Chenab Bridge Project ... vs Northern Railway And Anr.
2019 Latest Caselaw 1922 Del

    * IN THE HIGH COURT OF DELHI AT NEW DELHI
    %                           Date of decision: April 08, 2019

+    W.P.(C) 3375/2019, CM No. 15459/2019

     CHENAB BRIDGE PROJECT UNDERTAKING              ..... Petitioner
                 Through: Mr. Mukul Rohatgi and Mr. Dayan
                           Krishnan, Sr. Advs. with Mr.Anirudh
                           Krishnan, Mr.Balaji Srinivasan,
                           Mr.Adarsh Subramanian, Mr.Hitesh
                           Kumar, Ms.Garima Jain, Ms. Pallavi
                           Sengupta, Mr.Siddhant Kohli, Advs.
                 versus

     NORTHERN RAILWAY AND ANR.                 ..... Respondents
                  Through: Mr. J.K.Singh, Standing Counsel with
                            Ms. Madhulika Agrawal and
                            Mr.Harsh Pandit, Advs. for Northern
                            Railway-R-1
                            Ms.Kiran Bhagalia, Adv. with
                            Ms. Suchitra A. Chitate and
                            Ms.Pallavi Bali, Adv. for R-2
    CORAM:
    HON'BLE MR. JUSTICE V. KAMESWAR RAO

    V. KAMESWAR RAO, J. (ORAL)

1. The present petition has been filed by the petitioner /

Chenab Bridge Project Undertaking with the following prayers:

"In view of the above, the Petitioner humbly prays that this Hon'ble Court may be pleased to issue:

i. Any writ, order or direction in the nature of mandamus and/or any writ, order or direction directing the Respondents to enforce the findings in

the minutes of Meeting dated 15.05.2018 signed by the Respondent No.1;

ii. Any writ, order or direction in the nature of certiorari and/or any writ, order or direction to quash the impugned notice dated 27.03.2019 issued by the Respondent No. 3;

iii. Any writ, order or direction in the nature of mandamus and/or any writ, order or direction to the Respondent No. 3directing it enter in to supplementary agreements with the Petitioner and thereby act in adherence of Clause 41 of the GCC and to conclude the variations at the earliest;

iv. For such further and other orders as the nature and circumstances of the case may require and costs, if any against the Respondents for this petition."

2. Some of the relevant facts as noted from the writ petition

are, pursuant to a tender process initiated by respondent no.2,

Konkan Railway Corporation Limited (KRCL), the petitioner was

awarded the contract for design and construction of a Special Bridge

across the River Chenab at Kilometer 50/800 on the Katra - Laole

Section of Udhampur-Srinagar-Baramulla Rail Link Bridge. The

duration of the contract was set at 30 months with a date of

completion as April 30, 2007. There is no dispute that the contract

has not yet been completed.

3. It is the case of the petitioner, that on April 4, 2005, it had

submitted a revised Design Based Note (DBN) complying with

modifications, to DBN submitted with Tender, proposed by the

Respondent No.2 and on June 2, 2005, the respondent no.2 KRCL

provisionally approved the said DBN. It is also pleaded that KRCL

on its own issued revised DBN on September 5, 2006.

Subsequently on April 23, 2010, final DBN was issued by KRCL.

As on date it is the DBN of 2010, which is valid, with correction

slips to the same having been issued in 2011 and 2013.

4. It is the case of the petitioner that it must be paid for

difference in quantities of structural steel between tender DBN and

2010 DBN. For the purpose of reaching a via-media in the

interregnum the petitioner was willing to accept payment for the

difference in quantities issued between 2005 DBN and 2010 DBN.

It is the case of the petitioner that on May 15, 2018, deliberations

have been held when the officer of the Northern Railway, for whom

respondent no.2 is executing the project, was also present, wherein

the following decision was taken:

 Sl.                Item                  Remarks / Status
No.
2.         Commercial issues        It has been jointly decided
           of enhanced steel        that KRCL will forward the
           quantity                 details submitted by WSP,
                                    (designer of this bridge)
                                    regarding enhanced quantity
                                    of steel over and above
                                    approved DBN of 2005 to
                                    M/s Flint & Neill, the proof
                                    checker. CBPU should
                                    arrange to provide any
                                    additional information, if
                                    asked by M/s. Flint & Neil.
                                    KRCL should organize a
                                    meeting of the designer and
                                    the proof of checker to
                                    conclude       this    issue
                                    expeditiously.

5. It is their case that the minutes of meeting dated May 15,

2018 needs to be implemented. It is averred that further the KRCL

on August 29, 2018 contended that the statement in the minutes of

meeting dated May 15, 2018 is only advisory and on November 6,

2018 issued a letter enclosing therewith a letter of respondent no.1

negating the promise made in the minutes of meeting dated May 15,

2018. It appears, the petitioner has informed the KRCL that it was

unable to proceed with the work on the ground that several

modifications / variations brought about by respondent no.2 KRCL

attracted Clause 41 of GCC whereby the petitioner ought not to

proceed with the work until supplementary agreements are entered

into by the parties for such modifications / variations.

6. It is noted that on March 27, 2019, respondent no.2 invoked

clause 62 of the GCC by issuing a show-cause notice giving

petitioner 7 days' time to commence the work to make good the

progress failing which further action as provided under Clause 62 of

the GCC, viz., terminating the contract between respondent no.2

KRCL and the petitioner and a decision to complete the work at the

petitioner's risk and cost would be taken.

7. Mr. Mukul Rohatgi and Mr. Dayan Krishnan, learned Sr.

Counsels appearing for the petitioner submitted that they are

conscious that an arbitration clause exists in the agreement executed

between the petitioner and the KRCL, but as this petition has been

filed seeking a direction to the Northern Railway to implement the

Minutes of the Meeting dated May 15, 2018, the present petition is

maintainable. It is their submission that the project being of

national importance, respondent no.1 was actively involved in the

project monitoring / execution of the project even though they are

not signatory to the contract with the petitioner. In other words, the

most crucial decisions in respect to the project have always been

taken pursuant to the approval of the respondent no.1. So, the

appropriate remedy is to invoke the writ jurisdiction of this court for

a direction to the respondent no.1 to ensure the implementation of

the minutes of the meeting dated May 15, 2018. It was submitted

by them that on July 6, 2018 the parties acted in furtherance of the

decision dated May 15, 2018, inasmuch as the required documents

have been submitted to the proof-checker and in fact CAO

instructed the KRCL to ask the proof-checker to expedite the

proceedings. They stated that the stand of the respondent KRCL in

the letter dated August 29, 2018 is that the minutes of the meeting

dated May 15, 2018 are only advisory is untenable. Even the letter

dated November 02, 2018 of respondent no.1 has been issued by

completely ignoring the Minutes of Meeting dated May 15, 2018.

According to them, the increase in structural steel quantities have to

be decided due to changes in DBN. It is their submission that DBN

2006 was neither approved nor implemented at any point of time.

In fact, final DBN of 2005 incorporated the suggestions given by

the petitioner. It was their submission that based on DBN 2005, the

petitioner had altered its position by executing works based on the

said approved DBN, therefore the respondents are estopped from

going back on their promise. So, in substance, their submission was,

as the increase in structural steel is relatable to variations /

modifications in the work, clause 41 of the GCC gets attracted and

the parties mandatorily have to enter into a supplementary

agreement incorporating the agreed terms and conditions before the

work continues. They stated that despite requests to the respondents

to enter into supplementary agreement on agreed terms and

conditions so that the work can be resumed, the same has not been

acceded to. Mr. Rohatgi and Mr. Krishnan had relied upon the

following judgments of the Supreme Court and this Court in support

of their submissions about the maintainability of the writ petition

despite an arbitration clause which according to them shall not be

applicable as the writ petition has been filed seeking a direction

against the Northern Railway to implement the minutes of meeting

dated May 15, 2018.

1. Union of India and Ors. v. Tantia Construction Pvt.

Ltd. 2011 5 SCC 697

2. Gujarat State Financial Corporation v. M/s. Lotus Hotels Pvt. Ltd. 1983 2 SCC 379

3. LPA 57/2019 NTPC Ltd. and Anr. V. M/s BGR Mining and Infra Ltd.

8. On the other hand, Ms. Kiran Bhagalia, learned counsel for

the respondent no.2 / KRCL had challenged the maintainability of

the petition on three grounds; (i) the plea of the petitioner that for

the limited relief sought for, i.e., implementing the minutes of

meeting dated May 15, 2018 by the Northern Railway, the writ

petition is the only remedy, is untenable as the contract for the

design and construction of a special bridge across the river Chenab

has been executed by the petitioner with the respondent no.2 and the

issue in question about the increase in the structural steel is a related

issue with contract and the petition under the garb of seeking a

direction against the Northern Railway is not maintainable; (ii) there

is an arbitration clause in the agreement executed between the

petitioner and the respondent no.2 and any dispute between the

parties needs to be decided through the arbitration; (iii) there are

disputed question of facts and the writ petition is not an appropriate

remedy.

9. On merit it was her submission that the 2005 DBN was

provisional and this fact had not been contested by the petitioner at

any point of time. It was in the year 2006 that DBN was approved

and the same should be the basis for calculating the increase in steel

till 2010. It was her submission that the only stand of the petitioner

throughout, had been that it is entitled to extra cost because of the

increase in the steel. It did not at any point of time sought

modification of contract. In fact, according to her, the petitioner

had been raising bills, which were being duly paid. Ms. Bhagalia

during her submissions had drawn a distinction between clauses 39

and 41 of the contract to contend that the contract being for

lumpsum amount, the increase in quantities required no

modification. She also stated that clause 41 says, if the parties think

that the contract needs to be modified, then only it can be modified.

She admitted that respondent no.2 is required to pay the petitioner

for the extra material used in the execution of the work. She also

stated no supplementary agreement can be executed without

quantities and rates being determined. In other words, if the

quantities and rates are fixed, the supplementary agreement can be

executed. She justifies the show-cause notice dated March 27, 2019

issued by invoking clause 62 of the GCC. She stated that a

Mandamus cannot be sought by the petitioner against the

respondent no.2, not to exercise the right under the contract. It was

her plea that the filing of the writ petition by the petitioner is not

bona fide and liable to be dismissed. She relied upon the following

judgments of the Supreme Court in support of her submissions:

1. Rajasthan State Industrial Development and Investment Corporation and Anr. V. Diamond and Gem Development Corporation Limited and Anr. 2013 5 SCC 470.

2. State of Jammu and Kashmir v. Ghulam Mohd. Dar and Anr. 2004 12 SCC 327

3. Pimpri Chinchwad Municipal Corporation and Ors.

v. Gyatri Construction Company and Anr. 2008 8 SCC 172

4. State of Bihar and Ors. v. Jain Plastics and Chemicals Ltd. 2002 1 SCC 216

5. Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd.

2004 4 SCC 671

10. Mr. J.K. Singh, Adv. who appeared for the respondent /

Northern Railway had submitted that the project, even though of

Northern Railway, the same is being executed through the aegis of

respondent No.2 / KRCL which had issued the tender and awarded

the contract. According to him, there is no agreement between the

Northern Railway and the petitioner and the agreement is between

the petitioner and the respondent no.2 and all financial and

commercial terms have to be looked into by respondent no.2 based

on the contractual stipulations.

11. Having heard the learned counsel for the parties, the issue

which arises for consideration is whether a direction can be issued

to respondents including the Northern Railway to implement the

minutes of the meeting dated May 15, 2018.

12. There is no dispute that the Project in question falls under

the Northern Railway Zone of Indian Railways. The Northern

Railway decided to get the same executed through respondent no.2

KRCL. It is the KRCL which issued the tender. It also issued the

Letter of Acceptance to the petitioner, on being found successful in

the tendering process. The contract incorporates all technical and

commercial terms relatable to the project. The contract has also an

arbitration clause in terms of the arbitration agreement executed

between the parties on February 28, 2012.

13. The plea of Mr. Rohatgi and Mr. Krishnan was, since the

proceedings dated May 15, 2018 were held under the aegis of

Northern Railway, whose project is being executed by the KRCL,

the Northern Railway should ensure that the minutes of meeting

dated May 15, 2018, more specifically item no.2 thereof is

implemented and a supplementary agreement is executed on the

basis of the said decision. The plea of the counsel for the respondent

Northern Railway is that any financial / commercial terms has to be

decided by KRCL based on the contract stipulations. In other

words, the issue of increase in structural steel, whether based on

DBN 2005 or DBN 2006 needs to be looked into by the KRCL in

terms of the stipulations in the contract. If that be so, the petition

against Northern Railway is not maintainable as the issue raised,

which is noted above is an issue connected with the contract

executed between the petitioner and the KRCL and not Northern

Railway. If a need is felt by the petitioner, at a later point of time

to establish the purport of the minutes of the meeting dated May 15,

2018 to mean that extra steel has to be calculated on the basis of

DBN 2005, the petitioner can summon the officer present for the

Northern Railway in such proceedings, that are initiated finally

including Arbitration Proceedings.

14. That apart, I find after the meeting of May 15, 2018, the

parties, i.e., the petitioner and the respondent no.2 KRCL have

moved much forward, as can be seen from the various

communications / documents annexed from Page 252 onwards of

the writ petition, a perusal of the same does reveal that there is a

dispute which has arisen between the petitioner and the KRCL and

the same necessarily has to be decided by the Arbitral Tribunal, on

the same lines of previous 19 claims filed by the petitioner, as

submitted by Ms. Bhagalia during her submissions. Moreover, the

arbitration is the appropriate remedy when disputed questions of

fact arise, as can be inferred from the above, which cannot be

decided on the basis of affidavits (Ref. State of Jammu and

Kashmir v. Ghulam Mohd. Dar and Anr. (Supra))

15. What is glaring in this case is that filing of the present

petition has got triggered because of the issuance of the show-cause

notice dated March 27, 2019 as is clear from the proximity between

the date of show-cause notice, i.e., March 27, 2019 and filing of the

writ petition on April 1, 2019. So, the show-cause notice is only a

ploy for the petitioner to approach this court (after at least 10

months) on the pretext of seeking an implementation of the minutes

of meeting dated May 15, 2018, as I note the petitioner has also

challenged the show-case notice dated March 27, 2019.

16. It is a settled position of law by the Supreme Court in the

case of Union of India v. Kunisetty Satyanarayana 2006 12 SCC

28, wherein the court has deprecated the practice of entertaining

writ petitions questioning the legality of the show-cause notice,

stalling the enquiries as proposed and retarding investigation into

facts, except it is a case of absolute want of jurisdiction of the

authority to investigate into the facts, the writ petition will not be

entertained on the mere asking and as a matter of routine. The said

position of law squarely applicable in the facts of this case as I have

been informed that the petitioner has responded to the show-cause

notice by filing a reply to the same on March 31, 2018 and a

decision is yet to be taken by the competent authority on the said

show-cause notice. It goes without saying that an order to be passed

by the authority concerned shall be subject to arbitration

proceedings as agreed to between the parties to the contract.

17. In so far as the judgments relied upon by Mr. Rohatgi and

Mr. Krishanan in the case of Tantia Construction Pvt. Ltd. (supra)

and Joshi Technologies (supra) on the proposition of law that

arbitration clause is not a bar to invoke the writ jurisdiction when

injustice is caused and rule of law is violated is concerned, there is

no dispute on the said proposition, but it must be noted, as stated

during submissions that the petitioner herein has made 19 claims

against the respondents before the Arbitral Tribunal. There is no

reason why deviation should be made, only on the ground that the

petition is directed against Northern Railway, which plea is without

merit, being not maintainable, in facts. Suffice it to state the

Judgments are distinguishable on facts.

18. Similarly, in so far as the Judgment relied upon by Mr.

Rohatgi and Mr. Krishnan in the case of Gujarat State Financial

Corporation (supra) is concerned, the same would not be relevant

to the facts of this case.

19. In view of my discussion above, this court is of the view

that the present petition is not maintainable and is liable to be

dismissed. Ordered accordingly.

CM. No. 15459/2019 (for Stay) Dismissed as infructuous.

V. KAMESWAR RAO, J

APRIL 08, 2019/jg