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Judgment
Mukul Mudgal, J.—This appeal challenges the judgment of the learned Single Judge dated 10.3.2000 affirming the award of the Arbitrator
dated 15.9.1992 and directing the payment of interest @ 15% on Rs. 21,08,468/-.
Before the learned Single Judge the only objections pressed were with respect to Claim Nos. 1, 3, 4 (d) and 7. Before us also the challenge is
to the same claims.
In so far as Claim 4 (d) is concerned, the counsel for the appellant has contended that Clause 3.5.2 did not permit any calculation of a distance
beyond the radial distance irrespective of route taken. The said Clause 3.5.2 reads as follows:
3.5.2 Measurement for Carriage
i) The disposal and lead payable shall be intimated by the Engineer in-Charge. Payment for carriage shall be made per cubic metre of excavated
material to be carried to any location.
a) From the initial lead of 50 metres upto a distance of 500 metres.
b) 500 metres to 1 kilometer
c) 1 kilometer to 2 kilometers
The lead in every case shall, however, be measured from the point of excavation to the centre of the actual disposal area and shall be exclusive of
the initial lead of 50 m which is deemed to be included in the item of excavation. All distance for the purpose of payment of lead shall be measured
along the radial distance irrespective of the route actually taken and the decision of the Engineer-in-Charge in this regard shall be final. For this
purpose of measurement of lead, the area excavated shall be divided into suitable blocks and for each block the distance from the centre of the
block to centre of placed earth pertaining to this block shall be taken as the lead.
ii) The quantity indicated under the schedule of items indicates the total quantity to be transported under this item assuming an average of 50% as
item (a), 30% as item (b), 20% as item (c). However, depending on the actual requirements, the lead will vary. The Contractor, while quoting for
this item, may take his own assumption, if necessary, to quote a suitable rate.
(Emphasis supplied)
The counsel for the appellant has contended that since the contract provided for the measurements of radial distance irrespective of the route
actually taken in the present case, the Arbitrator has erred and the learned Single Judge has wrongly affirmed the award in respect of the route
actually taken. Au Contraire Mr. Chaudhary, learned senior counsel appears on behalf of the respondent has submitted that the contract only
provided for payment as per the radial distance only upto 2 kms. and for a distance beyond that the payment was not forbidden by the contract as
per Clause 3.5.2 Mr. Chaudhary has also relied upon the letter dated 3.11.1987 written by the appellant itself wherein the following statement was
made.
(iii) Claim of M/s. Simplex towards extra lead for disposal beyond 5 kms. And upto 7 kms. Security as per the contract, the distance had to be
measured only radially. Payments had already been released according to this. However, as a special concession, it was decided subsequently that
the measurements of lead radially will be restricted to 2 kms. And the rest shall be measured as per the actual route taken. The payment shall be
released according to this decision.
(Emphasis supplied)
The appellant''s stand that beyond the distance of 2 kms. the distance would be radial distance and not the actual distance is, therefore, not correct
in terms of the language of Clause 3.5.2 and the letter dated 3.11.1987 (both extracted above). Therefore, the bar contemplated by Clause 3.5.2
does not come in the way of payment and thus so awarded by the Arbitrator. We thus find substance in the plea of Mr. Chaudhary and while the
plea advanced by Mr. Buddhiraja at first blush appears to be a plausible, but on a detailed examination of the clause we are of the view that
Clause 3.5.2 forbids payment for actual distance as opposed to radial distance only upto the distance of 2 kms and not for a distance beyond that.
This is also evident from the letter of the appellant dated 3.11.1987 extracted above. Accordingly, we are satisfied that there is no merit in the plea
advanced by the counsel for the respondent and the plea has to be rejected in view of the terms of Clause 3.5.2 and the letter of the appellant
dated 3.11.1987.
Mr. Buddhiraja has further submitted that Clause 12.0 relating to security deposit clearly forbids payment of any interest as awarded by the
Arbitrator and which clause reads as under:
12.0 SECURITY DEPOSIT
Security Deposit shall be deducted @ 5% of the value of contract. The initial earnest money shall be adjusted towards the security deposit and the
balance amount shall be recovered @ 5% of the value of work from the running bills. 50% of the security deposit will be released after six (6)
months of successful completion of works, and the balance shall be refunded after preparation of the final bill by NPCC Limited or at the end of
the defect liability period (12 months) whichever is later. Security deposit will not bear any interest.
We are of view that this clause does not entitle returning of the security deposit without interest beyond the period of six months of successful
completion of the work or the preparation of the final bill or at the end of the defect liability period, whichever of the three is later. Since the period
for which the security deposit is not refunded was indisputably beyond the period of Clause 12.0 we are satisfied that there is no merit in this plea
also.
As regards the challenge to the finding of fact with respect to claim No. 1 we are unable to interfere in our limited jurisdiction sitting as an
appellate court, moreso as even in the original jurisdiction for challenge to the Award u/s 30 of the Arbitration Act, 1940 the scope of challenge to
a finding of fact is well limited.
The appeal is accordingly dismissed. We are informed that the payment under the impugned judgment has already been released in favour of the
respondent. Accordingly, we are not saying anything on the quantum of interest aspect under the award. The appeal is, therefore, dismissed.