Point of Law: Section 8 of Act is an example of referring parties to arbitration.

JUDGMENT :

1. The instant writ petition has been filed by the Petitioners challenging the imposition of liquidated damages upon the Petitioners in respect to 3 (three) contracts.

2. The facts involved in the instant case is that the Inland Waterways Authority of India had in pursuance to Notice Inviting Tenders and finding the Petitioners’ bid to be the lowest awarded 3 (three) contracts to the Petitioners by issuance of Letter of Acceptance as well as the work order. The said contracts in question are (i) construction and supply of 2 (two) pontoons for Tejpur of the bid value of Rs.1,49,76,000/-in respect to which a Letter of Acceptance was issued on 27.02.2008; (ii) construction and supply of 2 (two) pontoons for Neamati of the bid value of Rs.1,67,70,000/- in respect to which a Letter of Acceptance was issued on 09.07.2008 and (iii) construction and supply of 2 (two) pontoons for Dibrugarh of the bid value of Rs.1,67,70,000/-in respect to which a Letter of Acceptance was issued on 09.07.2008.

3. It further appears from the three Letters of Acceptance so issued that the time was the essence of the contract and the delivery period of the 2 (two) pontoons was to be completed within 7 months from the date of issuance of the work order as per the agreed terms and conditions. It is further relevant to take note of that pursuant to the issuance of the Letters of Acceptance as well as the work orders, the Petitioner No.1 entered into separate agreement in respect to 3 (three) works with the Respondent No.2. Although in the writ petition, only the agreement pertaining to the construction and supply of 2 (two) pontoons for Neamati has been enclosed as Annexure-3 to the writ petition but during the course of the hearing, the learned counsels have produced before this Court the said agreements.

4. From a perusal of the said agreements which are para materia in content as regards the terms and conditions, it was stipulated that various documents shall form and has to be read and construed as the part of the agreement. The various documents were (a) Agreement, (b) Notice Inviting Tender, (c) Instructions to bidders, (d) General Conditions of the Contract, (e) Special Conditions of the Contract, (f) Technical specifications and drawings, (g) Form of bid, (h) Cost Schedule, (i) Letter of Acceptance.

5. It further reveals from the record that the contracts in question could not be completed within time. In respect to the contract pertaining to the construction and supply of 2 (two) pontoons for Tejpur which is the contract for Yard No.101-102, there was a delay of 117 days (17 weeks). In respect to the contract pertaining to construction and supply of 2 (two) pontoons for Neamati i.e. the contract for Yard No.105-106, there was a delay of 164 days (24 weeks) and in respect to the contract pertaining to construction and supply of 2 (two) pontoons for Dibrugarh i.e. the contract for Yard No.103-104, there was a delay of 206 days (30 weeks). Subsequent to the completion of the said contracts, the final bills of the Petitioners were released after deducting 10% of the total value of each contract in terms with Clause 14 of the Special Conditions of Contract. Under such circumstances, the Petitioners submitted a representation dated 07.04.2011 requesting for release of the amount so deducted against liquidated damages. In pursuance to the said representation dated 07.04.2011, the Respondent No.2 issued a communication dated 25.04.2011 to provide adequate documentary proof to substantiate delay and establish that the same was beyond their control. Thereupon, the Petitioners have submitted some documents and details vide a communication dated 19.07.2011. It is however relevant to take note of that such documents do not form a part of the records.

6. Upon the said documents being submitted, the Deputy Director of the Respondent No.2 Authority is