1. This is an appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (the Act), filed by the petitioner/DDA in CS 95/2023 on the file of the learned Additional District Judge-12, Central District, Delhi aggrieved by the order dated 13.08.2013, whereby the application filed by them under Section 34 of the Act was dismissed.

2. The parties herein shall be referred to in the same rank as they are arrayed in the claim before the Arbitrator.

3. Initially, the claimant filed a suit for recovery of an amount of ₹5,00,000/- against the respondent/ defendant/ Delhi Development Authority (the DDA). In the plaint, it was alleged thus:- The claimant a registered partnership Firm duly registered under the Indian Partnership Act, 1932, is a registered contractor with the DDA. The DDA invited sealed item rate tenders for construction of 103 dwelling units in Pocket-3, Sector-9, Dwarka, New Delhi. As the rates offered by the claimant was the lowest amongst all the tenderers, the same was accepted by the DDA. An agreement no. EE/WD-6/AC/94-95 was executed between the parties on 25.08.1994. As per the agreement, the date for starting of the work was 02.09.1994. The time allotted for completion of the work was 18 months. The stipulated date of completion of work was 01.03.1996 and the actual date of completion of work was 16.05.1997. Thereafter, certain disputes arose with regard to the contract for which a suit for recovery, that is, suit number 1008 of 2001 was filed before the before this court.

3.1 Pursuant thereto, a fresh dispute arose with regard to the supplementary agreement executed between the parties after the completion of the original agreement. It was alleged that the claimant had completed the work in all aspects and that the date of completion of work had also been recorded as 16.05.1997. All the works except a few items remained to be completed. The remaining items of work were to be completed when the flats were actually allotted or possession handed over to the allottees. It was in this connection a supplementary agreement came to be executed between the parties on 31.03.2000. When the supplementary agreement was executed, the DDA had with them sufficient amount against the original agreement and also against the watch and ward charges payable to the claimant in accordance with circular no. 520 dated 30.03.1999, which had also been made part of the supplementary agreement.

3.2 There were a few items of work proposed to be executed at the time of handing over of the possession of the flats, which were detailed in the supplementary agreement. In addition, the plaintiff was assigned with the work of watch and ward, for which it was agreed that they would be paid ₹ 6,600/- per month. Initially, the supplementary agreement was valid for a period of 12 months, that is, till 30.03.2001. By the said date, the DDA failed to hand over possession of the flats to the allottees. Hence, the DDA wanted the period of the agreement be extended to which the claimant had no objection. Accordingly, the supplementary agreement was extended as desired by the DDA.

3.3 Approximately, 45 dwelling units had been allotted to different allottees. As the allottees were not taking possession of the flats in time and as the remaining works to be completed as per the supplementary agreement involved use of costly materials, the DDA desired those items of work to be completed only at the time of actual allotment and also that watch and ward be kept till the actual allotment took place. Hence, the claimant was bound to engage watch and ward in order to protect the materials that had been installed inside the flats.

3.4 Though the works as specified in the schedule of the supplementary agreement were carried out as per the instructions of the DDA, payments were not made for the work executed or for the watch and ward maintained by the claimant in terms of supplementary agreement. In terms of the original agreement, a sum of ₹ 1,55,829/- wa