OMP Nos. 1165/2014; 1556/2014 & OMP (Comm.) No. 156/2016. Case: National Highways Authority of India Vs Hindustan Construction Co. Ltd.. High Court of Delhi (India)
| Case Number | OMP Nos. 1165/2014; 1556/2014 & OMP (Comm.) No. 156/2016 |
| Counsel | For Appellant: Mr. A.B. Dial, Senior Advocate with Mr. Mukesh Kumar & Ms. Gunjan Sinha Jain, Advocates and For Respondents: Mr. Dayan Krishnan, Senior Advocate with Ms. Malavika Lal, Advocate |
| Judges | S. Muralidhar, J. |
| Issue | Arbitration & Conciliation Act, 1996 - Section 34 |
| Judgement Date | April 20, 2017 |
| Court | High Court of Delhi (India) |
Judgment:
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These are three petitions under Section 34 of the Arbitration & Conciliation Act, 1996 (''Act'') filed by the National Highways Authority of India (''NHAI'') which give rise to common questions and, therefore, are being disposed of by this common judgment.
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OMP (Comm.) No. 156/2016 is directed against an impugned majority Award dated 13th June, 2015 passed by the majority of the Arbitral Tribunal (''AT'') in the disputes between NHAI and the Respondent, Hindustan Construction Company Limited (''HCCL'') (also referred to as 'Contractor') arising out of the award by the NHAI in favour of HCCL of a Contract Package for four-laning from KM 45 to KM 92 of Lucknow-Ayodhya Section of NH-28 in Uttar Pradesh (U.P.) -- Contract Package LMNHP-- EWII-- WB-2.
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OMP No. 1165/2014 is directed against an Award dated 28th May, 2014 passed by the majority of the AT in the disputes arising between the parties out of the Contract Package for four laning from KM 9 to KM 45 of Lucknow to Ayodhya Section of NH-28 in U.P. -- Contract Package LMNHP EX-II WB-1.
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OMP No. 1556/2014 is directed against an Award dated 22nd July, 2014 passed by the majority of the AT in the disputes between the parties arising out of the Contract Package four-laning from KM 92 to KM 135 of Lucknow to Ayodhya Section of NH-28 in U.P. -- Contract Package LMNHP EX-II WB-3.
OMP (Comm.) No.156/2016
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The Court proceeds to first deal with the issues that have arisen in OMP (Comm.) No. 156/2016 as that was what was argued first. The submissions on behalf of NHAI were advanced by Mr. A.B. Dial, learned Senior Advocate and on behalf of HCCL by Mr. Dayan Krishnan, learned Senior Advocate.
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Claim No. 1 was for fixation of new/appropriate rate for varied work of construction of embankment at Ramsnehighat Bypass with earth obtained from the Contractor''s borrow areas, in place of flyash embankment as provided for in the Contract. The case of NHAI was that the said claim by HCCL was not maintainable. The Bill of Quantities (''BOQ'') provided for item Nos. 2.02, 2.03 and 2.08 for construction of embankment. Item No. 2.02 was for construction with borrow pit soil, Item 2.03 with excavated earth obtained from drains, foundations, etc. and Item 2.08 with flyash from thermal power stations. Out of the total quantity of 5,00,336 cubic metres (cum) for all the three items above, the quantity of Item No. 2.08 was only 33,170 cum, which worked out to about 7% of the total quantity. On being brought to its notice by HCCL by the letter dated 4th December, 2006, the Engineer realised that the quantity of Item No. 2.08 for embankment with flyash was inadequate. In consultation with NHAI, the Engineer instructed HCCL to restrict the quantity of Item No. 2.08 to 33,170 cum and to carry out the further work of embankment with earth obtained from HCCL's borrow areas.
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NHAI contends that Clause 51.1 of the General Conditions of Contract (''GCC'') permits the Engineer to vary both the quality and quantity of the work as may be necessary in his opinion and accordingly instruct the Contractor. Clause 52.1 of the GCC provides that variations under Clause 51 are required to be determined in terms of Clause 52 and valued at rates set out in the Contract, if in the opinion of the Engineer, the same shall be applicable. The Engineer valued the work in terms of the said clauses. It is stated that under Clause 52.2 of the GCC, the Engineer was empowered to fix rates.
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According to NHAI, no new item had been introduced and the increase in the quantity had to be considered as an increase in BOQ Item No. 2.02. The payment for such increased quantity was admissible in terms of Clause 52.1 of the GCC subject to further adjustment in terms of Clause 52.2. In terms of the proviso to Clause 52.2 of the Conditions of Particular Application (''COPA''), no change in rate or price of any item was admissible unless such an item accounted for more than 2% of the contract price and the actual quantity of work executed exceeded the quantity of BOQ by more than 25%. Admittedly, the quantity of BOQ Item No. 2.02 increased by more than 25%. However, the total cost of the item executed was only 1.696% of the contract price, which was less than 2% of the contract price. Accordingly, it was contended by NHAI that no revision in the rate was called for and that the Engineer was right in rejecting the request of HCCL for fixing new rates.
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The case of HCCL, on the other hand, was that the above instructions of the Engineer were...
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