Jamia Millia Islamia v. Airwaves Engineers Pvt.Ltd

NAVIN CHAWLA, J MAY 02, 2019 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. 404/2015 Reserved on: 04.12.2018 Date of decision : 02.05.2019 JAMIA MILLIA ISLAMIA ..... Petitioner Through: Dr.Amit George, Mr.Alamgir and Mr.Rishabh Dheer, Advs. versus AIRWAVES ENGINEERS PVT.LTD. ..... Respondent Through: Mr.Ankit Jain and Mr.Sarvesh Rai, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') challenging the Award dated 25.03.2015 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the Agreement dated 14.06.2011 by which the petitioner had awarded the work of 'Air-conditioning and Associate Civil & Electrical Works at Centre for Interdisciplinary Research in Basic Science Building at Jamia Milia Islamia' to the respondent. 2. The Scheduled Date of Commencement of work was 21.06.2011 and the work was to be completed within a period of three months. It is important to note at this stage itself that though the estimated cost of the work was Rs.2,23,30,347/-, the respondent had submitted its bid only at Page 2 Rs.1,66,52,193/-, which was 25.42% lesser than the estimated cost and the same had been accepted by the petitioner. 3. It is the case of the petitioner that the respondent having bid below the cost price and having obtained the Contract, first submitted defective drawings to the petitioner, which could not be approved by the petitioner, leading to the petitioner calling upon the respondent to revise the same. It was only on 17.01.2012 that the respondent finally submitted the corrected drawings and the same were approved on the same day by the petitioner. In spite of approval of the drawings, the respondent did not carry out any work forcing the petitioner to issue a Show Cause Notice dated 16.03.2012 to the respondent asking it to show cause why the Contract be not terminated. The respondent did not give any reply to this notice and the petitioner, left with no other option, terminated the Contract by its letter dated 24.04.2012. It is only after the termination of the Contract that the respondent raised its claims challenging the said termination. 4. It is submitted by the counsel for the petitioner that the Arbitrator has wrongly held that the termination of the Agreement by the petitioner was not correctly made, and hence, cannot be sustained. 5. On the question of delay and the termination of the Contract, the counsel for the petitioner has further submitted that the respondent had not only caused delay in submission of the drawings but also claimed escalation by its letter dated 04.11.2011. This was contrary to the terms of the Agreement, as Clause 55 of the Additional / Particular Conditions and Specifications (hereinafter referred to as 'Particular Conditions') Page 3 attached to the Agreement specifically prohibited grant of any escalation during the period of the Contract. He submits that even beyond the period of Contract, such escalation can be awarded only as damages for which not only must there be a finding of default by the petitioner but also proof of such damages by the respondent. The respondent had not produced any proof in support of its claim for escalation. In fact, the Arbitrator has rejected Claim no.4 of the respondent, which was towards escalation, holding that since the period of completion was less than 18 months, no escalation was permissible, however, has accepted the same as a justification for the respondent to stop the work. 6. Counsel for the petitioner has further submitted that the Arbitrator has also held the termination to be illegal on account of petitioner's failure to grant extension of time for completion of the work. He submits that the petitioner had in its communications dated 30.12.2011, 04.01.2012 and 11.01.2012, not only requested the respondent to expedite the work but also assured that the extension of time will be give