SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2016 Supreme(Del) 3358

IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG, PRATIBHA RANI, JJ.
SILICON GRAPHICS SYSTEMS INDIA PRIVATE LTD. - Appellant
Versus
M/S STERLING & WILSON ELECTRICALS PRIVATE LTD. - Respondent
FAO (OS) 509/2015
Decided On : 07-09-2016

Advocates Appeared:
For the Appellant : Mr. Rajender Prasad, for Mr. Rajiv Tyagi.
For the Respondent: Mr. Anurag Kumar.

Headnote:

Limitation Act, 1963 - Article 18, 113 - Arbitration and Conciliation Act, 1996 - Section 23, 34 - Assignment of electrical works - Installation of D.G. Sets and laying of electrical wires - Respondent was the successful bidder for the electrical works - Testing and commissioning the D.G. Sets - Delay in installing - Liquidated damages - Claim of expenses by the contractor for running the D.G. Sets - Contractor had failed to prove a prior approval or written confirmation for running the D.G. Sets as required under the contract - Contractor's claim for additional payments was rejected - Majority arbitrators had awarded a sum of Rs.13,58,928/- in favour of the contractor - Award in favour of the contractor is limited to the liquidated damages levied and recovered by the owner - Contractor not completed the works within the contract stipulated date - Majority award has noted that certain additional works were awarded beyond the contract stipulated date - This has not been noted by the minority arbitrator - There is a difference of opinion whether the quantum of the additional works was so meager that it did not warrant extra time for completion thereof - Majority opined that the additional works were not meager - Minority has held to the contrary - View taken by the majority on this aspect is based upon admitted facts - Additional works being awarded and as regards its quantum and impact on the time schedule the opinion rendered cannot be called perverse - Minority has not taken into account a very relevant fact.

JUDGMENT :

PRADEEP NANDRAJOG, J.

1. We shall be referring to the appellant as the ‘owner’ and the respondent as the ‘contractor’. It is a fight over an award passed by the majority in favour of the contractor and against the owner holding that the liquidated damages in sum of Rs.13,58,927.60 deducted from the amount payable to the contractor be refunded to the contractor.

2. The owner had its office in a leased premises at A-30, Kailash Colony, New Delhi for which monthly rent in sum of Rs.2,66,913/- was being paid. Besides, an interest free security deposit with the landlord in sum of Rs.32,02,980/-. The owner found rent burden to be onerous and therefore decided to purchase a property and the search led the owner to buy property bearing No.228, Udhyog Vihar, Phase I, Gurgaon. The building needed refurbishing as per the requirement of the owner. Bids were invited from contractors to execute civil and electrical works. The electrical works had two components. Installation of D.G. Sets and laying of electrical wires. It is apparent that the coordination had to be done by the owner of the works between the civil contractor and the contractor for the electrical works.

3. The respondent was the successful bidder for the electrical works. The time of completion admittedly was 4 months. Time was to reckon from the date of award of the contract which was August 06, 1998 for the electrical works and October 09, 1998 for the installation of D.G. Sets. Concededly the works were executed beyond the period of 4 months. The dispute pertained to only one issue. Liquidated damages levied by the owner of the works on the contractor.

4. There is a majority award in favour of the contractor decreeing the claim laid before the Arbitral Tribunal by the contractor and needless to state the sum awarded is the liquidated damages levied and adjusted from the amount payable to the contractor for the work done and as per the rate fixed under the contract. There is a minority award in favour of the owner rejecting the claim laid.

5. Vide impugned order dated March 24, 2015 challenge to the award has failed and we have in our lap a prolix appeal spanning 58 pages.

6. Regretfully, we find a practice emerging to challenge all and sundry findings returned in an award with a hope by the litigating party that something may stick. This makes the task of adjudicating objections to the award very prolix and time consuming. This frustrates one of the many objects of an arbitration proceedings : timely resolution of the dispute between the parties.

7. We propose to succinctly note the controversy and thereafter highlight whether it would be permissible for a Court to re-appreciate the factual backdrop leading to the conclusion arrived at by the majority arbitrators, for if the exercise would be to sit as an Appellate Court over the majority award, it would suffice for us to state that the task required to be performed by us is prohibited by law. This exercise would be done by us by noting the issues which were discussed by the majority arbitrators and the minority as per the majority award penned on January 12, 2004 and the minority on January 14, 2004.

8. Notwithstanding the Arbitral Tribunal not formally settling issues for discussion, a perusal of the majority as also the minority award shows that before delving into the merits of the claim and the defence, two preliminary issues have been discussed in the two awards. The first is the bar of limitation pleaded by the owner. The second is whether the claim by the contractor was vague and not disclosing a cause of action and hence warranting a rejection on principles akin to Order 7 Rule 11 of the Code of Civil Procedure. Thereafter the majority has discussed the evidence and legal issues arising under three heads with the third head having various sub-heads. The minority has discussed the evidence and legal issues arising under six heads with the fifth and the sixth head having various sub-heads. We propose to note the r



































Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top