Simplex Infrastructures Limited vs Director General Married ...
2021 Latest Caselaw 3347 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                           Date of decision: 07.12.2021
+     ARB.P. 784/2021
      SIMPLEX INFRASTRUCTURES LIMITED                    ..... Petitioner
                          Through     Mr. Kirti Uppal, Sr. Adv. with Mr.
                                      Ayush Aggarwala, Mr. Samrat
                                      Sengupta, Ms. Riya Gulati and Mr.
                                      Ishan Thakur, Advs.,
                          versus

      DIRECTOR GENERAL MARRIED ACCOMMODATION
      PROJECT                                ..... Respondent
                   Through Mr. Harish Vaidyanathan Shankar,
                           CGSC with Mr. Karan Chhibber and
                           Ms. S. Bushra Kazim, Advs.

      CORAM:
      HON'BLE MR. JUSTICE SURESH KUMAR KAIT

                          J U D G M E N T (oral)

1. The present petition has been filed under Section 11 of the Arbitration

and Conciliation Act, 1996 seeking appointment of sole Arbitrator to

adjudicate the disputes with respondent in terms of Clause 60 of the General

Conditions of Contracts for Lumpsum contracts and measurement contracts

entered into between the parties.

2. Petitioner is a company established in 1924 and is in business of

executing projects in several sectors like Transport, Energy & Power,

Mining, Buildings, Marine, Industrial Structures and Real Estate.

3. Respondent is Director General, Married Accommodation Project of

the Ministry of Defence and works under the aegis of the Engineer in chief

and has been entrusted with the task of constructing accommodation for

Married Personnel of the Armed Forces.

4. As per the averments made in the present petition, respondent issued a

tender for construction of residential accommodation for Army and Air

Force at Lucknow, Fatehgarh and Memaura on 28.06.2010. Petitioner

submitted its bid on 07.09.2010 for a lump-sum price of Rs.176,52,21,231/-.

By way of a separate letter, it also offered the respondent a rebate of 14% on

such quoted sum. Respondent issued a letter dated 16.09.2010 regarding

reviewing the rates quoted by the petitioner as it deemed the same to be

high. Thereafter, petitioner replied on 20.09.2010 that the rates were already

quite competitive and reducing it further was not possible. However, the

revised rates for certain sections were submitted to the respondent.

Eventually, the petitioner's bid was accepted and it was awarded the Project

on 21.09.2010 for the price of Rs.151,80,90,258.86/- after applying the

rebate of 14% offered by the petitioner. Pursuant to the same, parties

executed the Contract Documents. Subsequent to issuance of Letter of

Award and upon execution of the said agreement, the petitioner had

commenced mobilizing its equipment, funds and resources on the work site.

However, due to the various breaches and the disregard of the express terms

of the Contracts, as well as poor planning and management by the

respondent, the petitioner suffered significant time overrun as well as

additional costs and losses inter alia relating to increased overheads, interest,

unforeseen costs and unforeseen escalations attributable solely to the

unnatural prolongation of the contract periods but still completed 98% of the

works under the contract. Petitioner was accordingly compelled to invoke

Arbitration clause contained in Clause 60 of the General Conditions of

Contracts for lump-sum contracts and measurement contracts vide Letter

dated 12.06.2021 for adjudication of its claims and nominated its arbitrator

to decide the disputes and differences between the parties. However, the

respondent failed to appoint an arbitrator or show any cooperation for

settlement of dispute. Hence, the present petition has been filed.

5. Learned CGSC appearing on behalf of respondent submit that though

the averments made in the present petition are disputed, however, he has no

objection if sole Arbitrator is appointed by this Court for adjudication of

dispute between the parties.

6. In view of the above, the present petition is allowed. Accordingly,

Justice KG Balakrishnan, former Chief Justice of India

(Mobile:9717266700) is appointed sole Arbitrator to adjudicate the dispute

between the parties.

7. The fee of the learned Arbitrator shall be governed by the Fourth

Schedule of the Arbitration and Conciliation Act, 1996.

8. The learned Arbitrator shall ensure compliance of Section 12 of

Arbitration and Conciliation Act, 1996 before commencing the arbitration.

9. The present petition stands disposed of accordingly.

10. A copy of this order be sent to the learned Arbitrator for information.

(SURESH KUMAR KAIT) JUDGE DECEMBER 07, 2021 rk