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2019 Supreme(Del) 570

IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Central Government Employees Welfare Housing Organistion - Appellant
Vs.
Labh Construction And Industries Ltd. - Respondent
Original Miscellaneous Petition No. 278 of 2013
Decided On : 23-04-2019

Advocates Appeared:
D. Moitra, Adv., Sanjoy Bhaumik, Adv., Aniruddha Deshmukh, Adv., Nikhil Goel, Adv.

JUDGMENT :

Prathiba M. Singh, J.

The present petition challenges the award dated 14th November, 2012 passed by the Ld. Sole Arbitrator. The Respondent M/s LABH Construction & Industries Ltd. (hereinafter 'Contractor') was the claimant before the Ld. Arbitrator and the Petitioner - Central Government Employees Welfare Housing Organisation (hereinafter 'CGEWHO') is the employer of the Contractor. The Contractor had made various claims before the Ld. Arbitrator and CGEWHO had made various counter claims.

2. The background of the present dispute is that a turnkey contract was entered into on 11th July, 2001 between CGEWHO and the Contractor for construction of a housing project at Bopal, Ahmedabad. Relevant dates in respect of the award of the contract are set out here-in-below:

(a)

Name of work

Turnkey Housing Project at Ahmedabad

(b)

Acceptance of bid from LCIL and issue of LOI by CGEWHO

27.10.1998

(c)

Acceptance of LOI by LCIL

03.11.1998

(d)

Issue of MOU and LOI after finalization of specs and dwelling units between CGEWHO and CAG

31.08.2000

(e)

Date of signing of CA

11.07.2001

(f)

Date of completion of Project

May 2007

3. The date of completion of the contract, as envisaged in the contract dated 11th July, 2001 was two years from the date of execution of the contract. However, it is not disputed that the actual completion was much later i.e., in May, 2007. The Contractor raised various claims before the Ld. Arbitrator and CGEWHO raised various counter claims. The Ld. Arbitrator had allowed some of the counterclaims of CGEWHO which were challenged by the contractor in a petition under Section 34, being OMP 354/2015 which was dismissed as being time barred on 21st October, 2016. The challenge to the said judgment was also dismissed by the Supreme Court vide order dated 21st January, 2018. Thus, in respect of the rejected counter claims, the award has attained finality.

4. The findings of the Ld. Arbitrator, on the various claims made by the Contractor are as under:

A. Claim No. 1 Escalation from period of LOI (27.10.1998) to the date of Contract Agreement (11.07.2001): The Ld. Arbitrator, on the basis of the minutes of the meeting held on 17th September, 2001, held that since the CGEWHO failed to consider the claim for escalation, they were in violation of the representation made and accordingly, allowed the claim of the Contractor for a sum of Rs.22,78,564/-.

B. Claim No.2 Loss for a period of 32 months from the date of LOI to CA for blocking of land: Finding the claim to be untenable on the ground that that no proof of the loss was preferred, the Ld. Arbitrator passed a NIL award in respect of this claim.

C. Claim No:3 Additional payment for increase in the cost of power supply and electrification: Pursuant to the argument that both parties were responsible for the wrong bidding and wrong acceptance, both parties were held equally accountable for the same, and an amount of Rs.21,42,000/- was awarded to the Contractor.

D. Claim No.4 - Loss to LCIL (Claimant) even after application of escalation formula: This claim was rejected as the CGEWHO clearly proved that the there was no revision of the escalation formula given in the contract.

E. Claim No.5 - Loss due to reduction in dwelling units: Since liability of reduction in scope of work for not constructing 45 dwelling units rests with the Contractor, the Ld. Arbitrator rejected the claim.

F. Claim No. 6 Non payment of escalation of Bill No.4 and extension thereof: A sum of Rs.8,18,431/- was awarded to the Contractor, being the difference between the amount payable, without restricting WPI, and actual amount paid, which was calculated after restricting WPI.

G. Claim No. 7 Extra items executed after earth quake: The Ld. Arbitrat













































































































































































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