M/S S.R. Ashok & Associates vs Delhi Development Authority & Anr

$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 23.07.2026
Judgment pronounced on: 28.10.2026
+ CS (OS) 361/2008
M/S S.R. ASHOK & ASSOCIATES ....Plaintiff
Through: Mr. Akshu Jain and Ms. Stuti Jain,
Advocates
versus
DELHI DEVELOPMENT AUTHORITY
& ANR. ....Defendants
Through: Ms. Kritika Gupta, Ms. Chand Chopra,
Mr. Punishk Handa, Advs.
+ CS (OS) 362/2008
M/S S.R. ASHOK & ASSOCIATES ....Plaintiff
Through: Mr. Akshu Jain and Ms. Stuti Jain,
Advocates
versus
DELHI DEVELOPMENT AUTHORITY
& ANR. ....Defendants
Through: Ms. Kritika Gupta, Ms. Chand Chopra,
Mr. Punishk Handa, Advs.
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH

J U D G M E N T
1. The present suits have been filed under Sections 14 and 17 of the
Arbitration Act, 1940 (“the Act”) on behalf of the plaintiff, seeking to
make two Arbitral Awards dated 31.01.2008 and 28.01.2008
(“Impugned Awards”) passed by the Ld. Sole Arbitrator/defendant No.
Signed By:ANSH
SRIVASTAVA
Signing Date:29.10.2026
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2 (“Arbitrator”) in the matters of arbitration between M/s. S.R. Ashok &
Associates v. Executive Engineer, D.D.A ., as Rule of the Court.
2. It is clarified that even though the plaints in the two suits in their
respective prayer clauses have interchanged the dates of the Impugned
Awards, the awards are substantially the same in both except for one
claim and therefore, my reasoning will remain the same.
3. The defendant No. 1/DDA has filed objections under Sections 30 & 33
of the Act, against the Impugned Awards vide applications bearing IA
No. 4749 of 2008 in CS (OS) 361/2008 in respect of Claim No. 1(4) and
Additional Claim Nos. 1, 2, 3 & 4 and IA No. 4753 of 2008 in CS (OS)
362/2008 in respect of Claim No. 1(4) and Additional Claim Nos. 1, 2,
3, 4 & 6.
4. The plaintiff namely M/s. S.R. Ashok & Associates, a partnership firm,
duly registered under the Partnership Act, was the claimant in both the
arbitral proceedings and defendant No. 1 namely Delhi Development
Authority (“DDA”) was the respondent in both the proceedings. The
defendant No. 2 is the Arbitrator in both the arbitration proceedings.
FACTUAL BACKGROUND
CS (OS) 361/2008 (arising out of Arbitral Award dated 31.01.2008)
5. The defendant No. 1/DDA had issued a notice inviting tenders for
execution of work for construction of Lower MIG Houses at Kondli
Gharoli Complex, SH: 256 Lower MIG Houses, Group III. In response
to the said notice inviting tender, the plaintiff/claimant submitted its
tender, which was accepted by the concerned division of the defendant
No. 1. The said tender was on the basis of Delhi Schedule of Rates,
1981.
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SRIVASTAVA
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6. An agreement bearing No. 29/EE/HD-23/1/85-86 dated 21.10.1985 was
executed with regard to the said work between the plaintiff and the
defendant No. 1. As per the said Agreement, the date of commencing
the work was 24.10.1985, and the scheduled date for completion of the
said work was to be 23.10.1986.
7. The case of the plaintiff is that the plaintiff had made all arrangements
with respect to the required labour and machinery. However, due to
consequent amendments to the specifics of the construction work, lapses
and delays on the part of the defendant No. 1, the date for completion of
work was subsequently extended up to 20.10.1990, without levy of any
compensation.
8. Thereafter, disputes and differences arose between the parties with
regard to the final account due and payable to the plaintiff by the
defendant No. 1, which led to the plaintiff invoking arbitration vide its
letter dated 22.08.1995, under Clause 25 of the Agreement, for
settlement of disputes.
9. Thereafter, the Engineer Member, DDA, vide letter bearing No. CE
28(72)EZ/JLO/Arbn./98/62 dated 24.02.2000 appointed Sh. N. K.
Sharma, Superintending Engineer (Arbitration)-I as Sole Arbitrator to
decide the disputes and make his award regarding the claims/disputes.
10. However, the arbitration proceedings were adjourned sine die by the
said arbitrator vide letter dated 10.07.2000, as both the plaintiff and
defendant No.1 did not seek enlargement of time.
CS (OS) 362/2008 (arising out of Arbitral Award dated 28.01.2008)
11. The defendant No. 1/DDA had issued another notice inviting tenders for
execution of work of construction of Lower MIG Houses at Kondli
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SRIVASTAVA
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Gharoli Complex, SH: 256 Lower MIG Houses, Group IV, for which
the bid of the plaintiff was accepted by the concerned division of the
defendant No. 1.
12. An Agreement bearing No. 30/EE/HD-23/1/85-86 dated 21.10.1985 was
executed with regard to the said work between the plaintiff and the
defendant No. 1. As per the said Agreement, the date of commencing
the work was 24.10.1985, and the date scheduled for completion of the
said work was to be 23.10.1986. Similarly, the date for completion of
this work was subsequently extended up to 19.10.1990, without levy of
compensation.
13. Thereafter, disputes and differences arose between the parties with
regard to the final account due and payable to the plaintiff by the
defendant No. 1, which led to the plaintiff invoking arbitration vide their
letter dated 26.07.1995, under Clause 25 of the Agreement, for
settlement of disputes.
14. Thereafter, the Engineer Member, DDA, vide letter bearing No. CE
28(72)EZ/JLO/Arbn./98/909 dated 01.11.1999 appointed Sh. N. K.
Sharma, Superintending Engineer (Arbitration)-I as Sole Arbitrator to
decide the disputes and make his award regarding the claims/disputes.
15. However, the arbitration proceedings were adjourned sine die by the
earlier arbitrator vide letter dated 31.03.2000 stating that both the
plaintiff and defendant No. 1 did not seek enlargement of time.
COMMON FACTUAL BACKGROUND
16. The plaintiff/claimant requested the Engineer Member, DDA, vide letter
dated 07.02.2007, to appoint an arbitrator in terms of Clause 25 of the
aforesaid Agreements.
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SRIVASTAVA
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17. Pursuant thereto, the Engineer Member, DDA, vide his letters bearing
Nos. CE 28(72)EZ/JLO/Arbn./98/58 and CE28(72)EZ/JLO/Arbn./98/59
dated 26.02.2007 appointed Mr. S. S. Jain, Superintending Engineer,
(Arbitration)-I/ defendant No. 2 as Arbitrator to determine the claims
referred to the earlier arbitrator and to continue the proceedings from the
stage at which it was left off.
18. The plaintiff, vide letter dated 18.04.2007, had taken exception to the
continuance of arbitration proceedings from the stage where it was left
off by the earlier Arbitrator. The Engineer Member, DDA, then issued
another letter dated 23.05.2007, referring the claims as per the statement
dated 18.04.2007 with the direction that these additional claims may
also be arbitrated upon, if they were within the purview of Clause 25 of
the Agreement.
19. The Arbitrator entered reference on 27.06.2007. The plaintiff/claimant
had already filed their statement of facts/claims on 22.06.2007. Counter
statement of facts was filed by the defendant No. 1/respondent on
25.09.2007 and thereafter, rejoinder was filed on 28.09.2007.
Impugned Award dated 31.01.2008 (in CS (OS) 361/2008)
20. The Arbitrator passed the said Impugned Award, awarding claims of the
plaintiff/claimant to the extent of Rs. 30,91,140/-. He also awarded
simple interest at 18% per annum on the amount awarded under claim
Nos. 1, 2, 3 and additional Claim No. 1 with effect from 20.04.1991 and
22.08.1995, i.e. the date of invocation of Clause 25 of the Agreement.
Thereafter, the said awarded amount carried simple interest at 10% per
annum till the date of the award. Furthermore, simple interest at the rate
of 10% per annum was awarded upon the amount awarded against
Signed By:ANSH
SRIVASTAVA
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additional claim No. 2 with effect from 22.08.1995 till the date of the
award. The amount awarded against additional claim No. 3 carried
simple interest at 10% with effect from 01.01.1999 till the date of award
and further, the entire awarded amount carried simple interest at 8% till
the date of realisation.
Impugned Award dated 28.01.2008 (in CS (OS) 362/2008)
21. The Arbitrator passed the said Impugned Award, awarding claims of the
plaintiff/claimant to the extent of Rs. 31,99,664.80/-. He also awarded
simple interest at 18% per annum on the amount awarded under claim
Nos. 1, 2, 3 and additional Claim No. 1 with effect from 19.04.1991 till
26.07.1995, i.e. to the date of invocation of Clause 25 of the Agreement.
Thereafter, the said awarded amount carried simple interest at 10% till
the date of award. Furthermore, simple interest at the rate of 10% per
annum upon the amount awarded under additional claim No. 2 with
effect from 27.07.1995 till the date of the award. The amount awarded
against additional claim No. 3 carried simple interest at 10% with effect
from 01.01.1999 till the date of award and the amount awarded against
additional claim No. 6 carried interest at the rate of 10% with effect
from 02.09.2004 till date of the award. Also, the entire awarded amount
carried simple interest at 8% till the date of realisation.

OBJECTIONS RAISED ON BEHALF OF DEFENDANT NO. 1
22. Learned counsel on behalf of the defendant No. 1 submits that the
Impugned Awards are liable to be set aside in respect of claims due to
error apparent on the face of the award, legal misconduct on the part of
the Arbitrator, having passed Impugned Awards which are unreasoned,
Signed By:ANSH
SRIVASTAVA
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beyond the pleadings of the parties and against the public policy of
India.
23. As the objections raised in both suits are, except as to Additional Claim
No. 6 in CS (OS) 362/2008, substantially identical, I shall deal with
them together by this common judgment.
24. For the sake of convenience, I shall set out the facts and record my
findings with reference to CS (OS) 361/2008, it being clarified that the
same findings and reasoning shall apply mutatis mutandis to CS (OS)
362/2008, save as to Additional Claim No. 6, which is dealt with
separately below.
GENERAL SUBMISSIONS (IN CS(OS) 361/2008 AND CS (OS)
362/2008) ON BEHALF OF DEFENDANT NO. 1
A. Claims are time-barred
25. Ms. Kritika Gupta, learned counsel for defendant No. 1, states that the
Arbitrator failed to appreciate the fact that the invocation of arbitration
on 22.08.1995, more than three years after actual completion of the
work on 20.10.1990, by the plaintiff/claimant and subsequent invocation
of additional claims vide letter dated 18.04.2007 were hopelessly time-
barred in terms of the Agreements. Reliance for the same is placed on
M/s Attar Singh & Brothers v. DDA 2018 SCC OnLine Del 13032 and
Bindra Builders v. DDA & Anr. 2012 SCC OnLine Del 3975.
26. It has been contended that the Engineer Member had no authority to re-
open the proceedings after a period of more than 7 years. This power to
enlarge the time for making and publishing the award under Section 28
of the Act lies exclusively with the Court.
B. Waiver of claims
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SRIVASTAVA
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27. It has been submitted on behalf of the defendant No. 1 that the plaintiff
has waived off its claims, if any, with respect to the subject contract
since the plaintiff had failed to raise such claims/invoke dispute within
30 days of payment of the final bill on 31.05.1995, in view of Clause 7
of the Agreements.
28. The plaintiff also did not dispute the payments made on 31.05.1995.
C. Legal misconduct by the Arbitrator
29. Learned counsel for the defendant No. 1 vehemently argues that the
Impugned Awards are liable to be set aside under Section 30 of the Act
as the Arbitrator had allegedly committed legal misconduct, by ignoring
crucial documents and contractual stipulations. Reliance was placed on
Seth Mohanlal Hiralal v. State of MP , (2003) 12 SCC 144.
Objections on merit:
30. Learned counsel for defendant No. 1 vociferously opposes the
Impugned Award dated 31.01.2008 to the extent of disallowing Claim
No. 1(4) and Additional Claim Nos. 1, 2, 3 & 4 and opposes the
Impugned Award dated 28.01.2008 to the extent of disallowing Claim
No. 1(4) and Additional Claim Nos. 1, 2, 3, 4 & 6.
CLAIM-WISE OBJECTIONS, AS SET OUT IN CS (OS) 361/2008
Claim No. 1, Sub Claim No. 4: Work done but not paid/less paid
31. It has been contended that the Arbitrator erroneously awarded a sum of
Rs. 1,52,532/- in the Impugned Award for straightening and cutting of
steel to the required sizes, without considering the Agreement item 3.7
which already included complete operation of cutting, straightening,
bending, binding and placing in position, Central Public Works
Department/CPWD specifications Volume I 1977 for this work under
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SRIVASTAVA
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paras 5.3.1, 5.3.2 and 5.3.4 and also Clause 42 of the Agreement.
32. Furthermore, it was submitted that similar claims have been set aside by
the Court in Anant Raj Agencies v. DDA, 2005 SCC OnLine Del 425
and Wee Aar Constructive Builders v. DDA, 2001 SCC OnLine Del 273 .
33. It is further contended that Clause 42(i) and (ii) of the Agreement
specifically provide for and allow 3% wastage on account of cutting into
pieces, which demonstrates that cutting and straightening of bars to the
required sizes is a process already contemplated within the scope of the
Agreement, and not a separate or extra item. The present claim is
accordingly not maintainable.
Additional Claim No. 1: Compensation for C.S. and damages due to
prolongation of the contract period
34. At the outset, it is submitted by the learned counsel for the defendant
No. 1 that the Engineer Member, DDA had exceeded his/her jurisdiction
by issuing letter dated 23.05.2007 by referring additional claims that
were barred by limitation.
35. The learned counsel for the defendant No. 1 argues that a sum of Rs.
20,26,935/- was wrongly awarded to the plaintiff under this head by the
Arbitrator since the plaintiff/claimant was responsible for slow progress
of work by taking several extensions of time (“EOTs”) during the
pendency of the contract, having also given express undertakings not to
seek damages for extended period of the contract.
36. Clauses 10, 10CC, 22 and Condition No. 1 of “Specifications and
conditions” are relied on by the learned counsel in support.
37. The learned counsel for the defendant No. 1 places further reliance on
M.L. Mahajan v. DDA, 1998 SCC OnLine Del 700 and Ramnath
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SRIVASTAVA
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International Construction (P) Ltd. v. Union of India, (2007) 2 SCC
453 .
38. It has been contended that no financial loss has been suffered by the
plaintiff and the Arbitrator had arbitrarily awarded 50% of the claim
amount sought under this head, travelling beyond the terms of the
agreement, based on alleged letter dated 08.11.1990, exhibited as
Exhibit C-17, that was never served upon the defendant No. 1.
39. It is contended that as per Section 74 of the Indian Contract Act, 1872,
actual loss and evidence of mitigation of losses also, needs to be proven
which was not done satisfactorily by the plaintiff.
Additional Claim Nos. 2 & 3: For watch and ward staff deployed for
security of site till houses were taken over by allottees or, defendant
No. 1/DDA
40. It has been contended by the learned counsel for the defendant No. 1
that the Arbitrator has wrongly awarded Rs. 7,57,423/-.
41. The plaintiff failed to show that the defendant No. 1 had at any time
asked the plaintiff to engage any staff/labour, and nowhere had the
Engineer-in-Charge directed the plaintiff to engage staff or do the work
of allotment or handover possession of the flats to the allottees. Payment
was made to the plaintiff on a monthly basis based on work actually
executed.
42. The letters relied on by the plaintiff were never served upon the
defendant No. 1 due to the fact that they had an incomplete address.
Even account books, register of wages and salaries etc. were not
produced on behalf of the plaintiff in order to corroborate the claim so
made.
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SRIVASTAVA
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43. It is submitted that no person of ordinary prudence would engage staff
to the extent claimed i.e. 8 chowkidars per shift in both projects (Groups
III and IV) within the same complex, amounting to 48 chowkidars in a
day, and that the identical strength of staff is alleged to have been
engaged across both groups, exposing the claim as fabricated and
intended to defraud the defendant No. 1.
44. It is further contended that the rate of Rs. 7,700/- per month awarded for
the period 21.10.1990 to 31.12.1998 was never part of the Agreement,
that the circulars relied upon did not exist before 1997, and that the
judgment relied upon by the plaintiff is distinguishable since the work in
that case was completed after 1998, whereas the work in the present
case was completed seven years prior.
Additional Claim No. 4: Present, pendente lite and future interest @
24% per annum
45. The Arbitrator under the above-mentioned claim wrongly awarded
interest at the rate of 18% per annum on the amount awarded under
Claim Nos. 1, 2 and 3 and Additional Claim No. 1 w.e.f. 20.04.1991 to
22.08.1995. Thereafter, the said awarded amount carried interest of 10%
per annum till the date of the award. The 10% per annum simple interest
was carried upon the awarded amount against additional claim No. 2
with effect from 22.08.1995 till the date of the award. The 10% simple
interest was carried upon the awarded amount against additional claim
No. 3 with effect from 01.01.1999 till the date of the award.
Subsequently, the awarded amount carried future interest at the rate of
8% per annum till the date of its realisation.
46. The learned counsel for the defendant No. 1 places reliance on State of
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SRIVASTAVA
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Rajasthan and Anr. v. Nav Bharat Construction Co. AIR 2002 SC 258 ,
wherein in similar circumstances the Hon‟ble Supreme Court had
reduced the rate of interest from 18% per annum to 6% per annum.
Furthermore, it was also contended that there is no clause in the
Agreement for the payment of interest.
CLAIM-WISE OBJECTIONS (AS SET OUT IN CS (OS) 362/2008)
47. The objections raised by defendant No. 1 qua Claim No. 1(4) and
Additional Claim Nos. 1, 2, 3 and 4 are identical to those raised in
CS(OS) 361/2008 and therefore, are not being reproduced separately.
Additional Claim No. 6: Refund of Rs. 1,60,151/- deposited by the
plaintiff pursuant to a letter by the defendant No. 1
48. Learned counsel on behalf of the defendant No. 1 objects that the said
claim was never referred by the Engineer Member, so the Arbitrator
lacked jurisdiction to adjudicate and award the same. Simply because
the defendant No. 1 chose to reply to the claim on merits, under protest,
does not cure the defect.
49. It is further argued that the plaintiff deposited Rs. 1,41,151/- on
31.08.2004 to the defendant No. 1 without any protest, pursuant to
agreeing with the same vide its own letter dated 07.07.2004. Therefore,
the said claim is nothing but an afterthought, which is beyond the scope
of reference of the Arbitrator.
Reply on behalf of the plaintiff to the objections of defendant No. 1
50. At the outset, Mr. Akshu Jain, the learned counsel on behalf of the
plaintiff, submits that the objections raised on behalf of the defendant
No. 1/DDA are not maintainable since the requirements of Sections 30
and 33 of the Act are not met. The defences sought to be raised by the
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SRIVASTAVA
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defendant No. 1 against the Impugned Awards have already been
adjudicated by the Arbitrator, and accordingly, the scope of interference
by this Court is extremely limited.
51. It is submitted that the Arbitrator, having examined the material and
evidence on record, being the best judge of its quality and sufficiency,
this Court cannot reappraise such evidence or substitute its own view for
that of the Arbitrator while exercising jurisdiction under Sections 30 and
33 of the Act.

52. Furthermore, it is contended that the decision of the Arbitrator on the
issue of limitation is binding and cannot be re-agitated by this Court,
considering the same was specifically referred to the Arbitrator. Even
otherwise on merits, the claims adjudicated by the Arbitrator were
within the period of limitation.
53. It is submitted on behalf of the plaintiff that the work was not completed
in time due to various breaches of the Agreement committed by the
defendant No. 1/DDA. The defendant No. 1 had also granted the EOT
without levy of any compensation, vide letter dated 13.11.1990, for the
same reason.
54. Subsequently, even though the work was completed by the plaintiff on
20.10.1990, only a provisional completion certificate was issued by the
defendant No. 1 and no final completion certificate was issued at any
point. In fact, 20.10.1990 cannot be taken as the starting point of
limitation since the defendant No. 1 had thereafter granted EOT,
approved various works executed by the plaintiff under extra items from
1991 to 1994 and subsequently prepared the so-called final bill only on
31.05.1995.
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SRIVASTAVA
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55. The 28th Running Account bill/R.A. bill was issued by the defendant
No. 1 on 31.05.1995 as the so-called final bill. However, from the said
final bill, the DDA made a recovery of Rs. 96,563/- on account of
reduction items and also withheld a sum of Rs. 20,000/- without
assigning any reason.
56. Thereafter, being aggrieved by the said bill, the plaintiff/claimant had
invoked arbitration under the Agreement vide letter dated 22.08.1995
(within 90 days from the date and payment of bill i.e. 31.05.1995).

57. Even after invocation of the arbitration clause, the defendant No. 1, in
June 1997, released an amount of Rs. 80,000/-, which had been retained
under Clause 42 of the Agreement towards supply of material and the
same was only released after verification of steel. In August 1998, the
defendant No. 1 again recovered a sum of Rs. 8,071.35/- against Extra
Item No. 16, which had already been paid to the plaintiff/Contractor on
31.05.1995.
58. It is submitted on behalf of the plaintiff that it invoked arbitration by
letter dated 22.08.1995, pursuant to which the Engineer Member, DDA
appointed the earlier Arbitrator by letter dated 24.02.2000, and the
proceedings were adjourned sine die on 10.07.2000. Upon Sh. S.S. Jain
taking charge as Superintending Engineer (Arbitration-I), both parties
were duly informed and directed to appear on 25.07.2006, when both
parties appeared and jointly agreed to an enlargement of time for
making and publishing the award.
59. The plaintiff, thereafter requested, by letter dated 07.02.2007, that the
arbitrator be appointed by name rather than by office, pursuant to which
the Engineer Member, DDA appointed Sh. S.S. Jain by name on
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SRIVASTAVA
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26.02.2007. The defendant No. 1 subsequently filed an application dated
26.11.2007 seeking applicability of the Act and prayed that proceedings
be kept in abeyance pending a mutual extension of time, and on the
same date both parties jointly agreed to such enlargement.
60. It is submitted that although settled law requires a fresh notice to be
issued where a matter has been adjourned sine die , such fresh notice was
duly served on both parties upon Sh. S.S. Jain assuming charge.
Reliance was placed on Chandrakant Khaire v. Dr. Shantaram Kale,
(1988) 4 SCC 577 .
61. On the plaintiff‟s request to appoint an arbitrator as per Clause 25 of the
Agreement, Engineer Member, DDA, vide letter dated 26.02.2007, had
done the same. The issue of limitation was specifically decided by the
Arbitrator holding that the claims of the plaintiff were within limitation.
62. It is submitted that the defendant No. 1 itself took the position before the
Arbitrator that the work executed by the plaintiff could not be treated as
complete on 20.10.1990, since it remained the plaintiff's contractual
obligation to hand over the houses to the allottees, and that obligation
continued to subsist thereafter. It is submitted that this position is borne
out by the allotment register produced by the defendant No. 1 itself,
which shows that only 239 out of 256 flats had been handed over as of
31.12.1998 .
63. It is submitted that the defendant No. 1, having itself taken the stand that
completion of the contract was tied to handover of possession to
allottees, and that process having continued well beyond 20.10.1990,
cannot now be permitted to contend that limitation is to be reckoned
from 20.10.1990 for the purpose of Clause 7 of the Agreement.
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SRIVASTAVA
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Therefore, the invocation of arbitration by the plaintiff on 22.08.1995
was well within the limitation period prescribed under Clause 25.
64. It has been brought to my attention by the learned counsel for the
plaintiff that Claim Nos. 2 and 3 awarding a sum of Rs. 1,00,000/- and
Rs. 54,250.41/- in the Impugned Awards have not been disputed by the
defendant No. 1 in its objections, exposing the inconsistency of the
defendant No. 1 considering the allegation of the defendant No. 1 that
the claims of the plaintiff herein are time-barred.

65. The learned counsel also refers to letters dated 13.11.1990, 17.02.1991,
15.07.1991, 15.02.1993, 22.05.1993, 15.07.1993, 15.02.1994 wherein
work under certain extra items executed by the plaintiff were expressly
approved by the defendant No. 1. Reliance has been placed on P.C.
Sharma & Co. v. Delhi Development Authority; 2011 SCC OnLine Del
5149 to state that wherein the plaintiff/contractor has duly notified the
defendant No. 1 regarding the extra items of work and sought payment
for the same, the claim is maintainable.
66. The plaintiff from time to time duly informed the defendant No. 1 that
the plaintiff would be charging overhead expenses for the work
executed beyond the stipulated date of completion. It is pertinent to
mention here that these letters were never denied or disputed by the
defendant No. 1 either contemporaneously or at any stage of the arbitral
proceedings.
67. It has been pointed out that on multiple dates including 05.05.1990,
14.09.1990, 18.11.1990, 10.01.1991, 21.10.1992, 16.11.1992,
08.01.1993, 23.04.1993, 18.12.1993 and 31.05.1995, exhibited as
Exhibits C-16, C-5, C-17, C-6, C-18 to C-22 & C-4, the plaintiff had
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SRIVASTAVA
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requested the defendant No. 1 to take over possession of the site and
release the payment. The said letters had clearly informed the defendant
No. 1 that the watch and ward expenses incurred by the plaintiff would
have to be borne by the defendant No. 1/DDA.
68. Learned counsel for the plaintiff also placed reliance on DDA Circular
Nos. 509, 510 and 520 governing watch and ward charges to corroborate
their claim.
69. It is further submitted on behalf of the plaintiff that the contention by the
defendant No. 1 that the plaintiff had given an undertaking on
08.11.1990 is devoid of any force since no such defence was put forth
by the defendant No. 1 in its counter statement of facts in the arbitral
proceedings. Even assuming 08.11.1990 was written by the plaintiff, the
plaintiff on the same day, i.e. 08.11.1990, protested and informed the
defendant No. 1 that the undertaking was obtained under coercion and
the said undertaking was withdrawn. Therefore, the arbitrator had
correctly adjudicated the same.
ANALYSIS AND FINDINGS
70. I have heard the learned counsel for both the parties.
71. Before I proceed with the merits of the matter, it is pertinent to note that
vide order dated 30.11.2007, it was recorded by the Arbitrator that the
matter must proceed as per the Act.
Scope of interference under Sections 30 and 33 of the Act
72. Before dealing with the merits of the case, it is apposite to highlight the
scope of interference under Sections 30 and 33 of the Act.
73. The Court can only set aside an Arbitral Award on the grounds
mentioned in Section 30 of the Act and not otherwise. The scope of
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interference under Section 30 of the Act is limited, and the Court does
not sit as a Court of appeal while adjudicating the objections against the
Impugned Award. The Hon‟ble Supreme Court in NTPC Ltd. v.
Deconar Services (P) Ltd., (2021) 19 SCC 694 summarized the scope
of Sections 30 and 33 of the Act as under:
“11. Before proceeding further, it is necessary to make note
of the scope of interference by courts in arbitral awards
passed under the Arbitration Act, 1940. This Court has
consistently held that the Court does not sit in appeal over
an award passed by an arbitrator. In Kwality Mfg. Corpn. v.
Central Warehousing Corpn. (2009) 5 SCC 142, this Court
held as follows : (SCC pp. 146-47, para 10)
“10. At the outset, it should be noted that the scope of
interference by courts in regard to arbitral awards is
limited. A court considering an application under Section
30 or 33 of the Act, does not sit in appeal over the findings
and decision of the arbitrator. Nor can it reassess or
reappreciate evidence or examine the sufficiency or
otherwise of the evidence. The award of the arbitrator is
final and the only grounds on which it can be challenged
are those mentioned in Sections 30 and 33 of the Act.
Therefore, on the contentions urged, the only question that
arose for consideration before the High Court was, whether
there was any error apparent on the face of the award and
whether the arbitrator misconducted himself or the
proceedings.”
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(emphasis supplied)
12. Further, it is also a settled proposition that where the
arbitrator has taken a possible view, although a different
view may be possible on the same evidence, the court would
not interfere with the award. This Court in Arosan
Enterprises Ltd. v. Union of India, held as follows : (SCC p.
475, paras 36-37)
“36. Be it noted that by reason of a long catena of cases, it
is now a well-settled principle of law that reappraisal of
evidence by the court is not permissible and as a matter of
fact exercise of power by the court to reappraise the
evidence is unknown to proceedings under Section 30 of the
Arbitration Act. In the event of there being no reasons in the
award, question of interference of the court would not arise
at all. In the event, however, there are reasons, the
interference would still be not available within the
jurisdiction of the court unless of course, there exist a total
perversity in the award or the judgment is based on a wrong
proposition of law. In the event however two views are
possible on a question of law as well, the court would not be
justified in interfering with the award.
37. The common phraseology “error apparent on the face of
the record” does not itself, however, mean and imply closer
scrutiny of the merits of documents and materials on record.
The court as a matter of fact, cannot substitute its
evaluation and come to the conclusion that the arbitrator
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had acted contrary to the bargain between the parties. If the
view of the arbitrator is a possible view the award or the
reasoning contained therein cannot be examined.”
13. From the above pronouncements, and from a catena of
other judgments of this Court , it is clear that for the
objector/appellant in order to succeed in their challenge
against an arbitral award, they must show that the award of
the arbitrator suffered from perversity or an error of law or
that the arbitrator has otherwise misconducted himself.
Merely showing that there is another reasonable
interpretation or possible view on the basis of the material
on the record is insufficient to allow for the interference by
the court [see State of U.P. v. Allied Constructions (2003) 7
SCC 396; Ravindra Kumar Gupta & Co. v. Union of India
(2010) 1 SCC 409 and Oswal Woollen Mills Limited v.
Oswal Agro Mills Ltd. (2018) 16 SCC 219].
(emphasis supplied)
74. With this scope in mind, I shall now deal with rival contentions with
respect to preliminary objections and claims.
Plea of Limitation and Waiver
75. The defendant No. 1 has contended that the claims by the plaintiff were
time-barred as initial invocation of the arbitration was more than three
years after actual completion of work and further that the subsequent
letter dated 18.04.2007 seeking reference of the claims was also
hopelessly barred by limitation. It was further stated that the plaintiff
has waived off its claims with respect to the subject contract since it
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failed to raise them within 30 days of payment of the final bill i.e. on
31.05.1995, as required under Clause 7 of the Agreement.
76. The Arbitrator held that the plaintiff's claims were within limitation,
finding that arbitration had first been invoked by letter dated
22.08.1995. It was further noted by the Arbitrator that the said
invocation, being within 90 days of the final bill dated 31.05.1995 as
required under Clause 25 of the Agreement, was itself within limitation.
The defendant No. 1's contention that the claims were barred by the 30-
day timeline for raising disputes under Clause 7 was rejected, since even
after the final bill was paid on 31.05.1995, certain amounts remained
withheld, and payments for extra items continued to be made till as late
as 1998. The Arbitrator further noted that it was only due to inaction on
the part of the Engineer Member, DDA, that the earlier arbitrator came
to be appointed vide letter dated 24.02.2000. The letter dated 07.02.2007
was not a fresh invocation but merely a continuation of the reference
dated 24.02.2000. The same was pursuant to the original invocation of
22.08.1995. The defendant No. 1's contention that additional claims had
been raised for the first time in 2007 was also rejected by the Arbitrator
observing that all the claims eventually referred to him formed part and
parcel of the invocation made on 22.08.1995.
77. The relevant portions of the Impugned Award dated 31.01.2008 read as
under:-
“From the aforesaid, it is clear that the Claimants were
agitating their grievance of the appointment of the
Arbitrator in continuance of their letter dated 22.08.1995.
Letter dated 07.02.2007 cannot be said to a fresh
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invocation, at all. This is also clear from the fact that the
proceedings under the reference dated 24.02.2000 was in
continuance when the letter dated 07.02.2007 was written
by the Claimants. Respondents have not challenged the
reference dated 24.02.2000. Reference dated 24.02.2000
was pursuant to the invocation dated 22.08.1995. The
Engineer Member, D.D.A.'s letter dated 23.05.2007 refers
all the earlier correspondence on the issue and related
therewith finally put the issue of reference at rests. This
letter dated 23.05.2007 cannot be read in isolation was in
continuance of letters dated 24.02.2000 and 26.02.2007.
Letter/reference dated 26.02.2007 certainly referred claims
as contained in Claimants' letter dated 22.08.1995. This
letter dated 23.05.2007 has to be taken as the final
reference. Only issue is as to whether vide letter 23.05.2007
any additional claim was also referred as inferred from the
reading of the same or all the additional claims were stood
raised vide letter dated 22.08.1995. Further, whether any of
the claims were properly referred or not or barred by the
limitation.
Letter dated 22.08.1995 is admitted by the Respondents. A
bare perusal of the said letter shows that 15 claims, in total
which were sought to be referred for arbitration. Claimants
submitted that the claims no. 1 and 5 to 9 in their letter
dated 22.08.1995 relate to work done but not paid and those
claims were clubbed together under one heading Claim
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No.1 in the Statement of Facts. This fact has not been
disputed by the Respondents. Further scrutiny of the letter
dated 22.08.1995 and Statement of Facts shows that the
Claim no.2 and additional claims no. 1 to 5 in the Statement
of Facts were sought to be referred in letter dated
22.08.1995 under various heads and they are part and
parcel of the letter dated 22.08.1995.
From the above discussion, it is quite clear that
there was no fresh invocation of Clause - 25 of the
agreement by the Claimants. Arbitration Clause was
invoked vide letter dated 22.08.1995. Claimants
subsequently raised the dispute on the issue of improper
reference and appointment of the Arbitrator. Finally, vide
letter dated 23.05.2007, I was appointed as Arbitrator to
decide and adjudicate upon all the claims as referred vide
letter dated 23.05.2007 including the additional claims
subject of course to the limitation and other objections
intact. Therefore, I can safely conclude that the Arbitrator
was finally appointed vide letter dated 23.05.2007 by the
Engineer Member, D.D.A in pursuance to the letter invoking
the arbitration Clause - 25 of the agreement.
There is no force in the submissions of the Respondents that
the claimants failed to submit list of disputed items within
30 days from the payment of the final bill and therefore, the
claims deemed to have been fully waived within the meaning
of Clause - 7 of the agreement. As per the Respondents,
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final bill was prepared on 31.05.1995 and list of disputed
items should have been submitted within 30 days there from.
On the other hand, Claimants have submitted that the said
bill cannot be deemed to be a final bill as payments made
subsequent to the said bill on various dates. Certain
payments were withheld by the Respondents, which have not
been paid till date. Clause - 7 of the agreement provides for
that submission of the final bill from the contractor upon
completion of work or upon furnishment of the completion
certificate by the Engineer-in-charge. It further provides
time limit for payment thereafter in a time-frame. It also
provides that contractor shall submit a list of disputed items
within thirty days from the disallowance thereof and if the
contractor fails to do so he shall be deemed to have waived
his claims. Thus, such claims shall be deemed to have been
waived if list thereof has not been submitted within thirty
days from the disallowance of the payment under the final
bill and also of additional items. Clause - 25 of the
agreement provides that contractor should make a demand
for arbitration within 90 days from the date of receiving
intimation that the bill is ready for the payment. Final bill
was ready as on 31.05.1995. Payments made subsequent to
the said date and the Claimants vide their letter dated
31.05.1995 exhibit C-4 raised their claims immediately after
the receipt of said final bill. I cannot ignore the fact that the
Respondents themselves effected recovery of the amount of
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Rs.8,071.35 in August, 1998, under the present agreement.
Therefore, 31.05.1995 is not relevant for the purposes of
counting 30 days for submission of list of disputed items as
the same has to be reckoned from the date of receipt or
disallowance of payment. In any case right to seek
arbitration under Clause 25 is paramount and the said right
cannot be curtailed by reading of any other provision of the
agreement. Admittedly, letter dated 22.08.1995 is within 90
days from the date of the final bill. There is no writing or
nothing on record to suggest that the Claimants gave any
full and final settlement receipt. Claimants have raised
disputes vide their letter dated 22.08.1995 and sought
arbitration in respect of their claims. Therefore, it cannot be
held that there was no dispute between the parties. I am of
the view that the arbitration was invoked in time and was
within limitation as per the Judgement of Hon'ble High
Court of Delhi in Pandit Construction Company Vs. D.D.A.
2007(3) Arb. L. R. 205 (Delhi). Considering the entire facts
and in the light of above discussion, I hold that the claims
are within limitation as well as are not hit by the Clause - 7
of the agreement.”
78. The defendant No. 1/DDA prepared the final bill only on 31.05.1995.
Furthermore, no final completion certificate was issued even then by the
defendant No. 1 for the work executed by the plaintiff.
79. In fact, the final bill was prepared and paid by the defendant No. 1 on
31.05.1995. The same admittedly withheld amounts to the tune of Rs.
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91,928.65/-. The same as stated by the defendant No. 1 has been
recorded in the order dated 22.10.2007 of the Arbitrator.
80. The relevant order dated 22.10.2007 reads as under:


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81. Even otherwise, Clause 25 of the Agreement requires claims to be raised
in writing within 90 days from intimation that the bill is ready. The
relevant Clause 25 of the Agreement reads as under:
“Clause 25: "Except where otherwise provided in the
contract all questions and disputes relating to the meaning
of the specifications, designs drawings and instruction
herein before mentioned and as to the quality of
workmanship or materials used on the work or as to any
other question claim, right matter or thing whatsoever, in
any way arising out of or relating to the contract designs
drawings, specifications, estimates, instruction, orders or
these conditions or otherwise concerning the works or the
execution or failure to execute the same whether arising
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during the progress of the work or after the completion or
abandonment thereof shall be referred to the sole
arbitration of the person appointed by the Engineer Member
Delhi Development Authority at the time of dispute. It will
be no objection to any such appointment that the arbitrator
is so appointed is a Delhi Development Authority employee
that he had to deal with the matters to which the contract
relates and that in the course of his duties as Delhi
Development Authority employees he had expressed view on
all or any of the matters in dispute of difference. The
arbitrator to whom the matter is originally referred being
transferred or vacating his office or being unable to act for
any reason, such Engineer Member, Delhi Development
Authority as aforesaid at the time of such transfer, vacation
of office or liability to act shall appoint another person to
act as arbitrator in accordance with the terms of the
contract. Such person shall b entitled to proceed with the
reference from the stage at which it was left by his
predecessor it is also a term of this contract that no person
other than a person appointed by such Engineer Member
Delhi Development Authority as aforesaid should act as
arbitrator and, if for any reason that is not possible, the
matter is not to be referred to arbitration at all. In all the
cases where the amount of the claim in dispute is Rs.
50,000/- (Rupees fifty thousand only) and above, the
arbitrator will give reason for the award.
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Subject as aforesaid the provisions of the Arbitration Act,
1940 or any statutory modification or re-enactment thereof
and the rules made there under and for the time being in
force shall apply to the arbitration proceeding under this
Clause. It is the terms of the contract that the party invoking
arbitration shall specify the dispute or disputes to be
referred to arbitration under this clause together with the
amount or amounts claimed in respect of each such dispute.
It is also a term of the contract that if the contractor(s)
does/do not make any demand for arbitration in respect of
any claim(s) in writing within 90 days of receiving the
intimation from the Engineer-in-Charge that the Bill is
ready for payment, the claim(s) of the contractor(s) will be
deemed to have been waived and absolutely barred and the
Delhi Development Authority shall be discharged and
released of all liabilities under the contract in respect of
those claims.
Clause 25A: The arbitrator(s) may from time to time with
the consent of the parties enlarge the time for making and
publishing the award.
Clause 25B: The decision of superintending Engineer
regarding the quantum of reduction as well as justification
thereof in respect of rates for sub-standard work, which may
be decided to be accepted will be final and would not be
open to arbitration."
82. The plaintiff raised its claims on 22.08.1995 seeking reference to
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arbitration and therefore, the same were within a period of 90 days from
31.05.1995. Therefore, the contention of the defendant No. 1 that the
disputes/claims were not raised well within the time as specified in the
Agreement has been rightly rejected by the Arbitrator.
83. Furthermore, pursuant to the initial invocation letter dated 22.08.1995,
the receipt for which is not disputed by the defendant No. 1, no action
was taken by Engineer Member, DDA, and the Arbitrator was only
appointed in 2000. Subsequently, only vide letter 24.02.2000, the
Engineer Member, DDA, referred the disputes raised by the plaintiff to
the appointed Arbitrator.
84. It has been rightly observed by the Arbitrator that the proceedings under
the reference dated 24.02.2000 were in continuance when the letter
dated 07.02.2007 was written by the plaintiff/claimant. The defendant
No. 1 did not challenge the reference dated 24.02.2000, which was
pursuant to invocation dated 22.08.1995. Thereafter, on 10.07.2000, the
Arbitrator adjourned the proceedings sine die .
85. The proceedings were restarted on 25.07.2006 by the successor
Superintending Engineer, (Arbitration)-I, Shri S.S. Jain. Vide letter
dated 07.02.2007, the plaintiff objected that the appointment was not in
terms of Clause 25 and asked for an arbitrator to be appointed by name,
which reads as under:-
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86. The aforesaid letter expressly refers to the invocation of 22.08.1995 and
the appointment of 24.02.2000, and was written while that reference was
subsisting. On 26.02.2007, the Engineer Member, D.D.A. appointed
Shri S.S. Jain by name to continue from the stage left off. The plaintiff
objected again on 18.04.2007 and raised additional claims. The same
were referred by the Engineer Member, D.D.A. to the Arbitrator by
letter dated 23.05.2007, without prejudice to the defendant No. 1‟s
contention, including limitation. The said letter dated 23.05.2007 reads
as under:-


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87. On a perusal of these letters, the Arbitrator held that the letter dated
23.05.2007 was in continuity with those of 24.02.2000 and 26.02.2007
and was the final reference. The letter dated 07.02.2007 was not a fresh
invocation, and Clause 25 was invoked only once, on 22.08.1995.
Although the plaintiff raised these objections initially, both parties
thereafter participated. Pleadings were completed between June and
September 2007, and the matter was concluded with the consent of the
parties on 30.11.2007.
88. On the preliminary objections, the Arbitrator held that the claims were
within limitation. He held that Clause 7 of the Agreement did not bar the
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claims, as the 30-day period runs from receipt or disallowance of
payment and not from 31.05.1995, the defendant No. 1 itself having
effected a recovery in August 1998 and no full and final settlement
receipt was on record. He also held that the right to seek arbitration
under Clause 25 is paramount and cannot be curtailed by any other
provision.
89. A conjoint reading of the letters of 22.08.1995, 24.02.2000, 07.02.2007,
26.02.2007, 18.04.2007 and 23.05.2007 supports the Arbitrator‟s view.
The letter dated 07.02.2007 was addressed while the reference of
24.02.2000 was still subsisting, and it relied on the original invocation
of 22.08.1995. Its only object was to have the arbitrator appointed by
name in terms of Clause 25, and it raised no fresh dispute. The Engineer
Member‟s letters dated 26.02.2007 and 23.05.2007 were issued in
response to that request and not as a fresh reference. The defendant No.
1 never challenged the reference of 24.02.2000, and the later letters
expressly preserved its defences, including limitation. The discussion
above also shows that Clause 7 of the Agreement does not bar the
claims, and that the invocation of 22.08.1995 was within the time
prescribed by Clause 25 of the Agreement. The Arbitrator‟s findings on
limitation are thus based on the correspondence and the terms of the
Agreement.
90. Hence, no fresh reference to arbitration was invoked by the plaintiff and
the reference of disputes made to the subsequent arbitrator in 2007 was
simply a continuation of the initial invocation of arbitration by the
plaintiff in 1995.
91. The judgement of M/s Attar Singh & Brothers (supra) relied on by the
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defendant No. 1 to contend that the claims are barred by limitation is
misplaced. In that case, the work was completed by the contractor in
1985, the release of payment by the contractor was first raised in 1987,
while the arbitration clause was invoked only in 1992, and the final bill
was prepared only after invocation of arbitration; the Court accordingly
upheld the finding of the Arbitrator that the Contractor having failed to
submit the final bill within six months of completion, had no option but
to raise his claims within three years of the expiry of that six-month
period, and could not wait endlessly for DDA to finalise the final bill
before raising them.
92. However, in the present case, the defendant No. 1 was the one that
initially extended the completion date up to 20.10.1990 without levy of
compensation, issued only a provisional completion certificate, even
approved extra work items till 1994, and only prepared the final bill on
31.05.1995, while still admittedly withholding money from it. The rule
that a contractor cannot wait endlessly for the final bill to be prepared
therefore has no application where it is the defendant No. 1 itself
continued to give extra works to the plaintiff and did not issue a final
completion certificate. In the present case, the work was continuing and
had not come to an end.
93. The judgment in Bindra Builders (supra) , relied on by the defendant
No. 1, is equally misplaced. In that case, the work was completed on
27.12.1982 and the flats were handed over by 1984. The contractor first
sought payment on 06.11.1984 but never submitted a final bill. It kept
writing letters in 1985, 1986 and 1990, and invoked arbitration only on
30.09.1994, making its claims for the first time in May 1996. No
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completion certificate, provisional or final, was ever issued, and the
final bill was prepared by the DDA only during the arbitral proceedings.
The Court held that Clause 7 places the duty to submit the final bill on
the contractor, and that in the absence of the words “whichever is
later” , time for submitting runs from the date fixed for completion even
where no certificate is issued. It held that Clause 25 only determines
whether the demand for arbitration is in time and does not decide
whether the claims themselves are barred. As the contractor had not
submitted a final bill or invoked arbitration for over ten years after
completion, the Court upheld the Arbitrator‟s finding that the claims
were time-barred.
94. The facts of the present case are distinguishable from Bindra Builders
(supra) . In the present case, the defendant No. 1 only issued a
provisional completion certificate and no final completion certificate
was ever issued. Additionally, in the present case, the defendant No. 1
itself prepared the final bill on 31.05.1995, withheld amounts from it
and also awarded and approved extra items of work subsequently.
95. Reliance placed by the defendant No. 1 on Naresh Kumar Gupta v.
MCD, 2013 SCC OnLine Del 574 , is also misplaced. In that case, the
contractor never submitted a final bill, and none was ever prepared. The
contractor‟s letters were disputed and were not found in the employer‟s
records. Arbitration was invoked more than four years after completion,
and the last payment itself fell beyond three years from the date the
cause of action arose. In the present case, the defendant No. 1 itself
prepared and paid the final bill on 31.05.1995 while withholding
amounts from it, and the receipt of the plaintiff‟s letters dated
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31.05.1995 and 22.08.1995 are admitted. Arbitration was invoked
within 90 days of the final bill, as required by Clause 25. Further, the
Division Bench in Naresh Kumar Gupta (supra) upheld the
Arbitrator‟s finding on limitation, holding that the interpretation of the
clauses of the contract lies wholly within the domain of the Arbitrator.
That principle applies equally here, where the Arbitrator has taken a
plausible view that the claims are within limitation.
96. The reference subsequently made vide letter dated 26.02.2007 to the
Arbitrator included the adjudication on limitation.
97. The relevant portion of the letter dated 26.02.2007 reads as under:
“…. Whereas S.E. (Arbn.)-I was appointed as Sole
Arbitrators vide this office letter No.
CE28(72)EZ/JLO/Arbn./98/62 dt. 24.2.2000 in the above
matter and whereas the aforesaid Arbitrator has adjourned
the case sine die vide letter dt. 10.7.2000. Whereas S.E.
(Arbn.)-1 has restarted the arbitration proceedings from
25.7.2006. Whereas the claimant vide his letter dt. 7.2.07
has requested to appoint an arbitrator by name in terms of
Clause 25 of the agreement. I, A.K.Sarin, Engineer Member,
DDA in exercise of the powers conferred upon me under
Clause-25 of the said Agreement hereby appoint Sh. S.S.
Jain, S.E. (Arbn.)-I, DDA as Sole Arbitrator to determine
the claims referred to the aforesaid arbitrator in
accordance with the said Clause-25 of the aforesaid
agreement.
Sh. S.S. Jain, S.E. (Arbn.)-I may continue the proceedings
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from the stage at which the aforesaid left off. The arbitrator
shall give reasons for the award.
This reference is without prejudice to the defence that may
be raised by the respondents regarding the tenability of the
claims on all necessary and available grounds including
those of limitations.”
98. Therefore, the reference made to the Arbitrator included the question of
limitation. The Arbitrator's view on this issue is a plausible and
reasonable view and this Court is therefore not required to interfere in
the same.
99. Reliance is also placed on Tarapore & Co. v. Cochin Shipyard Ltd.,
(1984) 2 SCC 680 wherein it has been held that when a question of law
has been specifically referred to the arbitrator, then the award of the
arbitrator would be binding on the parties and the courts should not
interfere with the same. The relevant paragraph reads as under:-
“47. The discussion leads to the inescapable conclusion that
a specific question of law touching the jurisdiction of the
arbitrator was specifically referred to the arbitrator and
therefore the arbitrator's decision is binding on the parties
and the award cannot be set aside on the sole ground that
there was an error of law apparent on the face of the award.
It is also established that the claim for compensation made
by the arbitrator which led to the dispute was covered by
the arbitration clause. The quantum of compensation
awarded by the arbitrator was never disputed nor
questioned. Therefore, the High Court was clearly in error
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in reversing the decision of the trial court.”
100. Keeping in view the limited scope of judicial interference with an
Arbitral Award under Section 30 of the Act and that there is no error
apparent on record or any perversity with respect to the Arbitrator‟s
findings on the claims of the plaintiff being within limitation, the claims
of the plaintiff were within limitation. Hence, I am not inclined to
interfere with the same.
Enlargement of time under Section 28 of the Act

101. The objection qua limitation raised by the defendant No. 1 also extends
to the re-opening of the arbitral proceedings after a period of more than
7 years and it is urged that the same is in conflict with Section 28 of the
Act.
102. For reference, Section 28 of the Act reads as under:
“28. Power to Court only to enlarge time for making
award- (1) The Court may, if it thinks fit, whether the time
for making the award has expired or not and whether the
award has been made or not enlarge from time to time the
time for making the award.
(2) Any provision in an arbitration agreement whereby the
arbitrators or umpire may, except with the consent of all the
parties to the agreement, enlarge the time for making the
award, shall be void and of no effect.”
103. The above provision clearly notes that the arbitrator cannot on his own
enlarge the time. However, it is clear by reading the provision that sub-
section (2) indicates one exception to the above rule that the arbitrator
can enlarge the time, and that is when the parties agree to such an
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enlargement. This principle is discussed by the Hon‟ble Supreme Court
in Hari Krishna Wattal v. Vaikunth Nath Pandya, (1973) 2 SCC 510
which reads as under:
“11. Sub-section (2) of Section 28, however, indicates one
exception to the above rule that the Arbitrator cannot
enlarge the time, and that is when the parties agree to such
an enlargement. The occasion for the Arbitrator to enlarge
the time occurs only after he is called upon to proceed with
the arbitration or he enters upon the reference. Hence, it is
clear that if the parties agree to the enlargement of time
after the Arbitrator has entered on the reference, the
Arbitrator has the power to enlarge it in accordance with
the mutual agreement or consent of the parties. That such a
consent must be a post reference consent, is also clear from
Section 28(2) which renders null and void a provision in the
original agreement to that effect. In a sense where a
provision is made in the original agreement that the
Arbitrator may enlarge the time, such a provision always
implies mutual consent for enlargement but such mutual
consent initially expressed in the original agreement does
not save the provision from being void. It is, therefore, clear
that the Arbitrator gets the jurisdiction to enlarge the time
for making the award only in a case where after entering on
the Arbitration the parties to the arbitration agreement
consent to such enlargement of time.”
(emphasis supplied)
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104. It is relevant to note that, in consonance with the aforesaid, Clause 25A
of the Agreement states that the Arbitrator may from time to time with
the consent of the parties enlarge the time for making and publishing the
award.
105. In this context, the relevant order of the Arbitrator dated 26.11.2007 and
the application of the parties read as under:-

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106. Furthermore, the defendant No. 1 having participated in the arbitration
proceedings without objection after the appointment of a new arbitrator
in 2007, even to the extent of agreeing to the enlargement of time for
publishing of the arbitral award, is squarely covered by the principle of
acquiescence. The Hon‟ble Supreme Court in Prasun Roy v. Calcutta
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Metropolitan Development Authority, (1987) 4 SCC 217 elaborated on
the same, the relevant paragraph reads as under:
“5 . Can a party be permitted to do that? In Jupiter General
Insce. Co. Ltd. v. Corporation of Calcutta [AIR 1956 Cal
470, 472 : 60 Cal WN 721] P.B. Mukharji, J. as the learned
Chief Justice then was observed:
“It is necessary to state at the outset that courts do not
favour this kind of contention and conduct of an applicant
who participates in arbitration proceedings without protest
and fully avails of the entire arbitration proceedings and
then when he sees that the award has gone against him he
comes forward to challenge the whole of the arbitration
proceedings as without jurisdiction on the ground of a
known disability of a party. That view of the court is ably
stated by the editor of the 15th edn. of Russell on the Law of
Arbitration at page 295 in the following terms:
„Although a party may by reason of some disability be
legally incapable of submitting matters to arbitration that
fact is not one that can be raised as a ground for disputing
the award by other parties to a reference who were aware
of the disability. If one of the parties is incapable the
objection should be taken to the submission. A party will not
be permitted to lie by and join in the submission and then if
it suits its purpose attack the award on that ground. The
presumption in the absence of proof to the contrary will be
that the party complaining was aware of the disability when
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the submission was made‟.”
6. Mr Kacker submitted that this principle could be invoked
only in a situation where the challenge is made only after
the making of an award, and not before. We are unable to
accept this differentiation. The principle is that a party shall
not be allowed to blow hot and cold simultaneously. Long
participation and acquiescence in the proceeding preclude
such a party from contending that the proceedings were
without jurisdiction.
7. Russell on Arbitration, 18th edn. page 105 [ 20th Edn., p.
131] explains the position as follows:
“If the parties to the reference either agree beforehand to
the method of appointment, or afterwards acquiesce in the
appointment made, with full knowledge of all the
circumstances, they will be precluded from objecting to
such appointment as invalidating subsequent proceedings.
Attending and taking part in the proceedings with full
knowledge of the relevant fact will amount to such
acquiescence.
8. The Judicial Committee in its decision in Chowdhri
Murtaza Hossein v. Mussumat Bibi Bechunnissa [LR (1875-
76) 3 IA 209, 220] observed at page 220:
On the whole, therefore, Their Lordships think that the
appellant, having a clear knowledge of the circumstances
on which he might have founded an objection to the
arbitrators proceeding to make their awards, did submit to
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the arbitration going on; that he allowed the arbitrators to
deal with the case as it stood before them, taking his chance
of the decision being more or less favourable to himself;
and that is too late for him, after the award has been made,
and on the application to file the award, to insist on this
objection to the filing of the award.”
Relying on the aforesaid observations this Court in N.
Chellappan v. Secretary, Kerala State Electricity Board
[(1975) 1 SCC 289] acted upon the principle that
acquiescence defeated the right of the applicant at a later
stage. In that case the facts were similar. It was held by
conduct there was acquiescence. Even in a case where
initial order was not passed by consent of the parties a
party by participation and acquiescence can preclude future
challenges.
10. Mr S.N. Kacker, learned Counsel for the respondents
drew our attention to the fact that the decision in the
Chowdhri Murtaza Hossein case was where the party
challenged the appointment of the receiver after the award
was made. He also submits that in this case the respondents
herein had challenged the order of appointment of the
arbitrator on 19-4-1983 and not after the arbitrator had
made the award. We are unable to accept this distinction.
Basically the principle of waiver and estoppel is not only
applicable where the award had been made but also where
a party challenges the proceedings in which he participated.
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In the facts of this case, there was no demur but something
which can be called acquiescence on the part of the
respondents which precludes them from challenging the
participation (sic proceedings).
11. In that view of the matter, we are of the opinion that the
judgment and impugned order cannot be sustained. In the
premises the appeal is allowed. The order and judgment of
the High Court dated 8-12-1986 are set aside. The
arbitration proceedings will go on before the arbitrator
appointed by order dated 19-4-1983…”
(emphasis supplied)
107. For the aforesaid reasons, it is clear that the defendant No. 1 consented,
jointly with the plaintiff, to the extension of time for making and
publishing the award, and acquiesced in the proceedings before the
Arbitrator. Having done so, it cannot now contend that the proceedings
are void for want of enlargement under Section 28 of the Act.
Objections under Section 30 qua the Impugned Award
108. The defendant No. 1 has raised the objection of misconduct on part of
the Arbitrator, relying on the judgment Seth Mohanlal Hiralal v. State
of MP , (2003) 12 SCC 144 , which states that the interference under
Section 30 of the Act is not simply limited to a moral lapse but can also
include a situation wherein the Arbitrator may arrive at certain finding
by ignoring relevant material on record. The relevant paragraph reads as
under:
“6 . In K.P. Poulose v. State of Kerala [(1975) 2 SCC 236 :
AIR 1975 SC 1259] it was held by this Court that
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misconduct under Section 30(a) has no connotation of
moral lapse. It comprises legal misconduct which is
complete if the arbitrator on the face of the award arrives at
an inconsistent conclusion even on his own finding or
arrives at a decision by ignoring the very material
documents which throw abundant light on the controversy
to help a just and fair decision.”
109. Courts have repeatedly held that, where the Arbitrator has passed a
reasoned award, interference is warranted only in cases of total
perversity or a wrong proposition of law. This has been elaborated in
Arosan Enterprises Ltd. v. Union of India, (1999) 9 SCC 449 , which
states as under:
“36. Be it noted that by reason of a long catena of cases, it
is now a well-settled principle of law that reappraisal of
evidence by the court is not permissible and as a matter of
fact exercise of power by the court to reappraise the
evidence is unknown to proceedings under Section 30 of the
Arbitration Act. In the event of there being no reasons in the
award, question of interference of the court would not arise
at all. In the event, however, there are reasons, the
interference would still be not available within the
jurisdiction of the court unless of course, there exist a total
perversity in the award or the judgment is based on a wrong
proposition of law. In the event however two views are
possible on a question of law as well, the court would not be
justified in interfering with the award.
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38. It is on the basis of this well-settled proposition that the
learned Single Judge came to a conclusion that the findings
of the arbitrators in regard to the extension of delivery
period and failure to fix the fresh date has resulted in
breach of the contract on the part of the Government and
the same being purely based on appreciation of the material
on record by no stretch of imagination can it be termed to
be an error apparent on the face of the record entitling the
Court to interfere. The arbitrators have, in fact, come to a
conclusion on a closer scrutiny of the evidence in the matter
and reappraisal of evidence by the court is unknown to
proceedings under Section 30 of the Arbitration Act.
Reappreciation of evidence is not permissible and as such
we are not inclined to appraise the evidence ourselves save
and except what is noticed hereinbefore pertaining to the
issue as time being the essence of the contract…”
(emphasis supplied)
110. A perusal of Arosan Enterprises (supra) shows that the Court does not
sit in appeal over the award and cannot reappraise the evidence.
Interference under Sections 30 and 33 of the Act is permissible in
circumstances where the Arbitrator ignores material documents, reaches
a conclusion inconsistent on the face of the award, is totally perverse, or
proceeds on a wrong proposition of law. Where the award is reasoned,
and two views are possible on facts or the law, the Court should not
interfere merely because it could have taken a different view.
111. The defendant No. 1 does not allege bias, unfairness or denial of
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hearing. On the contrary, the defendant No. 1 has actively participated
in the arbitral proceedings at every stage. A perusal of the arbitral
records, especially the Impugned Award, makes it clear to me that
contentions of both the parties have been properly considered and
adjudicated upon by the Arbitrator, considering the express provisions
of the Agreement between the parties, and the findings qua every claim
have been arrived at with detailed reasonings.
112. I am of the view that the Arbitrator has considered all the material
documents and averments of the parties at length and arrived at a
conclusion which depicts no misconduct. A bare assertion that material
documents were ignored, without providing proper details, cannot be
regarded as misconduct.
113. The aforesaid was reaffirmed by the Hon‟ble Supreme Court in Goa,
Daman and Diu Housing Board v. Ramakant V.P. Darvotkar, (1991)
4 SCC 293, while adjudicating under Sections 30 and 16 of the Act. The
relevant paragraphs read as under:
“12. Section 16 empowers the court to remit the award to
the arbitrator for reconsideration only in three cases
specified therein. Clause (c) of Section 16(1) provides that
the award shall be remitted to the arbitrator by the court
where an objection to the legality of the award is apparent
on the face of it. Of course, the High Court has come to a
finding that the arbitrator was guilty of misconduct for his
failure to give reasons as required. There is, however,
nothing to show that the arbitrator misconducted himself or
the proceedings in any other manner nor there is anything
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to show that the awards have been improperly procured.
There is no allegation, far less, any finding, that the
arbitrator was biased or unfair or he has not heard both the
parties or he has not fairly considered the submissions of
the parties in making the awards in question. In our
opinion, it is evident from the four awards made by the
arbitrator that the arbitrator has considered all the specific
issues raised by the parties in the arbitration proceedings
and came to his finding after giving cogent reasons. The
above awards cannot under any circumstances be
considered to be made by the arbitrator without recording
any reasons for the same. Therefore, in such circumstances,
it is not proper to hold that the arbitrator has misconducted
himself or in the proceedings in the matter of giving the
awards.”
(emphasis supplied)
114. Accordingly, the Impugned Award does not suffer from any infirmity
amounting to misconduct, nor can it be said to have been improperly
procured or to be otherwise invalid under Section 30 of the Act. The
objections raised by the defendant No. 1 have been considered and
found to be without merit to that extent, without prejudice to the
findings on each claim below. With this principle in mind, I now
proceed to deal with the merits of the claims.
Examining the merits of the claims:-
Claim No. 1(4)
115. A total sum of Rs. 1,52,532/-, as against the claim amount of Rs.
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2,03,376/-, was awarded by the Arbitrator on account of straightening
and cutting steel to the required sizes, being an extra item of work.
116. It is contended on behalf of the defendant No. 1 that the Impugned
Award wrongly grants the said amount because Agreement item 3.7
already covers the complete operation of cutting, straightening, bending,
binding and placing in position of the steel, in line with CPWD
Specifications Vol. I (1977), paras 5.3.1, 5.3.2 and 5.3.4. It is also stated
that Clause 42 (i) and (ii) allows 3% wastage for cutting into pieces,
which shows that cutting and straightening are part of the contracted
work and not an extra item.
117. The Arbitrator took the view that the agreement item No. 3.7(a) and
3.7(b) provided only for the reinforcement for R.C.C. work including
bending, binding and placing the position complete and the same cannot
be read to include cutting and straightening of steel. He held that the
cost towards the same must be treated as an extra item. The view of the
Arbitrator is reproduced hereinbelow:-
“After going through the submission made by both the
parties includes oral arguments and judgements filed by the
parties I find that admittedly, agreement item no. 3.7 (a)
and 3.7 (b) provide for the reinforcement for R.C.C. work
including bending, binding and placing in position
complete. In 2003(2) Arb. L. R. 110 (Delhi) Jagat Ram
Trehan & Sons Versus D.D.A. the Hon'ble High Court
upheld the award for cutting and strengthening of
reinforcement bars and the contention that the same was
included in the contract was rejected. Same is the position
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in the instant case. Said agreement item no. 3.7 (a) and 3.7
(b) cannot be read to have included cutting and
straightening of steel. Cost towards cutting and
straightening of the reinforcement bars is to be treated as
an extra item. Claimants were admittedly issued 2,54,220
Kg. of steel. I allow a rate of Rs. 0.60 per kg towards cutting
and straightening of said steel.”
118. Objection has been raised to the awarded amount under the said claim
by the defendant No. 1 by placing reliance on Anant Raj (supra) where
a claim for straightening bent-up steel was set aside by following the
judgement in Wee Aar Constructive Builders (supra) . The relevant
paragraphs read as under:-
“43. Decision in Wee Aar Constructive Builders (supra),
relied upon by counsel for DDA noted decision in K.C.
Chibber's case (supra). Decision in K.C. Chibber's case
(supra), was distinguished on the ground that in K.C.
Chibber's case (supra), petitioner had notified DDA that
straightening of steel was to be treated as an extra item of
work and this was not objected to by DDA.
44. In Wee Aar Constructive Builders' case (supra), learned
Single Judge held that since bending, binding and placing in
position steel for RCC works was included in the contract,
said work necessarily required the process of straightening
before cutting and, therefore, it was held that no claim for
extra was maintainable on said account.
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45. Learned counsel for the respondent could not point out
any evidence that contractor had written to DDA when work
was on that he would be having a claim as an extra item for
straightening of bent up steel bars issued in coils.
46. I, therefore, go along with the decision in Wee Aar
Constructive Builders' case (supra).”
119. The judgment of Wee Aar Constructive Builders (supra) , however,
distinguished another judgement of K.C. Chhibar v. Delhi Development
Authority on the ground that there the contractor had notified the DDA
about straightening as an extra item and DDA did not object to the
same. However, in Anant Raj (supra) , the contractor showed no such
communication. The relevant paragraph reads as under:-
“18. The two other decisions relied upon by learned counsel
for the petitioner, that is, K.C. Chhibar and Anant Raj
Agencies are clearly distinguishable. In both the cases, the
petitioner therein had notified the DDA that the cutting of
steel or the straightening of steel bars was being treated as
an extra item of work. This was not objected to by the DDA.
The claim of the petitioner in both the cases was upheld. In
the present case, this situation did not arise. No letter or
intimation was sent by the petitioner to the respondent. The
claim of straightening and cutting the steel bars was made
by the petitioner for the first time before the learned
Arbitrator. The respondent had no occasion to react (or not
to react) to the claim, prior to the arbitral proceedings.”
120. In the present case, there were clear communications by the plaintiff to
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the defendant No. 1 about the said extra item of cutting and
straightening of steel. The records of these communications are
available, and the same are reproduced hereinbelow:-

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121. In view of these communications, the judgments in Wee Aar
Constructive Builders (supra) and Anant Raj (supra) relied upon by
the defendant No. 1 are clearly distinguishable on facts. The principle in
K.C. Chhibar (supra) squarely applies, as such communications are the
decisive factor in such cases, and the Arbitrator‟s view is consistent with
it. The same view has been reaffirmed by this Court also in P.C.
Sharma & Co. v. DDA, 2011 SCC OnLine Del 5149 , which states as
under:-
“15. Thus, it is not in dispute that though the definition of
reinforcement for RCC work is illustrative and not
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exhaustive, in case the contractor puts the DDA to notice
during the currency of the contract and DDA does not raise
any objection then the amount can be recovered on this
account.
(emphasis supplied)
122. While the aforesaid letters have not been adverted to in the Impugned
Award, they are available on the record before the Arbitrator. The
Arbitrator awarded the sum of Rs. 1,52,532/- in the Impugned Award
under Claim No. 1(4), on the footing that agreement items 3.7(a) and
3.7(b) do not cover cutting and straightening of steel.
123. Furthermore, the objections of the defendant No. 1 based on Clause 42
(i) and (ii) were not raised before the Arbitrator. A party cannot be
permitted to raise a new plea for the first time before the Court in
proceedings under Sections 30 and 33 of the Act, as the Arbitrator had
no occasion to consider it. Reliance has been placed on Harish Chandra
& Co. v. State of U.P., (2016) 9 SCC 478 for the same, the relevant
paragraphs for which read as under:-
“29.4. Fourthly, the High Court went into the factual
question by referring to Clause 26 of the agreement for
holding that the arbitrator passed an award contrary to
Clause 26 and thereby travelled beyond the terms of the
agreement which constituted a legal misconduct on his part.
This finding, in our view, is, on the face of it, untenable in
law for the reason, inter alia, that this objection was neither
raised before the arbitrator nor before the trial court in the
manner in which it was raised for the first time in the High
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Court. In any event, in the absence of any finding recorded
by the arbitrator and the trial court, such issue could not
have been gone into for the first time in appeal by the High
Court. That apart, it has otherwise no substance on facts for
the simple reason that it being a question of fact, the same
could not be examined in appeal.”
(emphasis supplied)
124. Therefore, the view taken by the Arbitrator is plausible and reasonable
and based on the material placed before the Arbitrator. I find no
infirmity in the findings of the Arbitrator with respect to Claim No. 1(4).
The objection of the defendant No. 1 to the same is accordingly rejected.
Additional Claim No. 1
125. A total sum of Rs. 20,26,935/-, as against the claim amount of Rs.
47,85,000/-, was awarded by the Arbitrator under Additional Claim No.
1, on account of compensation and damages for the prolongation of the
contract period by 1453 days.
126. The learned counsel for defendant No. 1 contends that the sum of Rs.
20,26,935/- was wrongly awarded under this head, since the plaintiff
itself caused the slow progress of work by taking several extensions of
time and had given express undertakings not to claim damages for the
extended period, relying on Clauses 10, 10CC and 22 and Condition No.
1 of the “Specifications and Conditions”. It is also contended that the
plaintiff suffered no financial loss and that the Arbitrator arbitrarily
awarded 50% of the claim, going beyond the terms of the agreement and
relying on a letter dated 08.11.1990 that was never served on defendant
No. 1. It is further stated that, under Section 74 of the Indian Contract
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Act, 1872, the plaintiff had to prove actual loss and mitigation of losses,
which it failed to do satisfactorily.
127. The Arbitrator noted that the work was admittedly delayed by 1453
days, and that during this period the work was being carried out by the
plaintiff in full swing. He held that the undertaking recorded on the
application for extension of time, if voluntary, would at most bar a claim
for damages and not the recovery of actual expenses incurred, and that
the salary of the site staff is not “damages”. He also found force in the
plaintiff‟s case that the undertaking was recorded under coercion, since
the plaintiff had withdrawn it on 08.11.1990, the same day, by a letter
dated 08.11.1990 to which the defendant No. 1 gave no reply. The
Arbitrator further observed that nothing but vague averments had been
placed on record to show that the plaintiff was liable for the delay, and
that the absence of any penalty for the delay supported this. Since the
plaintiff was bound to employ minimum staff and pay their salary
during the extended period, the Arbitrator allowed 50% of the claimed
salaries of Rs. 2,790/- per day for 1453 days, and awarded Rs.
20,26,935/-.
128. The objection raised by the defendant No. 1 that the plaintiff gave an
express undertaking dated 08.11.1990 not to seek damages for the
extended period of contract has already been dealt with by the
Arbitrator. The plaintiff had immediately withdrawn such undertaking
on the same day as it was given, vide letter dated 08.11.1990. The
relevant observation of the Arbitrator reads as under:-
“It is quite apparent from the exhibit C-17 that on
08.11.1990, Claimants have protested and written to the
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Respondents that the said writing was under coercion and
that they keep all their rights intact towards claim of
damages on account of delay. They withdrew the said
writing/undertaking on the same day. However, there is no
reply or rebuttal of the said letter dated 08.11.1990. Fact
that the said undertaking was withdrawn immediately on the
same day with allegation of coercion and that there was
complete absence of response to such withdrawal and
allegation of coercion is material and vital.”
129. A perusal of the documents on record shows that the plaintiff/contractor
had addressed multiple letters dated 17.10.1986, 15.11.1986, 17.3.1987,
31.1.1987, 9.10.1987, 19.1.1988, 12.3.1988, 27.2.1989, 04.5.1989,
3.9.1989, 5.5.1990, 14.9.1990, 8.11.1990, 10.1.1991, 20.10.1992,
16.11.1992, 8.1.1993, 23.4.1993, 18.12.1993 and 31.5.1995, exhibited
as Exhibits C-9, C-10, C-11, C-2, C-12, C-13, C-8, C-3, C-14, C-15, C-
16, C-5, C-17, C-6, C-18, C-19. C-20, C-21, C-22 & C-4, informing the
defendant No. 1 about the overhead expenses of the work that was being
executed beyond the stipulated date of contract completion. Details of
salaries paid to staff and other relevant expenses were submitted by the
plaintiff from a period lasting 1453 days w.e.f. 24.10.1986 to
20.10.1990. The findings of the Arbitrator with regard to the same are as
under:-
“After going through the submissions made by the parties
including oral arguments, relevant clauses of the agreement
and various judgements submitted by the parties, I find that
admittedly, work was delayed for 1453 days. Work was in
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full swing during this delayed period. Claimants were
bound to employ the minimum staff and to pay salary to
such staff. Apart from the vague averments and submissions
nothing have been placed on record that the Claimants were
liable for the delay. No penalty has been imposed upon the
Claimants for delay which suggests that the claimants were
not liable for the delay. Under the circumstances, in my
opinion, justice would be done if half of the salary of the
staff, for the delayed, as claimed by the Claimants be
allowed against the entire claim of damages. Hence, I allow
50% Rs. 2,790/- per day for 1453 days.”
130. On the other hand, the reliance placed by the defendant No. 1 on ML
Mahajan (supra) and Ram Nath International (supra) is misplaced.
Both the judgements concern the principle that an arbitrator cannot
award compensation that the contract bars in express terms. The relevant
paragraph in ML Mahajan (supra) reads as under:-
“18. In terms of Clause 10 of the contract no compensation
is to be awarded although there is a delay in completion of
the work on account of non-supply of any material or stores.
The Arbitrator has awarded the aforesaid amount for
breaches committed by the respondent in respect of
materials, drawings and decisions which were responsible
for causing delays in the performance of the contract. The
aforesaid decision of the Supreme Court is binding on me
and relying upon which the decision in M.L. Mahajan
(supra) was delivered, with which I respectfully agree. Since
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the parties have agreed upon not to claim any compensation
or damages on account of any delay in supply of all or any
such materials and stores, the Arbitrator as well as this
Court has to give effect to the aforesaid intention of the
parties in all matters and the Arbitrator could not have
given an award contrary to the aforesaid express provisions
of the contract. The Arbitrator had jurisdiction only to act
in accordance with the contract which is also the principle
enunciated in Continental Construction Company's case
(supra). In that view of the matter the award passed by the
Arbitrator in respect of this claim is set aside.”
131. However, unlike ML Mahajan (supra) and Ram Nath International
(supra) , Clause 10 of the present Agreement is confined to delay due to
non-supply of materials and stores. In the present case, the plaintiff is
seeking compensation and damages due to prolongation of the contract
period, i.e. salaries of employees, and the same is not covered under
Clause 10 of the Agreement.
132. Furthermore, Clause 10CC of the Agreement is essentially an escalation
clause that compensates for increases in the prices of the material and
wages, on the condition that the same was either within the contract
period or during a period validly extended under the contract, also
subject to the condition that no such compensation shall be payable if
the stipulated period of completion is 6 months or less. Therefore, it is
clear that the Additional Claim No. 1 is not a claim for escalation. In
fact, what has actually been awarded in the present case is the actual
cost of salaries paid to the site staff during the extended period.
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SRIVASTAVA
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Therefore, the amount awarded does not result in duplication under
Clause 10CC of the Agreement.
133. The reliance placed by the defendant No. 1 on Condition No. 1 of the
„Specifications and Conditions‟ is also misplaced. The Condition bars a
claim for extra payment or compensation where part of the site is
unavailable, or there is an unavoidable delay in the supply of material. It
does not bar the cost of keeping staff at the site during a prolongation
that is not shown to be the plaintiff‟s fault. The Arbitrator found nothing
on record to suggest that the plaintiff was liable for the delay, and the
defendant No. 1 itself extended the time for completion without levying
compensation
134. The Hon‟ble Supreme Court in Northern Railway v. Sarvesh Chopra,
(2002) 4 SCC 45 highlighted the circumstances wherein even if the
contractor has undertaken not to make any claim for delay in
performance of the contract occasioned by an act of the employer, still a
claim for compensation due to prolongation of the contract period would
be entertainable. It was observed as follows:
“15. In our country question of delay in performance of the
contract is governed by Sections 55 and 56 of the Indian
Contract Act, 1872. If there is an abnormal rise in prices of
material and labour, it may frustrate the contract and then
the innocent party need not perform the contract. So also, if
time is of the essence of the contract, failure of the employer
to perform a mutual obligation would enable the contractor
to avoid the contract as the contract becomes voidable at
his option. Where time is “of the essence” of an obligation,
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SRIVASTAVA
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Chitty on Contracts (28th Edn., 1999, at p. 1106, para 22-
015) states
“a failure to perform by the stipulated time will entitle the
innocent party to (a) terminate performance of the contract
and thereby put an end to all the primary obligations of
both parties remaining unperformed; and (b) claim
damages from the contract-breaker on the basis that he has
committed a fundamental breach of the contract („a breach
going to the root of the contract‟) depriving the innocent
party of the benefit of the contract („damages for loss of the
whole transaction‟)”.
If, instead of avoiding the contract, the contractor accepts
the belated performance of reciprocal obligation on the part
of the employer, the innocent party i.e. the contractor,
cannot claim compensation for any loss occasioned by the
non-performance of the reciprocal promise by the employer
at the time agreed, “unless, at the time of such acceptance,
he gives notice to the promisor of his intention to do so”.
Thus, it appears that under the Indian law, in spite of there
being a contract between the parties whereunder the
contractor has undertaken not to make any claim for delay
in performance of the contract occasioned by an act of the
employer, still a claim would be entertainable in one of the
following situations: (i) if the contractor repudiates the
contract exercising his right to do so under Section 55 of the
Contract Act, (ii) the employer gives an extension of time
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either by entering into supplemental agreement or by
making it clear that escalation of rates or compensation for
delay would be permissible, (iii) if the contractor makes it
clear that escalation of rates or compensation for delay
shall have to be made by the employer and the employer
accepts performance by the contractor in spite of delay and
such notice by the contractor putting the employer on
terms.”
(emphasis supplied)
135. Further, the plaintiff put the defendant No. 1 on notice of its claim for
the prolongation. By letters dated 17.10.1986 to 31.05.1995 (exhibited
as Exhibits C-9, C-10, C-11, C-2, C-12, C-13, C-8, C-3, C-14, C-15, C-
16, C-5, C-17, C-6, C-18, C-19, C-20, C-21. C-22 & C-4), the plaintiff
repeatedly informed the defendant No. 1 of the overhead expenses being
incurred beyond the stipulated date and furnished details of salaries
paid. It also withdrew its undertaking on 08.11.1990, the same day it
was given. The defendant No. 1 nonetheless accepted performance
without protest, which brings the case within the circumstances
recognised in Sarvesh Chopra (supra).
136. For the said reasons, the view of the Arbitrator is both plausible and
reasonable and does not warrant my interference under Sections 30 and
33 of the Act.
Additional Claims Nos. 2 & 3
137. A total sum of Rs. 7,57,423/- as against the claim amount of Rs.
33,34,450/- was awarded by the Arbitrator towards watch and ward staff
deployed for the security of the completed houses till they were taken
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SRIVASTAVA
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over by the defendant No. 1/DDA.
138. The defendant No. 1 contends that the Arbitrator wrongly awarded the
aforesaid amount as the plaintiff never proved it was directed to engage
staff, or produced wage records, and that the plaintiff‟s claimed staffing
is implausible and fabricated. It also contends that the Rs. 7,700/-
monthly rate was never part of the Agreement and the defendant No. 1‟s
circulars relied on by the plaintiff postdate the work.
139. By the Impugned Award, the Arbitrator noted that, although completion
of the work was recorded on 20.10.1990, the remaining flats were taken
over by the defendant No. 1 only on 31.12.1998. The contention of the
defendant No. 1 that the completion certificate was conditional and that
the plaintiff was bound to rectify defects was rejected, as the conditions
merely obliged the plaintiff to rectify defects as and when they were
pointed out, and no notice for rectification was ever issued. The
Arbitrator further relied on the plaintiff‟s correspondence requesting the
defendant No. 1 to take over possession and cautioning that it would be
liable for the salary of the Chowkidars, and recorded that the defendant
No. 1 had neither denied receipt of the said correspondence nor disputed
the employment of 24 Chowkidars. The Arbitrator also took into
account the circulars of the Delhi Development Authority providing for
watch and ward charges during the extended period of a contract.
Accordingly, the Arbitrator allowed charges at the rate of Rs. 7,700/-
per month, amounting to Rs. 4,40,183/- for the period from 21.10.1990
to 25.07.1995 under Additional Claim No. 2, and Rs. 3,17,240/- for the
period from 26.07.1995 to 31.12.1998 under Additional Claim No. 3.
The relevant findings of the Arbitrator read as under:-
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SRIVASTAVA
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“Thus, no formal defect, as such, was pointed out in the said
completion certificate which required rectification by the
Claimants. Only an obligation was cast upon the Claimants
that as and when such defects would surface, Claimants are
bound to rectify the same. There is nothing on record to
suggest that an eventuality arose when the Respondents
required to Claimants to rectify defects under the said 16
conditions. That the completion certificate was recorded
without any actual defects and therefore, it does not lies in
the mouth of the Respondents that the Claimants were to
actually rectify any defects. Even no notice was issued by
the Respondents for rectification of defects till the flats were
handed over to the allottees.
A bare perusal of letter dated 8.11.1990, Exhibit C-17,
shows that the Claimants requested the Respondents to take
over the possession of the site. They put the Respondents on
notice that in case the possession was not taken the
Respondents shall be liable for the salary of the Chowkidars
with interest. Vide letter dated 20.10.1992, exhibit C-18, the
Claimants have informed to the Respondents that they have
employed 24 Chowkidars and if the possession is not taken
the salary of such Chowkidars shall be charged from the
department with interest. Same was reiterated vide letter
dated 16.11.1992, exhibit C-19, letter dated 05.06.1996,
exhibit C-24, letter dated 18.06.1997, exhibits C-26, Letter
dated 17.06.1998 C-27 and also in some other exhibits.
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SRIVASTAVA
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Respondents have not denied the receipt of the said letter.
Fact of employing 24 Chowkidars for the said period has
not been disputed by the Respondents in any of the
contemporaneous document/letter.
As per the Circular no. 509 dated 02.05.1997 of the
Respondents D.D.A. contractors are entitled for the watch
and ward charges during the operation of extended period
under the supplementary agreement for existing agreements
of housing and similar projects. Circular no. 510 dated
02.05.1997 of the D.D.A. provides for the charges payable
to the contractor for watch and wards in such cases of
extended period. The charges payable to a contractor under
the said circular is Rs.6,600/- per month for 150 or 200
S.F.S./M.I.G. category flats and Rs. 1100/- per month for
every additional 50 houses. However, under the said
circular the said charges are payable upon entering into a
supplementary agreement….”
140. It has been categorically admitted by the defendant No. 1, during the
proceedings dated 25.10.2007, stated that possession of 239 out of 256
flats remained in the plaintiff‟s possession until they were handed over
to the allottees up to 31.12.1998, which reads as under:-
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SRIVASTAVA
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141. Furthermore, in the Counter Statement of Facts, the defendant No. 1
stated that possession of the flats was with the plaintiff here till the
handing over of the same to the allottees. The relevant paragraphs of the
same read as under:
“The claim of the claimant is outside the purview of the
arbitration agreement between the parties. The completion
certificate of the above work was conditionally recorded on
19.10.1990 and as per the completion certificate, it is the
duty of the Claimant to rectify the defects before handing
over the possession of the houses to the allottees. Thus the
houses were in possession of the Claimant till the handing
over the possession to the allottees. Hence nothing is
payable on account of watch and ward.
The claim of the claimant is outside the purview of the
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SRIVASTAVA
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arbitration agreement between the parties. The completion
certificate of the above work was conditionally recorded on
20.10.1990 and the final bill of the claimant was paid on
31.5.1995. It is the duty of the Claimant to rectify the defects
before handing over the possession of the houses to the
allottees, which can be done only at the time of handing
over the possession. Hence nothing is payable on account of
watch and ward.”

142. The Arbitrator has rightly pointed out that the defects as referred to in
the aforesaid extract have not been disclosed in any way whatsoever by
the defendant No. 1. Among the 16 conditions recorded by the
defendant No. 1 at the time of completion, not even one was in the form
of a defect. Rather, they only created an obligation on the plaintiff to
rectify such defects, in case the said defects arose in the future.
143. A perusal of the documents shows that the plaintiff had made multiple
requests asking the defendant No. 1 to take over possession of the site
and even put the defendant No. 1 on notice that if the same is not done,
defendant No. 1 would be liable to pay salary of the security stationed at
the site along with interest. Details of the same were also divulged by
the plaintiff vide letter dated 20.10.1992, exhibited as Exhibit C-18, and
other subsequent letters addressed to the defendant No. 1.
144. Reliance has further been placed by the Arbitrator on the defendant No.
1/DDA‟s circulars bearing Nos. 509, 510 and 520, as per which
contractors were entitled to watch and ward charges during the
operation of the Agreement‟s extended period of an agreement for
housing and similar construction projects.
Signed By:ANSH
SRIVASTAVA
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145. The Arbitrator has also rightly relied on K.R. Builders (P) Ltd. v. DDA,
2007 SCC OnLine Del 1333 wherein in a similar factual matrix, the
claim for watch and ward charges was awarded by the Court basing the
same on the above referred circulars of defendant No. 1/DDA. The
relevant paragraphs read as under:-
“109. In my considered view, the testimony does give an
impression that the period for execution of the contract was
initially extended without levy of penalty which would only
arise if the plaintiff was not at fault, There were some defects
found but the testimony shows that the defects were removed
during the maintenance period. Thereafter it was the
responsibility of the defendants to have looked after the site.
The plaintiff claims watch and ward charges as per formula
provided by the defendants themselves in Exs. P1 and P2,
The only real plea raised is that the circulars do not apply as
defects were not removed but DW1 himself has stated that
defects were removed during maintenance period and no
monies have been spent by the defendants for carrying out
rectification.
110. The plaintiff is, thus, entitled to the amount of Rs.
2,90,400/- as watch and ward charges worked out as per
formula of the defendants.”
146. Therefore, the view taken by the Arbitrator is plausible and reasonable
and based on the material placed before the Arbitrator, and does not
warrant my interference under Sections 30 and 33 of the Act.
Additional Claim No. 4
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SRIVASTAVA
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147. A simple interest of 18% per annum was awarded on the amount under
claim Nos. 1, 2, 3 and additional claim No. 1 with effect from
20.04.1991 to 22.08.1995 (the date of invocation of Clause 25 of the
agreement). Thereafter, the awarded amounts carried simple interest of
10% per annum till the date of the award. Simple interest of 10% per
annum was also awarded on the amount under additional claim No. 2
from 22.08.1995 till the date of the award, and on the amount under
additional claim No. 3 from 01.01.1999 till the date of the award. The
awarded amount further carries future simple interest of 8% per annum
till the date of realisation, as against a claim of 24% per annum for pre-
suit, pendente lite and future interest.
148. The defendant No. 1 has disputed the said amount awarded as interest
on account of same being excessive and in the nature of punitive
interest.
149. The view of the Arbitrator is as under:-
“Additional Claim No. 4: Claimants claim for presuit,
pendentelite and future interest @ 24% per annum.
Claimants have claimed pre-suit, pendent elite and future
interest @24% p.a. Claimants under the contract were
entitled to receive final bill payment within or by six months
from the date of completion of the work. Thus amount
awarded under claims no.1, 2, 3 and additional claim no.1
should have been paid to the Claimants at the most by
19.04.1991. Further, the Claimants have submitted that the
Respondents while effecting recoveries from the R/A Bill of
the Claimants have charged interest @18% p.a. from the
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SRIVASTAVA
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similar work executed by the same Claimant simultaneously
under the same head and during the same period. And the
Claimants have paid the said interest to the Respondents.
This fact has not been denied by the Respondents. Claimants
have also relied and referred the Judgement of the Hon'ble
Supreme Court in Bhagwati oxygen Ltd. Vs Hindustan
Copper Ltd. Reported as 2005 (1) ALR608 (SC) wherein
award of interest @18% p.a. has been upheld on the plea
that the Employer has charged/recovered at the said rate of
Interest. Considering the facts that Respondents recovered
interest @ 18% p.a. from the Claimants as stated above.
Hence, I am of the opinion that the Claimants are also
entitled for the same rate of Interest at which was recovered
from the Claimants by the Respondents from the similar
work, only up to the date of invocation of Clouse 25 of
agreement. Hence, I award simple interest @18% p.a. on
the amount awarded under claims no.1, 2, 3 and additional
claim no.1 with effect from 20.04.1991 till 22.08.1995 that
is to the date of invocation of Clause 25 of the agreement.
Thereafter, the said awarded amounts shall carry simple
interest @10% p.a. till the date of award. I award simple
interest @10% p.a. upon the amount awarded under
additional claim no.2 with effect from 22.08.1995 till the
date of the award. Respondents shall pay simple interest
@10% p.a. with effect from 01.01.1999 till the date of
award upon the awarded amount against additional claim
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SRIVASTAVA
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no.3. The awarded amount shall carry future simple interest
@8% p.a. till the date of realization.”
150. In a catena of judgements, it has been stated that an arbitrator is not
prohibited from granting interest under the Act. The Hon‟ble Supreme
Court in Ferro Concrete Construction (India) (P) Ltd. v. State of
Rajasthan, 2025 SCC OnLine SC 708 held as under:-
“8. The position of law on the grant of interest under the
1940 Act and the 1996 Act is well-settled . The constitution
bench decisions of this Court in GC Roy (supra) and NC
Budharaj recognised the arbitrator's power to grant pre-
reference, pendente lite, and post-award interest on an
arbitral award made under the 1940 Act unless there is a
contractual bar.”
(emphasis supplied)
151. A similar view has been taken by a two-judge bench of the Hon‟ble
Supreme Court in Pam Developments (P) Ltd. v. State of W.B., (2024)
10 SCC 715 , the relevant paragraph for which reads as under:-
“23. The power of the arbitrator to grant pre-reference
interest, pendente lite interest, and post-award interest
under Section 31(7) of the Act is fairly well-settled. The
judicial determinations also highlight the difference in the
position of law under the Arbitration Act, 1940. The
following propositions can be summarised from a survey of
these cases:
23.1. Under the Arbitration Act, 1940, there was no specific
provision that empowered an arbitrator to grant interest.
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However, through judicial pronouncements, this Court has
affirmed the power of the arbitrator to grant pre-reference,
pendente lite, and post-award interest on the rationale that
a person who has been deprived of the use of money to
which he is legitimately entitled has a right to be
compensated for the same. [State of Orissa v. G.C. Roy,
(1992) 1 SCC 508, para 43(i). Also see State of Orissa v.
N.C. Budharaj, (2001) 2 SCC 721; Union of India v.
Krafters Engg. & Leasing (P) Ltd., (2011) 7 SCC 279 :
(2011) 3 SCC (Civ) 533] When the agreement does not
prohibit the grant of interest and a party claims interest, it
is presumed that interest is an implied term of the
agreement, and therefore, the arbitrator has the power to
decide the same. [State of Orissa v. G.C. Roy, (1992) 1 SCC
508, paras 43 (iv) & 44]”
(emphasis supplied)
152. A perusal of the aforesaid clearly shows that view of the Arbitrator is
reasonable and plausible, and does not warrant this Court‟s interference
under Sections 30 and 33 of the Act.
Additional Claim No. 6 (as set out in CS (OS) 362/2008)
153. A total sum of Rs. 1,41,151/-, as against the claim amount of Rs.
1,60,151/-, was awarded by the Arbitrator, being the refund of the
amount deposited by the plaintiff on 02.09.2004 as per direction of
defendant No. 1 vide their letter bearing No.
EE/HD.XXIII/A/I(180)2004-05/1131 dated 03.08.2004.
154. The defendant No. 1 has argued that the said claim was never referred
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SRIVASTAVA
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by the Engineer Member, DDA, and therefore, the Arbitrator exceeded
his jurisdiction. The defendant No. 1 having responded to the merits of
the claim does not give authority to the arbitrator to adjudicate on the
same, if it does not already exist.
155. The Arbitrator noted that the defendant No. 1 sought the recovery for
the first time by its letter dated 03.08.2004, about nine years after the
final bill and fifteen years after completion of the work, on the threat of
blacklisting, and that the plaintiff deposited the amount under protest.
The Arbitrator rejected the objection to maintainability. He held that the
cause of action arose only in 2004, and the plaintiff sought arbitration of
the claim by its letter dated 18.04.2007, and that the claim was duly
referred through the letter dated 23.05.2007 of the Engineer Member,
DDA. The same was within limitation, and directly related to the
Agreement. He further noted that the defendant No. 1, despite raising
the objection, filed a reply and argued the claim on merits. The
Arbitrator held as under:-
“After going through the submissions made by the parties
Including oral arguments and the documents placed on the
record, I am the opinion that the Respondents inspite of
raising objection that this claim was not referred by the
Engineer Member, D.D.A., and Respondents filed their
reply of this claim, denied and argued the claim on merits.
Hence, I am of the opinion that I can adjudicate this claim.
After going through the submissions and documents placed
on record, I find that the objection of the Respondent as to
maintainability of the Claim is totally unjustified.
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SRIVASTAVA
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Respondents have not denied that the recovery was sought
to be made by them vide their letter dated 03.08.2004 for
the first time. Such recovery, as per the Respondents, were
sought to be effected under Clause 12 of the agreement
between the parties. It is also not disputed that the,
Claimants deposited the said amount of Rs. 1,41,151/- vide
cheque dated 02.09.2004 Claimants stand is that they have
made/deposited such payment under protest. Claimants
sought arbitration of this claim through their letter dated
18.4.2007. There was no occasion for the Claimants to seek
redressal of the instant grievance on earlier occasion as the
cause of action in relation thereof arose for the first time
only in the year 2004. I have already held that the letter
dated 23.05.2007 issued by the Engineer Member, D.D.A. is
to be treated as final reference for the arbitration. This
claim was duly referred subject however to the limitation
and objections of the Respondents. Present Claim is within
the limitation; it has been referred for arbitration and
admittedly directly related with the agreement between the
parties. Therefore, the preliminary objection as to the
maintainability of the claim of the Respondents is without
any merits and decided against them.”
156. With respect to jurisdiction, the Arbitrator had already held that the
letter dated 23.05.2007 is the final reference, and the claim was raised
by the plaintiff in its letter dated 18.04.2007, which the reference
covered.
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SRIVASTAVA
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157. On merits, the Arbitrator found that the defendant No. 1 neither pleaded
nor placed on record any document to justify the recovery. The
deviation statement was never produced, its date of approval was not
stated, and no notice was given to the plaintiff after the final bill was
paid. There was no justification for a recovery under Clause 12 more
than nine years after the final bill, when the extension of time had been
granted on 08.11.1990 and any variation in rates could have been
accounted for in the final bill itself.

158. The defendant No. 1, by its letter dated 03.08.2004, directed the plaintiff
to deposit a sum of Rs. 1,60,151/- on account of the sanction of a
deviation item under Clause 12 of the Agreement, and the plaintiff
deposited it on 02.09.2004 under threat and compulsion. The defendant
No. 1 admitted the demand and the deposit in its Counter Statement of
Facts, the relevant paragraph is reproduced hereinbelow:
“The claim of the claimant is outside the purview of the
arbitration agreement between the parties. The Respondent
rightly recovered a sum of Rs. 1,60,151/-from the Claimant
on account of sanction of the deviations item as per Clause
12 of the agreement. At the time of the payment of final bill
the Respondent withheld minimum amount for approval of
deviation statement, which was approved after the payment
of the final bill. Hence the question of the refund of the
amount deposited by the Claimant does not arise.”
159. The only justification offered was that the deviation statement was
approved after the final bill was paid. Once the demand and the deposit
are admitted, it was for the defendant No. 1 to justify the recovery but it
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SRIVASTAVA
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adduced no material to do so. A deposit made under threat of
blacklisting is also not voluntary, and the defendant No. 1 cannot treat it
as a settlement. The Arbitrator was therefore entitled to direct a refund.
160. Therefore, the view of the Arbitrator is both reasonable and plausible,
and does not warrant this Court‟s interference under Sections 30 and 33
of the Act.
CONCLUSION
161. Therefore, I am of the view that the defendant No. 1 has failed to make
out any ground under Sections 30 and 33 of the Act. The claims are held
to be within limitation, and Clause 7 of the Agreement creates no bar.
Arbitration was invoked once, on 22.08.1995, and the reference of
23.05.2007 was a continuation of that invocation. The defendant No. 1
consented to the enlargement of time for making and publishing the
Award and participated in the proceedings, and cannot now invoke
Section 28 of the Act. The defendant No. 1 has also not shown any
misconduct on the part of the Arbitrator, any error apparent on the face
of the Awards, or any perversity. It has failed to demonstrate that the
Arbitrator allowed any claim contrary to any clause of the Agreements.
The Awards are reasoned, and the findings on each claim are based on
the pleadings and documents before the Arbitrator.
162. In the circumstances, I find no grounds to interfere with the Impugned
Awards dated 31.01.2008 and 28.01.2008 passed by the Arbitrator. The
objections of the defendant No. 1 are rejected and accordingly, I.A. Nos.
4749 of 2008 and 4753 of 2008 are dismissed.
163. Accordingly, the Awards dated 31.01.2008 and 28.01.2008 are made
Rule of the Court. Decree sheets be drawn up accordingly.
Signed By:ANSH
SRIVASTAVA
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164. The suits are disposed of in the aforesaid terms with pending
applications, if any.

JASMEET SINGH, J.
th
OCTOBER 28 , 2026/(SR)
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SRIVASTAVA
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