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Gujarat High Court · body

2019 DIGILAW 1189 (GUJ)

State of Gujarat v. Parth Associates

2019-12-27

A.P.THAKER

body2019
ORDER : 1. Being aggrieved and dissatisfied with the order dated 12th February 2018 passed in Civil Application No. 1 of 2017 in Arbitration Reference No. 37 of 2015 by the learned Gujarat Public Works Contracts Disputes Arbitration Tribunal, Ahmedabad (hereinafter be referred to as “the Tribunal”) whereby the learned Tribunal has allowed the application and condoned the delay with costs of Rs. 7,000/- the applicant-State of Gujarat has preferred the present civil revision application. 2. Brief facts of the present case are that the tender was issued for “constructing earthen bund and providing spurs” at Village-Vautha, Taluka-Dholka of Sabarmati river of flood protective scheme and after following due procedure, the tender was given to respondent at Rs. 3,37,20,406/- and for security, respondent had been deposited some amount and pursuant to which the work order was issued on 28.12.2007 and in view of the same, the work was required to be completed on or before 27.10.2008 considering the stipulated time limit of 10 months from the date of the work order. It is alleged that vide order dated 28.04.2010, the Executive Engineer had ordered to recover the liquidated damages for an amount of Rs. 35,69,453/- for non-maintenance of proportionate progress pursuant to the tender clause (2) and accordingly, the contract with the respondent was terminated as per clause (3) of the tender for non-completion of the said work. It is alleged that the respondent had served the claim notice to the State Authority on 08.06.2015 which was duly replied on 24.07.2015. It is further alleged that thereafter, the respondent had preferred Arbitration Reference No. 37 of 2015 before the learned Gujarat Public Works Contracts Disputes Arbitration Tribunal at Ahmedabad seeking to adjudicate the dispute between the parties of Rs. 1,56,10,314/- towards all the above claim along with the interest at the rate of 18% per annum from the due date i.e. from the date of claim notice dated 08.06.2015, till date of actual payment or realization of the scheme and as there was a delay in preferring the arbitration reference, the application being Civil Application No. 1 of 2017 was preferred for delay. It is alleged that the impugned order dated 12.02.2018 passed by the learned Tribunal is not sustainable in the eyes of law and committed an error in not exercising the jurisdiction vested in it. It is alleged that the impugned order dated 12.02.2018 passed by the learned Tribunal is not sustainable in the eyes of law and committed an error in not exercising the jurisdiction vested in it. It is further submitted that the learned Tribunal has, on relying submissions raised by the respondent, condoned the delay without appreciating the submissions canvassed by the present applicant. It is alleged that learned Tribunal ought to appreciate the fact that the contract was terminated vide order dated 28.04.2010 by considering non-compliance of the law. It is alleged that it is an admitted fact that respondent has waited for five years for preferring the reference and has tried to explain such a huge delay submitting that the delay ought to have been considered from the date of claim notice and, therefore, the same is very well in time, which itself shows that there is no sufficient explanation of five years of delay. It is alleged that it is a settled legal position and catena of decisions of the Apex Court wherein it has been held that huge delay can be condoned if sufficient explanation was provided. In the present case, the respondent has failed to provide sufficient explanation for huge delay. On all these grounds, the applicant-State has urged to quash and set aside the order dated 12th February 2018 passed in Civil Application No. 1 of 2017 in Arbitration Reference No. 37 of 2015 by the learned Tribunal. 3. Heard Ms. Megha Chitaliya, learned Assistant Government Pleader for the applicant- State. When the matter is taken up for hearing, nobody has appeared on behalf of the respondent. 4. Ms. Megha Chitaliya, learned Assistant Government Pleader for the applicant – State has submitted the same facts which are narrated in the memo of application and has submitted that the learned Tribunal has committed serious error of facts and law in allowing the application of condonation of delay. She has invited attention of the Court to the entire impugned order and has submitted that the learned Tribunal has observed in favour of the present respondent and yet without assigning any reason, abruptly allowed the application for condonation of delay which is against the provisions of Section 8(1) of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (hereinafter be referred to as “the Arbitration Tribunal Act”). She has submitted that there is delay of almost five years in preferring the Arbitration Clause by the respondent and the learned Tribunal ought not to have permitted the respondent to file reference which was time barred. 5. Having considered the submissions of learned Assistant Government Pleader for the applicant-State and the materials placed on record, it appears from the impugned order that the learned Tribunal has observed as under:- “..........But if we perused the provision of tender, as per clause 30 if any dispute arose between the parties, it can be resolved by referring it before the Arbitration Tribunal and in the present case, it can be said that dispute has arose when the contract has been terminated i.e. on 28.4.2010 or on the date on which final bill has been prepared on 3.6.2010. The copy of which is produced at exh.58 by the respondent. We found substance in the argument of the learned advocate of the respondent. A committee which was constituted by the Secretary is Administrative action and it is not judicial action and it is not as per the provision of tender clause and in these circumstances we found no substance in the argument of learned advocate of the applicant that cause of action arose to the applicant when he obtained copy of the report of the committee. But we are of the opinion that cause of action has arisen on the date on which contract is terminated and on the date maximum on which final bill has been prepared and as per Section 8 of the Act, the applicant has to file A.R. within one year from the date on which the cause of action has arisen. It is also not disputed that A.R. is filed on 3.11.2015 after giving notice. The argument of the applicant is that intimation regarding report of the committee was not given to the applicant is one of the reason for condonation of delay. It is also not disputed that A.R. is filed on 3.11.2015 after giving notice. The argument of the applicant is that intimation regarding report of the committee was not given to the applicant is one of the reason for condonation of delay. But it is also duty of the applicant to obtain the report or made search regarding the report of the committee as early as possible but the petitioner has made application after lapse of five years and in these circumstances we are of the opinion that the argument of the L.A. of the petitioner is not acceptable that there is a net delay of about 53 months for filing the A.R. as the contract has been terminated on 28.4.2010 and the petitioner has to file A.R. on or before 27.4.2011 while the petitioner has filed A.R. on 3.11.2015. Hence, there is a delay of 53 months.” 6. From the above observations of the Tribunal, it appears that the Tribunal has accepted the version of the present applicant to the fact that there was delay in filing the reference. However, on perusal of the last portion of the impugned order, it appears that without assigning any reasoning for condonation of delay, the Tribunal has abruptly granted the application filed by the respondent herein for condonation of delay. 7. It is worthwhile to refer to Section 17 of the Act which reads as under:- “17. The Tribunal may admit a reference under sub-section (2) of section 8 or entertain an application for review under sub-section (1) of section 11 or for revision under sub-section (1) of section 12 after the period of limitation laid down in sub-section (1) of section 8, sub-section (2) of section 11, or as the case may be, sub-section (1) of section 12 if the party satisfies the Tribunal that the party had sufficient cause for not making the reference or, as the case may be, the application for review or revision within such period.” 8. In view of the aforesaid provisions of Section 17 of the Act, it clearly appears that it is discretionary power of the Tribunal to admit any reference even if there is delay. In view of the aforesaid provisions of Section 17 of the Act, it clearly appears that it is discretionary power of the Tribunal to admit any reference even if there is delay. However, it is pertinent to note that in the present case, while passing the impugned order, the Tribunal has not assigned any reason as to how and under what circumstances, the learned Tribunal thought it fit to grant the application of the delay and condoned the delay. Therefore, in the interest of justice, while setting aside the impugned order of the Tribunal, the matter is required to be remanded to the Tribunal to decide the application of the respondent for condonation of delay afresh. 9. In view of the above, the present Civil Revision application is allowed. The impugned order dated 12.02.2018 passed by the Tribunal in Civil Application No. 1 of 2017 in Arbitration Reference No. 37 of 2015 is hereby quashed and set aside. The Tribunal is hereby directed to decide the application a fresh and in accordance with law by giving opportunity of hearing to both the sides. No order as to costs.