Delhi High Court (July 26, 2001) 2001 (TLS)125465 2001-AD (Del)-6-194 :: 2001-ILRDLH-6-97 JAGAT RAM TREHAN AND SONS Vs. Delhi Development Authority Vijender Jain ( 1 ) APPLICATION bearing IA No. 3102/97 are objections to the award by the learned Arbitrator filed by the respondent. The respondent has filed objections in relation to Issue Nos. 1 to 6, 12, 14, 16, 23, 24, 28 and 31. ( 2 ) IT has been vehemently contended by Ms. Salwan, learned counsel for the respondent/objector that the arbitrator has misconducted the proceedings and exceeded his jurisdiction in awarding the sums under various heads. From the arguments advanced before me, the serious objection is to claim of Rs. 1,75,000/- towards straightening and cutting of reinforcement bars vide claim No. 16. It was contended by Ms. Salwan that the agreement clause 3. 10 provided for reinforcement for RCC work for bending, binding and placing in position and, therefore, the award on this account For straightening and cutting of reinforcement bars could not have been awarded. In support of her contention, learned counsel for the objector has cited a decision of this Court in m. /sl. . . wee Aar _constructive Builders Vs. . Delhi Develppment authority. and_ Anr. (Suit No. 2456 A/96) decided on 14/03/2001. On the basis of the aforesaid decision it was contended that the very nature of the work involved of straightening and cutting of steel was included in bending, binding and placing in complete position. She also relied upon a decision of this Court in Shri S. K. Mangia Vs_. . Delhi,. Development Authority (Suit No. 181/92) decided on 22. 5. 1995 in which the learned single Judge of this Court held that there was no question of making separate provision of cutting operation and straightening and cutting of steel is part of bending, binding and placing in complete position. ( 3 ) ON the other hand, Mr. Malhotra, learned counsel for the petitioner/non-objector/claimant has contended that the nomenclature of Item No. 3. 10 was important as it did not include straightening and cutting of steel bars. He placed reliance on a decision in Suit No. l985-A/84 (K. . C. Chhibar v. Delhi. Development Authority), Suit no. 656-A/95 and Suit No. 570 A/95 (Anant Raj Agencies Vs. Delhi Development Authority) decided on 30. 10. 1991 as well as decision of Himachal Pradesh State Electricity board,vs. . R. J. 5 hah_and. He placed reliance on a decision in Suit No. l985-A/84 (K. . C. Chhibar v. Delhi. Development Authority), Suit no. 656-A/95 and Suit No. 570 A/95 (Anant Raj Agencies Vs. Delhi Development Authority) decided on 30. 10. 1991 as well as decision of Himachal Pradesh State Electricity board,vs. . R. J. 5 hah_and. Company (1999) 4 SCC 214 and B. V. Radha. Krishna Vs. Sponge Iron India Ltd. (1997) 4 SCC 693 . ( 4 ) MS. ANSUYA Salwan took great pains in assailing the award of the arbitrator with regard to Issue No. 31 whereby the claimant claimed Rs. 40 lakhs towards losses/damages on account of prolongation of work beyond stipulated period of completion vide Claim No. 30. She contended that the arbitrator could not have granted damages to the claimant as there was clause 10 CC under which the claimant was paid market rate on enhanced material as well as the labour component cost of the contract. She assailed the award of a sum of rs. 7,71,018/- on this account. In support of her contention learned counsel for the objector has relied upon Delhi Development Authority Vs. . U. Kashyap 1998 vii AD (Delhi) 300, 1991 (2) Arbitration Law Reporter 180 and Del. hi Development Authority Vs. K. C. Goyal and Co. 2001 II AD (Delhi) 116. ( 5 ) ON the other hand, Mr. Malhotra controverting the contention of learned counsel for the objector contended that what was received under clause 10 CC was not what was actually spent by the claimant on account of prolongation of work. Actual cost incurred by the claimant has been awarded to the contractor. He further contended that whatever amount was paid under clause 10 cc by objectors, the same was adjusted by the arbitrator. ( 6 ) MS. SALWAN has also contended that allowing the claim under infructuous overheads as well as ideal machinery, tools and plants was not correct. She has also challenged the claim of interest as well as award of interest. Learned counsel contended that as a matter of fact no interest ought to have been awarded by the arbitrator on the amount of damages. The arbitrator has awarded simple interest at the rate of 18% per annum. ( 7 ) ON the other hand, Mr. She has also challenged the claim of interest as well as award of interest. Learned counsel contended that as a matter of fact no interest ought to have been awarded by the arbitrator on the amount of damages. The arbitrator has awarded simple interest at the rate of 18% per annum. ( 7 ) ON the other hand, Mr. Malhotra has contended that as the amount had been spent by the contractor, the work having been completed in 1989, the award was given by the arbitrator in the year 19961. The arbitrator had rightly awarded simple interest at the rate of 18% per annum from 12/04/1990, i. e. from the date of reference, with regard to other objections in respect of other claims no serious arguments were advanced. ( 8 ) I have given my careful consideration to the arguments advanced by learned counsel for both the parties, with regard to the objection of the objector regarding claim no. 16, the same is as follows : "straightening and Cutting of reinforcement for RCC work including bending, binding and placing in position. " ( 9 ) THE law is well settled. When the arbitrator, a retired Chief Engineer, was appointed by the respondent, who was well conversant with the scope, interpretation and functioning of the respondent, has arrived at his own conclusion. This Court will not sit in appeal or judgment over the judgment of the arbitrator. ( 10 ) IN Himachal Pradesh State Electricity Board s case (supra), the Court held as under "in this case the arbitration clause is widely worded. The dispute which was referred to the arbitrators, inter alia, related to the construction of the contract. The contract did visualise the contractor raising a claim for revision of rates. The dispute was as to when such a claim could be raised. According to the appellant herein this being an item rate contract the revision of rates could take place only in accordance with clause 12-A when there was a deviation of more than 20 per cent with regard to individual items. On the other hand the terms of the contract, according to the claimant, permitted a claim being made of revision in rates if there was an increase of 20 percent of the total value of the contract. The dispute before the arbitrators, therefore, clearly related to the interpretation of the terms of the contract. On the other hand the terms of the contract, according to the claimant, permitted a claim being made of revision in rates if there was an increase of 20 percent of the total value of the contract. The dispute before the arbitrators, therefore, clearly related to the interpretation of the terms of the contract. The said contract was being read by the parties differently. The arbitrators were, therefore, clearly called upon to construe or interpret the terms of the contract. The decision there on, even if it be erroneous, cannot be said to be without jurisdiction. It cannot be said that the award showed that there was an error of jurisdiction even though there may have been an error in the exercise of jurisdiction by the arbitrators. " ( 11 ) IT was contended before me that straightening and cutting of reinforcement bars were not included in the contract and as it was not included in the clause, the same do not find mention in clause 42. 9 of the contract. Therefore, I hold that in case department wanted to insert a clause for straightening and cutting of reinforcement bars, the provision of same could have been done in the relevant clause. As the same did not find mention in Item no. 3. 10, the arbitrator s decision could not be interfered with by this Court. This Court cannot substitute its own finding in place of the finding of the arbitrator. On this ground objection of the respondents is dismissed. ( 12 ) NOW coming to the next objection of the counsel for the respondent with regard to the award of rs. 7,71,018/~, on account of escalation of cost of material and labour, in view of the fact that under clause 10 cc payment had already been made, the arbitrator was not justified in allowing the aforesaid amount as damages. Division Bench of this Court in Delhi development Authority Vs. K. C. Goyal (supra) has held that once a particular formula is provided in the contract, applying some other formula and awarding the claim would amount to legal misconduct. Following the ratio of Delhi Development Authority Vs. K. C. Goyal (supra) I hold that arbitrator has committed legal misconduct in awarding a sum of Rs. 7,71,018/~ on account of escalation of cost of material and labour. Following the ratio of Delhi Development Authority Vs. K. C. Goyal (supra) I hold that arbitrator has committed legal misconduct in awarding a sum of Rs. 7,71,018/~ on account of escalation of cost of material and labour. ( 13 ) I find no force in the arguments advanced by learned counsel for the respondent with regard to her objection to the award of damages in relation to infructuous overheads and damages suffered by the claimant on account of ideal machinery, tools and plants. The arbitrator has given a reasoned finding that out of the total claim of 577 days he has deducted 108 days and awarded the infructuous overheads for 469 days and on this score has awarded a sum of Rs. 9,03,995/~ on the basis of adoption of overhead charges at 5% on the basis of formula based on Hudson s Book on Building and engineering Contract. I do not find any reason to interfere with the finding of the arbitrator on this claim. I do not find any force in the objection of the respondent with regard to award of damages on idle machinery, tools and plants. The arbitrator has taken note of the fact that it was not disputed by the respondent that the machinery, tools and plants were deployed as detailed in this claim by the claimant. The work was going in full swing. It had three concrete mixtures, two water pump sets, two vibrators, 3000 steel shuttering plates, 3000 ballies, 1500 battas and 500 planks. On the basis of this calculation, the issue for idle machinery, tools and plants for 469 days at the rate of Rs. 1939/- per day had been worked out taking it to be the bare minimum machinery, tools and plants and on this score the arbitrator has awarded a sum of Rs. 9 ,09 ,391. / -. when the respondent has not disputed the deployment of plant and machinery and there is a finding by the arbitrator that work was prolonged. It was but natural for the arbitrator to have granted damages on this claim. I do not find any infirmity in the award of the aforesaid amount under this head by the arbitrator. / -. when the respondent has not disputed the deployment of plant and machinery and there is a finding by the arbitrator that work was prolonged. It was but natural for the arbitrator to have granted damages on this claim. I do not find any infirmity in the award of the aforesaid amount under this head by the arbitrator. ( 14 ) LASTLY it has been contended by learned counsel for the respondent that the interest awarded by the arbitrator on damages from 12/04/1990 till 4/09/1991 at the rate of 18% per annum is on the higher side and interest ought not to have been awarded by the arbitrator. Out of the total sum awarded by the arbitrator a sum of Rs. 7,71,018/~ be deducted from the total damages of Rs. 25,84,404/~. Counsel for the claimant stated that he leave the question of interest on the Court. The interest shall be payable by the respondent on the damages amounting to Rs. 18,13,386/- from the date of award i. e. 9. 12. 1996 at the rate of 15% per annum till realisation and the award is modified to the extent. Under the heading damages a sum of rs. 18,13,386/- is to be paid by the respondent as against a sum of Rs. 25,84~\404/~ as awarded by the arbitrator. The award is also modified to that extent. ( 15 ) NO other object ion survives in view of the discussion above- The objections are disposed of and the award is made rule of the Court. Decree in terms thereof be passed. Petition stands disposed of. --- *** --- .