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The appellant was awarded the work relating to the construction of residential and non-residential building at Central Excavation Training Institute (CETI) vide work order dated 25.2.1987 for an amount of Rs.68,91,589/-. Appellant submits that for want of final drawings and delay in the supply of cement and other construction materials, including supply of water, the work was delayed, but completed on 1.4.1989 and handed over the buildings to the respondent. We are of the view that the High Court was not justified in interfering with the amount awarded in respect of the water charges which comes to Rs.1,68,890.25. Going by the general terms and conditions of the contract, in our view, the department was bound to supply water, so found by the arbitrator, in our view, rightly. Therefore, that part of the award of the Arbitrator, with regard to the water charges, is upheld. However, the High Court, in our view, rightly denied the claim with regard to plaster of paris, therefore, not interfered with. Appeals are disposed of accordingly, subject to the above modification of the judgment of the High Court. However, there will be no order as to costs.

Non-Reportable

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

 

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6262 OF 2012
@ Special Leave Petition (C) No.24337 of 2009
NAND CONTR. & ENGR. THR G.D. AHUJA … Appellant(s)

Versus

NORTHERN COAL FIELD LTD. & ANR. … Respondent(s)

WITH

CIVIL APPEAL NO. 6263 OF 2012
@ Special Leave Petition (C) No.31125 of 2009

CIVIL APPEAL NO. 6265 OF 2012
@ Special Leave Petition (C) No.10681 of 2011

CIVIL APPEAL NO. 6264 OF 2012
@ Special Leave Petition (C) No.32878 of 2009
And
CIVIL APPEAL NO. 6266 OF 2012
@ Special Leave Petition (C) No.18183 of 2009
J U D G M E N T

 

K.S. Radhakrishnan, J.

 

1. Leave granted.

2. We may take up Civil Appeal arising out of Special Leave Petition (C)
No.24337 of 2009 as a lead case which arises out of a common judgment dated
14.11.2007 of the High Court of Madhya Pradesh at Jabalpur. In the first
three appeals, we are concerned with the claim on interest alone and, in
the other two appeals, the question involved is with regard to the claim
for interest, water charges and the cost of plaster of paris.

 

3. The appellant was awarded the work relating to the construction of
residential and non-residential building at Central Excavation Training
Institute (CETI) vide work order dated 25.2.1987 for an amount of
Rs.68,91,589/-. Appellant submits that for want of final drawings and
delay in the supply of cement and other construction materials, including
supply of water, the work was delayed, but completed on 1.4.1989 and handed
over the buildings to the respondent. There was delay on the part of the
respondents in preparing and sanctioning the final bills which gave rise to
various disputes and ultimately the matter was referred to a sole
arbitrator. The arbitrator passed an award dated 30.10.1999 on the claims
made by the appellant including claims for water charges and plaster of
paris. So far as the claim for interest is concerned, the arbitrator
awarded simple interest @ 15% per annum from six months of the date of
completion i.e. 1.4.1989 on all the amounts awarded till the date of
payment. Further, it was also ordered that in case the payment was delayed
beyond three months of the date of the award, interest be paid @ 18% per
annum from the date of payment. No payment was made within three months
from the date of the award. Hence, according to the appellants, as per the
award he was entitled for 15% interest from six months of the date of
completion i.e. 1.4.1989 on the amounts awarded by the Arbitrator till the
date of payment.

 

4. Award passed by the Arbitrator was challenged by the respondent
before the First Additional District Judge, Sidhi who did not upset the
award on merits, but modified the interest awarded by the Arbitrator and
substituted with 12% per annum simple interest from the date of the award
i.e. 31.10.1999 till the date of payment. Aggrieved by the said order,
appeals were preferred by the appellant before the High Court. The High
Court disposed of all the appeals, reducing the interest to 10% per annum.
The High Court has also set aside the award on the claim for water charges
and plaster of paris. Being aggrieved by the judgment, as already stated,
these appeals have been preferred by the appellant.

 

5. We have heard Shri Rohit Arya and Shri Mahabir Singh, learned senior
counsel, appearing for the appellant and respondents, respectively. Mr.
Rohit Arya, learned senior counsel submitted that that the High Court as
well as the District Court were not justified in interfering with the well
considered award passed by the Arbitrator. Learned senior counsel
submitted that the reasons stated by the High Court are incorrect and
contrary to the terms of contract as well as documents produced before the
arbitrator. Learned senior counsel submitted that the Arbitrator was
justified in allowing the claim of water charges to the tune of
Rs.1,68,890.25. Reference was also made to clauses 5(a) and (b) of
General Conditions applicable to the contract and submitted that it is the
responsibility of the respondents to supply the water at their costs.
Learned senior counsel also submitted the claim for plaster of paris which
was rightly allowed by the arbitrator and there was no reason to interfere
with the same.

6. Shri Mahabir Singh, learned senior counsel appearing for the
respondents, on the other hand, submitted that there is no reason to
interfere with the judgment of the High Court which has rightly rejected
the claims on water charges and plaster of paris and also reduced the rate
of interest. Further, no question of law arises for consideration in these
appeals.

7. We are of the view that the dispute between the parties lies in a
narrow compass. We find that the arbitrator has awarded simple interest @
15% per annum from six months of the date of completion i.e. 1.4.1989 on
the amounts awarded till the date of payment. The High Court thought it
fit to reduce the rate of interest to 10% per annum, which we find no
reason to disturb. The period for which the Arbitrator has awarded the
interest will remain the same. The appellant, therefore, would be entitled
to get interest at the rate of 10% per annum from 1.4.1989 till the date of
payment.

 

8. We are of the view that the High Court was not justified in
interfering with the amount awarded in respect of the water charges which
comes to Rs.1,68,890.25. Going by the general terms and conditions of the
contract, in our view, the department was bound to supply water, so found
by the arbitrator, in our view, rightly. Therefore, that part of the award
of the Arbitrator, with regard to the water charges, is upheld. However,
the High Court, in our view, rightly denied the claim with regard to
plaster of paris, therefore, not interfered with. Appeals are disposed
of accordingly, subject to the above modification of the judgment of the
High Court. However, there will be no order as to costs.
…………………………………J
(K.S. Radhakrishnan)
…………………………………J
(Dipak Misra)

New Delhi,
September 4, 2012

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