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2005 Supreme(Del) 190
DELHI HIGH COURT
Pradeep Nandrajog
DELHI JAL BOARD
v.
SUBHASH PIPES LTD.
OMP No. 240/2002,
Decided on : February 15, 2005.
Arvind Nayar - Petitioner.
P. C. Markanda, Naresh Markanda - Respondent.
The main legal point established in the judgment is that the findings of fact recorded by the arbitrator are immune from challenge unless it is shown that the arbitrator ignored a term of the contract or acted contrary to an express term of the contract.
Headnote:
Section 34 - Arbitration and Conciliation Act, 1996 - Summary of Acts and Sections: Section 34 - Arbitration and Conciliation Act, 1996 - The court discussed the award dated 12.04.2002 published by the sole arbitrator on a dispute referred to him pertaining to the claims and counter-claims of the parties, arising out of Contract Agreement No. 6 (1992-93). The court analyzed the admitted facts, claims, and counter-claims of the parties, and the findings of the arbitrator on delay and liability. The court also discussed the objections raised by Delhi Jal Board challenging the findings of the arbitrator. The court highlighted the legal provisions of Section 34 of the Arbitration and Conciliation Act, 1996 and their interpretation in the context of the case.
Fact of the Case:
The case involved objections under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the award dated 12.04.2002 published by the sole arbitrator on a dispute arising from Contract Agreement No. 6 (1992-93) between the parties. The dispute pertained to claims and counter-claims of the parties, particularly regarding delay and liability.
Finding of the Court:
The court analyzed the objections raised by Delhi Jal Board, the findings of the arbitrator, and the claims and counter-claims of the parties. The court found that the objections challenging the findings of the arbitrator were not sustainable, except for the objection pertaining to Claim No. 4, which was partially accepted and the award modified accordingly.
Issues: The issues involved in the case included the challenge to the award under Section 34 of the Arbitration and Conciliation Act, 1996, the findings of the arbitrator on delay and liability, the objections raised by Delhi Jal Board, and the claims and counter-claims of the parties.
Ratio Decidendi: The court held that the findings of fact recorded by the arbitrator were immune from challenge unless it was shown that the arbitrator ignored a term of the contract or acted contrary to an express term of the contract. The court also emphasized that the objections raised by Delhi Jal Board challenging the findings of the arbitrator had to be considered in the context of the immune findings of fact.
Final Decision: All objections were dismissed, except for the objection pertaining to Claim No. 4, which was partially accepted and the award modified as indicated in the judgment.
PRADEEP NANDRAJOG, J. (Oral)
1. Present objections under Section 34 of the Arbitration and Conciliation Act, 1996 lay a challenge to the award dated 12.04.2002 published by Sh. K. D. Bali, sole arbitrator on a dispute referred to him pertaining to the claims and counter-claims of the parties, arising out of Contract Agreement No. 6 (1992-93).
Respondent was the principal claimant. Petitioner was the respondent and had some counter-claims.
Learned arbitrator took note of the following admitted facts :
(a) Supply order was dated 26.08.1992.
(b) Date of start of commencement of supply was 25.09.1992.
(c) Contract stipulated date of completion was 25.09.1993.
(d) Work as per contract was completed on 10.03.1995.
Learned arbitrator noted that as per the contract between the parties, claimant was to be supplied certain raw materials from which pre-stressed pipes had to be fabricated by the claimant and supplied to Delhi Jal Board. Learned arbitrator also noted that the contract between the parties had certain reciprocal obligations, prior compliance by one party was a condition precedent for the other to comply with its reciprocal obligation. Learned arbitrator with reference to Annexure C-9 also took note of the fact that Delhi Jal Board extended time for completion of the supply after fabrication, without levy of liquidated damages.
Claim of the claimant was under various heads being :
(a) Outstanding payments for work done. This claim had two heads; first head was for price as per contract stipulated rates and the other towards escalation.
(b) There was claim for refund of the earnest money along with interest.
(c) There was a claim for refund of the rebate which the contractor claimed was wrongly debited to its account.
(d) There was a claim for compensation of overheads and loss of profits.
(e) There was a residual claim for interest.
(f) Costs were claimed.
6. Delhi Jal Board had counter-claims being :
(a) Amounts paid to other contractors on account of escalation due to the alleged delays of the claimant.
(b) Compensation towards loss of credibility of Delhi Jal Board.
(c) Claim on account of MODVAT benefits availed by the contractor.
(d) Claim for interest on MODVAT benefits.
(e) Claim for deployment of staff, tools and machinery during the period contract over ran.
(f) Costs of the arbitration.
The real genesis of dispute between the parties was as to who was responsible for delay. Learned arbitrator took note of the fact (Annexure C-9) that Delhi Jal Board extended time for completion of the contract without levy of any compensation on the contractor. Learned arbitrator took note of the fact that the contractor could not commence any work till drawings were approved by Delhi Jal Board. Learned arbitrator took note of Annexure C-11 to the effect that the contractor submitted the drawings and designs for approval on 03.11.1992 and approval was granted somewhere in April 1993. Learned arbitrator took note of Annexures C-71, C-72 and C-73, being contractor's letters dated 12.11.1992, 01.01.1993 and 11.03.1993 praying for expeditious decision on the drawings and approval thereof.
Learned arbitrator took note of Annexures C-12, C-20, C-77, C-78, C-79, C-80, C-82, C-83 and C-84 for purposes of ascertaining whether there was delay in placing orders for M.S. Specials. Learned arbitrator took note of Annexures C-23 to C-29, C-69, C-70, C-85 to C-88 and C-88A as also C-31 to C-33 in the context of whether there was delay in giving alignments.
In light of the evidence aforenoted, learned arbitrator held against Delhi Jal Board to the effect that :
(a) There was delay in approval of drawings and designs.
(b) There was delay in supply of raw materials by Delhi Jal Board.
(c) There was delay in placing orders for M.S. Specials.
(d) There was delay in supply of M.S. Plates.
(e) There was delay in giving alignments.
These are pure findings of facts based on evidence and would be immuned from challenge unless it is shown that the le
