Sh. Bharat Lal vs Municipal Corporation of Delhi and Others

Valmiki J Mehta, J.—In this petition u/s 34 of the Arbitration and Conciliation Act, 1996, the petitioner challenges the Award only as regards Claim Nos. 5 and 7.

Claim No. 5 was the claim for enhancement of cost of labour and material under Clause 10CC of the contract. It is an undisputed fact that the stipulated date of completion was 19.5.1993 but the actual date of completion was 24.6.1996. There is therefore an admitted delay which was caused in the completion of the work. The Arbitrator while dealing with this claim, on the one hand gives a finding that the petitioner did not produce any document to show that the competent authority has granted extension without levy of compensation, but in the same breath, he has given a finding that the respondent did not levy any compensation/liquidated damages under Clause 2 of the Agreement. These are clearly mutually inconsistent findings. Once the Arbitrator has found as a fact that no compensation/liquidated damages were imposed by the respondent under Clause 2 of the Agreement, the petitioner consequentially is not guilty of delay in the performance of the work. If the petitioner was guilty of delay in the performance of his obligations, then, the respondent would definitely have imposed liquidated damages and which it has not. Consequentially, therefore, the petitioner is entitled to payment of higher cost which it had incurred for material and labour under Clause 10 CC. The Award with respect to Claim 5 is therefore set aside and the matter is remanded back to the Arbitrator for a fresh decision on this claim in accordance with law. In case, the Arbitrator holds that the petitioner is not guilty of delay inter-alia because no liquidated damages have been imposed by the respondent, then in such circumstances, the Arbitrator will consider the awarding of an amount under Clause 10CC to the petitioner.

Claim No. 7 is also related to Claim No. 5 in that, this Claim No 7. was towards expenses incurred in the extended period towards maintaining establishment like Engineer, Head Mistri, Supervisor, Chaukidars, Vibrator etc. This claim has also been denied by the Arbitrator by holding that the claimant failed to produce documentary proof to show that the respondent is guilty for all the delays and that competent authority has not granted extension without levy of compensation. As already discussed under Claim No. 5, the competent authority has in fact not levied any compensation under Clause 2, and which would have been the case, if, the petitioner was guilty of delay. Accordingly this claim is also remanded back to the Arbitrator for a fresh decision in accordance with law on the same basis as Claim No. 5.

In case, the Arbitrator holds the petitioner entitled to the Claims 5 and 7, then the Arbitrator will also consider the prayer of the petitioner for grant of interest on this claim in accordance with law.

With the aforesaid observations, the Award to the extent of Claim Nos. 5 and 7 is set aside and sustained so far as the other claims as adjudicated. The records of the case which are presently in this Court be sent back by special messenger to the Arbitrator to pass a fresh Award in accordance with law with respect to Claim Nos. 5 and 7. The petition stands disposed of. Parties are left to bear their own costs.