Delhi High Court - Orders
M/S Kamaladityya Construction Pvt. Ltd vs Central Public Works Department ... on 12 April, 2022
Author: Anup Jairam Bhambhani
Bench: Anup Jairam Bhambhani
$~39
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 119/2022 & I.A. Nos.5693-94/2022
M/S KAMALADITYYA CONSTRUCTION PVT. LTD.
..... Petitioner
Through: Mr. Rajiv Nayar, Senior Advocate
with Mr. Navanit Pd. Singh Senior
Advocate, Ms. Vaibhavi Niti and Mr.
Madhari Agarwal, Advocates.
versus
CENTRAL PUBLIC WORKS DEPARTMENT (CPWD), & ORS.
..... Respondents
Through: Mr. Rajesh Gogna, CGSC with Ms.
Archana Surve, GP with Mr. Vinod
Kumar Ahlawat and Ms. Priya Singh
Advocates for R-1 to 3.
CORAM:
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
ORDER
% 12.04.2022 By way of the present petition under section 9 of the Arbitration & Conciliation Act 1996, the petitioner claims interim measures of protection against the respondents, arising from a letter dated 11.03.2022 issued by the respondents raising upon the petitioner a demand of about Rs.13.5 crores, towards compensation for alleged delay of 8.33 months, computed at the rate of 1% per month, in completion of work under agreement dated 10.04.2018, for setting up physical infrastructure for the National Institute of Communication Finance at Ghitorni, New Delhi.
2. Mr. Rajiv Nayar, learned senior counsel appearing for the petitioner, submits that the demand of about Rs.13.5 crores raised by way of the Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:18.04.2022 O.M.P.(I) (COMM.) 119/2022 Page 1 of 5 14:55:24 impugned letter is a result of a unilateral decision of the respondents against the petitioner, for alleged delay as aforesaid; and a unilateral computation of so-called compensation; all of which the petitioner disputes and denies, on all counts. Learned senior counsel further draws attention of the court to clause 2 of the modified provision of the General Conditions of Contract (GCCs) that govern the transaction between the parties, to point-out that while the unamended version of clause 2 contemplated that the quantum of compensation computed by the respondents would be final and binding upon the contractor, that provision now stands modified and amended, whereby it is no longer provided in the modified clause 2 that the decision of the respondents in relation to quantum of compensation is final or binding upon the contractor. Attention is also drawn to clause 25 of the modified GCC, the relevant portion of which reads as under:
"CLAUSE 25 Except where otherwise provided in the contract,all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:18.04.2022 O.M.P.(I) (COMM.) 119/2022 Page 2 of 5 14:55:24
(i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge or if the Engineer in Charge considers any act or decision of the contractor on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable and is disputed, such party shall promptly within 15 days of the arising of the disputes request the Chief Engineer or where there is no Chief Engineer, the Additional Director General [CE/ADG) who shall refer the disputes to Dispute Redressal Committee (DRC) within 15 days along with a list of disputes with amounts claimed if any in respect of each such dispute. The Dispute Redressal Committee (DRC) shall give the opposing party two weeks for a written response, and, give its decision within a period of 60 days extendable by 30 days by consent of both the parties from the receipt of reference from CE/ADG. ....
If the Dispute Redressal Committee (DRC) fails to give its decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee (DRC) or expiry of time limit given above, then either party may within a period of 30 days from the receipt of the decision of Dispute Redressal Committee (DRC), give notice to the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General, CPWD (CE/ADG/DG) for Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:18.04.2022 O.M.P.(I) (COMM.) 119/2022 Page 3 of 5 14:55:24 appointment of arbitrator on prescribed proforma as per Appendix XV under intimation to the other party. ..."
(emphasis supplied)
3. Mr. Nayar argues that clause 25 aforesaid contemplates an entire disputes redressal mechanism, which inter-alia provides that upon a dispute arising, the contractor is entitled to notify the Chief Engineer or other specified official, within 15 days of such disputes arising, who is then mandated to refer the dispute to the Dispute Redressal Committee (DRC) within 15 days; and if the dispute still remains unresolved, an arbitral mechanism is contemplated thereafter.
4. It is submitted, that resorting to the disputes redressal mechanism embedded in clause 25, and in response to impugned letter dated 11.03.2021 which was received by the petitioner on 16.03.2022, the petitioner issued to the respondents a communication dated 31.03.2022, calling upon the respondents to refer the disputes to the DRC as contemplated in clause 25; which communication was duly received by the respondents, but they have failed to refer the dispute to the DRC, thereby violating clause 25.
5. In these circumstances, it is prayed that the respondents be restrained from acting upon impugned letter dated 11.03.2022.
6. Issue notice on the petition.
7. Mr. Rajesh Gogna, learned Central Government Standing Counsel (CGSC), appears on behalf of the respondents on advance copy; accepts notice; and seeks time to file reply.
8. Let reply be filed within 06 weeks; rejoinder thereto, if any, be filed Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:18.04.2022 O.M.P.(I) (COMM.) 119/2022 Page 4 of 5 14:55:24 within 04 weeks thereafter; with copies to the opposing counsel.
9. Learned CGSC submits that the petitioner is misreading clause 25 inasmuch as the reference of disputes to the DRC is inapplicable to matters of delay in performance; in which case, the decision of the Chief Engineer is final and binding.
10. However, learned CGSC very fairly states that the respondents will take a clear stand on clause 25 in writing; and since the petitioner is still performing work under the contract in question and there is an on-going contractual relationship between the parties, the respondents will not take any further prejudicial action against the petitioner arising from impugned letter dated 11.03.2022, till the next date of hearing.
11. List on 25th August 2022.
ANUP JAIRAM BHAMBHANI, J APRIL 12, 2022 ds Signature Not Verified Digitally Signed By:SUNITA RAWAT Signing Date:18.04.2022 O.M.P.(I) (COMM.) 119/2022 Page 5 of 5 14:55:24