Era Infra Engineering Ltd v. Steel Authority of India

NAVIN CHAWLA, J NOVEMBER 3, 2017/vp

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + Reserved on:25th October, 2017 Date of decision: 3rd November, 2017 ERA INFRA ENGINEERING LTD. ..... Petitioner Through Ms. Geeta Luthra, Sr. Adv. with Mr. Rahul Pandey and Mr. Prateek Yadav, Advocates. versus STEEL AUTHORITY OF INDIA ..... Respondent Through Mr. Sanjay Jain, ASG with Mr. Kartik Rai, Ms. Veronica Mohan, Mr. Anshul Rawat, Ms. Suman Mathur and Mr. Ashish, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA IA No.12297/2017 (Exemption) Allowed, subject to all just exceptions. The application is disposed of. OMP(I)(COMM)436/2017 & I.A.No.12296/2017 (Stay) This petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') has been filed by M/s Era Infra Engineering Ltd., the petitioner herein praying for the following reliefs:- Page 2 "a. During the pendency of the present Petition, stay the operation of the Tender being floated on 26.09.2017, 28.09.2017, 29.09.2017 and 04.10.2017 for the balance work of the project for being arbitrary and illegal; b. Restraining the Respondent from opening and awarding the tender for the balance work to any third party; c. During the pendency of the present Petition, direct the Respondent to allow the Petitioner to continue with the balance work; d. During the pendency of the· present Petition, direct the Respondent to release the withheld amount in order to complete the aforesaid work." 2. Mr. Sanjay Jain, learned Additional Solicitor General appears for the respondents on advance notice and has also been heard. 3. The petitioner had been awarded the work of execution of structural work for setting up BOF (Basic.Oxygen Furnace) & CCP (Continuous Casting Shop) (Pkg. No. 033-B) (hereinafter referred to as the "Project") by the respondent at its Bhilai Steel Plant, Bhilai vide Agreement No. PCC/13/09 dated 30.09.2009. The completion period was 24 months from effective date i.e. 30.09.2009. 4. It is alleged by the petitioner that the respondent has been changing the scope of the project from time to time. Reference of this Court was drawn to various letters including letter dated 01.06.2017 in this regard. 5. It is alleged that due to various hindrances on the project site, for no fault of the petitioner, progress of the work was hampered, which resulted in delay which cannot be attributed to the petitioner. Page 3 6. It is further alleged that the time was not the essence of the contract, inasmuch as, Clause 49 of the General Conditions of Contract (in short GCC), provides that the completion period would be extended if the delay has occurred due to any fault by the respondent or change in scope of work. 7. The petitioner had earlier filed a petition being Arb.P. No.90/2017, titled M/s Era Infra Engineering Ltd. v. Steel Authority of India Limited seeking appointment of an arbitrator to adjudicate the dispute that had arisen between the parties in relation to the above contract. This Court vide its order dated 24.03.2017 permitted the petitioner to approach the Indian Council of Arbitration (in short ICA) for constitution of an Arbitral Tribunal not later than 10 days from the date of the order. I am informed that the petitioner duly approached the ICA, however, there was delay on its part in depositing the fee demanded by ICA, because of which the arbitration proceedings are yet to commence. The respondent contends that this delay has been caused for reasons solely attributable to the petitioner. 8. In the meantime, the respondent issued a notice dated 03.06.2017 invoking Clause Nos.43 and 51.2.2 of the GCC alleging negligence and failure on the part of the petitioner in executing the subject contract and further calling upon the petitioner to remedy such breach within 14 days from the date of issuance of said notice, failing which the respondent threatened termination of the agreement. The petitioner replied to the above notice vide its letter dated 17.06.2017. The petitioner vide its sepa