Delhi High Court
M/S Subhash Infraengineers Pvt ... vs Union Of India on 14 August, 2018
$~03
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) (COMM) 95/2018
Date of decision: 14th August, 2018
M/S SUBHASH INFRAENGINEERS PVT LTD ..... Appellant
Through Mr. Anil Mittal and Ms. Komal
Aggarwal, Advocates.
versus
UNION OF INDIA ..... Respondent
Through Mr. Jagjit Singh and Mr. Preet Singh,
Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE CHANDER SHEKHAR
SANJIV KHANNA, J. (ORAL)
This intra-Court appeal under Section 13 of the Commercial
Courts, Commercial Division and Commercial Appellate Division of
the High Courts Act, 2015 and Section 37 of the Arbitration and
Conciliation Act, 1996 (A & C Act, for short) impugns order dated
23rd February, 2018 passed in OMP (COMM) No. 38/2018 rejecting
objections filed by the appellant under Section 34 of the A & C Act.
2. The appellant was awarded work of earth work in filling,
embankment and cutting, provision of the blanketing material,
construction of bridges and other works between K.M 49.00 to K.M
74.4 on the Rewari-Jhajjar-Rohtak section.
3. The work was to be completed within 18 months from the date
of acceptance letter, i.e. on or before 3rd January, 2009. The work, it
is accepted, was completed on 28th February, 2011.
4. The dispute raised by the appellant before the Arbitrator was
regarding benefit of price variation clause. The contention was that
the respondent having extended time for execution of the work vide
letters dated 4th August, 2009, 7th August, 2009, 10th March, 2010 and
20th June, 2010 without penalty, the appellant was entitled to benefit
of price variation clause. The appellant was granted first extension of
time with benefit of price variation clause vide letter dated 12 th
February, 2009. Subsequent extensions vide letter dated 4th August,
2009, 7th August, 2009, 10th March, 2010 and 20th June, 2010 were
without benefit of price variation clause.
5. The aforesaid aspect and facts as to the reason and cause for
delay was examined by the learned Arbitrator-Mr. Justice G.S.
Singhvi (Retd.) in depth and detail vide paragraphs 43 to 52 in the
Award. The paragraphs examine the contention of the appellant that
L section drawings were furnished belatedly, and whether this delay
would justify and explain repeated extensions and prolongation of the
work. The contention was rejected by the learned Arbitrator after
referring to the letters exchanged between the parties as well as ocular
evidence. It has been held that delay in execution of work was not on
the said account and there were several other reasons and causes
which were attributable to the appellant. The findings on the said
aspect are cogent and well-reasoned. Learned single Judge in the
impugned order has also referred to and quoted paragraph 49 from the
award, which reads:-
"49. There is no doubt that there was some delay in
supply of drawings of the bridges required to be
constructed but the claimant cannot take advantage of
the same because M/s.Subhash Chander & Co. failed
to carry out the work in accordance with terms and
conditions of LoA and the Contract Agreement and
could construct only 35 minor bridges and that too
after grant of four extensions and one post facto
extension on the basis of written requests made by M/s.
Subhash Chander & Co, While granting first extension
vide letter dated 12.02.2009 the competent authority
had taken cognizance of the fact that there was some
delay on the part of the respondent in supplying the
drawings of bridges and this is the precise reason why
the benefit of price variation clause was given to the
claimant and a sum of Rs.64,89,807.54 was paid in
terms of price variation clause. However, all
subsequent extensions were granted without the benefit
of price because the concerned authority was
convinced that M/s. Subhash Chander & Co. had
failed to carry out the work with a due diligence. This
is amply proved from letters dated 04.08.2009
(Annexure R-2/ 2) dated 17.08.2009 (Annexure R-2/1),
10.03.2010 (Annexure R-2/3), 29.06.2010 (Annexure
R2/4), 17.03.2011 (Annexure R-2/5). Apart from these
letters, the concerned authority had made request to
the claimant vide the letters dated 30.07.2008 (Exhibit
RW1/7), 27.12.2008 (Exhibit RW-1/8), 22,01.2009
(Exhibit RW-1/9), 30.10.2009 (Exhibit RW-1/10),
23.07.2010 (Exhibit RW-1/11), 09.08.2010 (Exhibit
RW-1/12), 12.11.2010 (Exhibit RW-1/13), 20.10.2010
(Exhibit RW1/14), 29.11 2010 (Exhibit RW-1/15),
25.07.2011 (Exhibit RW-1 /16) and 29.09.2011
(Exhibit RW-1/18). When the claimant made
representation dated 12.05.2011 for grant of the
benefit of PVC on extended period of contract, the
Headquarter Office of the Northern Railway
specifically rejected, the same vide letter dated
22.06.2011 (Annexure R - 6) by pointing out that
approved section was finalized in November 2007. The
drawings of the bridges were given in stages to
commensurate with the progress of the work at the site
and complete set of drawings were given in February
2008, but even then the progress of bridges were very
poor and took it nearly three years to complete the
same. It was also mentioned that some investigation
was got done by M/s Subhash Chander & Co. as
nonschedule item, but it was in no way handicapped in
constructing tile bridges when there was no loss on
account of idling of labour, payment due to PVC and
in fact the work of the progress was very poor. It is
quite interesting to note that M/s Subhash Chander &
Co. did not protest against the denial of the benefit of
price variation clause in second, third, fourth and fifth
extensions till February 2012 . This goes a long way to
show that delay in the execution of work was directly
attributable to claimant."
The findings cannot be said to be bad and unreasonable on application
of Wednesbury principles.
6. The second objection raised by the appellant was in respect of
extra payment for bringing material from Tiba Basai, Rajasthan to
Jhajjar, Haryana in view of the stated ban imposed by the Punjab and
Haryana High Court and the circular issued by the Director Industries
and Commerce, Mines and Geology, Haryana. The said contention
has also been rejected after referring to the evidence and material on
record, including the factum that the appellant herein had not been
able to show and prove that the bills of M/s. Ashok Kumar and M/s.
Prem Engineers relied by the appellant were relating to the contract in
question. Factual findings on the said aspect are to be found in
paragraphs 53 to 58 of the Award. The said findings again are cogent
and well-reasoned. They do not require interference when we apply
Wednesbury Principles.
7. No other contention is raised.
8. The appeal has no merit and is accordingly dismissed, without
any order as to costs.
SANJIV KHANNA, J.
CHANDER SHEKHAR, J.
AUGUST 14, 2018
NA/VKR
