Document Fragment View
Fragment Information
Showing contexts for: turnkey in Delhi Jal Board vs M/S Kaveri Infrastructure Pvt. Ltd. & ... on 29 November, 2013Matching Fragments
14. The main contention of the petitioner is that admittedly the work in question is a turnkey contract. The learned Arbitrator, however has totally ignored the same and renders the impugned award in favour of respondent No.1 without application of his mind even though it was not envisaged in the contract in question. The impugned award negates the contract in question and, therefore, is patently illegal and is liable to be set aside. He argues that it is an item rate turnkey contract, it is of vital importance to the owner that the contractor must know in advance what it will cost to him in getting the work done on turnkey basis. It is not a conventional contract where the price remains uncertain till the work is completed.
15. It is submitted by the counsel for petitioner that the expression „turnkey contract‟ would be defeated if the price remains uncertain. In fact, it is inherent in such a contract that the economy of the turnkey contract should not exceed the rates fixed.
16. Counsel has also referred few quotations from the articles published including the quotation of Lord Denning who had the occasion of describing the expression „turnkey contract‟ as package deal contract. The expression „turnkey contract‟ leaves no ambiguity with regard to its intent and object.
The excess/additional work done by his client is not denied by the petitioner. The „additional work‟ done was neither specified by petitioners nor contemplated nor could be contemplated by respondent No.1 hence could not have been estimated at the time of execution of contract.
27. It is argued by the counsel that the contract was not a fixed price contract. There is no stipulation anywhere in the whole contract that this contract is a firm price contract. The price could be changed. It has in fact been changed. The total price mentioned in WO/contract was `23 crores, the petitioners gave more than that as during execution, some more length/stretch was asked by petitioner to be cleaned. The fact that in the contract in question, the work was awarded for `23 crores but the DJB gave more, showing that contract was not turnkey project. Though it may be shown as turnkey contract, but in spirit, it was not a turnkey contract and parties never treated it as a turnkey contract. There is no rule that in a turnkey contract, no payment over and above the price fixed can be given even if there are extra works done due to circumstances which could not be contemplated by either of the parties. It is stated that just by writing the word „turnkey‟ in the contract, the petitioner can not wash his hands off and refuse to compensate the respondent No.1 if the contractor suffers extra expenses and losses during execution of work owing to situations not made known by the owner or due to faulty specifications. Counsel has referred to the decision of Supreme Court, where it was held in Tarapore & Company vs. Cochin Shipyard Ltd., Cochin & Anr., (1984) 2 SCC 680 that once rates quoted became irrelevant on account of the circumstances beyond the control of the contractor, it would be open to the contractor to make a claim for compensation.
124. It is not denied by the respondent that it is a turnkey contract and that, price is fixed, to which the respondent himself had agreed. It is not the case of the respondent that it is not a turnkey contract. It is now impermissible to question the character of contract having been a party to the same.
125. It is not disputed by the respondent No.1 that the contract was signed with the clear understanding that rate under the contract was firm and final and that no exaltation in rates being turnkey contract. Despite the admission of the respondent No.1, the learned Arbitrator has totally ignored the stipulations in the contract. In the award, he has forgotten the basic and fundamental terms of the contract. It is evident that he has exceeded his jurisdiction. By ignoring the terms, the learned Arbitrator has travelled beyond his jurisdiction.