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2023 Supreme(Del) 90

IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, JASMEET SINGH, JJ.
Delhi Development Authority - Appellant
Versus
M/s Swastic Construction Co - Respondent
FAO(OS) (COMM) 179 of 2021
Decided on : 30-01-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr. Ashim Vachher & Mr. Vaibhav Agnihotri, Advs.
For the Respondent: Mr. Vivekanand, Adv.

Headnote:

Code of Civil Procedure, 1908 - Section 114, 151 - Arbitration & Conciliation Act, 1996 - Section 34, 37(1)(c) - Commercial Courts Act, 2015 - Section 13(1A) - Review application - Seeking review of judgment and order - Review application filed by review applicant/appellant seeking review of judgment and order – Held, Court is of opinion that both Clause 2 and 5 only puts a finality to determination of consequential issue relating to quantification of compensation on account of delayed progress of contract - Fact whether there was delayed progress or not, and whether awarded work has been completed within scheduled time are not covered within purview of excepted matters - Decision as to whether respondent was responsible for delay or not, is not an excepted matter and hence, arbitrable - In State of Karnataka vs. Shree Rameshwara Rice Mills Hon’ble Supreme Court held that one of parties to an agreement cannot reserve to himself power to adjudicate whether other party has committed breach - Once sole arbitrator, learned Single Judge and Division Bench have come to a categorical finding that respondent was not responsible for delay, there is no question of any quantification of damages accruing on account of that delay - Application dismissed.

JUDGMENT :

JASMEET SINGH, J

Review Pet. 347/2022

1. This is a review application filed by the review applicant/appellant under section 114 read with 151 of CPC seeking review of the judgment and order dated 20.12.2021.

2. The brief background which has led to filing of the review application is that the sole arbitrator on 28.07.2020 awarded claims in favour of the respondent. Against all the claims (except Claim No. 4 and 5 and Additional Claim no. 2 and 3) awarded in favour of the respondent in the award dated 28.07.2020, the review applicant/appellant filed objections under section 34 of the Arbitration & Conciliation Act, 1996 being OMP (COMM.) 17/2021.

3. The learned single judge dismissed the objections of the review applicant/appellant while upholding the award passed on 28.07.2020 vide order dated 01.09.2021.

4. The appeal filed under section 37(1)(c) of the Arbitration and Conciliation Act read with section 13(1A) of the Commercial Courts Act, 2015 to assail the judgment and order dated 01.09.2021 was dismissed by this Court vide order dated 20.12.2021.

5. Being aggrieved by the order dated 20.12.2021, the review applicant/appellant filed a Special Leave Petition being SLP Civil No. 19116/2022 titled “DDA vs. M/s Swastik Construction Company” and was heard on 02.11.2022. The SLP was dismissed by the Hon’ble Supreme Court while granting liberty to the review applicant/appellant as under:-

    “One of the grounds on which she assails the judgment and order impugned is that the point urged before the High Court for exclusion of certain claims on being excepted matters have not been dealt with in the said judgment. The present petition arises out of an arbitral award, which was sustained by the Court in a Section 34 proceeding under the Arbitration and Conciliation Act, 1996. Appeal against the order repelling challenge to the award was also dismissed, against this petition has been filed. In our view if that is the case, proper course for the petitioner would be to apply before the High Court with that plea.

We, accordingly, dismiss the present petition for special leave to appeal giving liberty to the petitioner to approach the High Court on the point as we have indicated above.

Needless to add, in the event, the petitioner’s argument on that count is not accepted by the High Court, the petitioner may further approach this Court, if so advised.

Pending application(s), if any, shall stand disposed of.”

6. It is argued by Mr. Vacchar, learned counsel for the review applicant/appellant that Claim No. 6 and 7 could not have been awarded in favour of the respondent as the issue of compensation and other consequences for the period of delay was an excepted matter.

7. Claim No. 6 was regarding Amount due on account of losses & damage suffered due to prolongation of contract. Against a claim of Rs. 27,85,032/-, the arbitrator awarded Rs. 8,87,716/-. Claim No. 7 was a declaratory decree that levy of compensation is bad in law amounting to Rs. 9,76,488. Against this the review applicant/appellant was directed to release BG submitted by the respondent.

8. Clause 2 and 5 of the agreement between the review applicant/appellant and the respondent reads as under:

    “CLAUSE 2

Compensation for Delay

If the contractor fails to maintain the required progress in terms of clause 5 or to complete the work and clear the site on or before the contract or extended date of completion, he shall, without prejudice to any other right or remedy available under the law to the DDA on account of such breach, pay as agreed compensation the amount calculated at the rates stipulated below as the Authority specified in Schedule F(whose decision in writing shall he final & binding) may decide on the amount of tendered value of the work for every completed day/month (as applicable) that the progress remains below that specified in Clause 5 or that the work remains incomplete. This will also apply to items or group of items for which a separate period of completion has been specifi

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