M/S. Pll-Pcl (Jv) vs National Highways Authority Of ...
2012 Latest Caselaw 5844 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                      (Not reportable)
            O.M.P. 464 of 2006 and I.A. No. 345 of 2008

        M/S. PLL-PCL (JV)                                    ..... Petitioner
                        Through:       Mr. Sandeep Sharma with
                                       Ms. Kanika Singh, Advocates.

                     Versus

        NATIONAL HIGHWAYS AUTHORITY OF INDIA
                                                          ..... Respondent
                          Through:     Ms. Tanu Priya Gupta, Ms. Padma
                                       Priya and Mukesh Kumar, Advocates.

        CORAM: JUSTICE S. MURALIDHAR

                          ORDER

28.09.2012

1. The measurement of the surface drain constructed by M/s Punj Lloyd

Limited - Progressive Construction Company Limited (Joint Venture)

('JV'), as part of the work of the construction of Jaipur Bypass, Phase-II,

Zone-D connecting NH-8 and NH-11 Rajasthan awarded to the JV by the

Respondent-National Highways Authority of India ('NHAI') by an

agreement dated 8th October 2001, formed the subject matter of the dispute

raised by the JV before a three member arbitral Tribunal ('AT'). The

question was whether payment for the lined surface drain was to be made as

per Technical Specification ('TS') Clause 309.4 as contended by the JV or

as per the running metre mode of measurement indicated in the Bill of

Quantities ('BoQ') Item No. 6.11 as contended by the NHAI. The majority

Award dated 2nd July 2006 of two members of the AT negatived the plea of

the JV and held that payments had to be made for the surface drain work

measured in lined metres at the rate of Rs.166.37 per metre. After providing

for 7% contractual rebate, the sum payable by the NHAI to the JV was

determined at Rs.45,09,743 with future simple interest at the rate of 10% per

annum from the date of the Award till the date of payment. The dissenting

member, on the other hand, held that the payment had to be made strictly as

per TS Clause 309.4.

2. The Court has heard the submissions of Mr. Sandeep Sharma, learned

counsel appearing for the Petitioner and Ms. Tanu Priya Gupta, learned

counsel appearing for the NHAI.

3. The description of BoQ item No. 6.11 for which tenders were invited by

NHAI reads as under:

"Constructing lined suface/sub-surface drains to the required lines and grades as per 'drawing' and Technical Specification Clause 309.

a) Open Type A"

4. The BoQ item itself indicates the unit in meters and the estimated quantity

as 21,120. The bidder was required to quote the "unit rate in Rupees".

Admittedly, the Petitioner quoted the unit rate of Rs.159 per meter for a total

sum of Rs.33,58,080 as regards BoQ Item No. 6.11.

5. The case of the Petitioner was that the rate of Rs.159 per meter was

quoted for a "sub-surfaced drain". According to the Petitioner, in terms of

the modified provision of TS Clause 309.4 as applicable to the work at hand,

the work of surface drain was to be measured in the respective units of

various items of construction work involved in excavation, brickwork, stone

masonry or concrete, the measurement for which and the rates of which

were set out in separate clauses. Further, the Petitioner contended that the

drawing for the surface drain specified the construction in Coursed Rubble

Stone ('CRS') Masonry in 1:6 cement sand mortar and 20 mm thick cement

plaster. There was a BoQ item No. 6.06 for the Random Rubble Stone

('RRS') Masonry in 1:3 cement mortar. The Petitioner used RRS as CRS

was not available locally. However, NHAI neither accepted the procedure

for alternative specification nor did it approve the modes of measurement

suggested by the Petitioner. Accordingly, the Petitioner claimed that up to

31st March 2005 it had executed the work of surface drain worth

Rs.2,74,81,418 based on the measurement of different components as

individual items. The amount was claimed with simple interest at 12% per

annum.

6. The case of NHAI was that under BoQ item No. 6.11 only 'Open Type A'

drain was to be constructed as per the drawings and TS. It was mentioned

that the said item was required to be measured in linear meter. Moreover,

Clause 309.1 of the TS envisaged the lined surface/sub-surface drain as a

single entity comprising the finished produce and not as a combination of

different components. NHAI pointed out that in a pre-bid meeting, one of

the bidders had complained about the non-availability of the drawings

referred to in Item 6.11 of the BoQ. Thereafter, the requisite drawing was

issued to all the bidders and an addenda was sent out. NHAI submitted that

as per Clause 5.2.2 of the conditions of particular application ('COPA') the

addenda to the bid documents took priority over TS. TS Clause 309.4 had to

be read along with TS Clause 309.5 and payments had to be made only after

measurement of the work in meters.

7. The submissions of NHAI before the AT were as under:

"2.7 Claimant's statement that the issue of Addenda dated 21.6.01 only changed the position from 'No drawing' to a 'Wrong drawing' is a distortion. The drawing in question gives details of cross-section and

components involved in Lined Surface drain Open Type

-A. All the other bidders understood the scope and meaning of the Item and the drawing, and quoted their rates, which vary from Rs.1,100 to Rs.2,700 per metre. The Claimant quoted a rate of Rs.159 per metre, probably to secure the contract. Financial comparison of the 5 bids received shows that, if the work of drain is taken out, the Claimant no longer remains L-1 i.e. the lowest, but becomes L-3 i.e. the third lowest. If he had quoted a rate at level with others, he would not have been able to bag the contract. Having won the contract, he now wants to reap undue additional financial benefit."

8. In paras 3.7 and 3.8 of the impugned majority Award it was held:

"3.7. BOQ Item 6.11 specified the unit of measurement i.e. per running metre. All the bidders are required to quote accordingly. If the bidders were to quote in different units, the common platform of comparative evaluation of the tenders disappears. No bidder can be allowed to destroy the common basis. The Respondent evaluated all the tenders received on the basis of yardstick/unit laid down in the BOQ; this basis was measurement of drain in running metres; this led to the Claimant coming out L-I, and winning the contract. The Claimant cannot say that while he is satisfied with the outcome, but he disputes the basis.

3.8. The Claimant's plea that the modified TS Clause 309.4 contemplates the measurement in the respective units of work involved is very forceful. But the question is, in what situation this mode would be applicable. The AT feels that this mode will apply in all situations other than Surface Drain of Open Type 'A'. The specific provision and scope of BOQ Item 6.11 restricts the rate to be in running metres and to be in no other unit or mode. The Claimant had his rates ready for the different

components of work; he also had the drawing of the surface drain; he could have easily worked out the quantities of the different components per metre length, and their cost, and quoted accordingly. He didn't do so. The Claimant should have abided by the terms and rules of bidding, and left nothing to chance or conjecture."

9. The majority of the AT found that the Petitioner had gone ahead with the

construction of the work using RRS without the approval of the Engineer. It

could therefore not later confront the Engineer with a fait accompli and

demand payment as per its own understanding and terms. The majority of

the AT concluded that the work of surface drain had to be paid for by the

NHAI only in lined meters. The majority awarded the Petitioner a sum of

Rs.45,09,743, and in the event the payment was not made, simple interest at

the rate of 10% per annum would become payable.

10. The dissenting member, on the other hand, held as under:

"To construe the contract strictly, I find that Item no.6.11 has the provision of sub-surface and surface drain. Secondly, the order of precedence agreed in the contract provides that the TS override the BOQ items. The TS clearly provides that in case of surface drain the rates shall be payable as per individual item rates provided in the contract. Therefore, it is not correct to say that the open type surface drain is excluded from the TS. TS will apply to all surface drains except open type A.

I do not agree that the harmonious construction is to be

made even when order of precedence has been agreed to by the parties.

I, therefore, hold that once the parties have provided the order of precedence and also that according to the order of precedence, TS overrides BOQ and the TS provides that in case of surface drain the individual item rates are to be paid and not as per running meter. It cannot be disputed that the construction made by the contractor is of surface drain only and therefore, TS309.4 must prevail. In this context the forceful provision of the Bid document/Volume II / Page 2 of 101 as Clause no. 2.2.1 states that; A particular clause or part thereof...... referred in Part-I above amended/modified/added upon and incorporated in Part-II referred to above, such amendment/modification/addition shall supersede the relevant Clause or part of the Clause."

11. On the examination of the majority and the dissenting Award, this Court

is unable to discern any patent illegality in the impugned majority Award.

The majority has correctly analysed the pleadings of the parties as well as

the evidence on record. The case of the Petitioner that it had quoted only for

the sub-surface drain was disbelieved by the majority of the AT for the

following reasons:

"3.1 For the BOQ Item 6.11 the Respondent had invited rates per metre of drain work. No doubt, the description of the item speaks of "constructing lined surface/sub- surface drains to the required lines and grades as per drawings..." but no drawing for the sub-surface drain was supplied at any time. Description of the BOQ Item further says that the drain shall be "(a) Open Type A".

There is only one sub-item (a), and no other. Open Type A relates to surface drain only. It appears to the AT that the intention of the Employer was only to go in for Surface Drain; Sub-surface drain was not at all contemplated."

12. In para 3.4 of the majority Award it was observed as under:

"3.4 While all other bidders quoted workable/reasonable rates for the Surface drain Type A, as envisaged in BOQ Item 6.11, it is only the Claimant who placed a different construction on the import of the item. Failure to understand, or to quote on assumptions, or to take cover under a low rate and contend that this rate was for the sub-surface drain and was not, and could not be, for the surface drain, are matters of bafflement, and difficult to gloss over."

13. It was further pointed out by the majority that the specific provision and

scope of BoQ Item No. 6.11 restricted the rate to be in running meters, and

to be in no other unit or mode. Further, it was held that TS Clause 309.4

would apply in all situations "other than Surface Drain of Open Type 'A'."

14. A perusal of the majority Award reveals that there was no justifiable

reason as to why the Petitioner presumed that it had to give quotation for a

sub-surface drain and not a surface drain. The drawings that were made

available were for an Open Type A surface drain. There could have been no

misconception that the work involved the construction of a surface drain.

While TS Clause 309.4 talked of measurement, it was TS Clause 309.5 that

talked of rates. While submitting a rate for BoQ Item No. 6.11 a bidder was

expected to account for the fact that Clause 309.5 referred to "excavation,

dressing the sides and bottom, providing lining, turfing, pitching, masonry,

concrete and plastering; providing, laying and jointing pipes; providing,

laying and compacting backfill and bed of granular material; providing,

fixing and painting of cover etc., including full compensation for all

materials, labour, tools and equipment, and other incidentals.". As pointed

out by the majority it was open to the Petitioner to have worked out the

quantities of different components per meter length and submit its quotation

accordingly.

15. The view taken by the majority was a plausible one. The analysis and

conclusion of the majority are based on sound reasoning. The order of

precedence was to be resorted only when there was ambiguity. In the present

case, if the TS are read as a whole then it becomes clear that the full nature

of the work had to be accounted for and in terms of the BoQ item, the

quotation had to be in metres. The Petitioner could not have possibly given a

quotation for only a sub-surface drain instead of a surface drain particularly

when there was no drawing for any sub-surface drain given to the Petitioner

16. This Court is unable to discern any illegality, much less a patent one, in

the majority Award of the AT. The objections to the impugned majority

Award are accordingly rejected and the petition is dismissed, but in the

circumstances, with no order as to costs. I.A. No. 345 of 2008 filed by

NHAI raising objections to the impugned Award is not maintainable as

such. In any event, the said objections are hopelessly time barred. I.A. No.

345 of 2008 is accordingly dismissed.

S. MURALIDHAR, J.

SEPTEMBER 28, 2012 AK