M/S Kulbhushan Wadhwa vs General Manager, Northern ...
2013 Latest Caselaw 1548 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                         Order delivered on: April 05, 2013

+                            Arb.P.No.118/2013

       M/S KULBHUSHAN WADHWA                   ..... Petitioner
                   Through Mr.M.S.Ahluwalia, Adv.

                    versus

       GENERAL MANAGER, NORTHERN RAILWAY & ANR
                                        ..... Respondents
                    Through  None
       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (ORAL)

1. By this order, I propose to decide the present petition filed by the petitioner under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

2. The case of the petitioner is that the petitioner-firm is a proprietorship firm and is a Railway contractor for the last several years. The respondents invited the tenders for work named "Prividing washable apron for platform line No.1 at ROK at DLI-BTI Section". The petitioner submitted its tender vide quotation along with the earnest money deposit of `1,17,000/- in the form of FDR. The said work was awarded to the petitioner vide acceptance letter No.128-W/260/302/08-09/W-IV in December, 2008. The date of completion of the said work was 11th June, 2009.

3. As per the terms and conditions of the Tender documents, cement for the work and for execution of the work, Traffic Block of PF Line No.1, was

to be provided by the respondent, but, neither the cement was available with the department nor any block was sanctioned. The petitioner vide letter dated 4th May, 2009 requested the respondents to arrange the cement and block for line-1, followed by two more letters dated 9th May, 2009 and 13th May, 2009. The aforesaid fact was admitted by the Sr. Section Engineer/Works of the respondents vide his letter dated 18 th March, 2011 addressed to DEN-IV/ DLI, requesting to close the work, due to failure on the part of railway to provide traffic block for Line No.1. The petitioner vide letter dated 17th March, 2011 asked the respondent to close the work and for refund of the earnest money. The respondent vide letter dated 22nd February, 2012 pointed out to the petitioner on his failure to deposit the performance guarantee for `2,99,467/- and one more opportunity was given to deposit the same within seven days under Clause 62 of General Conditions of Contract with instructions to deploy sufficient labour and resources and complete the work immediately. In reply, the petitioner issued the letters dated 2nd March, 2012 and 14th March, 2012 to the respondent.

4. Since the petitioner failed to deposit the performance guarantee, the respondents issued another letter dated 9th April, 2012 to the petitioner intimating it about the rescission of the contract.

5. As per the petitioner, the said rescission of the contract is unreasonable and unwarranted and in unlawful manner just to cover up their own fault. Thus, the petitioner vide letter dated 15th June, 2012 invoked the arbitration clause and requested the respondents to appoint an arbitrator to adjudicate the claims of the petitioner, followed by another letter dated 28 th September, 2012 as the petitioner has huge claims against the respondents

for the losses suffered on account of breaches committed by them.

6. As, the respondents failed to appoint an arbitrator, the petitioner filed the present petition.

7. I have considered the facts stated in the petition as well as the documents placed on record. It appears to me that no doubt, various letters have been exchanged between the parties which have been filed by the petitioner in respect of his contentions. I am of the view that the petitioner, without complying with the special conditions to the contract started corresponding with the respondents and despite last opportunity, the petitioner still failed to deposit the performance guarantee. By letter dated 22nd February, 2012 addressed to the petitioner, the respondents again asked the petitioner to comply the special conditions of the contract, the petitioner failed to deposit the performance guarantee of `2,99,467/- though originally it was to be deposited latest by 28th April, 2009. Since the said condition at the first instance was not complied with by the petitioner, it was informed to the petitioner that the petitioner was not interested to execute the work in question. The extracts of the letter dated 22 nd February, 2012 issued by the respondents to the petitioner are reproduced here as under:-

"Sub: Providing of washable apron of PF No-1 at ROK under ADEN/ROK.

Dear Sir, Contract for the above noted work was awarded to you on 12/12/2008 with stipulated date of completion 11/6/2009. Vide this office even no dt-21/04/2009. You are asked to deposit the performance guarantee for Rs-299467/- latest by 28/4/2009 same till date, but you have failed to be do, So It shows that you are not interested to execute the above noted work.

Under the circumstances explained above Rly. Administration is left with no other alternative except to serve you with this SEVEN DAYS NOTICE under clause 62 of General conditions of Contract with instruction to deploy sufficient labour and resources and complete the work immediately, failing which action will be initiated against you as per extant rules. Please note.

This issues without prejudice."

8. It is evident from the facts that the petitioner was to deposit the performance guarantee of `2,99,467/- latest by 28th April, 2009 against the contract which was awarded to the petitioner on 12th December, 2008 for the completion of the work by 11th June, 2009. Learned counsel for the petitioner has admitted that the said performance guarantee which is the special condition of the contract was not deposited by the petitioner by 28 th April, 2009 and even upto date. The petitioner in fact started his correspondence with the respondent w.e.f. 4th May, 2009 when on that date he was already in default. Thus, the respondent in its right to pass the order for rescission of contract by letter dated 12th April, 2012. Thereafter, no dispute between the parties are left. The petitioner is unnecessarily trying to raise his dispute when nothing exists. The petition is entirely false and frivolous, the same is dismissed with costs at ` 5000/- which shall be deposited by the petitioner with the Delhi High Court Mediation and Conciliation Centre, within two weeks from today.

(MANMOHAN SINGH) JUDGE APRIL 05, 2013