Delhi High Court
M/S National Highways Authority ... vs M/S Ose-Gil J.V. on 5 December, 2014
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgement delivered on: 05.12.2014
+ O.M.P. 616/2009
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Petitioner
Through: Ms Tanu Priya Gupta, Adv.
versus
M/S OSE-GIL J.V ..... Respondent
Through: Mr Anil Airi, Mr Ravi Krishan Chandna,
Ms Sadhna Sharma & Mr Gaurav Seth, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J
1. The only ground of challenge to the impugned award, as laid by Ms
Gupta, learned counsel for the petitioner, is that, the observations made in
paragraph 15 of the award are not in line with the judgements of the court,
with regard to Section 28 of the Indian Contract Act, 1872 (in short Contract
Act).
2. It may be noted that the arbitral tribunal was, by way of the impugned
award, only dealing with "additional payments", which the respondent
sought in the form of "cost-compensation".
2.1 On the merits of the matter, the aspect stands determined against the
petitioner herein by virtue of the judgement dated 17.12.2009, passed by a
single Judge of this court, in the case titled: Punj Lloyd Ltd. vs National
Highways Authority of India in OMP No. 340/2008.
2.2 It is also not disputed before me that the said matter was carried in
appeal by the petitioner to the Supreme Court. The Supreme Court vide
order dated 18.04.2012, passed in SLP No. 14885-14886/2009, dismissed
the same, keeping the question of law with regard to Section 28 of the
Contract Act, open.
3. Ms Gupta, therefore, argues that Section 28 of the Contract Act would
have no application, in view of the fact that, clause 53.1 of the contact
obtaining between the parties only prescribes a procedure, by which, claim
for additional payments, if any, can be triggered by the contractor (i.e., the
respondent in this case). Ms. Gupta says that clause 53.1 of the contract
does not, as held by arbitral tribunal, firstly, prescribe a period of limitation;
and secondly, a period shorter than that prescribed under law, rendering it
liable to run afoul of Section 28 of the Contract Act.
4. In the context of what Ms. Gupta has submitted it would be necessary
to extract relevant portion of not only clause 53.1, but also, an attendant
clause, i.e., clause 53.4; which was also relied upon by the arbitral tribunal.
The same read as follows:
"Clause 53.1: Notwithstanding any other provisions of the
contract, if the contractor intends to claim any additional
payment pursuant to any Clause of these Conditions or
otherwise, he shall give notice of his intention to the Engineer,
with a copy to the Employer, within 28 days after the event
giving rise to the Claim has first arisen......
.....Clause 53.4: If the Contractor fails to comply with any of
these provisions of this Clause in respect of any claim which
he seeks to make, his entitlement to payment in respect thereof
shall not exceed such amount as the Engineer or any arbitrator
or arbitrators appointed pursuant to Sub-Clause 67.3 assessing
the claim considers to be verified by contemporary records
(whether or not such records were brought to the Engineer's
notice as required under sub-clauses 53.2 and 53.3)...."
5. In my view, a plain reading of clause 53.1 would show that, while it is
a non-obstante clause, it provides that where a contractor intends to claim
additional payment, he is required to give notice of his intention to the
engineer, with a copy to the employer (i.e., the NHAI in this case), within 28
days after the event, giving rise to the claim, has arisen.
5.1 On the other hand, clause 53.4, provides for an anticipated situation,
which is, where a contractor fails to comply with any provisions of the
clause in issue (i.e., clause 53), in respect of any of his claims, for which, he
seeks entitlement to payment, and thus, the manner in which it is to be
assessed by the engineer or an arbitrator, as the case may be.
5.2 Clause 53.4, therefore requires that, in such a situation, the engineer
or, the arbitrator(s) so appointed to adjudicate upon the dispute in this
behalf, shall assess the claim for additional payment by verifying the same
with reference to the "contemporary records".
5.3 A conjoint reading of clause 53.1 and 53.4, persuades me to accept
the submission of Mr Airi, learned counsel for the respondent, that the
provisions of clause 53.1, which required issuance of notice before a claim
can be lodged for additional payment, is not mandatory, and that, it is only a
directory provision. Failure, to issue notice, does not envisage a situation
that the contractor, i.e., the respondent in this case, would lose his right to
agitate his claim for additional payment. If notice is not issued, as
contemplated under clause 53.1, then, the engineer or the arbitrator(s)
appointed to adjudicate upon the claim lodged, can assess its tenability and
value with reference to contemporary record.
5.4 It is not disputed before me, by the counsel for the petitioner, that the,
claim has been verified by the arbitral tribunal with reference to
contemporary record. It is also not in dispute that there is, today, no
grievance vis-a-vis the quantum of the claim, so ascertained by the arbitral
tribunal.
6. Having regard to the above, in my opinion, the discussion on Section
28 of the Contract Act by the arbitral tribunal was, in a sense, made in
addition, to its view on the interpretation of clauses 53.1 and 53.4.
6.1. For the reasons given by me above, the award can be sustained even
on a plain reading of the provisions of clauses 53.1 and 53.4. Therefore, I
need not go into the applicability of Section 28 of the Contract Act, as the
award can be sustained, even on this score.
7. The petition is accordingly dismissed. The parties shall, however,
bear their own costs.
RAJIV SHAKDHER, J
DECEMBER 05, 2014
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