The court upheld the award of financing charges and simple interest as per the contract, finding that the claims were not barred by limitation and that the delay in completion of works was not attributable to the respondent.

JUDGMENT :

Vibhu Bakhru, J.

1. Delhi Jal Board (hereinafter ‘the DJB’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the A&C Act’) impugning an arbitral award dated 02.09.2019 (hereinafter the ‘impugned award’) delivered by an Arbitral Tribunal comprising of Shri Anand Kumar as the Sole Arbitrator (hereinafter the ‘Arbitral Tribunal’).

2. The impugned award was rendered in the context of disputes that had arisen between the parties in relation to the agreement dated 28.11.2003 (hereinafter the ‘Agreement’).

Factual context

3. In April 2003, the DJB invited tenders from bidders for “Construction of various reservoirs at different location in TYA Areas, Delhi of Delhi Jal Board.” (hereinafter ‘the Project’). The construction work included civil works, supply, installation, testing and commissioning of electrical and mechanical equipment etc.

4. Pursuant to the said notice inviting tenders, a consortium of M/s Mohini Electricals Ltd. (hereinafter ‘the respondent’), M/S Jes Engineering Company Pvt. Ltd. and GSJ Envo Ltd. submitted its bid for the Project with the respondent acting as the consortium leader. By a Work Order dated 30.09.2003, the work for executing the Project was awarded to the respondent on behalf of the consortium. The total contract value was agreed at Rs.28,49,72,521/-, which comprised of a sum of Rs.18,63,11,936/- for civil works and a sum of Rs.9,86,60,585/- for E&M works on turnkey basis.

5. Thereafter, on 28.11.2003, the parties entered into the formal Agreement. Under the terms of the Agreement, the Project was to commence from the 14th day of the issuance of the Work Order and was to be completed within eighteen months thereafter. Thus, the date of commencement was stipulated as 14.10.2003 and the date of completion was scheduled as 13.04.2005 with a further period of sixty months provided for operation and maintenance.

6. Further, the Agreement also provided that if the respondent failed to commence the Project on the scheduled date, for reasons other than those as provided in the Agreement, the DJB would be entitled to levy financing charges on advance payment till the time the Project commenced.

7. The DJB states that the respondent started civil works on selective sites on 19.11.2003. By a letter dated 03.12.2003, the DJB informed the respondent that the Project started only on one location on the scheduled date and the physical progress of the Project was negligible. Further, the respondent was required to obtain a number of approvals before commencement of the concrete works, which had not been obtained till date.

8. Thereafter, on 10.12.2003, the respondent gave a bank guarantee dated 06.12.2003 for a sum of Rs.1,86,31,194/- and on 29.01.2004, furnished another bank guarantee dated 09.12.2003, for a sum of Rs.98,66,059/- against mobilization advance provided by the DJB.

9. By a letter dated 21.02.2004, the respondent alleged that the DJB had breached the Agreement. The DJB responded by a letter dated 01.04.2004, countering the said allegation and asserting that the delay was attributable to the respondent as it had submitted the bank guarantee on 10.12.2003 after a significant delay.

10. By a letter dated 20.04.2004, the DJB complained about the poor arrangement at the location sites due to which, permission to commence reinforced cement concrete works (RCC) could not be granted. It alleged that there was mismanagement on the part of the respondent along with failure to arrange the mixing unit and the concrete pump.

11. On 03.06.2004, the respondent was informed by the DJB to speed up the work in all the locations and complete the entire Project within the scheduled period. However, by a notice of delay dated 15.07.2004, the DJB informed the respondent that the progress was still not upto the mark as only 21% of the work was completed within a per