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2011 Supreme(Del) 926

IN THE HIGH COURT OF DELHI AT NEW DELHI
Vipin Sanghi, J.
Chugh Kathuria Engineers (P) Ltd. - Appellant
Versus
Delhi Development Authority (DDA) - Respondent
CS(OS) 1043/2009
Decided On : 15-06-2011

Advocates Appeared:
Mr. Sandeep Sharma, Advocate for the Plaintiff.
Mr. Abhishek Puri, Advocate for the Defendant.

Headnote:

Arbitration Act, 1940 - Sections 30 & 33 – Delay and laches – Petitioner awarded work of construction which was to be completed within nine months – However, work continued since 1981 to 1985 and never completed – Respondent D.D.A. alleged that petitioner abandoned the work – Petitioner states that respondents were responsible for delay – Exhibit R-2 a letter written by petitioner taking responsibility of delay was ignored by the arbitrator – Petitioner states that such letter was written under coercion and pressure – Arbitrator awarded a compensation of Rs. 6 lacs – Grant of extension of time by respondent, till the time of abandonment, cannot necessarily lead to the conclusion that the delay was attributable to the respondent and not the respondent – Award of arbitrator is lacking clarity as to how the arbitrator arrived at a figure of Rs. 6 lacs – Impugned award cannot be sustained – Complete arbitral record and a copy of order be communicated to the newly appointed arbitrator.

Vipin Sanghi, J.

I.A. No. 1008/2010

1. These are objections preferred by the respondent-DDA under Sections 30 & 33 of the Arbitration Act, 1940 against the award dated 19.03.2009 passed by Mr. Justice R.C. Chopra, retired Judge, Delhi High Court.

2. The petitioner M/s Chugh Kathuria Engineers (P) Ltd. was awarded the work of construction of 96 Type-III, 96 Type II quarters and 140 Scooter Garage in Block-B, Janak Puri, New Delhi vide an agreement No. 41/EE/HD/VII/DDA/81-82. The stipulated date of commencement of work was 20.08.1981. The work was to be completed on or before 19.05.1982 i.e. within a period of nine months. However, the work continued till 1985, and was never completed by the petitioner.

3. The respondent-DDA alleged that the petitioner had abandoned the work. On the other hand, the case of the petitioner was that the respondent was responsible for delays and breaches. Disputes arose between the parties which were referred to arbitration by Mr. M.S. Telang. Mr. Telang rendered his award on 31.01.1994. The DDA challenged the said award by filing I.A. No. 8700/1994 in CS(OS) No. 543/1994. By judgment dated 01.08.2006, the learned Single Judge decided the objection petition. While dealing with the award on claim No. 3, additional claim No. 3 and counter-clam No. 2, the court observed that the learned Arbitrator had failed to take into consideration a relevant document, namely, Exhibit R-2 dated 01.08.1985 which was written by the petitioner. Consequently, the court set aside the award pertaining to claim No. 3, additional claim No. 3 and counter-claim No. 2. The relevant extract from the said order reads as follows:

"44. On claim No. 3 of the contractor as also additional claim No. 3 and counter claim No. 2 of DDA, in my opinion there is serious problem with the award.

45. Claim No. 3 was on account recompense claimed by the contractor for the expenditure incurred during the period contract got prolonged. Sum of Rs. 6,05,800/- has been awarded to the contractor. On additional claim No. 3 sum of Rs. 28,900/- has been awarded. This claim also related to the contract prolonged period and was pertaining to the tools and plants stationed at the site.

46. Counter claim No. 2 of DDA was for losses suffered due to contract getting prolonged.

47. In the preamble of the award, learned Arbitrator has referred to the delay in furnishing the structural drawings. He has also referred to the fact that the contractor established that the site had hindrances. Learned Arbitrator has also held that there was delay in supply of cement and steel items which were to be supplied by DDA. Learned Arbitrator has held delay attributable only to DDA.

48. Consequence of said finding is that DDA's counter claim No. 2 has been rejected and contractor's claim No. 3 and additional claim No. 3 has been allowed in sum of Rs. 6,05,800/- and Rs. 28,900/- respectively.

49. Learned counsel for DDA drew my attention to Ex R-2 being a letter relied upon by DDA., The said letter dated 1.8.1995 bears the signature of the contractor.

50. The said letter written by the contractor contains an admission that delay was occasioned due to contractor's faults.

51. Learned counsel for the contractor drew my attention to the minutes of the hearing held on 20th August, 1993 (pages 49 to 57 of Part-I of the Arbitrator's record).

52. Minutes of the said meeting notes the stand of the contractor to the effect that Ex.R-2 was obtained under duress by the Engineer concerned.

It records the justification of the contractor that the said letter was written after 2 years of letter Ex. C-24 dated 6.5.1983. The minutes note that the letter Ex C-24 pertains to grant of extension of time and does not refer to any delay by the contractor. Minutes record the submission of the contractor that the language of Ex R-2 does not show volition of the contractor. It is also noted that the letter is not on the letter head of the contractor. It is also recorded that case of the contractor is that in the par

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