Delhi District Court
Institute Of Geoinformatics Pvt. Ltd vs Indian Oil Corporation Ltd on 24 February, 2024
IN THE COURT OF SH.RAJ KUMAR TRIPATHI:
DISTRICT JUDGE (COMMERCIAL COURT)-08,
SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI
CS (COMM.) No. 242/2019
CNR No. DLSE01-006335-2019
(Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd.)
24.02.2024
Institute Of Geoinformatics Pvt. Ltd.
Through its Authorized Signatory
S-205, 2nd Floor, Raksha Tower
Chunabhatti, Kolar Road
Bhopal (Madhya Pradesh) - 462016.
.....PLAINTIFF
Through:-Sh.Jay Savla along with
Sh.Jasdeep Singh Dhillon and
Sh.Anirudh Jamwal,advocate
VERSUS
Indian Oil Corporation Ltd.
Through its Chairmanm
Government of India
Having its Registered Office at
G-9, Ali Yavar Jung Marg
Banda (East), Mumbai - 400051.
Also through:
Chief Project Manager (Contracts)
Pipelines Division, A-1, Udyog Marg
Sector -1, NOIDA, (Uttar Pradesh) - 201301
Also through:
Manager
Corporate Office of Pipelines Division
of Indian Oil Corporation Limited at:
Plot No. 3079/3, Sadiq Nagar, J.B. Tito Marg
New Delhi - 110049
... DEFENDANT
Through: Sh.Deepesh, Advocate
CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 1 of 74
Date of registration of suit 19.08.2019
Date of Arguments 15.01.2024, 16.01.2024 &
23.01.2024
Date of Judgment 24.02.2024
JUDGMENT:
1.1 Plaintiff filed the present suit for recovery, damages and rendition of accounts against defendant inter alia praying for the following reliefs:-
a) Defendant be directed to pay to the Plaintiff, an amount of Rs.28,75,087/- (Rupees Twenty Eight Lacs Seventy Five Thousand Seventy Six Only), being the value of the work done by Plaintiff for the Defendant; and
b) Defendant be directed to pay Plaintiff an amount of Rs.20,87,501/- (Rupees Twenty Lacs Eighty Seven Thousand Five Hundred One Only) being the loss of profit caused to the Plaintiff due to the illegal termination of the contract; and
c) Defendant be directed to pay Plaintiff an amount of Rs.8,00,000/- being the demobilization costs and the notice period salary to staff and payments to vendors being the additional costs incurred by Plaintiff due to the illegal termination of contract by Defendant; and
d) Defendant be directed to pay Plaintiff the interest @ 12% on the above-mentioned relief in para a, b & c from 02.11.2010 (Date of termination) till the date of filing the suit aggregating to Rs.61,06,026/- (Rupees Sixty One Lakh Six Thousand and Twenty Six Only) and a further interest @ 12% from the date of filing of the suit till the actual realization.
e) Defendant be directed to pay to the plaintiff, an amount of Rs.5,17,513/- (Rupees Five Lacs Seventeen Thousand Five Hundred Thirteen Only), being the value of GST; and
f) An order awarding the costs of this suit to the plaintiff;
g) Any further orders as this Hon'ble Court deems fit and proper in the facts and circumstances of the case.CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 2 of 74 BRIEF FACTS:
Case of the Plaintiff:
2.1 The plaintiff is a registered company, incorporated on 18.11.2009 with the objective of preparation of DPR, survey, design and consultancy in field of civil infrastructures. 2.2 Defendant is a Public Sector Undertaking involved in refining, transportation and marketing of petroleum products. Defendant company has expanded its operations across the hydrocarbon value chain-upstream into oil & gas exploration & production and downstream into petrochemicals, besides diversifying into natural gas and alternative energy resources. 2.3 Defendant issued tenders, for expansion of the existing 10,000 km pipeline and lay new Liquefied Petroleum Gas Pipelines from Paradip to Haldia and from Haldia to Durgapur. Plaintiff was declared as a successful bidder. Consequently, a Letter of Acceptance was issued to plaintiff on 15.06.2010 for engineering survey, soil survey, cadastral survey and preparation of drawings for establishment of ROU in ROW of Paradip-Haldia-Durgapur LPG Pipeline Project.
2.4 Subsequently, parties to the suit executed the main contract on 14.07.2010. The said contract outlined a total work consideration of Rs.1,67,91,749/- (Rupees One Crore Sixty Seven Lakh Ninety One Thousand Seven Hundred Forty Nine Only) which was to be completed within 28 months. The said contract stipulated that detailed engineering survey and Population Density Index Survey were to be completed within the period of four months from the date of issuance of LOA i.e. 15.06.2010.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 3 of 74 2.5 According to plaintiff, due to delay solely attributable to defendant, the contract was executed in the month of July 2010, even though the letter of acceptance was issued on 15.06.2010. The team of plaintiff could reach the project site only after mid-July, which saw extensive rainfall (being the monsoon season) at the project site. Since the ground which was to be surveyed was a paddy field, it was filled with rainwater, and therefore, there was no stable ground which could support the instruments required to survey the field, as the said instruments required a stable ground surface to work properly.Thus, plaintiff made a representation dated 29.09.2010 to defendant for extension of time till November 2010 for completing the survey work.
2.6 In view of the representations made by plaintiff, Engineer- in-charge, ERPL, Kolkata of defendant extended the time for a period of one and half months to finish the Detailed Engineering Survey of the project site, thereby, granting an extension from 15.10.2010 to 30.11.2010.
2.7 That in the interregnum, plaintiff sent regular progress reports to defendant, reporting the work done on the project site via e-mails and hard copies. However, defendant ignored the progress reports and on 21.10.2010, sent a pre-termination letter to plaintiff giving a final opportunity to submit a detailed recovery schedule by 22.10.2010, failing which, it would terminate the contract, at the cost of plaintiff. The said pre-termination letter does not refer to the extension letter dated 30.09.2010 or the various progress reports sent by plaintiff time to time to defendant.
2.8 Plaintiff replied to the same vide its letter dated 22.10.2010, informing defendant regarding the work progress on CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 4 of 74 site and also explained the site conditions i.e. the unfavourable field conditions due to heavy monsoons and the paddy field. Further, vide the said letter, plaintiff requested defendant to provide route maps and full support for the patrolling man on site, so that the survey work may be completed in time.
2.9 Plaintiff sent further letters dated 28.10.2010 & 30.10.2010 to defendant, whereby reporting the work completed on the 61 km stretch and again requested the defendant to provide route map and toposheets, unavailability of which was causing difficulties at the project site. However, rather than verifying and appreciating the difficulties faced by plaintiff at the project site and further instead of providing with the necessary documents, route map, toposheets and assistance to complete the survey work at the project site, defendant illegally and arbitrarily terminated the contract vide its letter dated 02.11.2010. Defendant instructed plaintiff to return its material and hard and soft copies of route maps, etc. back to the designated store of defendant. Plaintiff was also instructed vide the said letter to present itself at IOCL ERPL Office, Kolkata on 08.11.2010 for the purposes of joint measurement of the work performed.
2.10 Vide letter dated 02.11.2010, plaintiff responded to termination letter and requested the defendant to withdraw the same as the slow progress of work was caused due to circumstances beyond the control of plaintiff, and that the work progress had significantly increased after the monsoon period. It was also informed to defendant that the task at hand was achievable well before December 10, 2010 i.e. within 5 months of execution of the Agreement. However, defendant failed to reply to the said letter CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 5 of 74 dated 02.11.2010. Since defendant failed to respond to plaintiff's request, all the records available with plaintiff were returned to defendant along with letter dated 03.11.2010.
2.11 As per plaintiff, parties to the suit had decided to meet on 08.11.2010 to jointly measure the work performed by plaintiff as the said measurement was essential to the condition detailed in clause no. 6.1.3.0 and 6.2.1.0 of the Agreement. However, as per clause 6.1.4.0, if plaintiff absents himself on the day of measurement, then the measurement had to be carried by defendant and the same would be final.
2.12 Unfortunately, joint measurement was not carried out and defendant also failed to take the measurements on its own accord. After waiting for reply of Letter No.174/IGEOPL/10 dated 02.11.2010 requesting defendant to withdraw the termination, plaintiff raised its bill on the basis of measurement of the work executed by him.
2.13 Pursuant to termination of plaintiff's contract, defendant awarded the said contract to M/s Secon Pvt. Ltd., Bangalore vide LOA No. 23268402 through a limited tender for an amount of Rs.2,80,25,950/- (Rupees Two Crore Eighty Lakh Twenty Five Thousand Nine Hundred Fifty Only). The same contract awarded to plaintiff was only for an amount of Rs.1,67,91,749/- (Rupees One Crore Sixty Seven Lakh Ninety One Thousand Seven Hundred Forty Nine Only). Thus, there was huge difference of Rs.1,12,34,000/- in the contract amount. The fact that M/s Secon Pvt. Ltd. was awarded contract without an open tender bid, clearly demonstrates the malafide intention of defendant in illegally terminating the contract of plaintiff.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 6 of 74 2.14 Furthermore, plaintiff was provided a time period of four months to complete the Detailed Engineering Survey and Population Density Index Survey at the project site which comes under Group "A" of BOQ. However, on the other hand, M/s Secon Pvt. Ltd., Bangalore has taken approximately more than 6 years to complete Group "A" work. The project was assigned to M/s Secon Pvt Ltd, Bangalore on 01.12.2010 and the contract period was 28 months. However, as per RTI reply dated 01.05.2019, the work had been completed by M/s Secon Pvt. Ltd. on 06.01.2019 i.e. approximately 9 years after the assignment of project, which clearly exhibit the malafide intentions of defendant. The said intentions further draws strength from the fact that no penalty was levied by defendant upon M/s Secon Pvt. Ltd. for the delay in work, leave alone threat of termination.
2.15 Since defendant failed to respond to the communications of plaintiff, it was left with no other alternative but to seek appointment of an Arbitrator. As defendant failed to respond to the claims raised by plaintiff and also did not appoint an Arbitrator to resolve the issues pending between the parties, plaintiff filed Arbitration Petition No. 42 of 2011 before Hon'ble Delhi High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996. However, the said Arbitration petition was withdrawn with liberty to approach the General Manager of defendant, in accordance with the Arbitration Clause of the Agreement.
2.16 Thereafter, plaintiff approached the General Manager of defendant to resolve the issues between the parties vide its letter dated 23.11.2011. Plaintiff also sent letter dated 10.01.2012 detailing the work having been done and the various difficulties CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 7 of 74 faced at the project site due to the weather conditions and non- cooperation by defendant. Plaintiff also explained that defendant terminated the contract in a biased, prejudiced, malafide and illegal manner. However, General Manager of defendant, in an arbitrary manner, vide its order dated 12.03.2012 held that claim no. 1, 3, 4 & 5 sought by plaintiff were not notified claims as the procedure prescribed by Clause No. 6.3.1.0 had not been observed, and therefore, not arbitrable.
2.17 Being aggrieved by the order dated 12.03.2012 passed by General Manager of the defendant, plaintiff filed Arbitration Petition No.175 of 2012 on 30.03.2012, under Section 11(6) of the Arbitration and Conciliation Act, 1996, before Hon'ble Delhi High Court seeking appointment of an Arbitrator. The said petition was allowed vide order dated 19.05.2015. However, High Court observed that to decide whether General Manager of defendant was correct in not notifying claims no. 1, 3, 4 and 5 was beyond its jurisdiction.
2.18 Thereafter, both the parties approached the Sole Arbitrator appointed to resolve the issues between the parties. Plaintiff sought the following reliefs through the Arbitration proceedings:-
(i) Direction for payment of Rs.46,41,793/- i.e. cost of work executed by Plaintiff.
(ii) Direction for payment of Rs.4,20,000/- deposited with defendant as Security Deposit. Since the contract had been illegally and unlawfully rescinded by defendant, the same became due towards plaintiff.
(iii) Direction for payment of Rs.21,86,992/-
(profit from the contract) which the plaintiff would have received had the defendant not terminated the contract and allowed plaintiff to execute the entire contract. Since, the contract was unlawfully terminated by defendant, plaintiff sustained severe loss of profits.
(iv) Direction for payment of Rs.8,00,000/- for CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 8 of 74 demobilization of the deployed resources, after the unlawful termination of the contract.
(v) Direction for payment of interest @ 18% for the above-mentioned claims sought before Ld. Arbitrator.
2.19 Defendant contested the claims by filing statement of defence dated May, 2016.
2.20 The Sole Arbitrator vide its detailed and reasoned Award dated 05.05.2017 allowed all the five claims made by plaintiff, in its favour and also awarded cost of Rs.32,89,924/-. 2.21 Against the Award dated 05.05.2017, defendant filed Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996, against claims no. 1, 3, 4 & 5 and not in respect of claim no.2. However, Single Judge of Hon'ble High Court placed its reliance on order dated 19.05.2015 passed earlier in the Arbitration Petition preferred under Section 11(6) of Arbitration and Conciliation Act, 1996, and held that since claim no. 1, 3, 4 & 5 are not notified claims, thus are not arbitrable. The observation/ finding of Arbitrator to the effect that termination is bad and quantum of work carried out by plaintiff was not disturbed. Further, Hon'ble Single Judge also granted liberty to plaintiff to pursue remedy against its grievances, in accordance with law, with respect to claims no. 1, 3, 4 & 5, which were being rejected by Hon'ble High Court as not arbitrable.
2.22 The order dated 14.09.2017 was challenged before Hon'ble High Court by plaintiff and defendant vide FAO (OS) COMM No. 197 of 2017 and FAO (OS) COMM No. 189 of 2017 respectively. The appeal filed by plaintiff was dismissed and the one filed by defendant was partly allowed to the extent of arbitration costs and interest only. The findings of Award that termination was CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 9 of 74 bad was not disturbed by Hon'ble High Court. Further, the Arbitrator had rejected the counter claim of defendant. The said rejection of counter claim was also not disturbed. Vide order dated 23.08.2018 (Para 8), Hon'ble High Court observed that plaintiff is well within its right to address all its grievances against defendant, in accordance with law. Thus, plaintiff has preferred the present suit against defendant in view of liberty granted by Hon'ble High Court.
Defence of defendant 3.1 In response to summons, defendant appeared before the court and filed its written statement through its authorized signatory, Mr. Anil Kumar, Deputy General Manager (PJ-Contracts) 3.2 In written statement, defendant contended that plaintiff has not approached the court with clean hands and has suppressed material and essential facts solely with an intent to create a prejudice against the defendant and obtain relief from the court. 3.3 It is stated that defendant, a Government of India undertaking, is engaged in petroleum refining, marketing, transportation and maintenance of crude and petroleum products pipelines throughout the length of the country. With a view to expand the then existing 10,000 km of pipeline network, defendant had decided to lay a new Liquefied Petroleum Gas ("LPG") pipeline of a tentative total length of 680 kms from Paradip to Haldia and from Haldia to Durgapur LPG Bottling Plant ("Project"). For laying of the above LPG pipeline, defendant also intended to carry out detailed engineering survey, population density Index survey, soil resistivity survey, soil chemical analysis survey, soil CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 10 of 74 stratification survey, cadastral survey, acquisition of Right of User ("ROU") in Right of Way ("ROW") as per Petroleum and Minerals Pipelines Act, 1962 ("P & MP Act") obtaining permission from concerned authorities for various type of pipeline crossings and activities related to opening of ROW.
3.4 On 19.11.2009, defendant had invited sealed tenders. Pursuant to plaintiff being declared the successful bidder, a Letter of Acceptance dated 15.06.2010 ("LOA") was issued to plaintiff, which was followed by execution of the main Contract No. PLCC/PHDPL/CL/0960 (Work Order No. 23166768) on 14.07.2010. The Contract envisaged execution of work of "Detailed Engineering survey, Soil survey, Cadastral survey & providing services for establishing ROU in ROW OF Paradip-Haldia-
Durgapur LPG Pipeline Project" (TENDER NO.
PLCC/PHDPL/CL/0960) ("Contract") within 28 months from the date of issuance of Letter of Acceptance. The total contract value was Rs.1,67,91,749.30 (Rupees One crore sixty-seven lakhs ninety one thousand seven hundred forty nine and paise thirty only) excluding service tax. As per the contract, plaintiff deposited 2.5% of the total nominal contract value i.e Rs.4,20,000/- (Rupees Four lakh and twenty thousand only) as the security deposit. 3.5 Under the contract, the scope of work was divided into three groups - Group A, B and C.
(a) Group A consisted of detailed engineering survey to be completed within four months from the date of LOA and cadastral survey to be completed within four months from the date of completion of detailed engineering survey.
(b) Under Group B, specific notice for commencement from CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 11 of 74 Engineer-in-Charge ("EIC") is to be issued at any time within three months from the completion of Cadastral Survey under Group A scope of work. Scope of work under Group B further required providing services for establishing ROU in ROW under P&MP Act, 1962 for acquiring new ROW as per detailed scope of work, tender specification and requirement of work during pipeline laying activities and obtaining approvals/permissions from the respective State/Central and other statutory authorities for laying cross country pipeline, to be completed within 8 months from the date of issuance of Specific notice for commencement from EIC.
(c) Group C required providing services related to opening of ROW and other activities after ROU acquisition has been completed within 12 months from the date of issuance of specific notice for commencement from EIC.
3.6 It is stated that initially, defendant had nominated Mr. A.K. Anandan, Chief Construction Manager ("CCM"), Paradip as the EIC but he was subsequently replaced and Mr.S.K. Mandal CCM, ERPL, Kolkatta was nominated as the EIC. The said nomination was duly conveyed to plaintiff vide letter dated 17.06.2010.
3.7 For the purpose of facilitating effective implementation of the project and to expedite the work progress as well as to assist the plaintiff, the defendant had provided documents and drawings to plaintiff on 13.07.2010 namely, the route maps for Haldia -Barauni, Paradip-Haldia, Survey of India's toposheet of the defendant's existing pipelines of Paradip-Haldia and Haldia- Durgapur section cadastral map, hard and soft copies of as Built Maps for Paradip- Haldia crude oil pipeline and break up of quantities of schedule of CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 12 of 74 rates.
3.8 Under the Contract, prior to carrying out of Detailed Engineering Survey including Population Density Index survey for the Paradip - Haldia- Durgapur LPG Pipeline, plaintiff was required to conduct Reconnaissance Survey Work which involved activities such as Desk top study, Field reconnaissance survey, selection of final route, establishing and demarcating major ground control point, collection of details along the final route and preparation of Report. The purpose of Reconnaissance Survey was to prepare a realistic cost estimate and Project proposal for cross country pipeline for transportation of crude oil/ petroleum products. Thus, the plaintiff was required to submit Reconnaissance Survey Report ("Report") for the proposed LPG pipeline - (a) from Belmuri to Kalyani Bottling Plant; (b) from Chitraganj Terminal Point to Budge-Budge LPG Bottling Plant; and (c) from DVC More (Durgapur) to Durgapur LPG Plant.
3.9 On 07.07.2010, defendant received the Report prepared by plaintiff for the proposed LPG pipeline from Belmuri to Kalyani Bottling Plant. However, the same was returned to plaintiff vide email dated 12.07.2010 as the same was inaccurate. Plaintiff resubmitted the revised Report on 19.07.2010. However, since the plaintiff had not conducted Field Reconnaissance Survey (verification of ground truth through extensive physical travelling along identified alternate routes) of the route recommended and finalized by it, defendant vide email dated 20.07.2010 instructed the plaintiff to physically verify the route and to deploy sufficient manpower to complete the work as per schedule.
3.10 On 28.07.2010, defendant received the Report prepared CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 13 of 74 by plaintiff for the proposed LPG pipeline from Chitraganj Terminal Point to Budge-Budge LPG Bottling Plant. However, since plaintiff had not physically verified the route, defendant vide email dated 02.08.2010 advised plaintiff to resubmit the Survey Report and issued similar instructions as contained in its email dated 20.07.2010 with reference to the revised Report submitted for the pipeline from Belmuri to Kalyani Bottling Plant.
3.11 It is alleged that plaintiff failed to confirm the instructions contained in the defendant's email dated 02.08.2010 regarding physical verification of the route recommended for the proposed LPG pipeline from Chitraganj Terminal Point to Budge-Budge LPG Bottling Plant. Accordingly, defendant was constrained to issue emails dated 09.08.2010 and 13.08.2010 to plaintiff seeking confirmation with regard to compliance of the instructions contained in its letter dated 02.08.2010, but to no avail.
3.12 As regards the report for the route from DVC More (Durgapur) to Durgapur LPG Plant, defendant in its email dated 13.08.2010, issued instructions to plaintiff to send Report to it and depute manpower for detailed engineering survey including population density index survey as the route was dry and short. 3.13 In all its letters to plaintiff, defendant consistently instructed plaintiff to deploy manpower in the field and complete the work as early as possible as the plaintiff was required to submit the Detailed Feasibility Report ("DFR") of the Project before 10.09.2010 for Board Meeting. However, despite repeated request and reminders, plaintiff did not deploy adequate/requisite manpower and rather, started raising frivolous pleas in an attempt to somehow justify its failure to start the survey work. Plaintiff repeatedly turned CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 14 of 74 down its request for deployment of manpower on completely false and unjustifiable ground that survey was not possible as the field was full of water. The manpower details submitted by plaintiff showed that it had engaged two survey teams with an Engineer in each team, however, in truth it was only on paper and no one ever visited the site. In fact, plaintiff had only engaged four surveyors for the entire 680 km pipeline. Since plaintiff had not engaged any Engineer/Supervisor to supervise or coordinate the work in progress, the actual conditions were never verified by any Engineer/Supervisor/Director. To make matters worse, plaintiff had also withdrawn all its manpower i.e. four surveyors with effect from August 7/8, 2010, a fact which was brought out vide defendant's e- mail dated 16.08.2010.
3.14 In order to speed up the work and take a stock of the standstill situation, defendant called for a meeting on 23.08.2010 with the representatives of plaintiff. In the said meeting, plaintiff was once again provided with the same set of documents/drawings which had been provided to it on 13.07.2010. Defendant stressed on the completion of the "Population Density Index Survey" along with the pipeline, site verification before finalizing the pipeline routes and the engagement of a local survey agency to speed up the jobs. It was decided that plaintiff would visit the site with local party and the defendant's representative for physical inspection. As regards water logging at various stretches of the pipeline route, defendant advised the plaintiff to carry out survey on dry areas as most of the areas had been declared as drought areas by the government and further advised the plaintiff to avoid water-logged stretches, if any. 3.15 Despite the tall promises made by plaintiff in the meeting CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 15 of 74 of 23.08.2010, there was no progress in work and defendant was constrained to send reminders dated 25.08.2010 and 31.08.2010. Pursuant to receipt of email dated 01.09.2010 intimating the defendant of its intention to resume work from mid-October 2010, defendant was compelled to send a caution letter by registered post and email to plaintiff on 03.09.2010 requesting to restart the work within ten days from the date of the letter, failing which necessary steps against plaintiff would be taken. In response, Mr. Pravin Chandra, one of the Directors of the plaintiff, without giving any deadline replied through email dated 05.09.2010 that they would restart the work as soon as the site conditions permit them to do so. 3.16 Thereafter, on 29.09.2010, discussions were held between the parties at the Noida office of the defendant, wherein plaintiff had assured of resuming survey work from mid-October. Plaintiff further assured that it would deploy three groups for Detailed Engineering Survey and two groups for Population Density Survey from 15.10.2010 and thereby, complete the work by the end of November, 2010. Assurances given by plaintiff during the aforesaid meeting, were confirmed by him in writing vide its letter dated 29.09.2010. Considering the time frame proposed by plaintiff, defendant vide its email dated 30.09.2010, requested plaintiff to send the revised Survey Work Schedule and manpower deployment details, in response to which plaintiff vide its email dated 04.10.2010 sent the revised Survey Work Schedule and not the manpower deployment details. Defendant vide its email dated 05.10.2010 expressed its concern over the revised Survey Work Schedule, wherein plaintiff had proposed to commence the Detailed Engineering Survey from 01.11.2010 contrary to its commitment of 15.10.2010 by engaging CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 16 of 74 three groups and getting it completed within 1.5 months i.e. by 15.11.2010. In the said letter, defendant advised plaintiff to adhere to its commitment of 15.10.2010 and to mobilize manpower accordingly.
3.17 Vide its emails dated 19.10.2010, defendant once again expressed dissatisfaction over the slow work progress and reminded the plaintiff to send the manpower deployment details for the entire route survey work. Frustrated by the fact that despite constant reminders, plaintiff had failed to commence work even after lapse of more than four months from the date of issue of LOA, defendant vide letter dated 21.10.2010 gave a final opportunity to plaintiff to demonstrate its seriousness to complete the job. In the said letter, defendant clearly intimated the plaintiff of its intention to take action under Clauses 4.7.3.0 and 4.7.4.0 and 7.0.0.0 of the GCC in the event the plaintiff failed to utilize the last opportunity given to it to submit a detailed recovery schedule by 22.10.2010 or deploy resources including manpower, equipment etc. latest by 28.10.2010. 3.18 Thereafter, plaintiff vide letter dated 22.10.2010 informed the defendant that it had deployed one group from Belmuri towards Durgapur side from 21.10.2010 to start the work on Population Density Survey in one section. Instead of giving the Recovery Survey Schedule as requested by the defendant time and again, plaintiff had sent a schedule that was starting from 10.11.2010 which was totally unacceptable to defendant.
3.19 As plaintiff did not respond to the contents of defendant's letter dated 21.10.2010 in a manner which would have demonstrated its seriousness to complete the works, furthermore aggravated by the fact that it did not deploy adequate resources as instructed, CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 17 of 74 defendant vide letter dated 02.11.2010 was compelled to exercise its right of termination under Clause 7.0.1.0 of the GCC. The occurrence of the following events/contingencies, provided in Clause 7.0.1.0 (i) & (ii) of the GCC, were given as reasons for termination of the contract:-
(a) Default or failure by Contractor of any of the obligations of the Contractor under the contract, including, but not limited to:
(b) Failure to commence any work at any job site in accordance with the time prescribed in this behalf in the progress schedule.
(c) Failure to carry out on the works or any of item to meet the Progress Schedule.
(d) Failure to provide at each job site sufficient labor, material, equipment, machinery, temporary and/or facilities required for the proper and/or due execution of the work or any part thereof.
(e) Failure to execute the works or any of item in accordance with the Contract.
(f) Disobedience of any order or instruction of the Engineer-In-Charge and/or Site Engineer
(g) Negligence in carrying out the works or carrying out of works found to be unsatisfactory by Engineer-in-charge.
(i) Suspension of the entire works or any part
thereof, for a period of 14 (fourteen) days or
more without due authority from Owner or
Engineer-in-charge;
(j) If the contractor is incapable of carrying out
the work.
3.20 Defendant avers that vide letter dated 21.10.2010, plaintiff
was informed that balance and incomplete works under the Contract would be carried out and completed at its risk and cost in exercise of the defendant's entitlement as Owners under Clause 7.0.9.0 of the GCC. It was further informed that cost incurred by defendant while finalizing the agency for completion of unfinished work of the subject work would be at plaintiff's risk and costs and the same would be intimated to it after the finalization of the said amount.CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 18 of 74 3.21 It is stated that from the very beginning, plaintiff neglected and avoided its contractual obligations and miserably failed to meet the stipulated schedule for completion of the Detailed Engineering Survey which ultimately resulted in termination of the contract. Despite several reminders and continuous follow ups through various communications including e-mails dated 20.07.2010, 02.08.2010, 09.08.2010, 13.08.2010, 16.08.2010, 31.08.2010, 03.09.2010 &, 30.09.2010, there was no progress of work. The progress of work never commensurate with the work schedule and manpower deployment details submitted by the plaintiff. Although, defendant had twice provided (on 13.07.2010 and 23.08.2010) hard and soft copies of the route maps, cadastral map, Survey of India's toposheet of its existing pipelines of Paradip- Haldia and Haldia-Durgapur section as well as Line Patrolmen in ROW as and when required in order to expedite the work progress and ease plaintiff's work. However, only 2% of the survey work had been completed even after the lapse of the scheduled completion time of four months from the date of the LOA. Despite being consistently warned, requested and persuaded to expedite the survey works, plaintiff had failed to rise to occasion, even in a single instance, as a result of which the Detailed Engineering Survey got delayed and defendant was left with no option but to terminate its contract with the plaintiff.
3.22 Plaintiff responded immediately vide a letter upon receiving the defendant's letter dated 02.11.2010 on the very same day. Subsequently, plaintiff sent an invoice dated 15.11.2010 to defendant as its first Running Account Bill for Rs.51,19,898/- claiming Rs.46,41,793/- for work done and Rs.4,17,105/- towards CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 19 of 74 service tax @ 10.3%. Vide letter dated 16.11.2010, the plaintiff made the following five claims:-
(i) Claim of Rs 51,19,898/- towards the value of work done along with service tax;
(ii) Claim for refund of Rs. 4,20,000/- deposited by the plaintiff towards security deposit;
(iii) Claim of Rs.18,22,493/- towards loss of profit suffered by the plaintiff;
(iv) Claim for Rs.8,00,000/- for de-mobilization of equipment, machinery and man force from the work site; and
(v) Interest @16% per annum on the total sum of Rs.81,62,391/- claimed under 1 to 4 above with effect from 01.01.2011.
3.23 Pursuant to termination of plaintiff's contract, the work was awarded to M/s Secon Private Limited vide LOA No. 23268402 dated 01.12.2010 at the risk and cost of the plaintiff. 3.24 Thereafter, on 02.08.2011, plaintiff had filed Arbitration Petition No. 42 of 2011 under Section 11(6) of The Arbitration and Conciliation Act, 1996 before the Hon'ble High Court of Delhi seeking appointment of a sole arbitrator for adjudication of its claims. The Defendant challenged the invocation of the arbitration clause by the plaintiff on two grounds - firstly, that the claims raised by the plaintiff were not notified claims and therefore, were not arbitrable within the scope of the arbitration agreement incorporated in Clause 9.0.1.0 of the General Conditions of Contract ("GCC") and secondly, that the dispute whether the plaintiff's claim is notified or not would have to be decided by the General Manager under clause 9.0.2.0 of the GCC prior to commencement of arbitrator proceeding.
3.25 By order dated 18.10.2011, Hon'ble High Court disposed off the aforesaid petition with direction that the plaintiff would approach the General Manager for seeking adjudication on the issue CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 20 of 74 of notified claims as per clause 9.0.2.0 of the GCC. Pursuant thereto, plaintiff had approached the General Manager, who after giving due consideration to the submissions made by both the parties, by order dated 12.03.2012 rejected Claim Nos. 1, 3, 4 and 5 as "not arbitrable" for not being notified and held that only Claim No. 2 i.e. the plaintiff's claim for refund of security deposit worth Rs.4,20,000/- along with interest thereon as arbitrable. 3.26 Plaintiff did not challenge the aforesaid order dated 12.03.2012 passed by the General Manager in accordance with law and instead once again filed an Arbitration Petition bearing No.175 of 2012 under Section 11(6) of the Arbitration and Conciliation Act, 1996 before Hon'ble High Court of Delhi seeking appointment of an arbitrator for adjudication of its aforesaid five claims. The Hon'ble High Court by order dated 19.05.2015 disposed off the aforesaid petition and held that "since the General Manager was of the view that the claim Nos. 1, 3, 4 and 5 are not notified claims, the same are not arbitrable". The Hon'ble High Court specifically referred only Claim No. 2 to the arbitration and in its order dated 19.05.2015 categorically stated that "the arbitrator so selected, would be within his/her right to arbitrate claim No.2 and the interest, if any along with the counter claims(s) if any of the Plaintiff." 3.27 The order dated 19.05.2015 passed by Hon'ble High Court was challenged by the plaintiff before the Hon'ble Supreme Court by way of a Special Leave Petition bearing No.23055 of 2015, which was dismissed by the Hon'ble Supreme Court vide its order dated 28.08.2015 without any interference. After the aforesaid order dated 28.08.2015, the order dated 12.03.2012 passed by the General Manager and order dated 09.05.2015 passed by the Hon'ble High CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 21 of 74 Court of Delhi had attained finality.
3.28 In compliance with the order dated 19.05.2015, defendant in concurrence with the plaintiff, appointed Mr. U.K. Pal as the sole Arbitrator vide its communication dated 28.01.2016. Thereafter, on 08.02.2016, learned Arbitrator entered reference and directed both the parties to appear before him for the first hearing. Plaintiff filed its statement of claims before the learned Arbitrator and with malafide intent included those claims (i.e. claim nos. 1, 3, 4 & 5), which were specifically not referred by the Hon'ble High Court to arbitration vide its order dated 19.05.2015.
3.29 On 25.05.2016, defendant had filed an application under Section 16 of the Arbitration & Conciliation Act, 1996 challenging the jurisdiction of the learned Arbitrator with respect to claims no.1, 3, 4 & 5. Learned Arbitrator, vide order dated 14.07.2016, dismissed the said application without ascribing any reasons whatsoever. On 05.05.2017, the learned Arbitrator passed the Award allowing all the claims (including Claim nos.1, 3, 4 & 5) of plaintiff and rejecting all the counter claims of the defendant without application of mind and ascribing any plausible reasoning on both, fact as well as on law. 3.30 Aggrieved by the Award passed by the learned Arbitrator, defendant filed a petition before the Hon'ble High Court under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the Award dated 05.05.2017. The Hon'ble High Court took into consideration the order dated 19.05.2015 passed by it earlier and held that the disputes which are subject matter of Claim Nos. 1, 3, 4 and 5 were not arbitrable. The Hon'ble High Court vide its order dated 04.09.2017 set aside the Award to the extent it dealt with Claims no. 1, 3, 4 and 5 for being "entirely illegal" and "contrary to CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 22 of 74 the provisions of the Act". However, as regards the rest of the award i.e. claim no. 2, award on interest, award on cost of arbitration and the counter-claims of defendant, the Hon'ble High Court upheld the same.
3.31 Defendant filed an appeal being FAO(OS)(COMM) 189 under Section 37 of the Arbitration and Conciliation Act, 1996 before the Hon'ble High Court against the final order and judgment dated 04.09.2017 passed by the learned Single Judge of the Hon'ble High Court to the extent it upheld the rest of the award. Plaintiff also filed an appeal bearing No. FAO (OS) (COMM.) 197 of 2017 challenging the order dated 04.09.2017 in respect of claims no.1, 3, 4 and 5.
3.32 Upon hearing both the parties, the Division Bench of the Hon'ble High Court was pleased to dismiss the plaintiff's appeal and with respect to the defendant's appeal, by order dated 23.08.2018, the Hon'ble Division Bench set aside the arbitral award in respect of the cost of arbitration and allowed the subject appeal to that extent. However, the other two issues regarding plaintiff's claim no.2 and the defendant's counterclaims were inadvertently not dealt with. Accordingly, defendant filed a review petition (i.e. Rev. Pet. No. 348/2018) before the Division Bench of the Hon'ble High Court seeking review of the order dated 23.08.2018. Plaintiff also filed a Review Petition (Rev. Pet. 361/2018) seeking review of the aforesaid order. Both the review petitions are pending adjudication before the Hon'ble High Court of Delhi.
3.33 Defendant contended that the suit filed by plaintiff is barred by limitation. As per defendant, it is is an admitted position of plaintiff that on 02.11.2010 defendant had terminated the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 23 of 74 Contract executed between the parties. Therefore, the period of limitation to file present suit runs from 03.11.2010. Plaintiff, instead of filing the suit before the court of competent jurisdiction for adjudication of its claims under the Contract, on 14.02.2011 had filed an arbitration petition being ARB. P. 42/2011 under Section 11 of The Arbitration and Conciliation Act, 1996 before the Hon'ble High Court of Delhi seeking appointment of a sole arbitrator for adjudication of its disputes.
3.34 Defendant challenged the invocation of the arbitration clause by the plaintiff on two grounds - firstly, that the claims raised by plaintiff were not notified claims and therefore, were not arbitrable within the scope of the arbitration agreement incorporated in Clause 9.0.1.0 of the General Conditions of Contract ("GCC") and secondly that the dispute whether the plaintiff's claim is notified or not would have to be decided by the General Manager under clause 9.0.2.0 of the GCC prior to commencement of arbitrator proceeding.
3.35 By order dated 18.10.2011, the Hon'ble High Court disposed of the aforesaid petition with direction that plaintiff would approach the General Manager for seeking adjudication on the issue of notified claims as per clause 9.0.2.0 of the GCC. Pursuant thereto, plaintiff had approached the General Manager, who by order dated 12.03.2012 rejected claims No.1, 3, 4 and 5 as "not arbitrable" for not being notified and held that only claim no.2 i.e. the plaintiff's claim for refund of security deposit with interest thereon as arbitrable.
3.36 Aggrieved by the General Manager's decision, plaintiff once again filed an Arbitration Petition bearing No. 175 of 2012 CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 24 of 74 under Section 11 of the Arbitration and Conciliation Act, 1996 before Hon'ble High Court of Delhi seeking appointment of an arbitrator for adjudication of its all five claims. The Hon'ble High Court by order dated 19.05.2015 disposed of the aforesaid petition and held that "since the General Manager was of the view that the claim nos. 1, 3, 4 and 5 are not notified claims, the same are not arbitrable". The Hon'ble High Court specifically referred only claim no.2 to the arbitration and in its order dated 19.05.2015 categorically stated that "the arbitrator so selected, would be within his/her right to arbitrate claim no.2 and the interest, if any along with the counter claims(s), if any of the plaintiff." 3.37 The order dated 19.05.2015 passed by the Hon'ble High Court of Delhi was challenged by plaintiff before Hon'ble Supreme Court by way of a Special Leave Petition bearing no. 23055 of 2015, which was dismissed by the Hon'ble Supreme Court vide its order dated 28.08.2015 without any interference. After the aforesaid order dated 28.08.2015 passed by Hon'ble Supreme Court, the order dated 12.03.2012 passed by the General Manager and order dated 09.05.2015 passed by Hon'ble High Court of Delhi had attained finality. Even if it is presumed, but not admitted, that the cause of action for filing the present suit had arisen on 28.8.2015 (i.e. date of Hon'ble Supreme Court's order), the present suit has been filed on 17.08.2019, which is after more than 4 (four) years and as such the present suit is hopelessly barred by limitation. 3.38 It is contended that despite the Hon'ble Supreme Court's Order, the plaintiff malafidely submitted all its claims (including those which were not referred to the arbitration) before the learned Arbitrator. Learned Arbitrator exceeded his jurisdiction and passed CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 25 of 74 the Award dated 05.05.2017 allowing all claims of the Plaintiff (including those which were not referred to the arbitration) and rejected all the counter claims of defendant. The Hon'ble High Court vide its order dated 04.09.2017 has set aside the Award to the extent it dealt with the non-arbitrable claims i.e. claims nos. 1, 3, 4 & 5 for being "entirely illegal" and "contrary to the provisions of the Act".
3.39 Defendant avers that even if the court is to consider the "exclusion of time of proceeding bona fide without jurisdiction"
prescribed under Section 14 of The Limitation Act, 1963, the proceedings before the learned Arbitrator for adjudication of the claims, which were not specifically referred to learned Arbitrator, cannot be construed as bona fide, since the plaintiff had malafidely submitted those claims before the learned Arbitrator despite being aware that the said claims were not referred to him. With an intent to undermine the majesty of the Hon'ble Supreme Court and Hon'ble High Court of Delhi, the plaintiff went ahead with submitting the non-arbitrable claims before the learned Arbitrator despite being aware that the same were held to be non-arbitrable by the Hon'ble High Court in its order dated 19.05.2015 and said order was later on confirmed by the Hon'ble Supreme Court vide its order dated 28.08.2015. In any event, the plaintiff has failed to explain in the plaint as to how the same is within limitation. Plaintiff has not made a single averment qua limitation or sought any exemption prescribed under Section 14 of The Limitation Act, 1963. 3.40 Denying the other averments and allegations made in the plaint, defendant prayed to dismiss the suit of plaintiff with costs.CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 26 of 74 4.1 In replication, plaintiff denied the averments of written statement and reiterated its stand as mentioned in the plaint. In respect of respondent's contentions that suit filed by plaintiff was barred by law of limitation, it is stated that Hon'ble High Court vide order dated 14.09.2017 granted liberty to raise grievances against the defendant in accordance with law thereby granted liberty to plaintiff to file the present suit. Plaintiff has categorically denied that the claims filed by it are barred by law of limitation as alleged by defendant.
Issues 5.1 On the basis of pleadings of the parties, the following issues were framed on 17.11.2022:-
(i) Whether the present suit of the plaintiff is time barred and liable to be dismissed on account of limitation? OPD.
(ii) Whether the termination of the contract dt. 14.07.2010 by the defendant was wrongful? OPP.
(iii) Whether the suit has been signed, verified and filed by a competent person on behalf of the plaintiff? OPP.
(iv) Whether the plaintiff is entitled to the reliefs as prayed for in the suit? OPP.
(v) Whether the plaintiff is entitled to receive an amount of Rs.28,75,076/- (Rupees Twenty Eight Lacs Seventy Five Thousand Seventy Six Only) from the defendant being the value of the work done by the plaintiff for the defendant?OPP.
(vi) Whether the plaintiff is entitled to receive an CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 27 of 74 amount of Rs.20,87,501/- (Rupees Twenty Lacs Eighty Seven Thousand Five Hundred one only) from the defendant due to the loss of profit caused to the plaintiff due to the illegal termination of the contract by the defendant?OPP.
(vii) Whether the plaintiff is entitled to receive an amount of Rs.8,00,000/- (Rupee Eight lacs only) from the defendant being the demobilization costs and notice period salary to staff and payments to vendors being the additional costs incurred by the plaintiff due to the illegal termination of contract by the defendant?OPP.
(viii) Whether the plaintiff is entitled to interest @ 12% on the above mentioned amounts in para no. 5, 6 and 7 from 02.11.2010 (date of termination) till the date of filing of the suit aggregating to Rs.61,06,026/- (Rupees Sixty One lacs Six Thousand and Twenty Six only) and further interest @ 12% from the date of filing of the suit till the actual realization?OPP.
(ix) Whether the defendant is liable to pay to the plaintiff, an amount of Rs.5,17,513/- (Rupees Five lac Seventeen Thousand Five Hundred Thirteen Only) being the value of GST?OPP.
(x) Whether the defendant could have awarded the said contract at a higher value and without open tender to M/s Secon Pvt. Ltd.?OPP.
(xi) Whether hindrances were caused in the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 28 of 74 execution of the contract due to unfavourable site conditions and non-cooperation of the defendant's staff as mentioned in para no. 5 of the plaint? OPP.
(xii) Relief.
Evidence of parties 6.1 In order to prove its case, plaintiff examined PW1 Ms.Ragini Sinha, AR of plaintiff. She filed her evidence by way of affidavit, Ex.PW1/A, wherein, she has reaffirmed and corroborated the averments as set out in the plaint. She relied upon the documents, Ex.PW1/1 to Ex.PW1/27 as mentioned in her evidence affidavit.
6.2 Besides PW1, plaintiff also got examined PW2 Sh.Pravin Chandra, AR of plaintiff for financial matters and field activities during project execution. Mr. Chandra in his affidavit of evidence, Ex.PW2/A has corroborated and supported the deposition as made by PW1. Plaintiff did not examine any other witness in support of its case. Accordingly, plaintiff's evidence was closed on 24.05.2023.
6.3 On the other hand, defendant has chosen not to lead any evidence in support of its defence. On 24.05.2023, learned counsel for defendant submitted that defendant did not wish to lead defence evidence. Accordingly, defendant's evidence was closed.
Analysis and Findings on Issues 7.1 I have heard and considered the submissions advanced by learned counsel for parties, including the written synopsis filed by them and perused the material on record. The issue wise findings CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 29 of 74 are as under:-
Issue no.(iii) Whether the suit has been signed, verified and filed by a competent person on behalf of the plaintiff? OPP.
8.1 Learned counsel for defendant submitted that the suit filed by plaintiff is not maintainable in the present form since the same has not been filed by plaintiff through an authorized representative. The cross-examination of PW1 Ms. Ragini Sinha is absolutely clear to the fact that she was not the constituted attorney of the plaintiff and in turn, she had no valid authority in her favour to file the present suit. The Power of Attorney in favour of Ms. Sinha is not a valid document under the provisions of The Power of Attorney Act, 1882.
8.2 He further submitted that plaintiff has failed to prove that Ms. Sinha is a competent person to sign and verify the present suit filed by plaintiff. The plaintiff has failed to prove that the Board Resolution dated 08.07.2019, Ex.PW1/1 was signed and executed by plaintiff company. He further argued that plaintiff has also failed to file the notice calling for the board meeting or the minutes of board meeting allegedly held on 08.07.2019. Further, plaintiff has failed to prove that the Board Resolution is an original document filed before the court.
8.3 He submitted that as per document, Mark-A on 13.03.2023, Mr.Vipin Kumar Patel was not a Director of the plaintiff company at the time of filing of suit and was not authorized to sign the Board Resolution. After inviting attention of this court to the cross-examination of PW1 Ms. Ragini Sinha recorded on CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 30 of 74 13.03.2023, he submitted that plaintiff has failed to discharge the onus to prove the issue. He prayed to decide the issue in favour of defendant and against the plaintiff.
8.4 Per contra, learned counsel for plaintiff submitted that the present suit has been signed and verified by Ms. Ragini Sinha, who is a Director of the plaintiff company. The same is ratified by the plaintiff company vide Board Resolution dated 08.07.2019, Ex.PW1/2. She is also the authorized signatory on the Letter of Acceptance, Ex.PW1/3 and Contract dated 14.07.2010, Ex.PW1/4 as well as all communications with the defendant have been through her.
8.5 He further submitted that Ms. Ragini Sinha (PW1) has diligently contested the suit on behalf of plaintiff and has herself deposed as PW1. Therefore, the plaintiff company, in allowing her to continue to represent the plaintiff in the present suit is an implied Ratification, which has been recognized by Hon'ble Supreme Court to be sufficient.
8.6 He further argued that since Ms. Ragini Sinha has always been one of the Directors of the plaintiff, any pleadings (including the plaint) signed and verified by her is validly constituted in terms of Order XXIX Rule 1 of The Code of Civil Procedure (in short 'CPC'). He submitted that the contract itself provided for tenderer to submit Power of Attorney or other proof of authority in favour of the signatory i.e. Ms.Ragini Sinha which was duly provided to defendant. Relying upon United Bank of India vs. Naresh Kumar & Ors. (1996) 6 SCC 660 and Seritec Electronics Pvt. Ltd. vs. Computer Peripheral Solutions, 2014/DHC/1002, he submitted that plaintiff has succeeded to prove on record that the present suit has CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 31 of 74 been signed, verified and filed by a competent person on behalf of plaintiff. He prayed to decide the issue in favour of plaintiff. 8.7 I have considered the rival submissions of both the parties and perused the material on record.
8.8 In United Bank of India (supra), Hon'ble Supreme Court in para no.9 and 10 held as under:-
"9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the CPC, to ensure that injustice is not done to any party who has a just case as far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
10. It cannot be disputed that a company like the appellant can sue and be sued in its own name.
Under Order 6 Rule 14 of the CPC a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the CPC, therefore, provides that in a suit by or against a corporation the secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the CPC it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto an de hors Order 29 Rule 1 of the CPC, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the CPC. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 32 of 74 In absence thereof and in cases where pleadings have been signed by one of its officers a Corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer."
8.9 Further, in para no.4 and 5 in Seritec Electronics Pvt. Ltd. (Supra), Hon'ble Delhi High Court held as under:-
4. This aspect, with respect to the authority to sign and verify the suit by a principal officer has been dealt with by a Division Bench of this Court in the case of Kingston Computers (1) P. Ltd. Vs. State Bank of Travancore MANU/DE/1946/2008: 153 (2008) DLT 239 (DB) and in which, it has been held that a principal officer is authorized by virtue of Order 29 Rule 1 CPC not only to sign and verify the pleadings, but also therefore to institute the suit.
Paras 23 to 26 of this judgment are relevant and the same read as under:-
23. This then is the short issue which needs to be considered by us exercising appellate jurisdiction.
24. Order 29 Rule 1 of the Code of Civil Procedure reads as under:-
1. Subscription and verification of pleading.-
In suits by or against a corporation, any pleading maybe signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.
25. Discussing Order 29 Rule 1 of the Code of Civil Procedure, in the decision in United Bank of India's case (supra), in para 10, Hon'ble Supreme Court held as under:-
Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 33 of 74 thereto and dehors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorize any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure.
26. Suffice would it be to state that in law, the Secretary, Director or a Principal Officer of a company would be treated as duly authorized to institute suit on behalf of a company. This flows out from a bare reading of Order 29 Rule 1 of the Code of Civil Procedure and as further explained in the decision in United Bank of India's case.
5. Reference may also be made usefully to the judgment of the Supreme Court in the United Bank of India Vs. Naresh Kumar & others MANU/SC/0002/1997: (1996) 6 SCC 660, in which, in para 13, it is said that there is a presumption of valid institution of a suit once the same is prosecuted for a number of years. This test as laid down by the Supreme Court is also satisfied in the present case inasmuch as the suit in fact has been prosecuted for about two years by the appellant corporation for seeking an appropriate decree against the respondent by adducing evidence.
I may note that the appellant is a public sector undertaking and not a private company where there would be disputes between two sets of shareholders claiming right to management and one set of shareholders are opposing another set of shareholders with respect to control and management of the company. This thus is an additional fact that there can be no dispute as to the authority of the person signing/verifying the pleadings and instituting the suit.
5. In view of the above, even assuming the appellant/plaintiff failed to prove that Ms. Avani Gupta was a co-director and was a signatory to a resolution, since the admitted fact is that the suit by the appellant/plaintiff was filed by one of the co-directors, therefore, the suit was validly instituted in terms of Order 29 Rule 1 CPC."
8.10 Plaintiff filed the present suit against defendant through its authorized signatory Ms.Ragini Sinha. She filed Board Resolution dated 08.07.2019, whereby she was authorized to represent and take CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 34 of 74 actions on behalf of plaintiff. She signed and verified the pleadings and filed her affidavit dated 14.08.2019 in support of plaint. 8.11 In her affidavit of evidence, Ex.PW1/A, Ms.Ragini Sinha stated that she was the authorized representative of the plaintiff. She was conversant with the facts and circumstances of the present case and was competent to swear the affidavit filed by her. She proved Board Resolution dated 08.07.2019 as Ex.PW1/1. 8.12 In her cross-examination conducted on 31.01.2023, PW1 Ms.Ragini Sinha deposed that she is the Director of the plaintiff company. She was acting officially in performing the activities of the company. She was monitoring the site activities through the survey team, involved on the site and accordingly, as per the data required on site was to be mapped and processed in the office, so her duties were to guide the site as well as the office activities related to the project in question. She further deposed that she was involved in monitoring the site activities as well as the mapping and processing of data to prepare the final reports and map. 8.13 From the aforesaid deposition of PW1, it is seen that she is well conversant with the facts and circumstances of the case. She was actively involved in performing the activities of the company. She has been monitoring the site activities on behalf of plaintiff company.
8.14 On 13.03.2023, the Board Resolution dated 08.07.2019 was shown to PW1 during her cross-examination and she was asked, if she was part of meeting dated 08.07.2019 in which the Resolution was passed. She replied in affirmative. She testified that she and Mr.Vipin Kumar Patel constituted part of the meeting in which Resolution dated 08.07.2019 was passed. She denied the suggestion CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 35 of 74 that neither any meeting was held on 08.07.2019 nor any resolution was passed appointing her as the authorized representative of plaintiff.
8.15 There is no dispute that PW1 Ms.Ragini Sinha was/is not the Director of plaintiff company. PW1 has signed, verified and filed the present suit against defendant. She has been contesting the present suit on behalf of plaintiff company since 2019 i.e. more than four years. She has deposed as PW1 being well conversant with the facts and circumstances of the case. She signed the Letter of Acceptance (in short 'LOA'), Ex.PW1/3 and Contract Document, Ex.PW1/4 on behalf of plaintiff company. Thus, it is found that the plaintiff company has ratified the representation of Ms.Ragini Sinha as its representative to file and pursue the present suit against defendant.
8.16 Additionally, in view of Rule 1 of Order XXIX CPC, PW1 Ms.Ragini Sinha being one of the Directors of plaintiff company is fully competent and authorized to sign and file the present suit against defendant. It is well settled that it is always fit and appropriate that matters are decided on their merits and not on hair splitting technicalities of law.
8.17 Keeping in view the aforesaid facts into account, I am of the view that plaintiff has succeeded to discharge the onus to prove the issue. Accordingly, it is held that the present suit has been signed, verified and filed by a competent person on behalf of plaintiff company. This issue is decided in favour of plaintiff and against the defendant.
Issue no.(i) CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 36 of 74 Whether the present suit of the plaintiff is time barred and liable to be dismissed on account of limitation? OPD.
9.1 Onus to prove this issue lies on defendant. Defendant has not examined any witness to prove the same.
9.2 During pendency of the suit, defendant filed an application under Order VII Rule 11 r/w section 151 CPC for rejection of plaint being barred by law i.e. The Limitation Act, 1963 (in short 'The Act'). Plaintiff filed an application under section 14 r/w section 5 of The Act for exclusion of time of proceedings conducted bonafide in court without jurisdiction. 9.3 The applications filed by parties were disposed off vide order dated 23.08.2022 with the observation that an issue on the point of limitation shall be framed which would be decided along with other issues.
9.4 Learned counsel for defendant submitted that benefit of section 14 of The Act should not be given to plaintiff as the proceedings initiated by plaintiff before learned Arbitrator cannot be bonafide. Relying upon order dated 12.03.2012 passed by the General Manager of defendant, order dated 19.05.2015 passed by Hon'ble Delhi High Court and order dated 28.08.2015 passed by Hon'ble Supreme Court, he submitted that plaintiff knew fully well that it was knocking at the wrong door/forum and yet continued to proceed with its claims before the learned Arbitrator. He argued that in light of findings given by Hon'ble High Court of Delhi in order dated 19.05.2015, there remained no dispute that claims no.1, 3, 4 and 5 (which are raised in the present suit) were not arbitrable. However, despite the findings of Hon'ble High Court, plaintiff challenged the said order before Hon'ble Supreme Court, which was CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 37 of 74 pleased to dismiss the petition. In utter disregard of the orders passed by Hon'ble High Court and Hon'ble Supreme Court, plaintiff went ahead and filed all its claims before the Arbitrator. Hence, the conduct of plaintiff reeks malafide and cannot be considered to be bonafide. In support of his submissions, learned counsel relied upon judgment titled as Param Preet Singh vs. Devender Kumar Relan & Ors. 258 (2019) DLT 385 (DB). He prayed to dismiss the suit filed by plaintiff being time barred.
9.5 Per contra, learned counsel for plaintiff submitted that the cause of action in the present case arose first on 02.11.2010, when contract was illegally terminated by defendant. Thereafter, plaintiff approached Hon'ble High Court of Delhi vide Arbitration Petition No.42/2011 which was withdrawn vide order dated 18.10.2011. Plaintiff approached the General Manager of defendant vide letter dated 23.11.2011, wherein the General Manager vide order dated 12.03.2012 held that the claims no.1,3,4 and 5 were not notified claims, therefore, not arbitrable.
9.6 Subsequently, plaintiff again approached Hon'ble High Court vide Arbitration Petition No.175/2012. The cause of action arose when the said petition was allowed and the matter was referred to arbitration by the Hon'ble High Court vide order dated 19.05.2015, wherein the Hon'ble High Court had observed that it was not in a position to conclude whether the General Manager was right in not notifying the claims no.1,3,4, and 5. 9.7 He further submitted that the present suit could not have been filed because plaintiff was bonafidely litigating and pursuing its remedy in Arbitration, wherein vide Award dated 05.05.2017, the claims of plaintiff were allowed and the application filed by CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 38 of 74 defendant u/s 16 of The Act was rejected. Therefore, plaintiff had a bonafide and legitimate claim which was being pursued by it. 9.8 Thereafter, the said award was set aside by Hon'ble High Court vide order dated 14.09.2017, whereby it was held that the claims no.1,3,4 and 5 were not arbitrable. However, liberty was given to plaintiff to take steps as per law regarding claims no.1, 3, 4 and 5. Plaintiff has filed the present suit within three years from 14.09.2017, therefore, the suit is not barred by limitation. 9.9 He argued that the Hon'ble High Court would not have granted the said specific liberty to plaintiff, in case it was of the view that plaintiff was not bonafidely pursuing its claims. He submitted that the facts and circumstances leading to filing of the present suit have been detailed in the plaint itself and therefore, there was no need for plaintiff to file a separate application u/s 14 of The Act. Regardless, the same was filed and is pending adjudication. He relied upon Delhi Metro Rail Corporation vs. Traffic Media Pvt. Ltd. 263 (2019) DT 770, wherein Hon'ble High Court of Delhi has held that in cases where reason for delay has been clarified and mentioned in the plaint itself, no formal application u/s 14 of The Act is required to be filed. 9.10 He further submitted that the judgment relied upon by defendant i.e. Param Preet Singh (supra) can be easily distinguished as in that particular case, the subject matter of the subsequent proceedings was not the same, which is not so in the present case. Moreover, plaintiff has been bonafidely pursuing its claims and the defendant has failed to prove any malafide or lack of bonafide on the part of plaintiff. Therefore, plaintiff ought to be given benefit of Article 14 of The Act.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 39 of 74 9.10 Considered the submissions of both the parties and perused the material on record.
9.11 As per the case of plaintiff, defendant floated tender on 17.12.2009 for expansion of LPG pipeline from Paradip to Haldia and Haldia to Durgapur. Plaintiff was declared successful bidder and LOA, Ex.PW1/3 was issued on 15.06.2010. As per the contract, Detailed Engineering Survey and Population Density Index Survey was to be completed within a period of four months from issuance of LOA i.e. by 15.10.2010. The work could not be completed within stipulated time. Accordingly, defendant had rescinded the contract vide letter dated 02.11.2010, Ex.PW1/12. 9.12 Disputes arose between the parties. Plaintiff approached Hon'ble High Court of Delhi vide Arbitration Petition No.42/2011 which was withdrawn vide order dated 18.10.2011 (Ex.PW1/19). Thereafter, plaintiff approached the General Manager vide letter dated 23.11.2011, wherein the General Manager vide order dated 12.03.2012 held that claims no.1,3,4 and 5 were not notified claims, therefore, not arbitrable.
9.13 Feeling aggrieved by order dated 12.03.2012 of the General Manager, plaintiff again approached Hon'ble High Court of Delhi vide Arbitration Petition No.175/2012 which was disposed off vide order dated 19.05.2015, wherein Hon'ble High Court observed that since the General Manager was of the view that the claims no.1,3,4 and 5 were not notified claims, the same are not arbitrable. It was further observed that the Arbitrator so selected, would be within his/her right to arbitrate the claim no.2 and the interest, if any thereon along with the counter claim(s), if any of the respondents.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 40 of 74 9.14 Plaintiff challenged the aforesaid order dated 19.05.2015 before Hon'ble Supreme Court vide SLP(C) No.23055/2015 which was dismissed on 28.08.2015.
9.15 Despite categorical order of Hon'ble High Court of Delhi dated 19.05.2015 regarding claims no.1,3,4 and 5 not being notified claims and not arbitrable, plaintiff chose to file statement of claims including claims no.1, 3, 4 and 5 before the Arbitrator. The Arbitrator admitted all the claims of plaintiff. Defendant moved application u/s 16 of The Arbitration & Conciliation Act, 1996 (in short 'A&CA') before the Arbitrator for having no jurisdiction to decide claims no. 1,3,4 and 5 as per order of Hon'ble High Court of Delhi. The Arbitrator dismissed the application of defendant and proceeded to decide all the claims filed by plaintiff including the claims having been held non-arbitrable by Hon'ble High Court. 9.16 On culmination of arbitral proceedings, defendant filed petition u/s 34 of A&CA challenging award dated 05.05.2017 passed by learned Arbitrator. The said petition was disposed off vide order dated 14.09.2017. In para no.15 and 16 of OMP (COMM.) No.317/2017, Hon'ble High Court held as under:-
"It is quite clear that the disputes which are subject matter of claims no.1,3,4 and 5 were not arbitrable. This court while disposing of the arbitration petition under section 11(6) of the Act on 19.05.2015 had specifically held so. In the light of this, there was no reason for the learned Arbitrator to have gone ahead and adjudicated upon those disputes. The impugned award to the extent that it deals with claims no.1,3,4 and 5 is held to be entirely illegal. The same has been passed contrary to the provisions of the Act. The Award to the extent it deals with claims no.1,3,4 and 5 is set aside. Rest of the award is upheld.
16. Petition stands disposed off. Liberty is granted to respondent to take steps as per law regarding its claim No.1,3,4 and 5."CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 41 of 74 9.17 Both the parties challenged order dated 14.09.2017 before Hon'ble Division Bench of Hon'ble High Court of Delhi. The appeal FAO (COMM) 189/2017 filed by defendant was allowed. FAO (COMM) 197/2017 filed by plaintiff was dismissed. 9.18 It is well settled that if liberty is granted to a party to prosecute its remedy in accordance with law, it does not mean that it is unfettered. It is always subject to law of limitation etc. The opposite party always has right to object the suit, application or claim on the ground of limitation etc. and take other legal pleas as per law of the land. In the instant case, plaintiff was granted liberty to take steps as per law regarding its claims no.1,3,4 and 5. Liberty itself implies that suit was to be filed as per law. Therefore, the filing of suit in respect of claims no.1,3,4 and 5, on being objected by defendant, is to be tested on the touchstone of law i.e. whether it has been filed within the stipulated period of limitation or not. 9.19 Section 14 of The Act provides for circumstances for computing the period of limitation for a suit, where the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief in a court. The principle of section 14 is the protection against the bar of limitation to a person honestly doing his best to get his case tried on the merits, but failing through the court being unable to give him such a trial. The expression "is unable to entertain" means "is unable to go into the merits of the case".
9.20 In the case of Consolidate Engineering Enterprises vs. The Principal Secretary (Irrigation Department) and Others, V (2008) SLT 545, the Hon'ble Apex Court held that the following CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 42 of 74 five conditions must be satisfied before section 14 can be pressed into service:-
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceedings was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and; (5) Both the proceedings are in a Court."
9.21 In Mooken Devarsy Ouseph vs. Rajappan Pillai 1983 KLT 922, it was held that a plaintiff, who was careless, will not get the time taken before a wrong court excluded in computing the period of limitation for the suit. If it is brought out that the suit happened to be instituted and prosecuted before the wrong court not because of any want of due care and attention on the part of plaintiff, only in that case, he can the time before the wrong court excluded under this section.
9.22 Further, in Ahmed Hassan vs. Smt.Ruab Bano 2005. AIHC, 2082 (All.), it was observed that where the parties are well aware of their rights and procedure to be followed, filing a suit which is not maintainable and also to get the appeal dismissed on merits, resorting to the remedy which is provided by law with an application to delay on the ground that he was prosecuting other civil proceedings bonafide cannot be accepted. 9.23 It is well settled that proceedings contrary to a clearly expressed provision of law cannot be regarded as proceedings in good faith.
9.24 In the case in hand, despite categorical order passed by Hon'ble High Court of Delhi in Arbitration Petition No.175/2012 dated 19.05.2015 that since the General Manager was of the view CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 43 of 74 that claims no.1,3,4 and 5 were not notified claims, the same are not arbitrable. Further, observation that the Arbitrator so selected, would be within his/her right to arbitrate the claim no.2 and interest, if any thereon along with the counter claim(s), if any of the respondents, plaintiff's act of filing the claims being not arbitrable before the Arbitrator shows that it was not acting with due care and attention. Prosecution of claims no.1,3,4 and 5 by plaintiff before the Arbitrator despite rejection of the same by Hon'ble High Court, cannot be said to be prosecution of remedy in good faith. 9.25 Plaintiff, despite being cautioned by defendant by filing application u/s 16 of A&CA before the Arbitrator, continued to pursue claims no.1,3,4 and 5. This shows negligence and carelessness on the part of plaintiff as it continued to prosecute its abovesaid claims before the Arbitrator despite being fully aware that the said claims were not arbitrable.
9.26 As per Article 113 of The Act, any suit for which no period of limitation is provided elsewhere in the Schedule, the limitation is three years from the date when the right to sue accrues. In the instant case, as per the case of plaintiff, cause of action arose firstly on 02.11.2010 when Contract was illegally terminated by defendant. It further arose when the learned Single Judge of Hon'ble High Court of Delhi referred the dispute for arbitration on 19.05.2015.
9.27 Plaintiff challenged the order dated 19.05.2015 before Hon'ble Supreme Court by way of filing SLP which was dismissed on 28.08.2015. Thus, order dated 19.05.2015 attained finality in respect of claims no.1,3, 4 and 5. Accordingly, the period of three years from 28.08.2015 expired on 27.08.2018. Plaintiff filed the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 44 of 74 present suit in the court on 17.08.2019 i.e. beyond the period of limitation.
9.28 Plaintiff's act of prosecution of claims no.1,3,4 and 5 before learned Arbitrator despite being not arbitrable and declined by Hon'ble High Court cannot be said that it was pursuing the remedy before Arbitrator with due diligence and bonafidely. 9.29 It is for plaintiff to prove that his case fell within the ambit of section 14 of The Act and the burden of proof cannot shift to defendant. For proving absence of 'good faith', it is not necessary to establish that plaintiff was dishonest in filing the suit before the wrong court or that he did it mala fide. If there is a lack of due care and attention on the part of plaintiff, then plaintiff cannot be said to be acting in good faith. So, a plaintiff, who was careless will not get the time before a wrong court excluded in computing the limitation period.
9.30 In the case in hand, plaintiff is found to have prosecuted its remedy in respect of claims no.1,3,4 and 5 before Arbitrator without due care and attention. Plaintiff was careless and it did not act in good faith in prosecution of its claim before the Arbitrator. Thus, plaintiff is not entitled to get the time excluded in computing the period of limitation.
9.31 For the aforesaid reasons and discussions, I am of the considered view that plaintiff cannot be given benefit of section 14 of The Act as prosecution of remedy in respect of claims no.1,3,4 and 5 before the Arbitrator cannot be said to be bonafide. The suit filed by plaintiff is found to be barred by law of limitation. Accordingly, issue no (i) is decided in favour of defendant and against the plaintiff.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 45 of 74 Issue no.(ii) Whether the termination of the contract dt. 14.07.2010 by the defendant was wrongful? OPP.
10.1 Learned counsel for plaintiff submitted that vide judgment dated 10.01.2023, Ex.PW1/27, Hon'ble High Court of Delhi categorically held that factual findings of learned Arbitrator cannot be ignored. Therefore, the findings of learned Arbitrator regarding claims of plaintiff have been affirmed and attained finality. He argued that issues raised before learned Arbitrator i.e. illegal termination of contract, work done and loss of profit were decided in favour of plaintiff. The said issues and findings therein were affirmed by Hon'ble High Court. Therefore, re-adjudication of said issues in the present suit is barred by the Doctrine of res- judicata/constructive res-judicata/issue estoppel. In support of his submissions, he relied upon Hope Plantation Ltd. vs. Taluk Land Board, Peermade & Ors. (1999) 5 SCC 590 and K.V. Geroge vs. Secretary to Government, Water and Power Department (1989) 4 SCC 595.
10.2 On the other hand, learned counsel for defendant submitted that plaintiff's contention on res judicata and issue estoppel is not applicable for the following reasons:-
(i) Issue estoppel is applicable only to criminal proceedings [refer judgments passed by the Hon'ble Supreme Court in the case of Venture Global Engineering LLC vs. Tech Mahindra Ltd. & Anr. (2018) 1 SCC 656 & Masud Khan Vs. State of UP (1974) 3 SCC 469.
(ii) Res judicata and issue estoppel are not applicable CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 46 of 74 where the orders suffers from jurisdictional error (refer the following judgments:
A. Dadu Dayalu Mahasabha Vs. Mahant Ram Niwas & Another (2008) 11 SCC 753 .
B. Isabella Johnson Vs. M.A. Susai (1991) 1 SCC 494. C. Sushil Kumar Vs. Gobind Ram (1990) 1 SCC 193.
10.3 I have given my thoughtful consideration to the submissions advanced by learned counsel for parties and the entire material available on record.
10.4 I do not find any merit in the submissions of plaintiff that the issues i.e. illegal termination of contract, work done and loss of profit have already been adjudicated in arbitration proceedings and the said issues have subsequently been affirmed by Hon'ble High Court. Therefore, re-adjudication of the said issues in the present suit is barred by doctrine of res-judicata/constructive res- judicata/issue estoppel.
10.5 It is matter of record that in Arbitration Petition No.175/2012, Hon'ble High Court of Delhi held that since the General Manager was of the view that claims no.1,3,4 and 5 were not notified claims, the same are not arbitrable. The Arbitrator was allowed to arbitrate the claim no.2 and interest, if any thereon along with the counter claim(s), if any of the respondents (defendant herein). The Arbitrator passed the award dated 05.05.2017 in respect of all the claims filed by plaintiff. The said award was challenged by defendant in OMP (COMM.) 317/2017, wherein, the Hon'ble High Court again held that the disputes which are subject matter of claims no. 1,3,4, and 5 were not arbitrable. It was observed that in view of order dated 19.05.2015, there was no CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 47 of 74 reason for learned Arbitrator to have gone ahead and adjudicated upon those disputes. The impugned award dated 05.05.2017 to the extent it dealt with claims no.1,3,4 and 5 was held to be entirely illegal having been passed contrary to the provisions of A&CA. 10.6 The order dated 14.09.2017 passed in OMP (COMM) No.317/17 was challenged by both the parties by filing appeal. The appeal filed by defendant being FAO (OS) (COMM) 189/2017 was partly allowed, while FAO (OS) (COMM) 197/2017 filed by plaintiff was dismissed.
10.7 For application of doctrine of Res-judicata, the following conditions must be satisfied:-
(1) The matter must be directly and substantially in issue in the two suits.
(2) The prior suit must have been between the same parties or persons claiming under them (3) Such parties must have litigated under the same title in the former suit.
(4) The court which determined the earlier suit must be competent to try the later suit (subject to the provisions contained in Explanation VIII, added by 1976 Amendment).
(5) The question directly and substantially in issue in the subsequent suit should have been heard and finally decided in the earlier suit.
10.8 In the case in hand, plaintiff has failed to prove on record that the disputes in this case have been earlier decided by a court of competent jurisdiction. The award dated 05.05.2017 passed by learned Arbitrator in respect of claims no.1,3,4 and 5 have been held to be entirely illegal as the same was passed without jurisdiction by Hon'ble High Court of Delhi. Accordingly, the doctrine of Resjudicata/constructive res judicata/issue estoppel as claimed by plaintiff is not applicable in the facts and circumstances of this case. 10.9 In light of above discussion, this court proceeds to decide CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 48 of 74 as to whether plaintiff has succeeded to prove on record that the termination of Contract dated 14.07.2010 by defendant was wrongful or not.
10.10 Onus to prove this issue lies on plaintiff. Plaintiff has examined two witnesses to discharge the onus to prove the issue. PW1 Ms.Ragini Sinha in her affidavit of evidence, Ex.PW1/A, has deposed the same facts as mentioned in the plaint. In the course of her deposition, she proved Certificate of Incorporation of plaintiff company dated 18.11.2009 as Ex.PW1/2, Letter of Acceptance dated 15.06.2010, Ex.PW1/3, extract of Contract dated 14.07.2010, Ex.PW1/4, representation dated 29.09.2010 given by plaintiff to defendant company, Ex.PW1/6. Letter dated 30.09.2010 issued by Engineer Incharge to plaintiff company dated 30.09.2010, Ex.PW1/7. Pre-termination letter dated 21.10.2010, Ex.PW1/9, letter dated 22.10.2010 given by director of plaintiff company to the Engineer Incharge, Chief Construction Manager of defendant company, Ex.PW1/10, termination letter dated 02.11.2010, Ex.PW1/12, RTI reply dated 25.10.2017, Ex.PW1/16 and RTI reply dated 01.05.2019, Ex.PW1/17.
10.11 The exhibition of documents i.e. Board Resolution dated 08.07.2019, Ex.PW1/1, letter dated 10.01.2023 by professor of GEO Matics Engineering, IIT, Roorkee, Uttrakhand, Ex.PW1/5, Progress Reports dated 07.07.2010, 04.08.2010, 09.08.2010 and 25.10.2010 of the work done by plaintiff, Ex.PW1/8, letters dated 28.10.2010 and 30.10.2010 along with original postal receipt, Ex.PW1/11, letter dated 02.11.2010 given by plaintiff requesting defendant to withdraw termination, Ex.PW1/13, letters dated 15.11.2010 and 16.11.2010 along with original postal receipts, Ex.PW1/15, letter CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 49 of 74 dated 06.12.2010 with original postal receipts, Ex.PW1/18 were objected by counsel for defendant.
10.12 PW2 Sh.Pravin Chandra, AR of plaintiff has supported and corroborated the testimony of PW1 Ms. Ragini Sinha. He has relied upon documents, Ex.PW1/8, Ex.PW1/10, Ex.PW1/11, Ex.PW1/12 and Ex.PW1/15 as relied upon by PW1.
10.13 PW1 in her cross-examination admitted that she had not visited the site frequently. She stated that her entire survey team of eight to ten members were continuously reporting her. The other Consultant/Director Mr. Pravin Chandra visited the site many times. As per the witness, when the Letter of Acceptance was issued on 15.06.2010, they mobilized the survey team at the earliest to assess the field condition. Due to presence of black cotton soil and heavy rains, the site was difficult to work. Still, plaintiff tried to find out the dry workable patches, so that the work can be started. On receipt of LOA, plaintiff's full efforts was to make the project successful and not complain for site condition to defendant. On specific query, PW1 stated that she did not have any document to show that between December, 2009 till June, 2010 any concern was raised by plaintiff company about alleged delay in issuance of LOA. 10.14 PW1 further deposed that as per the record on 04.08.2010, plaintiff reported the difficulties through mails just after starting the work and first mail was sent in July, 2010. She did not furnish and prove the e-mail of July, 2010 on record. In her cross-examination recorded on 13.03.2023, PW1 stated that plaintiff had never engaged any vendor for the present contract because they had a complete technical team, site team, manpower and machinery, so there was no further requirement for engaging any vendor but IOCL people in a CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 50 of 74 meeting dated 23.08.2010 forced plaintiff to sub-let the work to a local party which was their favourable party.
10.15 On being asked as to how many staff members/technical team members were deployed by the plaintiff company for the present contract, PW1 could not give the exact numbers. She stated that roughly fifteen members of site team and five to seven members of technical team were available for that contract. She admitted that the records, map, drawing, reports and technical data of the project have not been filed by plaintiff.
10.16 PW2 Sh.Pravin Chandra in his cross-examination recorded on 24.05.2023 admitted that as per defendant's letter dated 30.09.2010 and para no.14 of his evidence affidavit, plaintiff was supposed to resume the work from 15.10.2010. He further admitted that as per letter dated 30.09.2010, plaintiff was supposed to share the manpower details. PW2 has failed to prove on record that the manpower deployment details between 30.09.2010 to 04.10.2010 and 04.10.2010 to 21.10.2010 were ever shared with defendant. 10.17 As per PW2, manpower deployment was shared to defendant prior to commencing the work. However, he failed to prove any communication on record, whereby the manpower deployment details were shared to defendant prior to commencement of the work. He admitted that as per letter dated 22.10.2010, Ex.PW1/10, plaintiff suggested to provide the manpower deployment details and equipment details to defendant by 28.10.2010. He could not tell the routes on which the plaintiff was working for the execution of the present contract. He also could not tell the distance of the routes as involved in the execution of the present project.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 51 of 74 10.18 Case of plaintiff is that on account of bad weather conditions i.e. heavy rainfalls, the entire project site, which comprised of paddy fields, was submerged in water. Consequently, plaintiff could not carry out survey work and requested extension of time vide letter dated 29.09.2010, Ex.PW1/6. The Engineer Incharge allowed extension vide letter dated 30.09.2010, thereby extending the time to 30.11.2010. However, the contract was prematurely terminated vide termination letter dated 02.11.2010, Ex.PW1/12.
10.19 Learned counsel for plaintiff submitted that since inception of project, conduct of defendant was malicious. The intention of defendant was to delay project till monsoon. Tender was floated on 17.12.2009 by defendant. However, LOA was issued in favour of plaintiff only on 15.06.2010 i.e. after a delay of six months. He further submitted that in terms of Clause 2.2.1.0 and Clause 2.2.2.0, defendant was to provide tentative route marked on toposheets and detailed working plans and drawings, Ex.PW1/4 for execution of work respectively.
10.20 As per plaintiff, the first set of alignment maps (which were incomplete) were provided on 13.07.2010 i.e. after more than one month from issuance of LOA. Thereafter, defendant failed to provide all relevant toposheets and drawings for actual execution of work and thus, hindering work progress even further. Defendant also failed to provide any official/site engineer, who could assist in identifying locations of existing pipelines at Project Site. It was submitted that in terms of Clauses 4.1.0.0, 4.1.3.0, 5.2.1.0, 5.2.1.1, 5.2.1.2, 6.1.3.0 and 6.1.4.0 (Ex.PW1/4), a Site Engineer was to be present to supervise work being done and communicate site CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 52 of 74 condition, major work and record bills to EIC. Presence of a Site Engineer was essential to the project but the same was deliberately not appointed by defendant.
10.21 He further submitted that despite being aware of the bad weather conditions and being in receipt of the letters written by plaintiff, defendant chose not to provide any assistance to plaintiff. The officers deputed by defendant failed to provide any assistance as they were neither Civil Engineers nor had any technical know- how of the project. Thus, resulting in complete chaos at the project site. Further, they were only available at the Kolkata office and were absent from the Project Site.
10.22 Learned counsel for plaintiff argued that defendant arbitrary and illegally terminated the contract vide Termination Letter dated 02.11.2010, Ex.PW1/12. He submitted that vide Termination Letter, defendant has given vague and baseless reasons for termination of contract, insufficient labour and material etc., execution of work and disobedience of orders/instructions. However, there is not a single document on record to substantiate the averments of defendant. He submitted that plaintiff has succeeded in discharging the onus to prove the issue and accordingly, he prayed to decide the issue in favour of plaintiff and against the defendant.
10.23 Per contra, learned counsel for defendant submitted that in accordance with the provisions of the Contract, plaintiff was liable to complete detailed engineering survey including detailed route survey, population density index survey, soil resistivity survey, soil chemical analysis survey, soil stratification survey and data generation survey within four months from the date of issuance of CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 53 of 74 the LOA. Further, the cadastral survey was to be conducted within four months from the date of completion of detailed engineering survey.
10.24 He further submitted that even after meeting held on 23.08.2010 with the representative of plaintiff, there was no progress in work. Again on 29.09.2010, discussions were held, wherein plaintiff gave an assurance that the work will be resumed from mid October. By e-mail dated 30.09.2010, defendant requested to send revised survey work schedule and manpower deployment details. In response, by mail dated 04.10.2010, the revised work schedule was sent by plaintiff but no manpower details were provided.
10.25 Plaintiff did not send any manpower deployment details till the termination of the Contract. Further, by its own admission, plaintiff vide e-mail suggested to provide the manpower deployment details and equipment details to defendant by 28.10.2010. Plaintiff was required to complete the detailed engineering survey by 15.10.2010. However, during the period 29.09.2010 and 30.09.2010 plaintiff only suggested resuming the work by 15.10.2010. 10.26 It is contended that plaintiff did not resume the work or shared the manpower deployment details by 15.10.2010. On the other hand, by letter dated 22.10.2010, plaintiff suggested to share the manpower deployment details by 28.10.2010 and resume the work from 10.11.2010.
10.27 Learned counsel for defendant argued that plaintiff failed to (a) commence or complete the detailed engineering survey after the issuance of LOA and (b) deploy manpower despite numerous opportunities afforded to it resulting into failure to complete the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 54 of 74 survey work. Plaintiff showed no iota of seriousness to adhere to the timelines. Thus, in view of continuous breaches of the contractual provisions, defendant was constrained to issue termination letter dated 02.11.2010 in accordance with Clause 7.0.1.0 of the General Conditions of Contract (in short 'GCC'). 10.28 He submitted that plaintiff was in continuous breach of the contractual terms of the Contract executed between the parties. Therefore, defendant has rightfully terminated the Contract in accordance with Clause 7.0.1.0 of the GCC.
10.29 I have considered the rival submission of both the parties and perused the material on record.
10.30 Parties entered into Contract on 14.07.2010 for detailed engineering survey, soil survey, cadastral survey and providing services for establishing ROU in ROW of Paradip-Halida-Durgapur LPG Pipeline project. As per the terms of the Contract, the detailed engineering survey was to be completed within four months from the issuance of LOA and cadastral survey was to be completed within four months from the date of completion of detailed engineering survey.
10.31 Clause 7 of GCC, Ex.PW1/4, page 146 deals with termination. As per Clause 7.0.1.0 of GCC, the owner is entitled to terminate the Contract by written notice at any time during the currency on or after the occurrence of anyone or more of the following events or contingencies namely:-
(i) Default or failure by Contractor of any of the obligating of the Contractor under the contract, including, but not limited to:
a) Failure to commence any work at any job site
in accordance with the time prescribed in the
progress schedule.
b) Failure to carry out on the works or any item to meet the progress schedule.CS (COMM.) No. 242/2019
Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 55 of 74
c) Failure to provide at each job site sufficient labour, material, equipment, machinery, temporary and/or facilities required for the proper and/or due execution of the work or any part thereof.
d) Failure to execute the works or any item in accordance with the Contract.
e) Disobedience of any order or instructions of the Engineer in charge and/ or site engineer.
f) Negligence in carrying out the works or carrying out of works found to be unsatisfactory by Engineer in charge.
g) Suspension of the entire works or any part thereof for a period of 14 days or more without due authority or Engineer in charge.
ii) If the Contractor is incapable of carrying out the work.
10.32 As per Clause 3.1.0 of the Special Conditions of the Contract (SCC) for carrying out the work, two survey teams each for detailed engineering and cadastral survey were required to be deployed by the contractor. The following minimum manpower/equipment have been assessed by the owner and the contractor shall ensure deployment of personnel of the following categories at least up to the strength indicated against the survey team.
a) The following minimum manpower (skilled/semi-skilled) shall constitute a survey team Detailed engineering survey works:
i. Engineers- 1ii. Senior surveyor- 2
iii. Surveyors- 3
iv. Field staff/helpers as per requirement
10.33 Plaintiff has contended that due to unfavourable site
conditions i.e. heavy rainfalls/monsoon season etc., it could not carry out the survey work. In respect of adverse conditions, defendant has relied upon Clauses 4.1.0 and 5.0.0 of the Contract, Ex.PW1/4 which is reproduced hereunder for ready reference:-
"4.0.0 SITE VISIT CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 56 of 74 4.1.0 The intending tenderers shall be deemed to have visited the site and familiarised themselves thoroughly with the working conditions at the work site before submitting the tender, Non-familiarity with the site condition will not be considered a reason either for extra claims or for not carrying out the work in strict conformity with the specifications."
"5.0.0 LOCAL CONDITIONS 5.1.0 It will be imperative on each tenderer to acquaint himself with all local conditions and factors which may have any effect on the execution of work covered under the scope of Tender document....."
10.34 In view of aforesaid Clauses of the Contract, the plea of plaintiff that due to bad weather conditions, it could not carry out the survey work cannot be accepted. As per the terms of the Contract, plaintiff was deemed to have visited the site and familiarized itself thoroughly with the working conditions at the work site before submission of the tender.
10.35 As per the terms of the Contract, plaintiff was required to complete detailed engineering survey by 15.10.2010. What to talk about completion of work, plaintiff even failed to resume the work by 15.10.2010. Vide letter dated 22.10.2010, Ex.PW1/10, plaintiff suggested to share manpower deployment details by 28.10.2010 and resume the work from 10.11.2010. Plaintiff has miserably failed to prove on record that the detailed engineering survey was completed or even resumed before 15.10.2010. Plaintiff further failed to prove on record that the manpower deployment details were shared to defendant on or before 15.10.2010. Thus, it is found that plaintiff committed breach of the contractual terms of the Contract executed between the parties. Accordingly, defendant was fully justified in terminating the Contract vide Termination Letter dated 02.11.2010, CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 57 of 74 Ex.PW1/12 in accordance with Clause 7.0.1.0 of the GCC. 10.36 In view of foregoing reasons and discussions, I am of the view that plaintiff has failed to prove that the termination of Contract dated 14.07.2019 by defendant was illegal and wrongful. Hence, this issue is decided in favour of defendant and against the plaintiff.
Issue no.(vii) Whether the plaintiff is entitled to receive an amount of Rs.8,00,000/- (Rupee Eight lacs only) from the defendant being the demobilization costs and notice period salary to staff and payments to vendors being the additional costs incurred by the plaintiff due to the illegal termination of contract by the defendant?OPP.
11.1 Onus to prove the issue lies on plaintiff. In order to discharge the onus to prove the issue, plaintiff has examined two witnesses i.e. PW1 Ms.Ragini Sinha and PW2 Sh.Pravin Chandra. The relevant portion of cross-examination of PW1 recorded on 13.03.2023 is reproduced herein below for ready reference:-
"Q. Has the plaintiff company placed on record any document which would show what amount was actually paid by it towards demobilization of cost, notice period salary to staff and payments to vendors?
A. Letter dt. 07.07.2010 (page 305) here we have mentioned the proposed manpower details and the machinery details and the survey schedule to be completed for the project. Accordingly calculation of the salary, demobilization and staff payment was produced in the arbitration/ tribunal. Here no such record is placed.
Q. Have you placed on record any bills raised by the alleged vendors before making any payments to them?
A. As mentioned above, we have not deployed any CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 58 of 74 vendor in the project because our team was competent enough.
Q. Have you placed on record any payment voucher to show that the plaintiff company in fact paid any salary to staff or additional cost was incurred by it in the present contract due to the alleged illegal termination by the defendant?
A. No such voucher is placed in court record but the work done which is well shown in the court record itself explained the cost incurred during the contract project execution for a length of 680 km of pipe line. These vouchers and documents were placed in the arbitration tribunal for claims as the findings of tribunal is attached there so we have not added those documents to make the record voluminous.
Q. I put it to you that the plaintiff company did not incur any cost for an amount of Rs.8 lacs towards demobilization, notice period salary and payments to vendor?
A. It is totally wrong to say this as the IOCL team was present in the tribunal proceedings with their three advocate, two law officers and one assistant manager of project, IOCL. They are witness of the entire arbitration tribunal proceedings in which we have submitted all the record and voucher, salary details. Accordingly, the arbitrator has awarded the claim no. 4 of Rs. 8 lac towards demobilization. Q. Is it the plaintiff's case that the amount of Rs. 8 lacs is claimed in the present suit on the basis of the award dt. 05.05.2017 passed by the arbitrator? A. Yes. On the page no. 5 of the award, it is well mentioned that we have claimed this amount against demobilization.
11.2 From the aforesaid deposition of PW1, it is seen that plaintiff has claimed Rs.8,00,000/- only on the basis of award dated 05.05.2017 passed by the Arbitrator. The impugned award to that extent has already been set aside by Hon'ble High Court of Delhi vide order dated 14.09.2017 passed in OMP (COMM.) No.317/2017. Plaintiff has failed to prove on record any payment voucher to show that in fact it paid any salary to staff or additional cost was incurred by it. Plaintiff has further not produced and CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 59 of 74 proved the manpower details employed by it and machinery details used to complete the project. There is nothing on record to suggest that plaintiff employed the staff for completion of the project and any payment was made to such staff or plaintiff company incurred any cost towards demobilization. The list and details of staff employed by plaintiff and proof of salary made to such alleged staff, if any has neither been filed nor proved on record by plaintiff. Thus, plaintiff has miserably failed to prove its entitlement for claiming an amount of Rs.8,00,000/-. Accordingly, this issue decided in defendant's favour and against the plaintiff.
Issue no.(xi) Whether hindrances were caused in the execution of the contract due to unfavourable site conditions and non-cooperation of the defendant's staff as mentioned in para no. 5 of the plaint? OPP. 12.1 In para no.5 of the plaint, plaintiff has cited following grounds:-
(1) Unfavourbale site conditions; difficulties faced due to weather/rains in execution of project. (2) Non-cooperation by defendant's staff. (3) Malafide intentions of defendant behind the decision to terminate the services of plaintiff. (4) Non-compliance of provisions by defendant.
12.2 In response to allegations of plaintiff that hindrances were caused in the execution of the Contract due to unfavourble site conditions, defendant has relied upon terms of the tender, Ex.PW1/4 of the heading 'special instructions to tenders' (in short 'SIT'). It was submitted that the bidder was required "to inspect and examine CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 60 of 74 the site, its surrounding and to satisfy himself before submitting his bid as to the nature of ground, physical conditions and shall obtain all necessary information as to the risks, contingencies and other circumstances that may affect his bid". As per Clause 4.1.0 of SIT, the intending tenderer shall be deemed to have visited the site and familiarized themselves thoroughly with the working conditions of the site before submitting the bid. Thus, plaintiff was supposed to be aware of the site conditions at the time of applying for tender. 12.3 In respect of non-cooperation of defendant/s staff, it was submitted that there was complete cooperation from defendant which is a public sector undertaking and it is aware that any delay in a particular subject will lead to huge losses to the Government Ex- chequer. Defendant contended that plaintiff has been unable to prove the alleged non-cooperation on the part of defendant. 12.4 The tender was admittedly floated on 17.12.2009. Plaintiff was issued LOA on 15.06.2010, Ex.PW1/3 being the successful bidder. The Detailed Engineering Survey and Population Density Index Survey were to be completed within a period of four months from the date of issuance of LOA. By letter dated 22.10.2010, plaintiff informed the defendant that they will be providing manpower details by 28.10.2010. Plaintiff has brought nothing on record to show that in the month of October, 2010 there was a heavy rainfall in the area, where the work was to be done. In terms of Clause 4.1.0 and 5.1.0, plaintiff was supposed to have visited the site and familiarized itself with the working condition at the work site before submitting the tender. Plaintiff even at the time of acceptance of LOA and entering into Contract was supposed to be well aware of the site conditions etc. In view of aforesaid, plaintiff CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 61 of 74 cannot be heard to say that due to bad weather condition and heavy rainfall, it could not complete the work in time. Needless to state that plaintiff has brought nothing on record to suggest that even till the date of issuance of termination letter dated 02.11.2010, plaintiff had mobilized its resources, shared manpower deployment details to defendant and started the work. Thus, plaintiff has miserably failed to prove on record that due to unfavourable site conditions hindrances were caused in execution of the Contract. 12.5 In respect of non-cooperation on the part of defendant, the following cross-examination of PW2 Sh.Pravin Chandra is material which is reproduced below for ready reference:-
Q. Is it correct that the defendant on 13.07.2010 (ref. Page 15 of defendant's document) shared documents and drawing related to the contract with the plaintiff which was accepted by Ms. Ragini Sinha, PW1?
Ans. Yes. However, these documents were incomplete for project execution.
Ques. Can you point to any communication on record of this Hon'ble Court from the plaintiff to the defendant where plaintiff raised an objection that the documents provided by the defendant on
13.07.2010 were incomplete for project execution? Ans Yes. The objections were raised on various occasions communications with regard to the same were filed before the arbitration proceeding and also in the plaintiff company e-mail box. The same can be produced, if required.
Ques. I put it to you that the plaintiff did not raise any objection to the documents provided by the defendant on 13.07.2010 i.e. the reason it has not filed any such communication before this Hon'ble Court?
Ans. It is incorrect.
Ques. Is it correct that the defendant by e-mail dated 20.07.2010 (ref. Page no. 16 of defendant's document) agreed to route no.1 as recommended by the plaintiff for detailed engineering survey from Belmuri T-point to Kalyani Bottling Plant?
Ans. It is correct. However, the IOCL never sent any official for physical verification of site.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 62 of 74 12.6 In view of aforesaid deposition of PW2 Sh.Pravin Chandra, it is seen that vide communication dated 13.07.2010, defendant had shared documents and drawing related to the Contract with plaintiff which was accepted by PW1 Ms.Ragini Sinha. Plaintiff has brought nothing on record to prove that the documents shared by defendant with plaintiff were incomplete for project execution. In view of the same, it cannot be said that there was non- cooperation on the part of defendant in execution of the project. 12.7 For the aforesaid reasons, I am of the view that plaintiff has failed to discharge the onus to prove the issue. Accordingly, this issue is decided against plaintiff and in favour of defendant.
Issue no.(v) & Issue no.(ix) Whether the plaintiff is entitled to receive an amount of Rs.28,75,076/- (Rupees Twenty Eight Lacs Seventy Five Thousand Seventy Six Only) from the defendant being the value of the work done by the plaintiff for the defendant?OPP.
AND Whether the defendant is liable to pay to the plaintiff, an amount of Rs.5,17,513/- (Rupees Five lac Seventeen Thousand Five Hundred Thirteen Only) being the value of GST?OPP. 13.1 Learned counsel for defendant submitted that plaintiff has failed to file any document on record to show that it did value of work for Rs.28,75,076/-. Plaintiff has claimed the said amount of Rs.28,75,076/- on the basis of award dated 05.05.2017 which has already been held to be illegal to the extent of the present claim vide order dated 14.09.2017.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 63 of 74 13.2 He further submitted that plaintiff has vaguely made a claim for an amount of Rs.5,17,513/- being the value of GST but has failed to raise or make any averment in the suit towards the said claim. He further submitted that plaintiff has not filed any documentary evidence in support of the claim towards the value of GST. Further, no calculation has been filed by plaintiff claiming the amount of GST. He submitted that plaintiff has failed to prove issue no.(v) and (ix) and accordingly prayed to decide both the issues against the plaintiff.
13.3 On the other hand, learned counsel for plaintiff submitted that Contract itself provides the Schedule of Rates which categorically gives the per unit rate of Detailed Engineering Survey and Population Density Index Survey i.e. the work done by plaintiff in the present case. Further, Clause 13.1.0 provides that on completion of preliminary work, the payment would be @ 60% of the rate of relevant items. Therefore, in view of the work done by plaintiff, a bill was raised to defendant vide e-mail and letter dated 15.11.2010 and 16.11.2010, Ex.PW1/15. Defendant failed to come up with a counter figure and outrightly refused to respond to the bills of plaintiff.
13.4 Finally, the Arbitral Tribunal, after perusal of the work done and bills raised, rightly awarded Rs.28,75,076/- i.e. 60% of the amount claimed, which has been claimed in the present suit for the work done by plaintiff. It was submitted that it is provided in the Contract between the parties and also mandated by law that service tax be paid on quantum awarded for work done. Therefore, the plaintiff has made a claim for GST @ 18% on the work done for which no evidence is required to be led since it is an admitted CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 64 of 74 contractual clause between the parties (Clause 19.5.0 of the Contract).
13.5 In order to discharge the onus to prove the issues, plaintiff has examined two witnesses namely PW1 Ms.Ragini Singh and PW2 Sh.Pravin Chandra. For the sake of better appreciation of rival contentions of both the parties, relevant portion of cross- examination of PW1 is reproduced herein below for ready reference:-
Q. Can you explain on what basis the plaintiff company computed/arrived at a sum of Rs.28,75,076/-?
A. This computation of Rs.28,75,076/- was done by the arbitrator, however, the plaintiff has claimed much more than this amount.
Q. Can you point on record any communication to show that the plaintiff company did value of work of Rs.28,75,076/-?
A. We have claimed much more amount than given by the arbitrator i.e. Rs.28,75,076/-. Q. Can you point any document on court record to show that the plaintiff submitted documents in terms of the contract to the defendant for alleged value of work done for Rs.46,41,793/- or Rs.28,75,076/-? A. Yes. Please refer Ex PW1/15 page 328 to 334 where we have enclosed the details of the submission made to IOCL along with the bill for the work done. Letter dt. 15.11.2010 mentions the bill and the record submitted and letter dt. 16.11.2010 mentions the quantified claims for the work done. Ld. Arbitrator asked us to submit all the records, map, drawing, reports and technical data of the project and we submitted them. After the technical evaluation and considering the contract provisions, finally he gave an amount of Rs.28,75,076/- towards the work done on field.
Q. Is it correct that the records, map, drawing, reports and technical data of the project as referred in the above response has not been filed by the plaintiff company before this court?
A. These records have not been filed in the suit because the entire proceedings of one year was taken by the arbitrator to evaluate these data as the tribunal findings were in our favour, so we do not have the intention to make the record voluminous. If CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 65 of 74 it is required, we can produce the copy of those document to the court.
Q. Is it the plaintiff's case that the amount of Rs. 28,75,076/- has been claimed in the present suit on the basis of the award dt. 05.05.2017?
A. Yes. Please refer page no. 40 of the plaint. Q. I put it to you that no documents were submitted by the plaintiff to the defendant in terms of the contract for the alleged value of work done for Rs.46,41,793/- or Rs. 28,75,076/-?
A. It is totally wrong to say that no record was submitted against the work done. Right from the beginning we have sent the work progress and related data to the defendant by email and hard copy. Please refer page no. 305 to 316 related to the work progress. Same records were submitted to the arbitration tribunal for evaluation of the work done and his findings are on page no. 23 and 24 of the award.
Q. I put it to you that the plaintiff company did not do any value of work for Rs. 46,41,793/- or Rs. 28,75,076/- and hence, it is not entitled to receive the same from the defendant?
A. It is totally wrong because we have submitted enough survey records and data through email and hard copy. The arbitrator who was ex general manager of the defendant company has findings against our work done and our claims. (please refer page no. 23 to 27 of the award because we have placed enough record and data in the tribunal. Q. Is it correct that the emails which have you referred in the above response have not been produced by the plaintiff company before this court? A. Some emails and hard copy of work done are attached. Please refer page no. 305 to 316. we have placed the complete set of emails in the tribunal. We have no intention to make the data voluminous, so other emails are not attached here, if required copy of those emails, can be produced here and can be checked in the email box of the company.
13.6 Defendant has denied to have received letters dated 28.10.2010 & 30.10.2010, Ex.PW1/11 and 15.11.2010 and 16.11.2010, Ex.PW1/15.
13.7 Plaintiff has failed to prove on record that documents as pointed out by PW1 i.e. page no.305 to 316 were sent and served CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 66 of 74 upon the defendant. PW1 has herself admitted that the documents i.e. records, maps, drawing, reports and technical data of the project have not been filed in the case. On specific query, as to whether plaintiff has claimed the amount of Rs.28,75,076/- on the basis of award dated 05.05.2017, PW1 replied in affirmative. PW1 further admitted to have not produced all the relevant records for proving the value of work done in this case.
13.8 As per PW1 Ms.Ragini Sinha, the computation of Rs.28,75,076/- was done by Arbitrator. It is not in dispute that the award passed by Arbitrator dated 05.05.2017 has already been set aside by Hon'ble High Court of Delhi vide order dated 14.09.2017 in respect of claims no.1,3,4 and 5.
13.9 Learned counsel for plaintiff invited attention of the court to page no.61 of plaintiff's documents filed along with the suit i.e. Schedule of Rates of the Contract which gives per unit rate of Detailed Engineering Survey and Population Density Index Survey i.e. the work done by plaintiff in the present case. The Schedule of Rates at page no.61 is admitted by both the parties. The question is as to whether plaintiff performed the work in respect of the amount claimed by it in the present suit. Plaintiff has miserably failed to prove on record that it did the value of work for Rs.28,75,076/- or Rs.46,41,793/- as claimed in the suit. The details of work done by plaintiff and the amount claimed on the basis of said work done report have not been proved on record by plaintiff in this case.
Plaintiff is solely relying upon the award dated 05.05.2017 for claiming the amount of Rs.28,75,076/-. The award for an amount of Rs.28,75,076/- passed by the Arbitrator in arbitration proceeding has already been set aside by Hon'ble High Court of Delhi. In the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 67 of 74 absence of any proof in respect of the work done by plaintiff for an amount of Rs.28,75,076/- or Rs.46,41,793/-, plaintiff is not entitled for the amount as prayed in prayer clause (b) of the suit only on the basis of Schedule of Rates of the Contract prescribed for payment. 13.10 For the foregoing reasons and discussions, I am of the view that plaintiff has failed to discharge the onus to prove issue no.
(v) & (ix). Accordingly, these issues are decided against the plaintiff and in favour of defendant.
Issue no.(vi) Whether the plaintiff is entitled to receive an amount of Rs.20,87,501/- (Rupees Twenty Lacs Eighty Seven Thousand Five Hundred one only) from the defendant due to the loss of profit caused to the plaintiff due to the illegal termination of the contract by the defendant?OPP 14.1 Learned counsel for plaintiff submitted that he is only relying upon the standard profit margin of 15% to make the claim of loss of profit on the balance work which could not be done on account of illegal termination of Contract by defendant. In support of his submissions, he relied upon A.T. Brij Pal Singh & Ors. vs. State of Gujrat, AIR 1984 SC 1703 and Dwaraka Das vs. State of Madhya Pradesh & Ors. (1999) 3 SCC 500.
14.2 He further submitted that plaintiff, at the time of entering into Contract with defendant, had submitted Audited Balance Sheets of its last three financial years in terms of Clause 8.7.0 of the Contract. Therefore, defendant throughout the litigation had knowledge of the legitimate profit that plaintiff sought to earn from the Contract in question. He argued that the judgments relied upon CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 68 of 74 by defendant are not applicable in the present case since they deal with cases, wherein the loss of profit was a remote or indirect loss due to extension of time or extension of scope of work of Contract, wherein the contractor had to prove that he had some additional work lined up for which he would have earned profit. However, in the present case, the loss of profit is a direct and proximate loss due to the illegal termination by defendant and plaintiff is restricting its claim only to the profit on the balance amount of the Contract. Reliance was placed upon Delhi Development Authority vs. Polo Singh & Company 101 (2002) DLT 401.
14.3 Per contra, learned counsel for defendant submitted that the termination of Contract dated 14.07.2010 was strictly in accordance with Clause 7.0.1.0 of the General Conditions of the Contract solely attributable to the actions of plaintiff i.e. failure to deploy manpower and suspension of work for more than a period of fourteen days. Therefore, the termination of Contract was not illegal.
14.4 He further submitted that the present claim of loss of profits by plaintiff is based on surmises and conjectures. In the present suit plaintiff failed to provide the details of profit earned by it in the previous years.
14.5 He argued that plaintiff has made the present claim @ 15% basis of an industry practice. However, PW1 admitted that no document or independent assessment has been filed to support the fact that in the contracts of present nature, the profit is 15%. Hence, there is no base of making a claim @ 15%. Further, no evidence has been filed to prove that plaintiff suffered a loss of Rs.20,87,501/-. Referring to the cross-examination of PW1, learned counsel for CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 69 of 74 defendant submitted that as plaintiff did not suffer any loss due to the termination of Contract and it failed to justify or prove its claim for loss of profit, he prayed to decide the issue against plaintiff. In support of his submissions, he relied upon the judgments titled as NTPC vs. Avantika 2020 SCC Online Del 2409, NHAI vs. IJM 2020 SCC Online Del 2498 and Ajay Singh vs. Suneel Darshan 2015 SCC Online Bom 1412.
14.6 Considered the rival submissions of both the parties and perused the material on record.
14.7 At the outset of deciding the issue, it is to be noted that I have already returned the findings on issue no.(ii) that the termination of Contract dated 14.07.2010 by defendant was not wrongful. In view of the same, plaintiff is not entitled for any amount for loss of profit as claimed.
14.8 Additionally, it is well settled that the party claiming loss of profits is required to establish and prove the loss suffered by him. In the case of NTPC Ltd. (Supra), it was held that law, with regard to claiming loss of profit is no longer res integra. Loss allegedly suffered has to be pleaded and proved through documents and evidence.
14.9 In NHAI vs. HCC 2016 SCC OnLine Del 6112, Hon'ble Delhi High Court has held that a person claiming loss of profit must establish that he had opportunity to deploy his resources in other ventures and those ventures would have yielded profit. 14.10 In the case of DDA vs. P.C. Sharma FAO (OS) 143/2006 decided on 02.02.2009, a Division Bench of Hon'ble High Court of Delhi held that in order to be entitled to loss of profits, a contractor will be required to establish the loss. Loss of profits is a claim in the CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 70 of 74 form of damages u/s 73 of The Indian Contract Act and therefore, must be proved through evidence.
14.11 In Essar Procurement Service Ltd. vs. Paramount Constructions 2016 SCC OnLine Bom 9697, Hon'ble Bombay High Court held that Sections 73 and 74 of Contract Act require actual damage or loss and proof cannot be dispensed with. 14.12 In the case of Ajay Singh vs. Suneel Darshan 2015 SCC OnLine Bom 1412, a Division Bench of the Bombay High Court relying on Maharashtra State Electricity Board vs. Sterlite Industries (India) Ltd. 2000 SCC OnLine Bom 89 held that if a party has not suffered any loss, even if the defaulting party commits a breach, in the absence of proof of loss, the opposite party cannot be awarded the claim of loss of profit. It was further held that when loss in terms of money is prayed, the party claiming compensation has to prove such loss or damages suffered by him. If the party, who has not suffered any loss is awarded any compensation u/s 73 of The Indian Contract Act, it would amount unjust enrichment to such party.
14.13 In view of afore-noted pronouncement by Hon'ble superior courts, it is clear that in order to claim loss of profit, it has to be proved through documents and evidence. In the case in hand, plaintiff has miserably failed to prove on record through documents and evidence that it suffered any loss of profit. Therefore, plaintiff is not entitled for the amount Rs.20,87,501/- as claimed for loss of profit.
14.14 The judgments i.e. A T Brij Pal Singh & Others (supra), Dwaraka Das (supra) and Delhi Development Authority (supra) relied upon by counsel for plaintiff are distinguishable and they are CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 71 of 74 not applicable in the facts and circumstances of the case. In the case of A T Brij Pal Singh (supra) which was decided in the year 1984, it was held that the damages for loss of profit would be measured at 15% of the value of remaining parts of the contract. The said position was reiterated in the case of Dwaraka Das (supra), wherein it was held that once it was proved that the contract was illegally terminated, claim of expected profits was legally admissible. In the case in hand, it has categorically been held that the Contract in question was not illegally terminated by defendant but it was due to fault of the plaintiff that defendant was constrained to terminate the Contract. Thus, the judgments relied upon by counsel for plaintiff are of no help for plaintiff. 14.15 In view of foregoing reasons, I am of the considered view that plaintiff has failed to discharge the onus to prove the issue. According, issue no.(vi) is decided against the plaintiff and in favour of defendant.
Issue no.(viii) Whether the plaintiff is entitled to interest @ 12% on the above mentioned amounts in para no. 5, 6 and 7 from 02.11.2010 (date of termination) till the date of filing of the suit aggregating to Rs.61,06,026/- (Rupees Sixty One lacs Six Thousand and Twenty Six only) and further interest @ 12% from the date of filing of the suit till the actual realization?OPP.
15.1 In view of findings given on issue no.(v), (vi) and (vii), plaintiff is not entitled for any interest as claimed. Accordingly, this issue is decided against the plaintiff and in favour of defendant.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 72 of 74 Issue no.(x) Whether the defendant could have awarded the said contract at a higher value and without open tender to M/s Secon Pvt. Ltd.?OPP. 16.1 Onus to prove the issue lies on plaintiff. Plaintiff has failed to prove on record that defendant had no authority to award contract to some other entity after termination of contract of plaintiff. Plaintiff has further failed to prove on record that the award of contract by defendant to M/s Secon Pvt. Ltd. was/is in violation of any rules and regulations of the Government of India. Thus, plaintiff has failed to discharge the onus to prove this issue. Accordingly, this issue is decided against plaintiff and in favour of defendant.
Issue no.(iv) Whether the plaintiff is entitled to the reliefs as prayed for in the suit? OPP.
17.1 In view of findings given on issue no.(i), (ii), (v), (vi),
(vii), (viii), (ix) and (xi), plaintiff is not entitled for grant of any relief. This issue is disposed off accordingly.
Issue no.(xii) Relief 18.1 For the reasons and discussions made above, I am of the view that plaintiff is not entitled for grant of any relief as claimed in the suit. Plaintiff has failed to prove its case against defendant. Accordingly, the suit filed by plaintiff is dismissed. 19.1 Parties are left to bear their own cost.
20.1 Decree sheet be prepared.
CS (COMM.) No. 242/2019Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 73 of 74 21.1 File be consigned to Record Room.
Announced in the open court Dated: 24.02.2024 (RAJ KUMAR TRIPATHI) District Judge (Commercial Court)08, SouthEast District, Saket Courts, New Delhi CS (COMM.) No. 242/2019 Institute Of Geoinformatics Pvt. Ltd. vs. Indian Oil Corporation Ltd. Page No. 74 of 74