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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J.
Wapcos Ltd - Appellant
Versus
Jyoti Sarup Mittal - Respondent
O.M.P.(COMM.) No. 393 of 2020 & IA Nos. 1695 of 2021, 1366 of 2023
Decided On : 12-12-2023
Arbitration and Conciliation Act,1996 - Construction of WAPCOS Office Complex - Section 34
Fact of the Case:
The petition is filed under Section 34 of the Arbitration and Conciliation Act,1996 for setting aside the Award passed by the Sole Arbitrator on disputes arising out of a construction contract.
Finding of the Court:
The court found no merit in the contentions raised by the petitioner and upheld the impugned award, including the calculation of interest payable to the respondent and the assessment of escalation claims.
Issues: The issues included the calculation of interest payable, the award of escalation amount, and the arbitrator's treatment of counterclaims.
Ratio Decidendi: The court emphasized the limited scope of interference with arbitral awards and cited various judgments to support the principle that courts should not interfere with arbitral awards unless there is a patent illegality or violation of public policy.
Final Decision: The petition was dismissed, and the impugned award was upheld.
JUDGMENT
O.M.P. (COMM) 393/2020
1. The present petition is filed under Section 34 of the Arbitration and Conciliation Act,1996 for setting aside the Award dated 08.04.2014 passed by learned Sole Arbitrator, on disputes arising out of a contract for the work relating to 'Construction of WAPCOS Office Complex at 76 C', Sector-18, Gurgaon'.
2. The respondent/claimant raised the following claims in the arbitral proceedings:-
Claim No. 1 Claimants claim Rs. 76,61,322.78/- towards non-payment of final bill.
Claim No. 2 Claimants claim Rs. 6,12,066.22/-towards interest on nonpayment of final bill.
Claim No. 3 Claimants claim Rs. 6,09,802.29/- towards interest on the delayed payments of 15th Running account bill.
Claim No. 4 Claimants claim Rs. 62,32,453.67/- towards payment of balance amount of escalation.
Claim No. 5 Claimants claim Rs. 2,88,862/-on account of interest on delayed payments of running account bills from 1st to 14th R/A.
Claim No. 6 Claimants claim Rs. 78,88,313.70/- on account of loss of profit due to non-completion of the project within the stipulation period of completion on account of non-fulfillment of contractual obligations by the WAPCOS.
Claim No. 7 Claimants claim Rs. 1,75,500/- towards payment of item of 4 mm thick Fibre Doom not included in the Arrangement and was to be paid separately at the negotiated rate of Rs. 1350/- per sqm.
Claim No. 8 Claimants claim Rs. 1,13,40,000/- towards damages on account of salary of staff, establishment and under utilization of T & P etc due to prolongation of the Contract beyond stipulated date of completion due to non-fulfilment of contractual obligation by the WAPCOS.
Claim No. 9 Claimants claim Rs. 33,11,128/- on account of rise in market price of the labour and material for the work done beyond the stipulated period of completion.
Claim No. 10 claimants claim Rs. 10,00,000/- towards refund of security deposit.
Claim No. 11 Claimants claim for declaratory award that no action is warranted against the claimants under the clauses 63,72,43 of the Agreement.
Claim No. 12 Claimants claim of interest @ 18% on the amount of the claims as under :-
(i) Pre-suit interest from the date of invocation of arbitration Clause.
(ii) Pendentilite interest.
(iii) Future interest.
Claim No. 13 Claimant claim Rs. 5,00,000/- towards cost of arbitration proceedings/litigation expenses. '
3. The petitioner herein also preferred certain counterclaims. The impugned award, after carefully perusing the material and evidence on record, rejected most of the claims sought to be raised by the respondent and allowed only the following claims:-
| Claim No. 1 | Non Payment of Final Bill |
|
| i) | Amount of work done as per the final Bill prepared by the respondent but not paid | 31,07,640/- |
| ii) | Marble Chips Skirting | 3,884/- |
|
| P/F Makrama White Marble Slab | 1,214/- |
|
| Providing & laying six course water proof treatment | 1,16,797/- |
|
| Colour washing to give an even shade of new work | 3,254/- |
|
| Finishing external surface with water proofing cement paint | 27,611/- |
|
| Providing & Fixing GI Pipe 50 mm dia. | 11,043/- |
|
| Providing & Fixing 2mm thick Plain fiber sheet | 18,000/- |
|
| Providing & Fixing anodized Aluminum doors with frames | 58,960/- |
|
| Water supply and sanitation providing White Pedestal Type WC | 11,000/- |
| Claim No. 4 | Balance amount of Escalation | 18,46,689/- |
| Claim No. 10 | Security Deposit | 10,00,000/- |
|
|
| 62,06,092/- |
4. The counter claims that were allowed are as follows:-
| Counter claim no.1 | Liquidated damages | 38,87,665/- |
| Counter claim no.2 | Charges for Design of Dome | 15,657/- |
| Counter claim no.5 | Not rounding of edges & not providing glass strips in flooring | 694/- |
| Counter claim no.6 | Providing less size manhole covers | 732/- |
| Counter claim no.9 | Not providing Lipping in doors | 9405/- |
| Counter | ||
The judgment emphasizes the limited scope of interference with arbitral awards and the principle that courts should not interfere with arbitral awards unless there is a patent illegality or violation....
The limited grounds for interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, emphasize the concept of patent illegality and the criteria for setting asi....
The appellate jurisdiction under section 37 is limited to the grounds prescribed under section 34. Courts cannot re-appreciate evidence or substitute their views for that of the arbitrator, provided ....
The main legal point established in the judgment is that the court should not interfere with an arbitral award unless the arbitrator's conclusions are arbitrary, capricious, or perverse. The court's ....
The court affirmed that arbitral awards challenging under Sections 34 and 37 are limited in scope, requiring clear evidence of illegality or perversion; otherwise, the Arbitrator's decision stands.
(1) Appeal against modified arbitral award – Merits of award are only to be gone into, if award is demonstrated to be contrary to public policy of India.(2) Arbitral proceedings are per se not compar....
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