Full Text
HIGH COURT OF DELHI
Date of Decision: 08.04.2025
UOI .....Petitioner
Through: Mr. Akshay Amritanshu, Sr. Panel Counsel
Through: Mr. Vivekanand and Mr. Abhishek Semwal, Advocates.
JUDGMENT
1. By way of this petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, “Act”], the petitioner- Union of India [hereinafter, “UoI”] seeks to assail an arbitral award dated 01.10.2014, by which a learned sole arbitrator has adjudicated disputes between the parties under an agreement dated 02.09.2005, bearing NO. 24/ee(E)/FCED/2005-06. By way of the impugned award, a sum of ₹23,09,504/- has been awarded to the respondent- Jasbir Singh, sole proprietor of M/s Kalsi Engineers.
2. The petitioner invited tenders in the year 2005 for the execution of electrical work at the Regional Labour Institute at Sector- 47, Faridabad, Haryana. The tender was awarded to the respondent under a letter of award dated 18.08.2005. The contractual value of the work was ₹24,91,256/-, and the period for completion of work was stipulated as nine months, calculated from the 22nd day after the award of the work, i.e., 10.09.2005 to 10.06.2006. UoI issued a letter of commencement to the respondent on 02.08.2005. The time for completion of the work was extended on 09.06.2006 until 10.08.2006, and again on 07.08.2006 until 09.10.2006. The work was ultimately completed on 30.05.2008, and a completion certificate was issued on 08.12.2008.
3. The respondent raised demands for additional amounts, predicated upon loss suffered due to non-availability of work front, delays in approvals, payments, etc. After certain correspondence between the parties, the respondent invoked arbitration by a communication dated 18.05.2009, addressed to the Chief Engineer.
4. The learned arbitrator was appointed by an order of this Court dated 27.10.2009 in a petition filed by the respondent under Section 11 of the Act [Arb.P. 310/2009].
5. The respondent filed a Statement of Claim on 12.02.2010, enumerating his claims as follows:- “CLAIM NO. 1: Losses suffered, and additional expenses incurred due to increased rates of Labour and material over and above quoted rates on the value of the work done after stipulated period i.e. 10.6.2006, Rs. 21,00,072/-…………. CLAIM NO. 2: Losses suffered, and additional expenses incurred on account of staff, overheads and establishment expenses beyond stipulated period i.e. 10.6.2006 to the date of completion i.e. 30.5.2008. Rs. 5,01,507/-………… CLAIM NO. 3: Losses suffered due to idle skilled labour Rs.3,42,520/……………. CLAIM NO. 4; Refund of Security deposit including earnest money Rs.1,31,238/-……… CLAIM NO. 5: Less payment/no payment and wrong payment for substituted item of the Agreement item no. 21 to 24 - Rs.41,865/- …… CLAIM NO. 6: interest on the above payments @18% p.a. from 4.11.08 till actual date of payment……. CLAIM NO. 7: Cost of Arbitration proceedings as per actual estimated at Rs, 2,00,000/-………… It is, therefore, respectfully prayed that the Ld. Arbitrator be pleased: i) to award the amounts claimed under claims No. 1 to 3 and 5; ii) to award the interest at the rate of 18% per annum on all the claimed amounts 1-3 and 5 and also on delayed payment of claim No. 4 as claimed under claim No.6; iii) to award the cost of the proceedings of Rs.2,00,000/- as claimed under claim No.7 to the claimant.”
6. The UoI filed a statement of defence on 20.08.2010.
7. The learned arbitrator first made an award dated 28.03.2013, awarding a sum of ₹23,09,504/- in favour of the respondent.
8. The award was challenged by UoI before this Court in O.M.P.(COMM) 846/2013, and was set aside with the consent of learned counsel for the parties vide order dated 24.10.2013. The disputes were remitted to the arbitrator for fresh consideration.
9. On the basis of the pleadings, the following issues were framed, as recorded by the order of the learned Arbitrator in the impugned award dated 01.10.2014:- “i. Whether the claimant is entitled to the claims or any of them or part thereof? If so the amount against each claim. OPC ii. Who is entitled to what cost. iii. Final Relief.”
10. Evidence was led by the respondent herein. UoI chose not to file any evidence.
11. After hearing the parties afresh, the learned arbitrator passed the impugned award dated 01.10.2014, once again awarding the sum of ₹23,09,504/- in favour of the respondent. The details of the awarded amounts are contained in the following table:
┌───────────────────────────────────────────────────────────────────────────────────────────────────────────────┐ │ Sl. Particulars of Claim Amount Amount │ │ No. Claimed Awarded │ ├───────────────────────────────────────────────────────────────────────────────────────────────────────────────┤ │ 1. For losses suffered & ₹21,00,072/- ₹13,91,122.685/- │ │ additional expenses │ │ incurred due to increased │ │ rates of labour & material │ │ over and above quoted │ │ rates on the value of the │ │ work done after stipulated │ │ period, i.e., 10.06.2006. │ │ 2. For losses suffered and ₹5,01,507/- ₹4,74,158/- │ │ additional expenses │ │ incurred on account of staff, │ │ overheads, and │ │ establishment expenses │ │ beyond stipulated period, │ │ i.e., from 10.06.2006 upto │ │ the date of completion, i.e., │ │ 30.05.2008. │ │ 3. For losses suffered due to ₹3,42,520/- ₹3,42,520/- │ │ idle skilled labour. │ │ 4. For refund of Security ₹1,31,238/- NIL │ │ Deposit including earnest │ │ money. │ │ 5. For less payment/no ₹41,865/- ₹39,353/- │ │ payment & wrong payment │ │ for substituted items of the │ │ Agreement Item No. 21-24 │ │ Signature Not Verified │ │ Signed By:UMANG │ │ KHANNA O.M.P. (COMM) 291/2020 Page 4 of 12 │ │ 6. Interest on the above @ 18% p.a. from @9% p.a. simple │ │ payments 04.11.2008 till interest on the │ │ actual date of amounts awarded │ │ payment. to the claimant │ │ from date of filing │ │ of the claim, i.e., │ │ 10.02.2010 │ │ 7. Cost of Arbitration ₹2,00,000/- ₹60,000/- │ │ proceedings │ └───────────────────────────────────────────────────────────────────────────────────────────────────────────────┘
31. UoI’s challenge is based upon the delay not being attributable to it, which had already been rejected above. Claim No. 4
32. No award was made under this Claim. Referred to in paragraph 66 of the impugned Award. Referred to in paragraph 70 of the impugned Award. Claim No. 5
33. The claim pertains to substitution of some items in the contract which resulted in additional payments being made. The Arbitral Tribunal awarded a sum of ₹39,353/- on this account, holding that the UoI had erroneously proposed lower rates than those provided in the agreement. This claim has also been awarded on the basis of cogent evidence and does not call for interference. Claim No. 6
34. This claim concerns the award of interest, which the arbitrator has awarded at 9% per annum on the claimed amounts from 10.02.2010, which was the date of filing of the claim. Interest has thus been awarded for pendente lite period and future interest. No interference is called for with regard to the rate of interest, which appears to be quite reasonable. Claim No. 7
35. The arbitrator has awarded the respondent a sum of ₹60,000/towards costs, as against a claim of ₹2 lakhs. Of this amount, ₹37,500/was paid by the respondent by way of arbitrator’s fees alone. The award, therefore, does not appear to be perverse or arbitrary in any manner.
36. Resultantly, I do not find any ground to interfere with the impugned award in exercise of the Court’s jurisdiction under Section 34 of the Act. The petition is, therefore, dismissed.