Salar Jung Museum & Anr vs Design Team Consultants Pvt Ltd
FACTS OF THE CASE:
The Salar Jung Museum of Hyderabad houses a significant collection of art and other objects. In the year 1989, it decided to open additional buildings and organized a national level open architectural competition for this purpose. Design Team is a firm of architects from New Delhi. They participated in the competition and submitted models, designs, and rough cost estimates by way of a project report. They were declared the winner of the competition. The Museum and the Architects thus entered into a contract dated 17 January 1991 at Andhra Pradesh Bhawan, New Delhi, for designing, making detailed architectural drawings, and supervision of construction of additional buildings of the Museum. The preliminary estimated cost of construction was initially 5.94 crores, and the contract was for a period of five years
The Architects were required to complete designs, and supervise the construction, undertaken by National Building Construction Corporation. On May 5th, 1991 the Architects intimated that the cost of construction had to be increased to 10.52 crores this was not approved by the museum. On 11th August 1993, the architects submitted a revised estimated cost for construction which was 7.52 crores, and this was accepted by the museum. The architects on 4th January 1994 and on 13th January 1994 were informed by letters to prepare estimates without exceeding 7.52 crores.
The parties were unable to agree on the amount due to the Architects under the contract. The Architects contended that the work undertaken under the contract was more extensive than the original proposal resulting in the cost of work increasing from the proposed estimate of 5.94 crores to 10.52 crores. The Museum contended that the Architects were only entitled to remuneration based on the estimate of 5.94 crores, which they had submitted at the stage of the design competition.
In the interregnum, the Architects initially constituted as a partnership firm had reconstituted into a private limited company by the name of Design Team Consultants. It is this company that is claimed in the arbitration proceedings and is the respondent in the present petition. The Museum resisted the claim on this ground also, arguing that the takeover of the Architects' firm by the company could not relate to the contract, which had expired on 16 January 1996. The Architects contended, on the other hand, that the company had taken over all the assets and liabilities of the erstwhile firm, and that this was conveyed to the Museum by way of the communication dated 19 September 1996.
The disputes led to the invocation of arbitration by the Architects, and an application filed by them before this Court under Section 11 of the Act. By an order dated 27 August 2002, the Court-appointed Justice R.P. Gupta, as the sole arbitrator.
By way of the impugned award dated 26 December 2008, the learned arbitrator awarded consultancy fee in favor of the Architects, reckoned upon the final cost estimate of 7.52 crores. The balance amount awarded under this head was computed as 8,96,315.
So, by the petition under Section 34 of the Act, the Museum seeks setting aside of this Award.
ISSUE OF THE CASE:
The impugned award was rendered by a sole arbitrator in favor of the respondent. So, a petition was filed under section 34 seeking to set aside the award.
JUDGMENT OF THE CASE:
The court decided that the issue of entitlement of the company claim under the contract, the court found no ground to interfere with the award. And the petition was therefore dismissed.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.