Delhi High Court
Union Of India vs M/S Pandit Construction Co on 24 July, 2017
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) (COMM) 147/2017 & CMs 25689-91/2017
Date of decision : 24th July, 2017
UNION OF INDIA ..... Appellant
Through: Ms.Aarti Bansal, Adv.
versus
M/S PANDIT CONSTRUCTION CO ..... Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE NAVIN CHAWLA
SANJIV KHANNA, J. (Oral)
CM 25691/2017
Exemption allowed subject to all just exceptions.
Application is disposed of.
FAO(OS) (COMM) 147/2017 & CMs 25689-90/2017
This intra-court appeal impugns the order dated 6 th
February, 2017 passed by the learned Single Judge dismissing
objections filed by the appellant challenging the award dated 8th
July, 2013, in respect of in respect of Claim no.8.
2. The appeal is belated and application for condonation of
71 days delay has been filed.
3. Before issuing notice on the application, we have deemed
it appropriate to examine the appeal on merits and find that
FAO(OS) (COMM) 147/2017 Page 1
there is no justification and reason to interfere with the
impugned order which upholds the decision of the Arbitrator in
respect of claim no.8.
4. The respondent was awarded contract for construction of
Admn. & Training Block for Group Centre & Academy for
CRPF at Kadarpur, Gurgaon. The total value of the contract
was Rs.928.44 lacs. This included civil work component of
Rs.892.52 lacs. Initially, the contract was to be completed by
13th February, 2007 but this date was extended by the appellant
to 6th June, 2007. To this extent, there is no dispute.
5. As per the award, the respondent had completed civil
work of Rs.906.44 lacs as on 15th March, 2007 when the work
was suspended. The suspension was at the request of the
appellant as they did not have sufficient funds to complete the
work. On 18th August, 2008, the work was foreclosed and final
bill was thereafter paid on 21st July, 2009. The quantum of
work executed by the respondent was calculated and quantified
by the appellant at Rs.906.43 lacs.
6. The contention of the appellant is that as the work never
got completed and was foreclosed, the arbitrator could have not
granted bonus @5% under clause 2A of the agreement
amounting to Rs.44.03 lacs.
Clause 2A of the agreement reads:
"Incentive for early completion- In case, the
contractor completes the work ahead of scheduled
completion time, a bonus @ 1% (one per cent) of
FAO(OS) (COMM) 147/2017 Page 2
the tendered value per month computed on per
day basis, shall be payable to the contractor,
subject to a maximum limit of 5% (five per cent)
of the tendered value. The amount of bonus, if
payable, shall be paid along with final bill after
completion of work. Provided always that
provision of the Clause 2A shall be applicable
only when so provided in „Schedule F‟."
The clause postulates payment of incentive in the form of
bonus @ 1% of the tendered value per month computed on
daily basis subject to maximum of 5% on early completion.
7. The claim relying on clause 2A was examined by the
Arbitrator who has referred in detail to the factual matrix and
has pointed out and held that the fault was of the appellant. The
appellant did not have funds and had actually stopped payments
as was admitted by the appellant vide letter dated 28th
December, 2006 asking the respondent to curtail execution of
the civil component of work within Rs.849 lacs to avoid non-
payment for want of funds.
8. Thus, the appellant was guilty for not arranging required
funds to execute the work.
9. The aforesaid findings have been affirmed by the learned
Single Judge who has referred to clauses 2A, 12.1 and 15 of the
contract.
10. The appellant has not placed on record before us the copy
of the letter dated 26th April, 2006 written by the respondent or
highlighted the reasons why time for completion was extended
from 13th February, 2007 to 6th June, 2007. This letter dated
FAO(OS) (COMM) 147/2017 Page 3
26th April, 2006 was also not relied upon before the learned
Single Judge. The Arbitrator had dealt with the question of
extension of time in paragraph 8.9 of the award, which findings
have not assailed and specifically challenged.
11. In the absence of any specific assertion and allegation
relating to fault of the contractor as being the reason why the
work was extended up to 6th June, 2007, we do not think the
respondent should be denied and deprived the amount allowed
under Claim no.8. In the factual matrix as found by the
Arbitrator, the respondent had substantially executed the work
by December, 2006, when he was asked to go slow and curtail
the civil component. Finally, the work was suspended on 15 th
March, 2007 and thereafter foreclosed for want of funds. The
closure was on account of lapse or fault of the appellant i.e.
absence of funds.
12. In these circumstances, we are not issuing notice on the
application seeking condonation of delay. The said application
and the appeal will be treated as dismissed.
SANJIV KHANNA, J
NAVIN CHAWLA, J
JULY 24, 2017
RN
FAO(OS) (COMM) 147/2017 Page 4
