Delhi Development Authority v. K. R. Anand

NAVIN CHAWLA, J APRIL 10, 2018/Arya

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP (COMM) 377/2017 & IAs 12254/2017, 184/2018, 3152/2018 Reserved on: 6th March, 2018 Date of decision : 10th April, 2018 DELHI DEVELOPMENT AUTHORITY ..... Petitioner Through: Ms. Kanika Singh and Mr. Rishi Vohra, Advocates. versus K. R. ANAND ..... Respondent Through: Mr. Harish Malhotra, Senior Advocate with Mr. Rajender Agarwal, Advocate. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. The petitioner by way of this present petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act'), challenges the Arbitral Award dated 09.06.2017 passed by the Sole Arbitrator awarding certain claims in favour of the respondent. 2. The challenge in the petition was confined to the grant of Claim Nos.4,5,6,7 and 8. However, after notice of the petition was issued to the respondent, the petitioner by way of I.A. No.3152/2018, sought leave of this Court to amend this petition so as to also challenge the Award of amount in favour of the respondent under Claim No.14. Page 2 3. Before dealing with the objections against each of the claims, the following basic facts regarding the dispute may be noticed. 4. By the Letter of Acceptance dated 29.06.2013, the petitioner had awarded the work of dense bituminous carpeting on main carriage way of Master Plan Roads of Dwarka in favour of the respondent. The stipulated date of commencement of the work was 09.07.2013 and the stipulated date of completion was 08.01.2014. The actual date of completion of work was 16.06.2014. The tendered amount was Rs.28,74,24,811/-, whereas the actual amount as per the final bill was worked out as Rs.37,26,23,089/-. 5. Claim No.4 was raised by the respondent towards the balance payment due under Clause 10C of the agreement for an amount of Rs.16,86,296/-. While raising the said claim in its Statement of Claim, the respondent had deducted contractor's profit and overheads @ 15%. Taking advantage of the same, the petitioner reworked the amount already released in favour of the respondent under Clause 10C of the agreement and raised a counter claim for an amount of Rs.9,37,596/- against the respondent. Realising its mistake in the Statement of Claim, the respondent submitted the revised working of the claim in its reply to the counter claim, this time without making any deduction on account of contractor's profit and overheads. The Arbitrator, after analysing Clause 10C of the agreement, has awarded a sum of Rs.6,62,055/-in favour of the respondent. Page 3 6. Learned counsel for the petitioner has submitted that as the Statement of Claim had not been amended by the respondent, the respondent could not have been allowed to resile from its admission that an amount of 15% had to be deducted as contractor's profit and overheads while granting its claim under Clause 10C of the agreement. 7. I do not find any merit in the objection raised by the learned counsel for the petitioner. As pointed out by the learned counsel for the respondent and taken note of by the Arbitrator, in the contract between the parties, the component of labour is expressed as 25% of value of work for purposes of Clause 10C. As the percentage is to be calculated on total value of work, this would necessarily include the profit @ 15% prescribed in the contract. Further, for the work done till the 11th RA Bill, no such deduction on account of contractor's profit and overheads was made by either of the parties. It is only due to filing of the Statement of Claim by the respondent along with the calculations, that the petitioner became wiser and tried to take advantage and rework the amount already paid to the respondent, so as to make a counter claim against the respondent. 8. The Arbitrator faced with the above situation where both parties were changing stands, interpreted the agreement itself and held that the contract, in Clause 10C thereof, does not provide for calculating escalation excluding contractor's profi