Gail Gas .Ltd v. Palak Construction Pvt Ltd

NAVIN CHAWLA, J NOVEMBER 27, 2019/rv

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM) 73/2018 & IA 7213/2018 Reserved on: 24.09.2019 Date of Decision : 27.11.2019 GAIL GAS LTD. ..... Petitioner Through: Mr.Dhruv Mehta, Sr. Adv. with Ms.Manmeet Arora, Ms.Chand Chopra, Ms.Pavitra Kaur, Ms.Anupama Dhruve, Advs. versus PALAK CONSTRUCTION PVT LTD. ..... Respondent Through: Mr.Kirti Uppal, Sr. Adv. with Mr.Ankit Gupta, Mr.Abhimanyu, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") has been filed by the petitioner challenging the Arbitral Award dated 30.09.2017 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the Contract/Letter of Award dated 01.07.2010 by which the petitioner had awarded the work for MDPE Pipeline Laying and Associated Works in City Zone Distribution (CGD) project of the petitioner in Meerut Region-2 to the respondent. 2. Before the Sole Arbitrator, the respondent had preferred 11 claims totaling Rs.2,46,81,168/-, while the petitioner had preferred nine counter claims totaling to Rs.70,07,547.61. The Impugned Award awards six out of eleven claims of the respondent and disallowed six out of nine counter Page 2 claims of the petitioner, granting the following final relief to the respondent: "Relief : In view of my finding in above issues the Claimant is held entitled to a sum of Rs. 76,61,916.00 (as per amended claim) + Rs.5,85,000.00 + Rs.1,04,602/- + Rs. 1,22,400/- (to be collected from authority) + Rs. 45,04,000.00 +Rs. 7,33,634.00 with interest @ of 12% per annum pendent lite and future whereas the respondent is held entitled to a sum of Rs. 1,85,956.32 + Rs.2,09,000/- + Rs. 1,01,036.40 with interest@ of 12% per annum pendent lite and future to be set off against the amount awarded to the claimant with no order as to costs in the facts and circumstances of the case." 3. The facts in brief that need notice of are that the petitioner had issued the Fax of Intent dated 26.06.2010 to the respondent accepting the tender submitted by the respondent for the above work. The estimated contract value for the works was Rs. 4,50,31,750/- and the completion period was prescribed as 16 months from the date of Fax of Intent. 4. The petitioner thereafter issued the abovementioned Letter of Award (LOA) to the respondent. Clause 1 of the LOA described the scope of work, while Clause 3 gave the Completion Schedule and is reproduced hereinunder:- "3. COMPLETION SCHEDULE The contract shall be valid for 16 months from the date of Fax of Intent (FOI). Engineer-in-Charge will give "Letter of Intimation" for executing pipeline as & when requirement arises during the validity of contract. The completion period (reckon from "Letter of Intimation" by EIC) for various pipeline shall be as follows:- Page 3 SL. No. Pipeline Length Time Schedule Upto 2 Kms 10 Weeks More than 2 Km but less than 5 Kms 16 Weeks More than 5 Kms but less than 20 Kms 24 Weeks 5. Clause 6 of the LOA provided for the Price Reduction Schedule applicable incase of delay in completion of the work beyond the stipulated time. Clause 7 of the LOA required the respondent to submit the Performance Bank Guarantee. 6. Clause 8 of the LOA prescribed the Defect Liability Period to be 12 months from the date of completion of work as certified by the Engineer-in-Charge as per Clause 80 of the General Conditions of Contract (GCC). 7. It is the case of the petitioner that there were roughly thirty areas in Meerut where the pipeline had to be laid. Though the Contract was executed area wise, it was part of one integrated contract. As the respondent failed to comply with the completion period as specified in the LOA, the date of completion was revised to 25.01.2013, 15.03.2013, 25.04.2013 and lastly to 20.08.2013. The letters of extension clearly stated that they had been issued without prejudice to the petitioner"s right and responden