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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. Sathish Kumar, J.
K. Dhanasekar Engineering Contractor - Petitioner
Versus
The Union of India, rep. by its General Manager Southern Railway, Park Town, Chennai & Others - Respondent
O.P.No. 4 of 2015 & O.A.No. 31 of 2015
Decided On : 10-09-2019
Arbitration and Conciliation Act, 1996 - Section 34 - Contract Act - Section 23 - Condition of contract – Claim that work was not completed in time – Claim on agreement - Claimant that work was not completed in time - Contract was terminated - It is not as per general condition of contract - It is his case that risk tenders were awarded on relaxed specification of impact value at exorbitant rate - Despite his plea for relaxing impact value to was not considered by Respondent - It plea of relaxation of impact value had been considered he would have supplied entire quantity - Specification of ballast has been changed in risk & cost tender risk & cost is not tenable and contract was also terminated after last extended date which is also not legally correct – Held, No reasons whatsoever stated for huge delay in passing Award - Even entire award do not indicate reason for such delay - Applying above ratio and delay in passing award beyond three years and months after completion of hearing which is certainly against very Act which is required to pass award within reasonable time - In absence of any explanation or reason for delay in passing award such delay in fact certainly have impact and violation of public policy of India - Above Award cannot be sustained in eye of law in view of delay alone - Though or contentions also raised with regard to contract become frustrated and Clause of contract has not been considered and subsequent circular of Railways during currency of contract has not considered this court is of view that since award itself is not in according to law and vitiated by long delay above aspects are kept open to be raised during Arbitral proceedings - respondents are directed to appoint fresh Arbitrators within a period of three months from date of receipt of copy of this Order and it is made clear that since challenge is only with regard to counter claim and or aspects have not been challenged before this Court parties are at liberty to canvas ir respective case as against counter claim alone originally - Petition allowed partly
JUDGMENT :
Prayer: Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the Award dated 23.05.2014 passed by Respondents 3 to 5.
Challenging the Three Members Arbitral Award, the present Original Petition has been filed.
2. The brief facts leading to file this O.P. is as follows:
2(b) It is the case of the claimant that work was not completed in time. However, contract was terminated. It is not as per general condition of contract. It is his further case that thereafter risk tenders were awarded on relaxed specification of 25% impact value at exorbitant rate. Despite his plea for relaxing the impact value to 25% was not considered by the Respondent. It is the plea of relaxation of impact value had been considered he would have supplied the entire quantity. The specification of the ballast has been changed in the risk & cost tender, the risk & cost is not tenable and the contract was also terminated after the last extended date which is also not legally correct. As per Clause 62(B)(b) of GCC the risk amount is payable if terminated work is got completed through another contractor. Final terminated work was awarded to the same contractor. Therefore, the risk amount claimed as counter claim is not maintainable.
2(c) It is the case of the respondent that the termination of the contract was due to poor progress of ballast supply by the claimant. The partial termination was done as per Clauses 62 of GCC after giving 7 days on 21.02.2007 and 48 hours notice on 23.03.2007 and termination notice on 09.04.2007. The termination was done as the claimant did not show proper progress as per approved programme of ballast every month. Despite several notices he did not show any improvement. Therefore, the respondent forced to terminate the contract partially for 40000 cum.
2(d) The claimant requested for lowering of specification could not be accepted as in the tender condition vide clause 2.2.1 of special condition of contract. Relaxation in abration and impact value shall be given prior to invitation of tender. The lowering of the specification has to be resorted to due to the failure of the claimant to supply the ballast in time so as to get the ballast in time for targeted work of doubling. Moreover, lowering the specification has been beneficial to the claimant as otherwise risk amount would have been even more as cost of ballast with original specification would have been more. The respondent has forced to terminate the contract finally as the claimant did not improve the supply position even after partial termination and had not even applied for extension. Learned three members Arbitrators finally allowed the counter claim to tune of Rs.1,70,96156 as risk & cost amount and dismissed the claim of the petitioner in entirety. Challenging the same the present Original Petition has been filed.
3. Though the Original Petition has been filed challenging the dismissal of the claim and also the counter claim, the main focus before this court is only with regard to the counter claim awarded by the Arbitrators.
4. The learned counsel appearing for the petitioner vehemently submitted that the Award has been passed with an inordinate delay of three years and seven months. The Award ought to have been passed within a reasonable time period. But in this case after the hearing was over the award has been passed after 3 years 7 months. Besides he has also submitted that the Tribunal has completely ignored the fundamental principle of contract law while deciding the dispute. The contrac
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