Calcutta High Court
Premco Rail Engineers Ltd vs Hooghly River Bridge on 28 July, 2016
Author: Soumen Sen
Bench: Soumen Sen
AP No.373 of 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
PREMCO RAIL ENGINEERS LTD.
-Versus-
HOOGHLY RIVER BRIDGE
COMMISSIONERS & ORS.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 28th July, 2016.
Appearance:
Mr. Siddhartha Banerjee, Adv.
Mr. Shibnath Bhattacharyya, Adv.
Mr. Abhishek Bhattacharjee, Adv.
...for the petitioner.
Mr. Sumit Panja, Adv.
Mr. Subrata Banerjee, Adv.
Ms. Sharmistha Pal, Adv.
...for the respondent.
The Court : The petitioner participated in a e-tender dated 21st April, 2o015 issued by the respondents for improvement of tram track on Sealdah Flyover. The petitioner was selected as the successful tenderer. Under the contract, the work is to be completed within a period of 9 months from the date of notice to commence the work. The notice to commence the work was issued on 3rd June, 2015. The fact remains that except some peripheral work, no substantial work was done by the petitioner under the agreement. There are 2 conflicting claims with regard to the extension of time being sought for by the petitioner. In view of the failure on the part of the petitioner to make any substantial progress in the work, a notice of termination was issued on 8th April, 2016. In the notice of termination, the respondent has alleged that the petitioner has failed to perform even the preparatory works and was not ready to take up the main work and completed the project within the stipulated time. The respondent has referred to various communications since June, 2015 till February, 2016 show that from time to time the petitioner was reminded of its obligation to complete the work. The petitioner was also informed about the failure to submit the required drawings and/or incomplete drawings.
Mr. Siddhartha Banerjee, learned Counsel appearing on behalf of the petitioner submits that in view of the communication dated 25th May, 2016, there is no termination of the contract and the said notice is only a show cause notice. It is submitted that no opportunity was given to the petitioner to reply to the said show cause notice. The petitioner unilaterally without formally terminating the contract, issued a notice inviting e-tender dated 16th June, 2016 for the self- same project.
There is no requirement as such to issue a show cause notice before termination of the contract. The communication of the respondent dated 8th April, 2016 is, in fact, a letter of termination. It is a detailed letter disclosing the grounds for which the said contract is terminated. There appears to be a reply to the said letter dated 13th April, 2016 which perhaps impelled the respondents to issue an elaborate letter dated 25th May 2016 in which issue-wise the grievance 3 of the petitioner was dealt with. A bare reading of the letter dated 25th May, 2016 would show that the respondent authorities by a chart has indicated the progress and/or compliance made by the contractor with regard to the requirement of submitting the essential brick construction working drawings. There is no reply to the said letter of 25th May, 2016. Instead, on 6th June, 2016 this application has been filed under Section 9 of the Arbitration and Conciliation Act after issuing a notice under Section 21 of the Arbitration and Conciliation Act. There cannot be any dispute that it is a public project and delayed execution of the said project would affect public safety. There is no satisfactory explanation offered for not being able to make progress beyond submitting few drawings which are inconsequential.
Under such circumstances, this Court finds not reason to pass any interim order in favour of the petitioner. This application accordingly stands dismissed. However, there shall be no order as to costs.
The bank guarantee is valid till September, 2016. Subject to the petitioner renewing the said bank guarantee which is to expire in September 2016 till December, 2018, and giving an adequate notice of such renewal at least two weeks prior to its expiry, the respondent authorities shall not invoke the said bank guarantee.
The observations made in this order shall not influence the arbitral tribunal in deciding the matter on merits.
4
Since the learned Counsel representing the respective parties upon instruction submits that instead of having an arbitral tribunal constituted of three arbitrators a sole arbitrator may be appointed by this Court.
Under such circumstances, Mr. Ajoy Krishna Chatterjee Sr. Advocate is appointed as an Arbitrator at a consolidated remuneration in accordance with the Fourth Schedule to the Amended Act of 1996 to be shared by the parties in equal measure at the first instance subject to the direction as to costs as may be contained in the final award.
The arbitrator is requested to conclude the reference within a period of ten months of the statement of claim being lodged before him.
A.P.No.373 of 2016 is, accordingly, disposed of. There shall be no order as to costs.
(SOUMEN SEN, J.) sp/