UNION OF INDIA vs M/S ANS CONSTRUCTION LTD
$~47
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 24.01.2024
+ FAO(OS) (COMM) 299/2018
UNION OF INDIA ….. Appellant
Through: Mr. T.P. Singh, Senior Central Govt. Counsel.
versus
M/S ANS CONSTRUCTION LTD ….. Respondent
Through: Mr. Sandeep P. Agarwal, Senior Advocate with Mr. Sushil Aggarwal, Advocate.
CORAM:
HON’BLE MR. JUSTICE RAJIV SHAKDHER
HON’BLE MR. JUSTICE AMIT BANSAL
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL)
1. This appeal is inter alia, directed against the order dated 23.03.2018.
1.1. Besides this the appeal also seeks to assail the award dated 26.07.2017 and the order dated 13.09.2017 passed by the learned arbitrator.
2. A perusal of the impugned order shows that during the course of the hearing, the respondents senior counsel, i.e. Mr. Sandeep P. Agarwal brought to the notice of the Court a letter dated 05.12.2017 offering a settlement in the matter. For convenience, the said letter is extracted hereafter:
M/s ANS Construction Ltd.
E-2/B.1, Extn. Mohan,
Co-op. Indl. Estate,
Mathura Road,
New Delhi- 110044
Sub- Award dated 26.07.2017 made by Shri V.K, malik,. Arbitrator in regard to the disputes arising of out of agreement No. 21/EE/LCD-II/2010-11 and referred to arbitration in arbitration case no. ARB/VKM/229.
Dear Sirs,
With reference to the award mentioned above, I am to say that the President of India has decided to accept the award for total amount of Rs.64,26,089/- ((Rs.24,53,937/- (against Claim No. – 8 + Rs. 11,45,980/- (rectified as per mutual consent) ( against Claim No. -9 / + Rs.2,12,426/- (part) (against Claim NO. -17 + Rs.9,15,389/- (against Claim No. -18)) i/c Interest @11% from 21.04.2014 to 26.07.2017 of Rs.16,98,357/- against total corrected amount of Award of Rs.1,10,67,412/-(original award amount is Rs.1,15,10,481/-) i/c interest @11% from 21.04.2014 to 26.07.2017 provided you accept the same as final and binding. Please intimate that you agree to accept payment of the sum awarded in full and final settlement of all your claims forming the subject matter of the reference to arbitration in the above case.
Yours faithfully
Executive Engineer
For and on behalf of the President of India
[Emphasis is ours]
3. Counsel for the appellant/Union of India (UOI) says that the settlement was only vis-à-vis claims referred to in the letter and not the counterclaims.
3.1. This very argument was raised before the learned Single Judge. The learned Single Judge, having examined the award, has rejected this argument for good reasons.
4. The record shows that the appellant had raised two counterclaims. 4.1. The first counterclaim concerned the imposition of liquidated damages. The claim made in this behalf by the appellant amounted to Rs.2,22,08,532/-. Concededly, the counterclaim raised concerning liquidated damages was rejected.
4.2. The second counterclaim concerned mobilisation advance. The mobilisation advance counterclaim was partially allowed by the Arbitral Tribunal. The appellant was awarded Rs.15,20,320/- towards the said counterclaim. Importantly, the sum awarded against mobilisation advance was adjusted by the Arbitral Tribunal against the amount awarded in favour of the respondent.
4.3. The amount awarded in favour of the respondent by the Arbitral Tribunal before adjustment was Rs.1,30,30,801/-. After adjustment of the mobilisation advance of Rs.15,20,320/-, the net amount awarded in favour of the respondent was Rs.1,15,10,481/-, which, we are told was corrected to Rs.1,10,67,412/-, as is reflected in the learned Single Judges order and the letter dated 05.12.2017.
5. The learned Single Judge, in this behalf, has made the following observations:
6. Mr Bhardwaj, the learned counsel appearing for the petitioner states that the said letter only refers to the settlement with regard to the claims preferred by the respondent and does not refer to the counter claims preferred by the petitioner, which were also subject matter of the impugned award.
7. The said contention is unpersuasive. A bare perusal of the aforementioned letter indicates that the petitioner had offered a consolidated sum of ?64,26,089/- against the corrected award of ?1,10,67,412/- in favour of the respondent. The said amount also includes adjustment of the counter claims awarded in favour of the petitioner. Thus, it is obvious that the settlement offered by the petitioner not only includes the claims preferred by the respondent but also the counter claims preferred by the petitioner.
8. It is seen that the petitioner had preferred two counter claims. The first claim was with regard to the imposition of liquidated damages for a sum of ?2,22,08,532/-. The said liquidated damages were imposed on account of delay on the part of the respondent in executing the works. The Arbitral Tribunal had rejected the said claim, essentially, on two grounds; first, it found that both the parties were responsible for the delay, and second, that there was no evidence produced by the petitioner for substantiating its claim. In view of the above findings, the Arbitral Tribunal not only rejected the counter claim on account of liquidated damaged but, consequently, also allowed the respondents claim (Claim no 17) for recovery of ?83,43,285/- from the running bills for non achievement of milestones. It is seen that Claim no.17 has been specifically mentioned in the aforesaid letter dated 05.12.2017 as a part of the settlement.
9. The second claim made by the petitioner was with regard to the mobilization advance. A sum of ?15,20,320/- had been awarded to the petitioner against the aforesaid counter claim, which was adjusted against the amount of ?1,30,30,801/- awarded in favour of the respondent. Thus, a net a sum of ?1,10,67,412/- was awarded in favour of the respondent. Thus the amount of counter claim awarded in favour of the petitioner had been adjusted to arrive at the final award of ?1,10,67,412/- which, admittedly, forms a part of the settlement offered by the petitioner.
10. There is yet another aspect that clearly indicates that some of the claims awarded to the petitioner are predicated on the basis that the respondent was not solely responsible for delay in execution of the project. The petitioner having agreed to settle the claims awarded on the said basis cannot now urge that there was no delay on the part of the petitioner and liquidated damages ought to be imposed on the respondent.
11. Since, there is no dispute that the petitioner had sent the letter offering the settlement as stated therein and that the respondent had accepted the same, the petitioner cannot be permitted to resile from its offer.
12. The present petition is disposed of in view of the settlement arrived arrive between the parties. All pending applications are also disposed of.
6. Therefore, the argument advanced on behalf of the appellant/UOI that the offer of settlement conveyed through the letter dated 05.12.2017 did not relate to counterclaims is misconceived; an aspect which has been dealt with by the learned Single Judge.
7. For the foregoing reasons, we find no merit in the appeal. The appeal is, accordingly, dismissed.
RAJIV SHAKDHER, J
AMIT BANSAL, J
JANUARY 24, 2024
B.S. Rohella
FAO(OS) (COMM) 299/2018 Page 2 of 2