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2018 DIGILAW 130 (HP)

Ashok Chauhan v. Engineer-in-chief, Hppwd

2018-01-10

CHANDER BHUSAN BAROWALIA

body2018
JUDGMENT Chander Bhusan Barowalia, J —This claim petition has been filed under subsection (6) of Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of Arbitrator. It has been alleged that the parties had entered into the Arbitration Agreement No.78 of 2007-08 and agreed to refer all the disputes relating or arising out of the agreement relating to the work C/o Roads from Nakora to Khaddar Km.0/0 to 10/0 under Panchayat connectivity (SH: formation cutting 5/7 mtr wide including passing places, X-drainage works, C/o retaining wall and B/wall, essential stone, Soiling and traffic sign board etc., in Km 0/0 to 10/0 under Package No.HP09-179) to the Arbitrator appointed by the Engineer-in-Chief, Chief Engineer, HPPWD, which contained under clause 25 of the Agreement. It has been alleged that the said work was awarded to claimant vide award letter dated 04.7.2007, under agreement No.78 of 2007-08 with the awarded amount of Rs.2, 36, 51784/-. The date of commencement of the work, as per agreement, was 19.7.2007, and the same was required to be completed within a stipulated period of one year. Typed copy of Clause 24 sand 25 of the agreement relating to the said work has also been annexed with this petition as Annexure A1. 2. It has been alleged that the arbitration agreement was provided for appointment of an Arbitrator by the Engineer-in-Chief/ Chief Engineer, HPPWD, Shimla, H.P., and also to adjudicate the dispute between the parties. It is further alleged that the dispute relating to arbitration agreement was required to be adjudicated upon by the Arbitrator, who was to be appointed by the Engineer-inChief/Chief Engineer, HPPWD. It has further been prescribed for the appointment of any person as an Arbitrator, but since the disputes between the parties involve adjudication on technical matters, an Engineer, well conversant with the matters relating to the construction work would be the best qualified and suited for being appointed as an Arbitrator. 3. It has been alleged that the dispute arose between the parties due to delay and latches on the part of the HPPWD (hereinafter to be referred as respondent) . It has been averred that the site was not handed over to the claimant free from all hindrances. 3. It has been alleged that the dispute arose between the parties due to delay and latches on the part of the HPPWD (hereinafter to be referred as respondent) . It has been averred that the site was not handed over to the claimant free from all hindrances. It has been pointed out that the road was being constructed across the forest as well as private land and the work remained at halt due to the litigation/disputes with the private land owners who stopped the execution work at the working site. It has further been deposed that there was stay from the Court of learned Civil Judge (Jr. Division) , Jubbal against the Department and claimant. 4. It has been averred that the department failed to sort out the matter well in time. It has been alleged that the Forest land also contributed for the delay and the department did not take any requisite permission from the concerned department well in time. It has been alleged that the site was handed over to the claimant on 31.3.2009 after the clearance from the Forest Department. Hence, there was no fault of the claimant so far as the delay in execution of work is concerned. It has been alleged that it is the prime duty of the department to hand over the working site free from all hindrances as per the contract to the claimant/contractor. It has also been alleged that even after facing the above mentioned problems, claimant had completed the work in all respects as per the direction of the Engineers and has handed over the same to the Authority concerned, but the final payment is still not finalized. It has been averred that the claimant also wrote to the Executive Engineer concerned in this regard, but he did not respond positively. Therefore, the claimant approached the Chief Engineer(South) , HPPWD, as per the contract agreement, to decide the dispute in hand. However, the Chief Engineer(South) vide its decision dated 05.7.2014, only waive off 01% penalty imposed by the Executive Engineer, Chopal to the tune of Rs.2, 36, 518/-. Rest of the claims did not find favour and order dated 05.7.2014 has been annexed as Annexure A2. Thereafter, the claimant filed an appeal before the Standing Empowered Committee as per the Contract Agreement. Rest of the claims did not find favour and order dated 05.7.2014 has been annexed as Annexure A2. Thereafter, the claimant filed an appeal before the Standing Empowered Committee as per the Contract Agreement. It has been alleged that the matter was compromised as per the undertaking given by the claimant, but the department failed to act as per the compromise and did not make the payment to the claimant as per his undertaking. However, the department made payment of Rs.9, 71, 355/- only as per the measurement done by the Junior Engineer, but not as per the bill submitted by the claimant/contractor, which includes the escalation charges alongwith analysis, as mentioned in the undertaking dated 11.3.2015. It has been alleged that only the damaged part has been surrendered by the claimant in that compromise. It has been further alleged that there are also many other disputes between the parties. Thereafter, the claimant served a legal notice dated 16.1.2016 upon respondent No.1 to appoint an Arbitrator regarding disputes arising out of the agreement concerned. The claimant was again invited for the compromise and the respondent agreed to pay the escalation charges amounting to Rs.41, 92, 733/-. It has been alleged that the respondents every time assured the claimant that the matter will be settled very soon, but never settled the same till date. It has been alleged that the dispute relates to the following amounts being claimed by the claimant: (a) Deducted amount Rs.1, 87, 810/- (b) Less paid payment of formation cutting etc. Rs.3, 35, 000/- (c) The escalation claim Rs.41, 92, 733/- (d) Damages for prolongation and establishment, overhead including machinery, idle labour & other staff, etc. approximately cost of the legal notice and other future legal expenses. Rs.30, 00, 000/- (e) Interest @ 24% per annum upon the claimed amount from the date, it is due, till its realization. 5. The claimant has prayed for appointment of an Arbitrator to adjudicate the dispute between the parties. The claimant has filed an affidavit and submitted that he has been satisfied to the condition under sub-section 6 (c) of Section 11 of Arbitration and Conciliation Act, 1996. 6. The respondents filed reply and submitted that the petition of the claimant is not maintainable, as the petitioner has not made any arbitral dispute. It has been submitted that the work of construction of road from Nakora to Khadar Km. 6. The respondents filed reply and submitted that the petition of the claimant is not maintainable, as the petitioner has not made any arbitral dispute. It has been submitted that the work of construction of road from Nakora to Khadar Km. 0/0 to 10/0 was awarded to the petitioner/claimant for an amount of Rs.2, 36, 51, 784/- vide award letter dated 04.07.2007, issued respondent No.2. It has been alleged that the date of commencement of the work, as per the agreement was 19.7.2007 and the period for completion of such work was one year. It has been submitted that the Contractor could not execute and complete the work within the stipulated period of limitation and took various excuses. He was directed to complete the award work from time and again, but the petitioner/claimant failed to complete the work and the respondents were compelled to impose penalty by invoking Clause 44.1 of the agreement @ 1% of the award amount vide letter dated 05.10.2009. It is further submitted that the claimant was again requested vide letters dated 16.10.2009, 08.03.2010, 18.03.2010, 11.05.2010, 28.8.2010 and 15.10.2010 respectively to deploy sufficient machinery and men power at the spot and complete the awarded work, however, the petitioner could not execute and complete the work at site, resultantly, the respondents were again compelled to impose another penalty of 01% of the awarded amount to the tune of Rs.2, 36, 518/-, as per Clause 44.1 of the contract agreement. 7. It has been submitted that the claimant invoked Clause 24 of the contract agreement executed between the parties and raised the dispute through representation dated 12.01.2014 before the competent authority i.e. the Chief Engineer (South Zone) , HPPWD, Shimla. The competent authority held various meetings and heard both the parties and consequently, disputes raised by the petitioner were finally decided vide its order dated 17.01.2014. The competent authority also waived off 01% penalty imposed by respondent No.2, vide his letter dated 05.10.2009. 8. It has been submitted that the contractor invoked Clause 24.2 of the contract agreement and requested to refer the matter to the Empowered Committee for decision. It has been alleged that respondent No.1, vide its order dated 16.10.2014, constituted a Committee of three members to adjudicate the dispute raised by the petitioner. It has been alleged that the Committee so constituted by respondent No.1, held its first meeting on 28.01.2015. It has been alleged that respondent No.1, vide its order dated 16.10.2014, constituted a Committee of three members to adjudicate the dispute raised by the petitioner. It has been alleged that the Committee so constituted by respondent No.1, held its first meeting on 28.01.2015. It has been alleged that another meeting was held on 11.03.2015, in which, the representatives of the respondents-department and Advocate of the petitioner were present and after hearing both the parties, the Committee decided that the second penalty imposed upon the petitioner vide its letter 02.05.2011 of respondent No.2 shall be waived off. It has also been decided that both the parties shall not raise any claim before any Arbitrator or before any Court of law. The disputes were finally settled. The copy of proceedings of the Empowered Committee, dated 11.03.2015, (Annexure-R4) has also been filed with the reply. 9. It has been submitted that the petitioner/claimant issued a legal notice to the respondents on 16.01.2016 and raised various disputes and subsequently a meeting was held in the office of Chief Engineer(SZ) , HPPWD, Shimla in which the Superintending Engineer(D-III) , Superintending Engineer, 14th Circle, Rohru, respondent No.2 and Joint Controller, Finance and Audit, Shimla as also the petitioner were present. In the said meeting, the petitioner withdrew his Claim No.(d) to (g) , which were in respect of the less payment for damages. Prolongation cost of legal notice, interest loyalty & damages and the only claim which remained to be decided was with reference to payment of price escalation. Therefore, the said claim was directed to be sent to the Superintending Engineer, 14th Circle, Rohru for calculation of the amount by the Chief Engineer(SZ) and the same is stated to be still under consideration. It has been submitted that the petitioner also gave an undertaking, in writing, to the effect that he is ready to settle the matter amicably and ready to withdraw claims as made in the legal notice. Therefore, in view of the facts enumerated above, it has been submitted that there is no arbitral dispute for invoking the provisions of Section 11(6) of the Act, hence the petition deserves dismissal. Therefore, in view of the facts enumerated above, it has been submitted that there is no arbitral dispute for invoking the provisions of Section 11(6) of the Act, hence the petition deserves dismissal. It has also been submitted that the demand dated 16.1.2016, as alleged by the petitioner was beyond the period of 90 days from the date of receipt of last payment from the respondents and that the petitioner has issued notice for appointment of Arbitrator on 16.1.2016, whereas the department has released the payment to the tune of Rs.9, 71, 355/- to the petitioner on 15.3.2015 and the security amount has been released on 23.6.2015 and the present petition has been filed on 19.9.2016, which is barred by limitation. Therefore, the respondents have prayed that the demand raised by the petitioner is debarred by period of limitation in view of Clause 25 of the agreement between the parties. It has been averred that as per Clause 21.1 of the General Condition of the Contract Agreement No.78 of 2007- 08 states that the employer shall give complete or part possession of the site to the contractor seven days in advance of the construction programme. Therefore, the claimant/contractor had been handed over 75% of the site of the work and he had been paid Rs.25, 88, 938/- on account of Ist RA/Bill measured vide MB No.1007, page-57, dated 16.11.2007, when the schedule date of start as per agreement was 19.7.2007. It has been alleged that the final approval of FCA was received on 6.11.2007 and the green feeling was cleared on 31.3.2009 and the contractor/claimant has completed the work on available cite amounting to Rs.92, 25, 483/- which is about 39% of the awarded amount of Rs.2, 36, 51, 784/- It has also been submitted that 09 Km site out of 10/500 Km was handed over to the petitioner, contractor and that the petitioner has taken the plea just to justify his illegal claim. It has also been submitted that a part of the site was handed over to the petitioner on 31.3.2009 after clearance from the Forest Department only for some portion of land. It has been mentioned that the petitioner has executed the work to the tune of Rs.2.10 crore during the stipulate period of completion of work. It has also been submitted that a part of the site was handed over to the petitioner on 31.3.2009 after clearance from the Forest Department only for some portion of land. It has been mentioned that the petitioner has executed the work to the tune of Rs.2.10 crore during the stipulate period of completion of work. Had there been any hindrance in the execution of the work, the petitioner could not have executed the work of 09 km of road site. It has been submitted that more than 75% of site was made available to the petitioner to execute the work smoothly and the construction of the road was completed on 15.12.2013 and the contractor has been paid full and final payment for the work executed by him and nothing is pending in this regard. It has also been submitted that the petition is just an after thought and has been made with a view to gain undue advantage from the respondents. Hence, the petitioner/claimant is not entitled to any claim and the appointment of Arbitrator cannot be made in the given facts and circumstances. The claimant also filed rejoinder to the reply filed by the respondent and reiterated the averments made in the petition, Hence, prayed that an Arbitrator may be appointed to adjudicate the dispute between the parties. 10. Heard. Mr. Rajiv Sirkek, learned counsel appearing for the petitioner has argued that an Arbitrator is required to be appointed for adjudication of the dispute arisen between the parties, as the respondents/State have failed to appoint Arbitrator despite several requests and within the reasonable time, therefore, some person may be appointed as an Arbitrator. 11. Mr. Rajat Chauhan, Law Officer appearing for the respondents has stated that in case there is dispute Arbitrator may be appointed for resolution of the dispute. 12. I am of the considered view that all the requirements of the Arbitration and Conciliation Act, 1996 have been fulfilled by the petitioner and an Arbitrator is required to be appointed to resolve the disputes, which have arisen between the parties. 13. So, taking into consideration all the facts and circumstance come on record, this Court finds that Shri Naresh Kumar Gupta, Advocate is required to be appointed, as Arbitrator and he is accordingly appointed, as Arbitrator, to adjudicate the dispute inter se the parties. 13. So, taking into consideration all the facts and circumstance come on record, this Court finds that Shri Naresh Kumar Gupta, Advocate is required to be appointed, as Arbitrator and he is accordingly appointed, as Arbitrator, to adjudicate the dispute inter se the parties. The Arbitrator is directed to enter into reference within a period of two weeks from the date of receipt of the copy of the order. Thereafter, the petitioner is directed to file claim petition within a period of two weeks. Reply/counter claim, if any, be filed by the respondents within a further period of three weeks. The pleadings, including, rejoinder and counterclaim, if any, shall also be completed by the parties within a period of eights weeks after entering into reference by the Arbitrator. Thereafter, the Arbitrator will afford an opportunity to the parties to place on record the documents, if they intend to do so, and evidence in any form by following the procedure with the consent of the parties. The Registry of this Court is directed to immediately inform Shri Naresh Kumar Gupta, Advocate about the passing of the order by sending a copy of this order to him. 14. In view of this, the petition stands disposed of. Pending application, if any, also stands disposed of. No costs.