Skip to content


Union of India Vs. Siri Ram and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit Nos. 834A , 835A and 864A of 1979
Judge
Reported in23(1983)DLT288; 1983(4)DRJ129; 1983RLR45
ActsArbitration Act, 1940 - Sections 30
AppellantUnion of India
RespondentSiri Ram and anr.
Advocates: R.M. Bagai and; P.N. Kumar, Advs
Excerpt:
.....in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promiseaccepts performance of such promise at any time other than that agreed, the promisecannot claim compensation for any loss occasioned by the nonperformance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so. (9) it is now well settled that while entertaining objections to an award, the court has not to assume itself the role of an appellate authority, or embark upon reviewing the decision on merits......stipulated date for the completion of work was 15-5-1974. however, extensions were granted from time to time, and ultimately they were up to 10-9-1975 by which time the work was completed. clause 2 of the contract permitted the engineer in charge to levy compensation for delayed execution of the contract at different stages, and the maximum that was livable was 10% of the contract amount. the superintending engineer, thereforee, in exercise of power available under this clause levied a compensation of rs. 20,130.00 on the contractor which was payable to the department. (4) the award while dealing with this controversy, makes certain observations which are not happily worded. there is mention of non-compliance of the mandatory requirements of section 55 of the contract act. that.....
Judgment:

D.R. Khanna, J.

(1) -THESE three cases relate to two awards delivered by Miss K.P. Sarojini, Arbitrator, of the date 3-5-1979 on disputes and differences inter se parties arising under agreement No. 4/EE/74. The contract was for construction of residential accommodation at Hauz Khas of 32 type I quarters phase II. The necessity for giving two awards arose as the disputes were referred to arbitration at different stages.

(2) Objections have been filed to the awardby the Union of India, and those agitated at the time of arguments, relate to the non-allowance of its claim of Rs. 19,727.96 p. which had been deducted by the Union of India from the bills of the contractor for delayed execution of the work, and the awarding of interest at the rate of 6% per annum on the amount allowed to the contractor.

(3) There is no dispute that the stipulated date for the completion of work was 15-5-1974. However, extensions were granted from time to time, and ultimately they were up to 10-9-1975 by which time the work was completed. Clause 2 of the contract permitted the Engineer in charge to levy compensation for delayed execution of the contract at different stages, and the maximum that was livable was 10% of the contract amount. The Superintending Engineer, thereforee, in exercise of power available under this clause levied a compensation of Rs. 20,130.00 on the contractor which was payable to the department.

(4) The award while dealing with this controversy, makes certain observations which are not happily worded. There is mention of non-compliance of the mandatory requirements of Section 55 of the Contract Act. That Section enjoins that in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promiseaccepts performance of such promise at any time other than that agreed, the promisecannot claim compensation for any loss occasioned by the nonperformance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so.

(5) The contractor has, in this regard, led me through the proceedings which took piace before the learned Arbitrator on 29-12-1978, wherein the Arbitrator had specifically required the Executive Engineer to answer if any proirtissional letter of extension was issued subject to the right to levy liquidated damages during the progress of work. The reply of the Executive Engineer was in negative. From this circumstance, it appears that the Arbitrator deduced that while accepting completion of the work from the contractor after stipulated period, the Union of India did not intimate that this was subject to the intention to levy compensation. The Union of India, however, has pointed out that clause 2 of the contract itself stipulated the levy of compensation and that was by itself enough notices.

(6) The contractor has also referred to a number of circumstances laid from his side before the Arbitrator to the effect that there were delays in the providing of designs, drawings and material by the department at different stages with the result that his labour had to remain idle, and the progress of the work was hindered. Compensation on this ground was claimed. The learned Arbitrator, however, has not referred to any such assertions. It is, however, pleaded that they should be presumed to have been taken into account while disallowing compensation to the Union of India.

(7) The compensation was levied by the Superintending Engineer almost three years after the completion of the contract, and the amount with- held was lying in suspense accrount,

(8) The quetion to be considered is whether in the totality of these circumstances, the decision of the Arbitrator can be said to suffer from a patent error of law. The Union of India has pleaded that it does, and the Arbitrator has committed judicial misconducted in not giving effect to clause 2 of the contract.

(9) It is now Well settled that while entertaining objections to an award, the Court has not to assume itself the role of an appellate authority, or embark upon reviewing the decision on merits. It has to confine itself whether the award suffers from any mistake of law apparent on the face of the award, and on that score the award is liable to be set aside or remitted back. If, however, the matter is capable of two opinions, and the Court considers that the decision arrived at by the Arbitrator though possible was not such that it would have itself arrived at if the matter had come before it for the first time, there will be no justification to interfere. The Arbitrator being the judge of both facts and law, has to form his own assessment of the evidence placed before him. It is also for him to interpret the different terms of the contract. If it is found that he has come to a conclusion which is not perverse or wholly unwarranted, and is based upon some evidence on record, and is further not arrived at by ignoring other material evidence on record, the award should be allowed to stand.

(10) Looked at from these aspects, it cannot be said that the awards in thc present cases are wich which the Court should interfere or hold that they suffer from an apparent error of law. After all the contractor had also made allegations of delays on the part of the department in furnishing designs, drawings and material. Whether they were correct or not, was for the Arbitrator to determine. There is every reason to presume that the Arbitrator took into account all the contentions and the respective cases of the parties while giving his award.

(11) Adverting to the other objections relating to the awarding of interest at the rate of 6% per annum, it is note worthy that the claim about interest was specifically referred to arbitration. The Arbitrator was, thereforee, competent to adjudicate upon the same.

(12) Considering all these circumstances, I am constrained to reject the objections to the awards and make them rules of the Court. Decrees in terms thereof are passed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //