Delhi High Court
Union Of India vs M/S Pradeep Vinod Constructions ... on 31 July, 2019
$~23
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 31st July, 2019
+ O.M.P. 34/2008
UNION OF INDIA ..... Petitioner
Through: Mr. Ashok Singh, Advocate. (M:
9313649228)
versus
M/S PRADEEP VINOD CONSTRUCTIONS
CO. & ORS. ..... Respondents
Through: Mr. S. W. Haider and Ms. Pooja Dua,
Advocates. (M: 9311307710)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
I.A. 9576/2019 (for restoration)
1. The present petition was dismissed for non-prosecution with a
detailed order dated 2nd July, 2019. Ld. counsel for the Union of India
(hereinafter „Railways') has entered appearance after that and filed the
present application seeking restoration of the petition and setting aside of the
order dated 2nd July, 2019. I.A. is allowed and the petition is restored to its
original number.
2. I.A. is disposed of in the above terms.
O.M.P. 34/2008
3. The parties have been heard on merits.
4. The present petition challenges the award dated 12th October, 2007
passed by a three members' Tribunal consisting of technical members
appointed by the Railways. The Respondent No.1 - M/s Pradeep Vinod
Constructions Co. (hereinafter the „Contractor‟) entered into an agreement
with the Railways for replacement of bridge timber with steel channel
sleepers on bridge No.79, 168, 196, 216, 225, 227 & 228 on DLI-UMB
section under ADEN/Karnal (`Project‟), vide Agreement No.04/KUN/DSE-
I/2003-04, dated 9th April, 2003.
5. The tenders were floated by the Superintendent Engineer-I, Northern
Railways and the Contractor submitted its bids. The total value of the
contract was Rs.81,18,000/- and the date for completion was 31st October,
2003. A formal agreement was entered into between the parties on 9th April,
2003. The date of completion expired on 31st January, 2005 after repeated
extensions being sought by the Contractor. On 6th June, 2005, the Contractor
sought closure of the contract and accordingly, the contract was rescinded
vide letter dated 4th July, 2005. The Contractor then submitted the final bill
for release of a sum of Rs.16,01,743/- which was rejected by the Railways.
Thereafter, the arbitration clause in the agreement was invoked and the
General Manager, Northern Railways referred the dispute to arbitration.
Claims were raised by the Contractor that were awarded by the ld. Tribunal
to the Contractor. The awarded amounts are as under:
Awarded
Claim
Amount
Claim No.1 - Towards balance Rs.3,87,449.65
quantity to be paid for schedule
item No.1 only involved 15.80
mt @ 30,700 PMT.
Claim No.2 - Towards Rs.97137.60
difference in rate of channel
and plate at the time of tender
and on the date of procurement
@ Rs.8000/- per MT.
Claim No.3 - Towards Rs.81,997-00
manufacturing guard rails in
Br.No.225. Qty involved 2x435
m=870m @ Rs.200/- per m
Claim No.4 - Towards Rs.225659-00
released/refund of security
deposit and earnest money
Total awarded amount Rs.7,91,243.00
6. The primary ground raised by Mr. Ashok Singh, ld. counsel for the
Railways is that the Contractor sought repeated extensions for completing
the work and despite this the ld. Arbitral Tribunal has awarded various
claims to the Contractor. Further, ld. counsel submits that the items of the
agreement are set out in detail and no extra amount was liable to be paid in
respect of additional claims raised, for example, in respect of guard rails,
rivets etc. Ld. counsel further submits that the Contractor on its own volition
made requests for supplies of channels of 16.8 kg/m and/or 17.7 kg/m.
However, as per the contract, the channel that was to be used was of 16.40
kg/m. It is submitted that for use of these items, since there was a
comprehensive contract which covered all the items to be used for proper
replacement and rates were fixed, no extra amount was payable.
7. It is further submitted by ld. counsel that the price which has been
awarded, i.e. Rs.30,700/- per metric tonne is also on the higher side,
inasmuch as the extra items, which have been procured are concerned. The
rate of Rs. 30,700/- per MT was the rate for steel and all other components
forming part of the work to be executed and could not be applied for merely
some additional material used.
8. On the other hand, the submission on behalf of the Contractor is that
the manner in which the Ld. Arbitral Tribunal has quantified each of the
items and has arrived at the extra amounts is quite detailed. Since the Ld.
Tribunal was a technical Tribunal, no interference is warranted. Further, it is
submitted that as against most of the claims raised by the Contractor, the
amount awarded is only the amount which the Tribunal considered proper in
terms of the use of the material by the Contractor.
9. The Court has perused the award by the ld. Arbitral Tribunal. A
perusal of the discussion under claim no.1 shows that the Ld. Arbitral
Tribunal came to the conclusion that the total extra steel which has been
used by the Contractor is 12620 kg, which has been valued as per the rate
fixed in the items of the agreement, i.e. Rs.30,700/- per metric tonne. Since
for work executed, the Contractor is liable to be fully compensated as per
the final bill, including all items which the Contractor had executed, the
award under Claim No.1 cannot be faulted. The submission of the Ld.
Counsel for the Railways that the rate was wrongly applied does not appear
to be correct as a lesser rate could not have been arrived at arbitrarily by the
Tribunal, when the agreement contained the agreed rate.
10. Insofar as Claims no.2 & 3 are concerned, the same relate to the
difference in rate of channel and plate at the time of tender and for
manufacturing guard rails. The ld. Arbitral Tribunal, being a technical
Tribunal, would have examined as to what are the items covered in the
document titled `Items in the agreement' as also the difference in the rate of
the channel and plate at the time of tender and actual use as also the amount
payable for manufacturing guard rails. These are completely factual aspects
which cannot be gone into in the present petition under Section 34 of the
Arbitration and Conciliation Act, 1996. The scope of interference especially
into factual findings is limited.
11. The rate of interest that was awarded by the ld. Tribunal is @ 18% per
annum after 45 days from the date of award till the date of realization of the
amount. The operative portion of the award reads as under:
"The respondent should realize the award announced
above within 45 days from the date of award and
claimant shall be entitled to interest @ 18% per annum
after 45 days from the date of award till the date of
realization of the amount."
12. Under the circumstances of this case, where the Contractor himself
has sought repeated extensions and has also finally sought closure of the
contract on his own, the rate of interest is modified to 10% per annum from
the date of the award.
13. The petition is disposed of in the above terms.
PRATHIBA M. SINGH
JUDGE
JULY 31, 2019/dk
