Case Analysis: Associate Builders V. Delhi Development Authority

Ms Bhumika Dandona, BBA-LLB (H.), Sushant University (erstwhile Ansal University), Gurugram, Haryana

Citation: 2014 SCC OnLine SC 937

Facts of the case

1. Delhi Development Authority (DDA), the defendant, awarded a construction work contract to the appellant. The latter had to build 168 Middle Income Group houses and 56 Lower Income Group houses, as per the contract. The tendered amount for the same was Rs.87,66,678. The appellant had to finish it within nine months. However, the work came to an end only within thirty-four months and was not fully complete.

2. The appellant asserted the delay in construction of the houses as a result of the defendant's defaults. The appellant made around fifteen claims regarding these defaults. The High Court of Delhi then appointed a sole arbitrator to arbitrate upon the matter.

3. After going through all the claims, the arbitrator came down to the four specific ones that were the most relevant. Allowing these four claims and upholding that the resulting delay was indeed the respondent’s (defendant) fault, the arbitrator stated that the respondent failed to fulfill its obligations, causing a delay in the work. It also led to the claimants (appellant) incurring heavy monetary losses to deal with the same.

4. Subsequently, the defendant appealed to the Delhi High Court. It raised its objections to the arbitral award before the Single Judge. However, the learned Single Judge dismissed the same and sustained the arbitrator's decision.

5. The defendant then appealed to the Division Bench of the same Court under section-37 of the Arbitration and Conciliation Act, 1996, challenging the single judge's judgment. The two-judge bench overruled the single judge's decision, nullifying those four claims. The judges then came down to another two claims, setting aside the award given by the arbitrator.