DELHI DEVELOPMENT AUTHORITY versus M/S R.S. SHARMA & CO., NEW DELHI

Citation: [2008] 12 S.C.R. 785 · Decided: 26-08-2008 · Supreme Court of India · Bench: P. SATHASIVAM · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2008] 12 S.C.R. 785 
"'1 
DELHI DEVELOPMENT AUTHORITY 
A 
V. 
MIS R.S. SHARMA & CO., NEW DELHI 
(Civil Appeal No. 2424 of 2002) 
AUGUST 26, 2008 
B 
[P. SATHASIVAM AND AFTAB ALAM, JJ.] 
~ 
--+ 
Arbitration and Conciliation Act, 1996 - s. 34(2) -Setting 
aside of arbitration award - Principles therein - Discussed -
On facts, work for development of land between DOA and c 
contractor- Disput~ with regard to extra cartage, stone brought 
from Nooh quarries in Haryana to Delhi - Claim of extra rate 
@ Rs.301- per cubic mtr - Award in favour of contractor -
However, Single Judge of High Court set aside the award in 
respect of claims for extra cartage but Division Bench upheld D 
the same - Held: Not justified - Extra cartage was awarded 
7 
without adverting to clause 3. 16 of agreement, which prohibits 
~ 
extra cartage over and above the rate of payment specified in 
" 
the Agreement - Contractor is wholly responsible for all extra 
leads - Arbitrator gave no reasons for accepting the claim, 
E 
thus there is error apparent on face of award- There is nothing 
on record to show that Department insisted upon bringing 
stone aggregate only from Nooh -
Hence, contractor not 
entitled to increased rates for extra lead- Judgment of Division 
Bench of High Court set aside and that of Single Judge restored. 
,1"'-. l. 
F 
... 
The appellant-Delhi Development Authority and the 
respondent-Company entered into work agreement for 
development ·Of the land according to the terms and 
conditions of the contract. During execution of the work, 
dispute arose between the parties, with regard to extra 
G 
cartage-stone brought from Nooh, Ha.ryana. The dispute 
:__y~ 
,, was referred to the Sole Arbitrator for adjudication. The 
claimant raised claim Nqs. 1-3 and additional claim Nos. 
1-3 claiming extra rate ·of Rs.30/- per cubic meter over and 
785 
·H 
786 
SUPREME COURT REPORTS 
[2008] 12 S.C.R. 
A above th.e rate agreed to in the Agreement for extra cartage 
involved in bringing the stone aggregate from Nooh 
'quarries to Delhi. It was claimant's case that it was required 
to use Delhi. quartz stone conforming to C..PWD 
specifications; that since DDA had failed to indicaJe the 
B approved quarry at Delhi for obtaining supplies of Delhi 
quartz stone, it had obtained blue quartz stone from Nooh 
quarries in Haryana, thus, the . claimant was entitled to 
extra rates at the rate of Rs .. 30/- per cubic meter for 
procurement of stone aggregate from the quarries at Nooh 
c in Haryana. The Arbitrator made the Award in favour of 
respondent. The respondent filed suit for making the 
Award a rule of the Court. The Single Judge of the High 
Court set aside the Award with respect to Claim Nos. 1 to 
. 3 as well as Additional Claim Nos. 1 to 3 and made the 
0 · remaining part of the Award c:{rule of the Court. It awarded 
interest @ 12% p.a. from the date of the decree till the 
. date of payment by DDA. However, the Division Bench bf 
the High Court set aside the order passed by the Single 
Judge and directed that the Award passed by the Arbitrator 
b~ made a Rule of the Court along with interest @ 12% 
E p.a. from the date of the decree till the date of payment on 
the entire amount as awarded. by the Arbitrator. Hence 
the present appeal. 
F 
· - Allowing the appeal, the Court 
HELD: 1. An Award, which is contrary to substantive 
. provisions- of law ; or the provisions of the Arbitration 
and Conciliation Act, 1996 ; or against the terms of the 
respective contract ; or patently illegal, cfrf)'rejudicial to 
the rights of the parties, is open to interference by the 
G 1 Court under section 34(2) of the Arbitration and 
Conciliation-Act, 1996. An award could be set aside if it is 
contrary to fundamental policy of Indian Law; or the 
interest of India; or justice or morality. The Award could 
also be set aside if it is so unfair and unreasonable that 
H it shocks the conscience of the Court. It is open to the 
,.! 
+ 
l 
DELHI DEVELOPMENT AUTH. v. MIS R.S. 
787 
SHARM/'. &. ~O., NEW DELHI 
Court to consider whether the Award is against the . A 
specific terms of contract and if so, interfere with it on the 
ground that it is patently illegal and opposed to the public 
policy of India. [Para 12] [801-A-F] 
Grid Corporation of Orissa Ltd. & Anr. vs. 8alasore 
Technical School (2000) 9 SCC 552; General Manager, 
B 
Northern Railway & Anr. vs. Sarvesh Chopra (2002) 4 SCC 
45; State of Rajasthan vs. Nav Bharat Construction Co. (2006) 
1 sec 

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