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2019 Supreme(Del) 709
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
Chenab Bridge Project Undertaking – Appellant
Versus
Northern Railway and anr. – Respondents
Writ Petition (Civil) No. 3375 of 2019; Civil Miscellaneous No. 15459 of 2019
Decided On : 08-04-2019
Mukul Rohatgi, Adv., Dayan Krishnan, Adv., Anirudh Krishnan, Adv., Balaji Srinivasan, Adv., Adarsh Subramanian, Adv., Hitesh Kumar, Adv., Garima Jain, Adv., Pallavi Sengupta, Adv., Siddhant Kohli, Adv., J.K. Singh, Adv., Madhulika Agrawal, Adv., Harsh Pandit, Adv., Kiran Bhagalia, Adv., Suchitra A Chitate, Adv., Pallavi Bali, Adv.
The main legal point established in the judgment is that disputes arising from a contract should be subject to arbitration as agreed in the contract, and the court may dismiss petitions that are triggered by show-cause notices and are subject to arbitration proceedings.
Headnote:
Chenab Bridge Project - Contract Dispute - DBN 2005, 2006, 2010 - The court discussed the validity of the Design Based Notes (DBN) of 2005, 2006, and 2010, and the implications of the increase in structural steel quantities on the contract. The court also considered the maintainability of the writ petition and the applicability of the arbitration clause.
Fact of the Case:
The petitioner, Chenab Bridge Project Undertaking, sought court intervention to enforce the findings in the minutes of a meeting dated May 15, 2018, related to a contract for the design and construction of a special bridge across the River Chenab. The petitioner claimed entitlement to payment for the difference in quantities of structural steel between tender DBN and 2010 DBN.
Finding of the Court:
The court found that the petition was not maintainable and dismissed it, stating that the dispute should be decided through arbitration as agreed in the contract. The court also noted that the filing of the petition was triggered by a show-cause notice and deprecated the practice of entertaining writ petitions questioning the legality of such notices.
Issues: The main issues were the validity of the DBNs, entitlement to payment for the difference in steel quantities, maintainability of the writ petition, and the applicability of the arbitration clause.
Ratio Decidendi: The court held that the dispute should be decided through arbitration, as agreed in the contract, and that the filing of the petition was triggered by a show-cause notice, which should be subject to arbitration proceedings.
Final Decision: The court dismissed the petition, stating that it was not maintainable and should be subject to arbitration proceedings as agreed in the contract.
V. Kameswar Rao, J.
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. No. Item Remarks/Status
2. Commercial issues of enhanced steel quantity It has been jointly decided that KRCL will forward the 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 tha
