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2024 Supreme(Online)(DEL) 10669
HIGH COURT OF DELHI
HON’BLE MR JUSTICE VIBHU BAKHRU, Tara Vitasta Ganju, J
DHARAMVIR & COMPANY – Appellant
Versus
DELHI DEVELOPMENT AUTHORITY & ANR. – Respondent
FAO (COMM)-115/2023
For the Petitioner: Mr. G.L.Verma, Adv.
For the Respondent: Ms. Aakanksha Kaul & Mr. Aman Sahai, Advs. for DDA.
Mr. Yoginder Handoo, Mr. Raghvendra Upadhyay & Mr. Vaibhav Tripathi, Advs. for NDMC.
The impugned award rejecting a principal claim was not amenable to challenge under Section 34 of the A&C Act.
Headnote:
Arbitration and Conciliation Act - Dispute over Contract for Repair of Quarters - Impugned Award Rejected Principal Claim - Challenge to Impugned Award Dismissed
Fact of the Case:
The appellant filed an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996, impugning an order passed by the Commercial Court in connection with a contract for repair of quarters. The appellant invoked the arbitration agreement after the respondent failed to pay the amount and filed an application for the appointment of an arbitrator. The Arbitral Tribunal accepted one claim but rejected the remaining claims of the appellant.
Finding of the Court:
The court found that the impugned award rejecting the principal claim of the appellant was not amenable to challenge under Section 34 of the A&C Act. The court dismissed the appeal, stating that there were no grounds to interfere with the impugned award.
Issues: The issues revolved around the rejection of the principal claim by the Arbitral Tribunal, the challenge to the impugned award, and the interpretation of the order passed by the First Arbitrator.
Ratio Decidendi: The court held that the impugned award did not violate the order passed by the First Arbitrator and that there were no grounds to interfere with the impugned award under Section 34 of the A&C Act.
Final Decision: The appeal was dismissed as unmerited.
JUDGEMENT
VIBHU BAKHRU, J
1. The appellant has filed the present appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereafter the A&C Act) impugning an order dated 21.03.2023 (hereafter the impugned order) passed by the learned Commercial Court in OMP(COMM) No.13/2020 captioned M/s Dharamvir & Company v. Delhi Development Authority & Anr.
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2. The appellant had filed the said petition under Section 34 of the A&C Act impugning an arbitral award dated 15.06.2020 (hereafter the impugned award).
3. The impugned award was rendered in context of the disputes that had arisen between the parties in connection with a contract between the appellant and the respondent, Delhi Development Authority (hereafter DDA), for repair of quarters in Pocket-A-5, Paschim Vihar (hereafter Works). The DDA had invited bids for execution of the Works. The admitted cost for completing the Works was ₹27,65,097/-. The appellant submitted its tender offering to execute the Works for a sum of ₹42,65,793/-. The parties thereafter negotiated the contract price at ₹40,57,083/-. The appellant’s tender for negotiated amount was accepted on 15.12.2012. The execution of the Works was to commence on 25.12.2012 and was required to be completed within a period of six months, that is, on or before 25.06.2013.
4. The Works were finally completed on 22.07.2014. The appellant claimed that the delay of 458 days in completing the Works was attributable to the DDA and the appellant was liable to be compensated for the same. In addition, the appellant also claimed that the DDA had wrongly withheld a sum of ₹7,000/- from the amount payable by DDA.
5. The appellant being aggrieved by the non-payment of the amount by the DDA, invoked the arbitration agreement under Clause Page 3 of 14 25 of the contract between the parties by sending several notices to the DDA seeking appointment of the arbitrator. However, the DDA neither replied to the letters nor took any steps for the appointment of the arbitrator. Therefore, the appellant filed an application, under Section 11 of the A&C Act, being Arb. P. 500/2017, before this Court for the appointment of an arbitrator to adjudicate the disputes between the parties. This Court by an order dated 11.10.2017 directed the Delhi International Arbitration Centre (hereafter DIAC) to nominate an arbitrator to adjudicate the dispute between the parties. Pursuant to the said order the DIAC appointed a sole arbitrator (hereafter the First Arbitrator) in April, 2018.
6. The appellant filed a Statement of Claim before the Arbitral Tribunal raising four claims: (i) Claim No.1 for a sum of ₹20,22,082/- being the amount of the final bill; (ii) Claim No.2 for a sum of ₹7,000/- on account of amount wrongly withheld; (iii) Claim No.3 for an amount ₹10,61,592/- on account of interest at the rate of 15% per annum from the date of completion of the Works (that is, 22.07.2014 till 31.01.2017); and, (iv) Claim No.4 for a sum of ₹2,00,000/- towards cost of litigation.
7. The term of the First Arbitrator was expired on 23.04.2019 and the appellant filed an application [being OMP (Misc.) (COMM) No.160/2019] under Section 29A of the A&C Act. This Court passed an order dated 20.12.2019 in the said application directing DIAC to appoint a substitute arbitrator in place of the First Arbitrator and also Page 4 of 14 extended the time for completion of the arbitration proceedings by a period of nine months. The said application was disposed in terms of the said order.
8. In compliance of the order dated 20.12.2019, the Chairperson, DIAC appointed a sole arbitrator in place of the First Arbitrator. The letter of appointment dated 08.01.2020 was received by the sole Arbitrator (the Arbitral Tribunal) on 13.01.2020.
9. The Arbitral Tribunal delivered the impugned award accepting the Claim No.2 (the amount wrongly withheld) and awarded an amount of ₹7,000/- along with interest at the rate
