitration, post award period and post decree period. While pre-reference award period is concerned the rate of interest provided in the interest will prevail, regard the interest payable after than is always as per the decision of the arbitration. If no interest is decided by the arbitrator then the statutory interest of 18 % is liable to be paid. (Para 9 and 10)
MOOL CHAND GARG,J.
1. This is an appeal filed by the appellant assailing the judgment dated 12.09.2005 delivered by the learned ADJ in having dismissed the objections filed by the appellant to an award dated 10.06.2004 made by the sole Arbitrator.
2. Briefly stating the facts of this case are that the respondent who was awarded a contract for the work of construction of 24 numbers Type IV Quarters at Gulabi Bagh, Phase-II vide order No.D/EE-VII/92-93/4 dated 06.07.1992 executed between the parties could not complete the work and as such differences and disputes arose between the parties which as per the orders passed by a learned Single Judge of this Court were referred to Mr. B.S. Sekhon, who was appointed as a sole Arbitrator vide its order dated 17.05.2004 in the Arbitration Petition.
3. After entering into the reference, the Arbitrator gave his award on 10.06.2004 in favour of the respondent/contractor. The appellant/MCD filed its objection under Section 34 of the Arbitration and Conciliation Act, 1996 (for short „the Act”). The objections were not found favour with by the learned ADJ and as such the learned ADJ dismissed the objections vide the impugned order dated 12.09.2005. It is this order which has been appealed against by the appellant under Section 37 of the Act.
4. During the course of arguments, the learned counsel appearing for the appellant confined the lis qua the decision given by the learned ADJ on issues No.6 and 8. It was contended that insofar as issues No.6 is concerned, the same was decided by the Arbitrator without there being any evidence on record. This aspect has also not been considered by the learned ADJ. It has been contended that the respondent/contractor has not led any evidence to justify the award of compensation on issue No.6 and thus, the said portion of the award was not sustainable in law. The learned ADJ failed to appreciate this issue and thus, the order of the learned ADJ as well as the award on that issue is not sustainable.
5. As far as issue No.8 which is with respect to awarding of interest @ 10% it is submitted by the appellant that the interest could not have been awarded over and above 9%. Insofar as issue No.6 is concerned, the Arbitrator has awarded a sum of ` 54,000/- in favour of the respondent. This award pertains to salary of one Chowkidar as a watch and ward staff to keep a watch on 24 quarters during the period 15.10.1994 to 30.08.1996 when the site was taken over after due certification about the completion of the work. Thus, the claim basically relates to keeping the site idle on account of delay due to non-availability of cement and steel from the municipal stores; due to non-laying of electric conduct pipes by the electric contractor; non-providing and fixing of electrical installation connections and wiring; and due to re-arrangement of labour. It was submitted on behalf of the respondent that since over a period of 29 months, the site could not be utilized by the contractor due to fault of the appellant and the site had to be kept secured with a watch and ward staff, despite there being no specific stipulation in the contract regarding such a claim, the appellant was still entitled to claim this amount. In this regard details have been supplied by the contractor which have been taken note of by the Arbitrator. Relevant portion of the discussion on the issue by the Arbitrator in are as follows:-
“Issue No.6 It would be appropriate to deal with the preliminary objections raised by the respondent in the first instance. This objection which was also urged by the Learned counsel for the respondent is that the instant claim and the claim under clause 10 CC over lap. This objection is plainly unsustainable as for one thing, clause 10 CC makes provision for price variation due to escalation in the components of materials and labour and the mode and principles to be followed for computing the compensation. Whereas, the claim for damages is founded on the provisions
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