Delhi High Court
Executive Engineer National Highway ... vs S&P Infrastructure Developers (P) Ltd on 4 July, 2022
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 04.07.2022
+ O.M.P. (COMM) 400/2020 and IA Nos.3006/2020, 3008/2020
& 3009/2020
EXECUTIVE ENGINEER
NATIONAL HIGHWAY DIVISION ..... Petitioner
versus
S&P INFRASTRUCTURE
DEVELOPERS (P) LTD. .... Respondent
Advocates who appeared in this case:
For the Petitioner : Mr. Udian Shamra, Mr. Manish Kumar, Ms.
Aarzoo Aneja & Mr. Jai Deep Khanna,
Advs.
For the Respondent : Mr. M. Dutta & Mr. Pavan Kumar
Chaturvedi, Advs.
CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act') impugning an arbitral award (hereafter the 'impugned award') dated 01.09.2019 delivered by the Arbitral Tribunal comprising of Mr B.D. Joshi, former Engineer-in-Chief, Himachal Pradesh PWD, Mr Kamlesh Kumar, former Additional Director General, Ministry of Road Transport & Highways, Government of India and Mr. S.N. Das, former Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 1 of 17 Signing Date:04.07.2022 Director General (Road Development) and Special Secretary to the Ministry of Road Transport & Highways, Government of India as the Presiding Arbitrator (hereafter the 'Arbitral Tribunal').
2. The respondent has opposed the present petition on the ground that it is barred by limitation. According to it, the application filed by the petitioner (I.A. No.3009/2020) seeking condonation of delay of forty-four days in filing the petition is liable to be rejected as this Court has no jurisdiction to condone the delay beyond the period of thirty days after the expiry of three months. Mr. Dutta, learned counsel for the respondent submits that the petitioner's application (I.A. No.3008/2020) seeking condonation of delay in re-filing the petition, is also liable to be dismissed. He submits that the petition, as initially filed on 13.01.2020, was non-est as it was not accompanied by the Arbitral Award; it was not signed; and the vakalatnama was defective. In addition, the petitioner had not filed any documents along with the petition. It has also not filed hard-copy of the petition as required. He referred to the decision of a Coordinate Bench of this Court in Union of India vs. Bharat Biotech International Ltd.: 2020 SCC online Del 483 in support of his contention that such a filing was liable to be considered as non-est.
3. The impugned award was rendered on 01.09.2019. Thus, three months' period for filing the petition expired on 01.12.2019. The petition was filed for the first time on 13.01.2020, which was beyond the period of thirty days after expiry of three months from the date of the impugned award.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 2 of 17 Signing Date:04.07.20224. Undisputedly, the delay beyond thirty days after expiry of three months as provided under Section 34(3) of the A&C Act, cannot be condoned. However, the petitioner claims that it had received the impugned award on 16.09.2019 and therefore, the petition was filed within the period of thirty days after expiry of the period of three months and the said delay can be condoned.
5. There is considerable controversy on the question whether the petitioner had received the impugned award on 16.09.2019 as claimed. Initially, it was contended before this Court that the award was received by post, however, there is no material to establish that the same was received on 16.09.2019. In the circumstances, on 21.08.2018, this Court issued an order directing the petitioner to file an affidavit as to the manner in which the award was received and the date on which it was received.
6. In compliance with the said order, the petitioner filed an affidavit affirmed by the Executive Engineer, National Highway Division, Bhagalpur stating that the impugned award was received on 16.09.2019 by hand in Patna from the representative of the Arbitral Tribunal. The award was rendered by the Arbitral Tribunal at New Delhi and it is difficult to understand as to why a representative of the Arbitral Tribunal would have delivered the same by hand in Patna. Further, the record also does not indicate as to who had delivered the award and to whom. The affidavit, affirmed by the petitioner, is based on the records and it does not appear that there is any record, which reflects as to who had handed over the impugned award to the petitioner.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 3 of 17 Signing Date:04.07.20227. Having stated the above, this Court also notices that the petitioner has produced an acknowledgement acknowledging the receipt of the impugned award.
8. In view of the above, this Court considers it apposite to proceed on the basis that the petitioner had received the award on 16.09.2019.
9. As noted above, the petitioner had filed the present petition on 13.01.2020 - after 44 days of expiry of the period of three months. This delay can be condoned if this condition is satisfied that the petitioner was prevented from filing the petition within the prescribed time for sufficient reasons. However, the principal controversy to be addressed is whether the filing on 13.01.2020 can be considered as valid. According to the respondent, the said filing is required to be treated as non-est. The petitioner had filed a total of 56 (fifty-six) pages on 13.01.2020. The petition was not signed by the petitioner. The vakalatnama was defective and it was not accompanied with any document including the impugned award. The petitioner was also required to file hard-copies of the petition but it had not done so. It had merely uploaded the petition electronically. Indisputably, in terms of the decision of a Coordinate Bench of this Court in Union of India vs. Bharat Biotech International Ltd. (supra), the said filing is required to be considered as non-est.
10. The petition as filed on 13.01.2020 was marked as defective and was re-filed on 19.02.2020, which is beyond the period that could be condoned. The petition, as filed on 19.02.2020, was also defective. It Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 4 of 17 Signing Date:04.07.2022 was re-filed on 22.02.2020, 26.02.2020, 27.02.2020, and finally on 02.03.2020.
11. There was an inordinate delay on the part of the petitioner to cure the defects. The petitioner has filed an application (I.A. No.3008/2020) seeking condonation of six days in re-filing the petition. The only reason for the delay stated in the application is that during the process of re-filing it was noted that certain annexures were incomplete and the counsel had to co-ordinate with the petitioner's office at Bhagalpur for the same.
12. As held by the Supreme Court in Northern Railway vs. M/S Pioneer Publicity Corporation Pvt. Ltd: 2017 (11) SCC 234, re-filing stands on a separate footing. However, the petitioner is not absolved from explaining the delay. In the present case, there is no explanation for the inordinate delay in re-filing the petition. According to the petitioner, there was only six days delay in re-filing the petition and the petitioner has sought condonation of such delay. However, if the initial filing was considered valid (as claimed by the petitioner), the delay in re-filing is far in excess of six days. As noted above, the petition was marked as defective and returned for re-filing on 15.01.2020. It was then re-filed thirty days later, that is, on 14.02.2020. The petition filed continued to be defective and was returned for re-filing on 17.02.2020. It was re-filed and returned under objections on several occasions and was finally re-filed on 02.03.2020.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 5 of 17 Signing Date:04.07.202213. In Delhi Development Authority v. Durga Construction Co.:
2013 (139) DRJ 133, this Court had highlighted that even though delay in re-filing does not fall within the limitation prescribed under Section 34(3) of the A&C Act, it would not be apposite for the court to take a liberal approach in condoning inordinate delays in re-filing as that would militate against the legislative intent of prescribing a shorter and inflexible period of limitation under Section 34(3) of the A&C Act. Since there is no application seeking condonation of delay in re-filing beyond the period of six days, the said delay cannot be condoned. The application seeking condonation of delay in re-filing the petition is, thus, liable to be rejected.
14. The petition, as initially filed, was not signed or accompanied by the impugned award. The copy of the impugned award was finally filed after 12.02.2020. The court fee was paid on 22.02.2020 and the signature was affixed on the petition on 13.02.2020. The petition, as filed, also bears a date of 13.02.2020. It is accompanied with a statement of truth which had been affirmed on 13.02.2020. Admittedly, the petition before this Court today is not the petition that was filed on 13.01.2020. While there is no cavil that the petitioner would be entitled to cure the defects, however, it is not open for the petitioner to amend the petition and file a fresh petition. Filing a fresh petition does not amount to curing a defect. The decision in the case of in Union of India vs. Bharat Biotech International Ltd.(supra) is binding on this Court.
15. The petition was, thus, filed beyond the period of thirty days after expiry of the period of three months of receipt of the impugned award.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 6 of 17 Signing Date:04.07.2022Therefore, it was filed beyond the prescribed period of limitation that can be condoned by this Court.
16. The petitioner's application for condonation of delay in re-filing is also rejected.
17. In view of the above, there is no requirement for this Court to now consider the petitioner's challenge on merits. However, this Court considers it apposite to briefly examine the same as well.
18. The impugned award was rendered in the context of disputes that have arisen between the parties in connection with the Agreement dated 05.07.2012 (hereafter 'the Agreement').
Factual Context
19. In the year 2008, the Ministry of Road Transport & Highways, Government of India (hereafter 'MoRTH') sanctioned the work regarding "widening and strengthening the road from km 167.00 to km 180.00 of NH 80 based on the 5904 PCU and 676 CVD" for a sum of ₹1272.92 lakhs.
20. On 11.09.2009, the petitioner invited bids for the aforesaid works from all eligible contractors. The said works were allotted to one M/s D.K Engineering Developers Pvt. Ltd. on 20.12.2009. However, the contract awarded to M/s D.K Engineering Developers Pvt. Ltd. was rescinded due to the slow progress in the completion of the works.
21. Thereafter, the petitioner invited tenders to complete the remaining works regarding "widening and strengthening of road from Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 7 of 17 Signing Date:04.07.2022 km 167.00 to km 180.00 of NH 80 under Bhagalpur Mirzachouki Section of NH Division, Bhagalpur in Bihar" (hereafter the 'Project'), on the terms and conditions stipulated therein.
22. Pursuant to the said invitation to tender, the respondent submitted its bid for executing the works. The respondent's bid was accepted by the petitioner and by a Letter of Acceptance dated 14.06.2012 (hereafter the 'LoA'), the contract for implementation of the Project was awarded to the respondent for an amount of ₹8,60,01,357/-. The respondent submitted the Performance Security, in terms of the LoA.
23. On 05.07.2012, the Agreement [bearing no 03 SBD (M)/2012- 13] was entered into between the petitioner and the respondent for executing the Project. In terms of the Agreement, the respondent was required to complete the Project within a period of thirteen months. The stipulated date of commencement of the Project was 14.06.2012 and the scheduled completion date of the Project was 13.07.2013.
24. The petitioner avers that in the month of August, 2012, on account of slow progress in executing the Project by the respondent, the petitioner directed the respondent to take steps to complete the work within time. Thereafter, on 07.09.2012, the petitioner sent a reminder bearing letter no. 435 to the respondent to submit the programme and start the main work under the Project, in order to complete the same on time.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 8 of 17 Signing Date:04.07.202225. It is further averred by the petitioner that after completing 88.5% of the Project, the respondent stopped the Project works on 18.07.2013 and prepared bills for the works completed by it.
26. Thereafter, on 13.03.2014, the MoRTH approved the 3rd revised estimate of the Project and the same was informed to the respondent telephonically and by a letter dated 09.04.2014.
27. The respondent, by a letter dated 21.04.2014, raised its apprehension regarding the specifications approved in the 3rd revised estimate and undertook to execute the Project only for the 1st km to evaluate the performance of the works executed with the given specifications before taking up the remaining works. The petitioner avers that the said undertaking was not honored by the respondent as it did not resume the remaining work.
28. Thereafter, by a letter dated 09.08.2014, the respondent disclosed its intention of foreclosing the Project.
29. Admittedly, disputes have arisen between the parties, essentially, pertaining to the 3rd revised specifications issued by the MoRTH. According to the respondent, if construction was done as per the specified sanctions, the road was likely to fail. The petitioner claims that due to the abandonment of the Project, the condition of the road worsened and therefore, it had incurred losses.
30. In view of the disputes between the parties, the respondent approached this Court by way of a petition under Section 11 of the A&C Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 9 of 17 Signing Date:04.07.2022 Act and the Arbitral Tribunal was constituted to adjudicate the disputes between the parties.
31. The impugned award was passed by the Arbitral Tribunal on 01.09.2019.
Arbitral Proceedings
32. Before the Arbitral Tribunal, the respondent filed its Statement of Claims. A tabular statement of the claims as set out in paragraph 2.1 of the impugned award is reproduced below:
Claim Claim Head Claim Interest Total
No. Amount Till
31.03.201
8
1 Dispute 60,20,310 33,63,721 93,84,031
pertaining to the
uncompensated
maintenance of
project highway
due to force
majeure
conditions
2 Dispute 1,13,67,737 75,62,459 1,89,30,196
pertaining to
Compensation of
losses of further
business due to
delay in
completion and
interest
3 Dispute 7,93,097 4,54,856 12,47,953
pertaining to the
delayed payment
of 6th RA Bill
Signature Not Verified
Digitally Signed
By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 10 of 17
Signing Date:04.07.2022
4 Disputes 7,34,546 1,36,109 8,70,655
pertaining to the
interest on
delayed release of
final bill after
foreclosure of
work
5 Disputes 26,19,133 4,85,316 31,04,449
pertaining of
delayed release of
escalation bills
6 Disputes 9,64,935 5,53,409 15,18,344
pertaining to non-
sanction of EOT
and force
deduction of EOT
from the Bills
7 Dispute 21,84,556 2,62,147 24,46,703
pertaining to
delayed release of
Security Deposit
deducted from
Bills of
Contractor after
foreclosure of
work
8 Dispute 2,15,06,000 1,23,34,10 3,38,40,107
pertaining to 7
release of idling
charges of the
equipment and
Manpower
9 Dispute 34,12,000 19,56,848 53,68,848
pertaining to
excess Regional
Office & Head
Office Expenses
due to heavy
Signature Not Verified
Digitally Signed
By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 11 of 17
Signing Date:04.07.2022
delay in sanction
of revised
estimate
10 Loss of Profit on 7,82,956 5,45,727 13,28,683
the less work
provided to
contractor due to
foreclosure
Total 5,03,85,270 2,76,54,69 7,80,39,969
9
33. The petitioner, also filed its Statement of Defence and raised certain counter-claims. A tabular statement of the counter-claims as set out in paragraph 2.2 of the impugned award is reproduced below:
Counter Claim Head Claim Amount
Claim
No.
1 Loss due to left out work by the 15,93,61,934
Claimant
2 Wear and tear of vehicles 20,00,00,000
3 Loss/sufferings of Livestock 30,00,00,000
4 Cost of visits done by officers 50,00,000
concerned
5 Pendente lite and future interest
6 Cost of litigations
34. By the impugned award, the Arbitral Tribunal awarded a sum of ₹10,97,236/- on account of delayed payments towards 6th RA Bill along with pre-award interest (Claim No. 3); an amount of ₹6,44,708/- on account of interest on delayed release of final bills after foreclosure of work along with pre-award interest (Claim No. 4); an amount Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 12 of 17 Signing Date:04.07.2022 of ₹35,56,995/- on account of delayed release of escalation bills along with pre-award interest (Claim No. 5); an amount of ₹4,08,286/- on account of non-sanction of Extension of Time (EOT) and forced deduction of EOT from bills along with pre-award interest (Claim No.
6); an amount of ₹18,00,196/- on account of delayed release of security deposit deducted from bills of contractors after foreclosure of work along with pre-award interest (Claim No. 7); and, an amount of ₹2,49,91,977/- on account of release of idling charges of equipment and manpower along with pre-award interest (Claim No. 8), in favour of the respondent. The Arbitral Tribunal further awarded post award simple interest at 2% above the rate of State Bank of India Prime Lending Rate, on the amount of ₹1,51,54,000/- awarded as idling charges under Claim no 8. The Arbitral Tribunal further rejected all the counter-claims preferred by the petitioner.
35. Aggrieved by the impugned award, the petitioner has filed the present petition.
Submissions, Reasoning and Conclusion
36. Mr. Sharma, learned counsel for the petitioner has assailed the impugned award on several fronts. First, he submitted that the Arbitral Tribunal had erred in awarding interest on delayed payment of the 6 th R.A. Bill in terms of Clause 43 of the General Conditions of Contract (GCC). He submitted that the interest in terms of Clause 43 was payable only if the contractor had submitted the monthly statement of the estimated value of work completed in terms of Clause 42.2 of the GCC.
Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 13 of 17 Signing Date:04.07.2022He submitted that the respondent had not submitted the monthly statement and therefore, the petitioner could not be faulted for not making payment within the stipulated period of 20 days. The aforesaid contention is unpersuasive. The Arbitral Tribunal had held that the engineer was liable to certify the IPC within the maximum period of 14 days but had failed to do so.
37. It appears that the petitioner is now seeking to raise a fresh controversy. The respondent had resisted the Claim No.3 by alleging that the respondent was not in fundamental breach of the Agreement. It was not the petitioner's case that the respondent had not submitted the details of the work done. The Arbitral Tribunal had not allowed the respondent's claim in full but had reduced a period by 42 days to account for the time available to the respondent to pay a bill.
38. Similar contentions were advanced in respect of the interest awarded on delayed release of the final bill after foreclosure (Claim No.4 and Claim No.5 amounts due as price adjustment). The said contentions are also unmerited.
39. Mr. Sharma had also assailed the impugned award inasmuch as it awarded idling charges for equipment and manpower. He submitted that the respondent had demobilised from the site and therefore, had sought time for re-mobilisation. The learned counsel for the respondent had countered the aforesaid submission. He submitted that there was sufficient material on record to establish that the respondent's plant and machinery were kept idle. The dispute relates to a question of fact. The Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 14 of 17 Signing Date:04.07.2022 Arbitral Tribunal had examined the record and found that the petitioner had produced various documents to confirm that the respondent was at site till November, 2014. It is not permissible for this Court to re- evaluate and re-appreciate the evidence on record. Undeniably, the Arbitral Tribunal's decision is based on some material available on record and therefore, cannot be interfered with.
40. Mr. Sharma had also contended that it was not open for the respondent to raise any claim since it had issued a 'farkati' on 20.07.2016, whereby it had confirmed that there was no further amount due in respect of the executed works. He states that the said 'farkati' is in the nature of a No Claim Certificate and the Arbitral Tribunal had failed to consider the same.
41. The statement of defence filed by the petitioner does mention that a 'farkati' was executed by the respondent. But it does not appear that the petitioner had advanced any contention to the effect that the respondent had accepted the amounts in full and final settlement by executing a 'farkati' and is therefore, is precluded from raising any claims, before the Arbitral Tribunal. The Arbitral Tribunal had not noted any such contention. The petitioner has also not raised any ground regarding non consideration of the 'farkati' in this petition.
42. It is also material to note that the respondent had filed a writ petition before the High Court at Patna, inter alia, raising a grievance regarding non-payment of bills. The said petition was disposed of by an order dated 17.12.2015 whereby the respondent was granted liberty to Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 15 of 17 Signing Date:04.07.2022 approach the Executive Engineer and file a fresh representation for redressal of his grievances. The concerned Executive Engineer was directed to examine and dispose of the said representation. This also indicates that the disputes regarding non-payments/delayed payments were live at the material time.
43. Mr. Sharma also assailed the impugned award on the ground that the interest awarded is excessive and is contrary to the order dated 17.12.2015 passed by the Hon'ble Patna High Court in civil writ jurisdiction case no. 18406/2015. The said petition was filed by the respondent on account of non-payment of bills. It is in this context that the Court had directed that in the event if there was any delay in the payment of admitted amounts, the respondent would receive the payment along with the interest at the rate of 9% per annum on the admitted dues calculated from the date when the amount became due till the date of actual payment. According to Mr. Sharma, this order precluded the respondent from claiming any interest above 9% per annum and the Arbitral Tribunal had erred in awarding interest. This contention is also unpersuasive. A plain reading of the order dated 17.12.2015 indicates that the Hon'ble Patna High Court had permitted the respondent to make a representation with the further direction that if any such representation is filed within the period of two weeks from the date, the same would be considered and disposed of within a period of six weeks from the date of receiving the representation and if any payments were found to be due and payable, the same would be paid with simple interest at the rate of 9% per annum. As noted above, the Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 16 of 17 Signing Date:04.07.2022 respondent had not made any representation; therefore, further directions for disposing of the representation by making payments with the admitted dues along with interest were not triggered. It is also apparent that the purpose of the said order was to provide certain relief to the respondent and not to preclude it from availing other remedies.
44. In view of the above, this Court finds no ground to interfere with the impugned award.
45. In view of the above, the petition is dismissed both on merits as well as being barred by limitation. All pending applications are also disposed of.
VIBHU BAKHRU, J JULY 04, 2022 Ch/RK Signature Not Verified Digitally Signed By:Dushyant Rawal O.M.P. (COMM.) 400/2020 Page 17 of 17 Signing Date:04.07.2022