AM.P.No.76of2007 v. DELHI DEVELOPMENT AUTHORITY

Petitioner Through; Mr. Sanjay Goswami, Advocate. Versus DELHI DEVELOPMENT AUTHORITY & ORS. .. Respondents Through: Mr. BhupeshNarula and Mr. Sunny Arora, Advocates. CORAM: JUSTICE S. MURALIDIIAR ORDER

19.11.2012

1. OMP No. 76 of 2007 has been filed by the Delhi Development Authority('DDA') under Section 34 of the Arbitrationand Conciliation Act, 1996 ('ActO againstan Award dated 3''' October2006 passedby the learnedsole Arbitratorin the disputesbetweenDDA and the Respondent OMP Nos. 76&266of2007 ^"9^1 of10 Signature Not Verified Digitally Signed By:AMULYA M/s. Shiv KumarWasal &Co. (hereinafter'Claimant')arisingout of the \ award of a contract by the DDA in favour of the Claimant for construction of 672 MIG (incremental) houses at Narela including water supply, sanitaryinstallationand internaldevelopmerit.

2. As per the terms of the agreement,between the parties, the date of commencementof the work was 28"' August 1990 and the stipulateddate of completionwas 2?"' Febmary 1992. The work was actuallycompleted on 22"'' October 1993. Afinal bill was paid on 21®' August 1998. On 3''' November1998, the Claimantaddresseda letterto the DDA raising in all 22 claims. On 16"" November 1998, the Claimant invoked the arbitration clauseand requestedDDA to appointan Arbitratorin terms of Clause25 of the agreementand to referthe 22 claims for adjudication.

3. By a letter dated S"" April 2000, DDA referred only 9 claims to the learned Arbitrator.On 18"" April 2000, the ClaimantrequestedDDA to referthe remainingclaimsalso to the learnedArbitrator.Afterthe learned Arbitratorappointedby the DDA entered upon reference on 20"' April 2000 by letter dated 15"' May 2000, DDA informed the Claimant that those claims which were not covered in the scope of the agreement had not been refen-edto the learnedArbitrator.Neverthelesson 28"' July 2000 the Claimant filed a statement of claims raising all the 22 claims before the learned Arbitrator. On 1?"' April 2001, the Claimant filed an application under Section 23(3) of the Act seeking to urge the 9 additional claims. By an order dated ll"' August 2005, the learned Arbitratorallowed the applicationand permittedthe Claimantto urge 9 further claims in addition to the 9 claims that had already been referred except Claims 1, 2, 4 and 6. OMP Nos. 76 &266 of2007 2 of10

4. The learnedArbitratorby an order dated 13^' September2005 directed DDA to file its counter statement of facts as well as reply to the supplementaryclaims ofthe Claimant. The DDA filed its reply on 27"^ October 2005. On 8"' May 2006, the learned Arbitratorheard the final arguments on all the 18 claims of the Claimant. However, on 9"' June 2006, the learned Arbitrator informed the parties that in view of his promotion,he would not be able to continue as Arbitrator.On 1®' July 2006, the Claimant wrote to the Chief Engineer, DDA seeking a reference of the remaining claims to arbitration. On 6"^ July 2006, the new Arbitrator appointed by the DDA directed the Claimant to get the remaining 9 claims referred from the persona designata of the DDA at the earliest.

5. In August 2006 the Claimant filed a petition in this Court under Section 11(6) of the Act for reference of the remaining 13 claims to arbitration. On 10,"' August 2006, the Claimantstated before the learned Arbitrator that he may decide the initial 9 claims referred to him as the petitionin respectof the remainingclaims was pendingin this Court. On 22"'' August 2006, the learned Arbitratorconcludedthe hearing of the 9 claims originallyreferredand reservedthe Award. On 3'^'' October2006, the learned Arbitrator passed an Award as regards the 9 .claims of the Claimant. It is againstthe said impugnedAward that the DDA has filed OMPNo. 76 of 2007.

6. On 26"' February2007, this Court permittedthe Claimantto withdraw the petition under Section 11 of the Act with liberty to the Claimantto take recourse under Section 33(4) of the Act before the learned Arbitrator to seek an Award in respect of the further 9 claims which had already OMP Nos. 76&266of2007 P°9e3 of10 been permitted to be filed by the order dated 11 August 2005 of the earlier Arbitrator.

7. Followingthe above order on 28"^ February2007, the Claimantfiled an applicationunder Section33(4) ofthe Act. On lO"^ April 2007 the learned Arbitrator dismissed the said application! Aggrieved by the aforesaid dismissal of the application under Section 33(4) of the Act, the Claimant has filed OMP No. 266 of 2007.

8. DDA has challengedthe originalAward dated 3'"'' October2006 insofar as Claim Nos. 1, 2, 4, 5, 6, 7, 9 and 10 are concerned. Claim No. 1 was for a sum of Rs.27,34,008 on account of revision of rates of work done in excess of the deviation limit under Clause 12A of the agreement. After detailed analysis of the relevant clauses of the agreementas well as the documents on record, the learned Arbitrator held that the Claimant was entitled to Rs.7,36,117 under Claim No.l.

9. In the grounds urged by DDA it is submittedthat the Claimant has sought increase in the rates without giving details as to where the rates have been derived from. Secondly,it is submittedthat since the deviation was only up to 16.67%, no amount was payableunless the deviationwas beyond 20%. Thirdly, it is submittedthat the award ofthe amountunder Claim No.l was beyond the scope of the agreement and in particular Clause 12A read with Clause 12(vi) of the agreement.It is submittedthat the essentialrequirementfor the Claimantto be entitled for market rate for the deviation under Clause 12A read with Clause 12(vi) was not fulfilled. Individual items were not to be considered for adjudicating deviationand in any eventthe deviationwas withinthe limit of20%. OMP Nos. 76 &266 of2007 ''"9®^

10. It is pointedoutby the Claimantthatcogentreasonshavebeengively by the learned Arbitrator for allowing Claim No.l in part. The rate analysis submittedby the Claimantwas acceptedas such. It is submitted that the deviation limit was beyond 20% when seen item wise. This was consistent with Clause 12A read with Clause 12(vi) of the agreement.,

11. A perusal of the impugnedAward as regards Claim No.l revealsthat the analysisof the clauses of the contractand the evidenceby the learned Arbitrator is detailed. The learned Arbitrator has referred to the decision of the Supreme Court in National Fertilizers v. Puran Chand Nangia (2000) 8 see 343, which held that the deviationlimit is to be calculated by taking into accountthe increasesand decreasesin various items and if the said increases and decreases pooled together exceed the deviation limit, the Contractor is entitled to extra rates. As pointed out by the learned Arbitrator, there was nothing in the agreement to support the contention of DDA that the deviation rates were to be paid only if the items in aggregateexceeded20% of the contractvalue. Also there was nothing to show that market rates were not admissibleif the quantityof deviationwas beyond 20%. The interpretationby the learned Arbitrator of Clauses 12A and 12(vi) of the agreement and the view taken thereon was a plausible one. The learned Arbitrator accepted the rate analysis submittedby the Claimantafter finding it to be in order. This was within scope of his powers. At the same time, the learned Arbitratordid not permitthe claim for deviateditems to the extentthe items in foundations were concerned.This Court finds no ground to interfere with the Award in respect of Claim No. 1. OMR Nos. 76&266of2007 P"9e5 of10

12. Claim No.2 was for a sum of Rs.55,500 on account of extra work of cutting of wild vegetationat site. The learned Arbitrator accepted the contention of the Claimant as even the.DDA did not rebut it. No grounds are made out for interferingwith the award of a sum of Rs.42,827under Claim No.2 in favour of the Claimant.

13. Claim No.3 was rejected. Claim No.4 was for a sum of Rs.2,87,385 on account of cutting, bending and straighteningof RCC bars. While awarding the Claimant a sum of Rs.2,79,353 the learned Arbitrator referred to the judgment of this Court in Naraindas R. Israni v. Delhi DevelopmentAuthority2005 (3) RAJ541 as well as relevantclausesand concluded that the "items of cutting and straightening are essential since without these components it is not possible to lay reinforcement in position". The work of cutting and straighteningwere found not to be included in Item 3.10. The decision of the learned Arbitrator in respect of Claim No.4 was based on a correct interpretation of Item 3.10 of the scheduleof quantities.If indeed the work of straighteningand cuttingof steel bars did not form part of Item 3.10, Claim No.4 was justified.The rate for the same was communicatedby letter dated 30"^ January 2002 (Ex.P-25) written by the Claimant and not rebutted by the DDA. Consequently,the award of Rs.2,79,353 by the learned Arbitrator in respectof Claim No.4 does not warrantany interference.

14. Against the claim of Rs.27,369 under Claim No.5 on account of rebates availed of by the department for release of running bills, the learned Arbitrator has awarded Rs.7,935. It was found that DDA had been making regular monthly payments, except for some minor slippage up to May 1993. However,there was a delay in making paymentsof the OMP Nos. 76&266of2007 PoQe 6 of10 32"'', 36''\ 37"', 38"\ 39"\ 41'' and 45"' bills. The learned Arbitrator computedthe rebates on accountof these bills as Rs.7,935 and awarded the same to the Claimant. This again being purely factual does not call for any interference.

15. Claim No.6 was for a sum of Rs. 10 laldis on account of amount withheld under Clause 10-CC. It must be mentioned that the Claimant admitted receiving a certain sum from the DDA with regard to Claim N0.6. Accordingto the Claimanta sum of Rs.5,84,090was nevertheless owed to it by the DDA. The learnedArbitratorfound that althoughDDA had been payingthe amountof escalationcorrectlyduringthe currencyof the agreement,all of a sudden in November1996 it deductedthe amount already paid based on a circular of lO"' December 1993. The learned Arbitrator held that apart from the fact that the said circular was prospective,it was not applicableas it primarilyrelated to inclusionof the secured advance in the value of work done. After analysing the annexure to the counter statement of facts and the net value of the 16 bills paid to the Claimantunder Clause 10-CC, the learned Arbitratorworked out the amount due to the Claimant as Rs. 10,28,468.29. Since the claim was restricted to Rs.lO lakhs, it was allowed to that extent. It must be noted that as far as Claim N0.6 is concerned, the Claimant acloiowledges that after accountingfor the part payment received by it, DDA owes it Rs.5,84,090.

16. Under Claim No.7, the Claimant claimed a sum of Rs.l 1,40,400 on account of amount withheld in the final bill. The learned Arbitrator has awarded Rs.1,30,000. This again turned on an appreciationof evidence on record and the supplementaryagreementdated 26"' June 1999. It was OMP Nos. 76&266 of2007 7of10 e © held that the Claimant had agreed to the withheld amount being released in phases. Nothing has been placed on record by the DDA to show that the period mentionedin the supplementalagreementhad been extended at any time. With the flats having been handed over to the allottees,there was no justificationfor the DDA to withhold any amount due to the Claimant.The reasons given by the learnedArbitrator for partly allowing Claim No.7 are cogent and on the basis of the evidence on record. This Court is unable to discern any illegality in the decision as regards Claim No.7.

17. Under Claim No.9 which was for a sum of Rs. 1,75,500 for difference in cost of white cement and grey cement, the learnedArbitratorawarded Rs.1,61,867. Detailedreasons have been given by the learnedArbitrator by applying consumptionfactor derived from Item 11.20 of the Delhi ScheduledRates, 1985. Since white cement was used and no distinction had been, made between white cement and ordinary cement in the agreement,the learnedArbitratorhas held that the Claimantis entitledto reimbursement of the difference in cost of white cement and grey cement. Moreover the agreement only talks of cement without any distinction between grey and white cement. This Court is unable to find any infirmity in the reasons and conclusion of the learned Arbitrator in allowingClaim No. 9 on the aforementionedfacts. The Award of simple interest @ 12% is also reasonable.

18. Consequently, this Court is not inclined to interfere with the impugned Award dated 3'"'' October2006 in so far as the 9 claims ofthe Claimantare concerned.Accordingly,OMP No. 76 of 2007 is dismissed. OMP Nos. 76 & 266 of2007 e ©

19. As regards OMP No. 266 of 2007, this Court notes that the previous Arbitrator by an order dated 11August 2005 allowed the Claimant's applicationunder Section 23 of the Act and permitted the Claimant to urge 9 additional claims. This order was not challenged by the DDA. In fact, the previous Arbitratorconcludedhearing on all the 18 claims and reserved the Award on 8"" May 2006 itself In the circumstancesthere was no occasion for the new Arbitrator to again require the Claimant to get the 9 additional claims referred by the DDA to arbitration. The necessityof the Claimanthaving to file a separatepetitionunder Section 11 of the Act for that purpose also did not arise.

20. In the above circumstances this Court is of the view that the learned Arbitrator fell in error in rejecting the Claimant's application under Section33(4) ofthe Act and by the impugnedorderdated lO"' April 2007 decliningto refer the 9 additionalclaims of the Claimantto arbitration. Accordingly,this Court sets aside the order dated lO"^ April 2007 of the learned Arbitrator rejecting the Claimant's application under Section 33(4) ofthe Act. The DDA will within a periodof four weeks from today appointan Arbitratorto adjudicatethe 9 additionalclaims ofthe Claimant which have alreadybeen permittedto be urged by the previousArbitrator by the order dated ll"' August 2005. The Arbitratorwill proceedOn the basis of the pleadings as they exist in respect of the said 9 additional claims and the evidence already recorded in regard to those claims. The Award in respect of the said 9 additionalclaims will be renderedby the Arbitratorso appointedwithin a period of six months after his entering upon reference. OMP Nos. 76&266of2007 P°Se9 of10 e

21. OMP No. 266 of 2007 is disposed of in the above terms. Order dasti to the parties. NOVEMBER 19, 2012 S. MURALIDHAR, J. OMP Nos. 76 & 266 of2007