Delhi High Court
M/S National Highways Authority ... vs R.N. Shetty & Company-Sunway ... on 19 November, 2018
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 19th November, 2018
+ O.M.P. (COMM) 178/2017
M/S NATIONAL HIGHWAYS AUTHORITY OF
INDIA ..... Petitioner
Through: Mr. Shambhu Sharan, Ms. Sehrachika
& Mr. Shashank, Advocates (M-
9560961880).
versus
R.N. SHETTY & COMPANY-SUNWAY CONSTRUCTIONS BHD-
JV ..... Respondent
Through: Dr. Arun Mohan, Senior Advocate
with Mr. Sharan Thakur, Mr. Rituj
Chopra & Mr. Vijay Kumar,
Advoctes (M-9871375675).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
I.A. 13108/2018 (for restoration)
1. This is an application seeking restoration of the petition. For the
reasons stated in the application, the petition is restored. I.A. is disposed of.
O.M.P. (COMM) 178/2017
2. The present OMP has been filed under Section 34 of the Arbitration
and Conciliation Act, 1996 challenging the award dated 25th September,
2007 passed by the Ld. Arbitrator. The background of the litigation is that a
contract was awarded to the Respondent/contractor by the NHAI for "four
laning and strengthening of KM 433 to 495 of Dharwar - Belgam section of
NH-4 in the state of Karnataka." The contract was awarded on 31st January,
2002 and the agreement was entered into between the parties on 28th
February, 2002.
3. Disputes arose between the parties in respect of the measurement and
embankment quantity for the purpose of payment. The matter was sent to the
Disputes Review Board (hereinafter „DRB‟) of NHAI. However, the
recommendations of the DRB were not accepted and the Arbitral Tribunal
was constituted. Claim IIB is the only claim which is under dispute in this
petition. On this, the Ld. Arbitrator has awarded a sum of Rs.63,59,608/.
There is no dispute between the parties that the contractor did carry out the
work in respect of clearing and grubbing prior to the building of the
embankment. The only question is as to whether the actual measurements
were on record and if the contractor had lead any evidence to prove as to
how much he is entitled on this claim.
4. The contentions of the parties have been recorded by the Arbitrator as
under:
"21.2.4 There is no dispute about the execution of the
item of Clearing and Grubbing, which stipulates
removal of top organic soil up to a depth of 150 mm.
from the original ground level as also the execution of
embankment work between the original ground level
and the ground level after grubbing. But the claimants
have contested that the Respondents are not eligible for
getting the payment for the embankment quantity
between the original ground level and the grubbed
level, in view of the stand taken by the claimants that in
MORTH 305.8 specifications the original position
means original ground level. We are of the view that
this stand does not stand to reason because of the
following :-
a. The original position means the ground level after
clearing and grubbing as already concluded under
claim 1(a).
b. Specifications of clearing and grubbing does not
stipulate that the item includes refilling cost of the
embankment conforming to the specification of the
embankment.
c. The Claimants cannot deny payment for the work
done."
5. A perusal of the award reveals that it is an admitted position between
the parties that the contractor executed the work of clearing and grubbing.
However, the exact measurements etc. were not carried out jointly during
the execution of the work. The contractor took the maximum depth of 150
mm to claim the sum of Rs. 1,10,99,106/-. The Arbitral Tribunal records that
the Engineer who was posted at site by the NHAI was regularly present and
had given the approvals for the purposes of excavation, clearing and
grubbing. The contentions of the Contractor are recorded in para 21.2.6 of
the award which is extracted herein below:
"21.2.6 Briefly contentions and arguments of the
respondents are furnished below:
a. The method of measurement adopted for the
embankment is as adopted in the adjacent package II
which is accepted by the Engineer and the NHAI for
which payment was made up to 23 IPCs.
b. The Engineer has deducted 150 mm. from the
original ground level to arrive at the excavation
quantity and no levels were taken and this procedure is
accepted NHAI (Claimants)
c. The RFIs were being approved by the Engineer
after clearing and grubbing.
d. Clearing and grubbing and removal of top soil was
being inspected by the Engineers/his representative
and one could see that the grubbing and removal of top
soil was more than 150 mm.
e. The respondents continued to claim embankment
quantity as arrived at by deducting 150 mm. from the
original ground level and the Engineer did not raise
the issue of taking levels after grubbing neither at the
time of submission of IPCs nor after receiving the
guide lines of NHAI but continued to deduct arbitrary
quantities towards 150 mm. grubbing depth from the
quantities claimed in the IPCs."
6. Since the measurements or the levels taken for carrying clearing and
grubbing were not available on record, the Arbitral Tribunal in fact
permitted the parties to jointly assess the quantity of work that may have
been undertaken by the contractor. This is clear from para 21.2.9 of the
contract which reads as under:
"21 .2.9 To assess the quantity of work executed on
this account, we requested both the Claimants and the
Respondents in our letter No.VRN/ARB/EMB/21, dated
16th November 2006 to furnish certain clarifications
and the types of soil in the areas where clearing and
grubbing work is carried out in gravelly murrum
reaches and organic soil/black soil reaches separately
under ( i ) embankment work executed with borrowed
earth, ( ii ) embankment work executed with available
excavated earth in two formats enclosed there in. We
also requested that the details prepared in the two
formats be verified and signed by both the Claimants
and the Respondents."
7. Thereafter, the parties carried out a joint inspection and verification.
A report was filed which was also duly countersigned by the NHAI. The
details of clearing and grubbing were taken on an estimated basis on the
basis of the soil in the area concerned. A reading of paras 21.2.11 and
21.2.12 clarifies this position.
"21.2.11 In view of the foregoing paras, we have come
to the conclusion that adoption of uniform depth of 150
mm. of clearing and grubbing for areas in the organic
soil and black cotton soil reaches and the uniform
depth of 50 mm. of clearing and grubbing for areas of
gravelly murrum reaches would be fair and meet the
ends of justice.
21.2.12 Based on the details furnished by the
Claimants (jointly verified and signed by the
Respondents) as indicated in para 21.2.9 supra and
depths considered as para 21.2.11 supra, quantity of
clearing and grubbing executed and amounts becoming
payable are furnished in the following table."
8. In view thereof, the Arbitral Tribunal has awarded a sum of
Rs.63,59,608/- by calculating the same as under:
Sl. Description Area Sq. Dept Quantity Rate. Amount
No. M. h Cu. M. Rs.* Rs.
mm.
1 2 3 4 5= 3x 4. 6 7= 5x6
1. Embankme 3,64,693 150 54,703.95 60 32,82,237
a. nt executed
in areas of
organic
soil/black
cotton soil;
with
borrow
material.
Chainage
2850 to
b. Embankme 1,32,952 150 19,942.8 33 6,58,112
nt executed
in areas of
organic
soil/black
cotton soil:
with
excavated
available
material.
Chainage
2850 to
2. Embankme 6,13,466 50 30,673.3 60 18,40,398
B nt executed
in areas of
gravelly
murrum
reaches
with
borrow
material.
Chainage -
1050 to
b. Embankme 3,50,825 80 17,541.25 33 5,78,861
nt executed
in areas of
gravelly
murrum
reaches
with
excavated
available
material.
Chainage-
1050 to
TOTAL 63,59,608
*Rates indicated are in terms of the agreement.
The Respondents are eligible for payment of Rs.
63,59,608/- (Rupees sixty three lakhs fifty nine
thousand six hundred eight only.) for the items of
quantities executed above. (Less sums already paid, if
any) towards the volume of embankment between the
original ground level and -the ground level after
clearing and grubbing. Payment of this amount to the
Respondents will meet the ends of justice."
9. The Arbitral Tribunal has undoubtedly gone on an estimated basis for
awarding this amount. The actual measurements were not available. Neither
party has furnished the actual measurements. However, it is not disputed that
the requests for inspection were being approved by the Engineer after the
clearing and grubbing was done by the contractor. Arbitral proceedings are
not strictly bound by provisions of the CPC. The Arbitral Tribunal may
arrive at a reasonable estimate of the work done. Since the work done is
itself not disputed in this matter and the Engineer on behalf of NHAI having
remained on site and having approved the requests for inspection, the
Arbitral Tribunal's approach to arrive at an estimate cannot be faulted.
Moreover, the NHAI never contested the Arbitral Tribunal's attempt to
arrive at an estimate and in fact agreed to jointly participate in the
verification which was undertaken.
10. Under these circumstances, the objections are not maintainable
against this claim.
11. Simple interest @12% on the awarded amount shall be payable till
date. The payment shall be made within three months, failing which, simple
interest @15% on the entire awarded amount would be liable to be paid.
O.M.P. is disposed of.
PRATHIBA M. SINGH
JUDGE
NOVEMBER 19, 2018
Rahul
