The Court allowed objections regarding duplication of payments under Claim No.2 and restricted damages under Claims 7 and 9 to the period post-30 September 1996, dismiss objections regarding the contractor not abandoning the site.
The award under Claim No.2 set aside; award under Claims 7 and 9 restricted to Rs.30,02,193/-.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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NTPC LTD. ..... Petitioner
Through: Mr. Puneet Taneja and Ms. Laxmi Kumari, Advocates. (M:9810208494)
versus
M/S RAJ KISHAN & CO. ..... Respondent Through: Mr. D. Moitra, Advocate. (M:9971075019)
CORAM:
JUSTICE PRATHIBA M. SINGH JUDGMENT
Prathiba M. Singh, J.
O.M.P. 329/2010
Page 1 of 10
Contractor abandoned the site without completing the project, on 31st January, 1998. The Contractor denies that the work was abandoned, and contends that the work actually stood completed. The factual position however is that no work was executed at the site after 31st January, 1998. Disputes arose between the parties and the Contractor invoked the arbitration clause. Vide order dated 25th November, 2003, this Court appointed the Ld. Sole Arbitrator. Various claims were raised by the Contractor and counter claims were raised by NTPC. The Ld. Sole Arbitrator awarded various claims in favour of the Contractor and some counter claims in favour of NTPC vide award dated 13th November, 2009. Corrections were carried out in the said award vide order dated 22nd February, 2010, and based on a conciliation between the parties, the Ld. Sole Arbitrator modified the impugned award. However, the award was challenged by the Contractor in O.M.P. 320/2010. The said petition was dismissed vide judgment dated 12th September, 2012.
(ii) Second challenge is towards the award in claim No.7 and 9. None of the other objections are pressed for by NTPC.
Objection No.1 - Award under Claim No.2
O.M.P. 329/2010
Page 2 of 10
“3. On the face of it there appears to be a computation error committed by me. The counsel for the claimant, however, argued that this does not amount to any error in the award in as much as in fact the claimant had not received Rs.1,47,49,458.70 paisa. There is no merit in this argument. I have given a finding on merits, which cannot be reopened while deciding this application, that the respondent had received Rs. 1,47,49,458.70 paisa till the 142 R.A. Bill. Thus I hold that this computation error is liable to be corrected in place of Rs. 1,54,28,696.15 paisa the amount to be allowed as mentioned in para 212 should be 6,79,237.45 paisa.”
Page 3 of 10
executed and the latter is in respect of work executed qua deviated items. The total work executed by the contractor, obviously, includes the work executed beyond the limit of 20% for some items and 100% for some other items. For extra works and deviation, the Contractor is entitled to payments as per clause 10C of the General Conditions of Contract. However, the payment cannot be made twice.
“Counsel for the parties state that parties have reconciled the amount pertaining to claim No.1A and 1(i)(i) it is agreed that amount payable would be Rs. 15,82,378.69P. However, there is deduction of Rs.
Page 4 of 10
O.M.P. 329/2010
2,13,902.28P which deduction the claimant disputes. Counsel for the respondent resumed the arguments but not completed. The arguments shall continue tomorrow 27th January, 2007 at 11.30 A.M.”
Page 5 of 10
O.M.P. 329/2010
Second Objection qua Claim No.7 and 9
“120. ………Admittedly, the respondent has granted 5 extensions and parties have signed revised bar charts in respect of 4 extensions. The first extension was from 21.9.1992 to 20.6.1993, second from 21.6.1993 to 31.12.1993 third from 1.1.1994 to 30.4.1994 fourth from 1.5.1994 to 30.4.1995 and the last one from 1.5.1995 to 30.9.1996.
Page 6 of 10
O.M.P. 329/2010
135. The perusal of the above correspondence exchanged between the parties during the progress of the work, do indicate that both the parties have been to the some extent responsible for the delay occurring in the completion of the work. It cannot be said with any rationality that the respondent alone had been responsible for the delay in completion of the work. The claimant also had been responsible for not achieving desired progress in the execution of the works due to insufficient deployment of manpower and machinery. In some of the letters, the claimant admitted such facts, as it had been assuring deployment of sufficient resources in future.
136. Be as it may, the extensions for completing the work were repeatedly granted and such extensions so granted were unto 30.9.1996. The claimant has been executing the work during the said extended periods, without raising any objection or giving any notice that it was accepting such extensions, reserving its right to claim any damages on account of delays attributable to the respondent. It is, hence, clear that both the parties had given up their grievances with regard to the delays attributable to each other which definitely took place in execution of work and both parties obviously are not entitled to claim any damages of any type for the delay which has occurred at lease in the execution of work, till the last extension.”
O.M.P. 329/2010
Page 7 of 10
under Claims 7 and 9 held as under:
“161. Now coming to the period from 1.5.1995 to 30.9.1996, the correspondence and the documents already referred above indicate that the claimant had put its claims for being compensation for the losses being suffered by the claimant due to the reasons of delay attributable solely to the respondent and the parties had agreed to have the opinion of an expert/ consultant Mr. Gahlowt in that respect. No final report of the said consultant has been placed on record. Apart from an averment made by the claimant in its pleading and applications that the said expert had given a final report, the claimants has not led any evidence to prove that in fact, such a final report had been given by the said expert. The onus was not on the respondent to show the negative that the said expert has not given any final report. The fact remains that in the MOM of May, 1996, the parties had referred to the claims of the claimant to be examined to be examined by the respondent, one of which was delay compensation.
162. In view of this, the claimant would be entitled to delay compensation for the period 1.5.1995 onwards, till 31-08-1998, if the finding is to be that delay in the progress of the work was for reasons attributable to the respondent. I have already referred to the correspondent ex-changed between the parties during the said period and it is irresistible that the conclusion can be arrived at that the respondent had failed to perform its various obligations with regard to release of payment, as envisaged in MOM of May 1996 and also its failure to release the fronts.
163. Hence, I hold that the claimant is entitled to have compensation for the losses suffered by the claimant due to prolongation of the contract………”
Page 8 of 10
O.M.P. 329/2010
August 1998, despite there being no evidence on record. The date of 31st August 1998 also appears to be a typographical error – as both parties are ad idem that the contractor left the site on 31st January 1998 and the 32 months period was also calculated based on 1st May 1995 to 31st January 1998. The Ld. Arbitrator having held that both parties are responsible for delays till 30th September 1996, could not have awarded damages for the period prior to 30th September 1996. The finding that the Contractor had reserved its right to claim damages, does not obviate the fact that the extensions were sought and granted after being agreed upon. To this extent, the award is selfcontradictory. Thus, the award of damages towards losses for a total period of 32 months including the period till 30th September 1996, is clearly not sustainable. The period till 30th September 1996, deserves to be excluded. 19. Insofar as the Arbitrator’s finding that the Contractor did not abandon the work, the same being a factual finding on the basis of the appreciation of the letters on record, this Court would not like to interfere with the same. 20. The question then arises is as to whether there would be automatic application of the Hudson’s formula as contained in McDermott (supra) or would some evidence need to be led by the Contractor to prove actual loss. Admittedly, the site was vacated by the Contractor only on 31st January, 1998. Until then, the Contractor was executing the works. During the period of execution of the works, the Contractor would have to compulsorily retain staff, labour, office premises, etc. It is not even NTPC’s case that the Contractor stopped the work prior to 31st January, 1998. This being the position, the award of damages under Claim Nos.7 and 9 is liable to be restricted for the period 1st October, 1996 to 31st January, 1998 i.e. a period of 16 months instead of 32 months awarded by the Arbitrator. Thus, the O.M.P. 329/2010 Page 9 of 10
Page 9 of 10
amount awarded under Claim Nos.7 and 9 is restricted to a sum of Rs.60,04,386/- ÷ 2 = Rs.30,02,193/-.
PRATHIBA M. SINGH JUDGE
FEBRUARY 04, 2019/ Rekha
Page 10 of 10
O.M.P. 329/2010
3 issues framed by the court
Whether the award under Claim No.2 constituted duplication of payment for deviated items already covered in Claims 1(a) and 1(i)(i).
Whether damages awarded under Claims 7 and 9 for contract prolongation were sustainable given the arbitrator's finding that both parties were responsible for delays up to 30 September 1996.
Whether the Hudson formula application required evidentiary proof of actual loss suffered by the contractor prior to vacating the site.
Colour shows how this judgement treated each authority
McDermott International Inc. v. Burn Standard Co. Ltd. & Ors.Referred¶14
McDermott International Inc. v. Burn Standard Co. Ltd. & Ors. (2006) 11 SCC 181 · Who else cites this
NTPC Ltd.
M/s Raj Kishan & Co.
Prathiba M. Singh
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
