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2012 DIGILAW 1199 (GAU)

North Eastern Engineering Construction Company (Neecco) v. State of Arunachal Pradesh and Ors.

2012-10-10

INDIRA SHAH

body2012
1. Heard Mr. Kento Jini, learned counsel for the petitioner. Also heard Mr. Kardak Ete, learned Additional Advocate General, Arunachal Pradesh, for the State Respondents. 2. The Chief Engineer (Power), EEZ, Department of Power, Government of Arunachal Pradesh, floated tender for execution of turnkey packages of Rural Household Electrification-works under Rajiv Gandhi Grameen Vidyutikaran Yojana ('RGGVY') for supply and erection for Changlang/ Khagam/Bordumsa-Diyun/Nampong-Manmao/Changlang/Khimyang CD Block/Miao Electrical Division/Package E/01 amounting to Rs. 33,57,45,000.00 only. The petitioner being the successful bidder was awarded with the work. An agreement was entered into between the parties. Subsequently, the petitioner, was served with Show Cause Notice dated 13.04.2010, which reads as follows : - 'Government of Arunachal Pradesh Office of the Executive Engineer (E): Miao Electrical Division Department of Power, Miao No. MED/W-J.2(D)/RGGVY/2010-11/1196-98 dated Miao the 13.4.2010. To M/s. North Eastern Engineering Construction Company (NEECCO) Hajarika Complex, 'Crossing Plaza', 1st Floor, Ganeshguri Chariali, Guwahati-781006, Assam, Sub : Show Cause Notice Name of work : Rural Electricity Infrastructure and Households Electrification in Changlang District of Arunachal Pradesh under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for supply and erection for Changlang/Khagam/Bordumsa-Diyun/Nampong-Manmao/ Changlang/Khimyang CD Block/Miao Electrical Division/Package E/01 (i) Agreement No. MED/W-12(D)/RGGVY/AGMNT/01, Dated 2.6.2008 (Supply). (ii) Agreement No. MED/W-12(DJ/RGGVY/AGMNT/02, Dated 2.6.2008 (Erection). Ref: (i) MED/W-12(Dj/RGGVY/2008-09/444-46, Dated Miao the 8.9.2008 (ii) MED/W-12(D)/RGGVY/2008-09/221-28, Dated Miao the 19.5.2009 (iii) MED/W-12fDVRGGVY/2008-09/276-78, Dated Miao the 11/6/2009 (iv) MED/W-12(D)/RGGVY/2008- 09/276-78, Dated Miao the 11.6.2009 (v) MED/W-12(D)/RGGVY(Erection)/2008-09/874-75, Dated 18.12.2009 Dear Sir, Whereas it is found that your mobilization for supply of materials as well as the field activities is going on in a snail's pace in spite of all the necessary supervisions and cooperation from the Department (owner) as envisaged in the Agreement. Whereas the date of completion of the Changlang Package of RGGVY is 13.5.2010 as per the Agreement but till now only ten villages have been completed out of total of 157 Nos. and not a single power sub-station is ready for take over by the Department (owner). Whereas it appears to the undersigned that by reason of your wrongful suspension of erection work at various sites — Namtok, Changlang, Jairampw, Miao and very slow progress of the work thereof entrusted to you under the Agreement referred to above, will not be completed within the stipulated time. Therefore, I, Er. Whereas it appears to the undersigned that by reason of your wrongful suspension of erection work at various sites — Namtok, Changlang, Jairampw, Miao and very slow progress of the work thereof entrusted to you under the Agreement referred to above, will not be completed within the stipulated time. Therefore, I, Er. (Smt.) Y. Dojt, Executive Engineer(E), Miao Electrical Division, Department of Power, Miao, in exercise of the powers conferred on me by the aforesaid agreement, for and on behalf of the Governor of Arunachal Pradesh, hereby give you notice to Show Cause within thirty days from the date of sorving this notice to my satisfaction why an action under sub-clause 43.1,43.2 and 43.3 of the above agreement, will not be taken against you on account of the breach of contract on your part. Please note that in case, no cause is shown by you within the stipulated period or the cause shown is not to my satisfaction, I shall take such actions against you as are contemplated under clause 44.0 and sub-clauses 44.1 and 44.2 thereunder of the said agreement and/or other clauses, without further notice. Yours sincerely Sd/- Executive Engineer(E) Miao Electrical Division Department of Power, Miao." 3. The petitioner's reply to the said Show Cause Notice, is quoted as under: "NORTH EASTERN ENGINEERING CONSTRUCTION COMPANY Ref. No: NEECCO/RGGVY/MIAO/388/W1040 Dated 15.9.2010 To The Executive Engineer MIAO Electrical Division Department of Power Govt. of Aruuachal Pradesh. Sub: Show Cause Notice. Ref: Your letter No.MED/W-12(DJ/RGGVY/2310-l 1/1196-98, Dated 13.4.2010 Name of Work : Rural Electricity Infrastructure and Households Electrification in Changlong District of Arunachal Pradesh under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) Diyun/Nampang/ Changlang/Khimyang Bordumsa-Electrical Division/Package E/0-1. (i) Agreement No. MED/W-12(D)RGGVY/AGMNT/O1, Dated 2.6.2008 (Supply) (ii) Agreement No. MED/W-12(D)/ROOVY/AGMNT/02, Dated 2.6.2008 (Erection) Madam, We have received your letter No. MED/W-12(D)/RGGVY/2010-11/1196-98 dated 3.4.2010 on 13.9.2010 by our representative from your office and we would like to put the following points for your kind consideration. (1) Agreement against above ref. work was signed on 2.6.2008, but we get the mobilization advance on 27.9.2008 and 10.10.2008. Ordering of bought out item effected/delayed by 3 months for delay in releasing mobilization advance. (2) For erection work, we deputed local agencies and after two months of starting of work the agency stopped their work for five months and did not allow us to depute alternate agency. As a result erection work delayed by five months. Ordering of bought out item effected/delayed by 3 months for delay in releasing mobilization advance. (2) For erection work, we deputed local agencies and after two months of starting of work the agency stopped their work for five months and did not allow us to depute alternate agency. As a result erection work delayed by five months. (3) Inspection of materials : After every offer for inspection third party takes 2/3 months time to inspect the materials and after inspection also we have to wait for another 15 days for despatch clearance. So, delivery of material at sight badly effected. (4) It is well known to you that Changlany is an insurgency effected district and our job is extremely effected and this type of problem cannot be avoided. (5) Due to frequent bandh in Assam area, transportation of materials effected and job is delayed. (6) Incessant raining also hampered the erection work. Considering all above, we discussed the matter with authority concerned and submitted our program and schedule for completion of work within March 2011. For your ref. we are enclosing herewith the copy of our letter No. NEECCO/RGGVY/SE/2010-11/25/966, dated 6.8.2010 and once again we confirm that the said job will be completed within March 2011. Thanking you, Yours faithfully For North Eastern Engineering Construction Company." 4. Thereafter, the petitioner vide his letter dated 29.9.2010, addressed to the Secretary (Power), Government of Arunachal Pradesh, with copy to the Chief Engineer (Power), Eastern Zone, and Executive Engineer, Miao Electrical Division, requested to refer the dispute to arbitration. Instead of referring the dispute to arbitration, the petitioner was served with final notice of termination of the contract dated 7.2.2011. The petitioner vide his letter dated 14.2.2011 requested the respondent No. 4 to reconsider and revoke the final termination notice and assured that the petitioner-firm shall complete the project in due time. But without considering the grievances of the petitioner and without making payment of bills raised by the petitioner, the respondent No.4, at the instance of the Secretary (Power), issued the termination/rescindment order dated 28.9.2011 and awarded the work in question to a firm, namely, M/s. T&T. 5. The petitioner's case is that the respondent-authorities have failed to comply with the terms and conditions of the agreement wherein it is specifically stipulated that in case of any dispute or difference, the matter should be referred to arbitration. The petitioner's case is that the respondent-authorities have failed to comply with the terms and conditions of the agreement wherein it is specifically stipulated that in case of any dispute or difference, the matter should be referred to arbitration. The respondent-authorities have issued letter of award for a work value of Rs. 26 crores as against the original work value of Rs. 33,57,46,100.00, out of which, the petitioner has already executed the work value of Rs. 16,82,76,548.33. The petitioner also issued and served a Legal Notice dated 16.2.2012 to respondent No. 4 requesting him to nominate an arbitrator but the respondent-authorities rescind the said contract. 6. Mr. Ete, learned Additional Advocate General, Arunachal Pradesh, appearing on behalf of the State respondents, has raised preliminary objection against the maintainability of the writ petition. It is submitted by the learned Additional Advocate General that it is a case of breach of contract and as per the terms and conditions of the contract, the contract was rescinded. There is absolutely no question of violation of any rights of the petitioner. 7. The petitioner, in his reply to the Show Cause Notice, has admitted that the works assigned to him, has been delayed, whatsoever, the reasons may be. He is entitled to claim to refer the dispute to arbitration only when there is any dispute but herein, there is no dispute that the petitioner failed to execute the work in stipulated time. Learned counsel for the petitioner has cited the case of Canara Bank and Ors. v. National Thermal Power Corporation and Anr., (2001) 1 SCC 43 and Major (Retd.) Inder Singh v. Delhi Development Authority, (1988) 2 SCC 338 wherein, the meaning of word 'dispute' is stated as "a controversy having both positive and negative aspects. It postulates the assertion of a claim by one party and its denial by the other." Dispute entails a positive element and assertion of denying not merely inaction to accede to a claim or a request whether in a particular case, a dispute has arisen or not, has to be found out from the facts and circumstances of the case. 8. Section 8 of Arbitration and Conciliation Act, 1996, says that in cases, where there is an arbitration clause in the agreement, it is obligatory for the court to refer to the parties to arbitration in terms of their arbitration agreement. 8. Section 8 of Arbitration and Conciliation Act, 1996, says that in cases, where there is an arbitration clause in the agreement, it is obligatory for the court to refer to the parties to arbitration in terms of their arbitration agreement. Under section 9 of the said Act, a party or a person is entitled to interim protection if action of the other party is either in breach of the terms of the agreement or otherwise. Section 11 of the Act deals with the appointment of arbitrators. Sub-section (5) to section 11 of the Act says that if the party fails to agree on the arbitration within 30 days from receipt of request by one party from another party to agree, the appointment shall be made, upon request by a party, by the Chief Justice of any person or institution designated by him. 9. The writ petitioner, in this petition, has, inter alia, prayed to direct the parties to settle the dispute through arbitration as per their agreement. Whether there is any dispute which is referable to arbitration, cannot be decided by the writ court. No application has been filed by the petitioner to refer the dispute to arbitration as per the Arbitration and Conciliation Act, 1996, or as per the Gauhati High Court Rules. This writ petition filed under article 226 of the Constitution of India, is, therefore, not maintainable. Accordingly, it is hereby dismissed and the same shall stand disposed of. 10. No costs.