2016 Supreme(Del) 1354
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG & MUKTA GUPTA, JJ.
NAVAYUGA ENGINEERING CO. P LTD – Appellant
Versus
PUBLIC WORKS DEPARTMENT AND ANR – Respondents
FAO (OS) 264/2014
Decided On : 15-03-2016
Mr. Sandeep Sethi, Sr. Advocate instructed by Mr. Abhijeet Sinha, Mr. Arijit Mazumdar and Mr. Shanto Nandy, Advocates.
Mr. Santosh Kr. Tripathi, ASC for GNCTD.
Headnote:
Contract Act, 1872 - Section 55 - Awarded of contract - Construction of bridge - Delay in construction - Arbitration - Rejection of claim - Delay in completion of project being on account of PWD - Absence of a covenant prohibiting compensation - Whether the Arbitrator misconducted in granting market rate beyond the stipulated period of contract - Notice was given by Navayuga of its intention to PWD - Navayuga had given notice of compensation due to extension of time - Arbitrator committed no error in allowing claim No.1 of Navayuga - Claim No.4 of Navayuga for payment of bonus of Rs.4,98,82,872/- - Declining to grant claim No.4 due to breach of contractual clauses of the agreement - Held, merely because the contract may have been performed after the stipulated time of completion on account of extension of time for completion of work being granted by PWD - It does not result in the change of "scheduled completion time" - Scheduled completion time could not have been extended by the Arbitrator by deducting the delay on the part of PWD - Appeal is disposed of.
MUKTA GUPTA, J.
1. Navayuga Engineering Co. (P) Ltd. (in short Navayuga), the appellant herein was awarded a contract to construct a bridge across river Yamuna, near Geeta Colony, Delhi vide Agreement No.10EE/PBEF/PWD/2004-2005. Due to delay in construction of the bridge disputes arose, which were referred to an Arbitrator. Navayuga raised seven claims of which claim Nos.2, 5 and 7 were rejected. Public Works Department (in short PWD) raised a counter claim which was also rejected. For claim No.1 Rs. 8,92,00,294/-, claim Nos.3(a) to 3(f) Rs. 2,90,39,805/- and for claim No.4 Rs. 2,12,83,367/- was awarded by the Arbitrator. Vide claim No.6 interest was awarded. PWD raised objections to the award in OMP No.420/2012 under Section 34 of the Arbitration and Conciliation Act, 1996 (in short the Act) before the learned Single Judge.
The challenge in the OMP was against allowing claim Nos.1 and 4. PWD raised no challenge to either claim No.3 being allowed in favour of Navayuga or rejection of the counter claim of PWD, however, by the impugned judgment the learned Single Judge set aside the award in its totality including claim Nos. 3(a) to 3(f).
2. Thus we hold at the outset that since no objections to claim Nos.3(a) to 3(f) for an amount of Rs. 2,90,39,805/- awarded were raised in the OMP, the learned Single Judge could not have set aside the award. Thus the award qua said claims is restored.
3. Claim No.1 before the Arbitrator was for work done. Rs. 23,86,75,025/- was claimed as under:-
(i)
Total amount of work done upto stipulated date of completion i.e.29.01.2008 as per agreement rate
Rs. 64,66,29,722/-
(ii)
Total amount of work done from stipulated date of completion to actual date of completion i.e. 22.12.2008 as per market rate.
Rs. 46,16,72,151/-
(iii)
Total amount of work done (i) + (ii)
Rs. 1,06,33,51,234/-
(iv)
Already paid vide 46th R/A Bill
Rs. 82,46,76,209/-
(v)
Balance amount payable
Rs. 23,86,75,024/-
4. Claim No.1 was revised by Navayuga and reduced to Rs. 14,23,77,790/- for the reason, the final bill of the claimant had been cleared. Navayuga further re-revised claim No.1 and reduced the same to Rs. 10,46,36,748/-.
5. As regards the question of delay the Arbitrator noted:
“Ample portion of the site was available for doing the work except for some portion on which there were hindrances which were sorted out by the Respondents on priority. I have gone through the pleadings and arguments of both parties carefully. It is to be noted that the EOT was granted twice, first up to 30.11.2008 and then up to 22.12.2008 by the competent authority i.e. Project Manager without levy of compensation. While granting EOT up to 30.11.2008, the competent authority i.e. Project Manager had noted as under: I agree with the analysis of hindrance done by the Executive Engineer. The weightages adopted by the Executive Engineer fairly correspond to the quantum of work hindered at a given point of time of hindrance which could have otherwise progressed taking in to account the effect of overlapping hindrances. Considering the cumulative effect to all the hindrance which were beyond the control of the contractor total justified period of delay works out to 366 days which is 60 days more than what was asked by the contractor. Considering the sincerity and efforts put in by agency and their intention to complete the work as early as possible the extension of time is granted upto 30.11.2008 (proposed date of completion by the contractor) without levy of compensation” The work was actually completed on 22.12.2008. Subsequently to the above, project manager, in his capacity as the competent authority, granted EOT up to 22.12.2008 without levy of compensation. Here again, against a justified delay of 26 days, actual delay was o