Allowed

M/S Prl Projects and Infrastruture Ltd. v. State of Rajasthan through Chief Engineer, (Nh)

Rajasthan HC19 May 2023ARBAP/26/2022

Case brief

AI extract

What is this about?

The High Court allowed an arbitration application filed by a construction company against the State of Rajasthan. The Court appointed a sole arbitrator to adjudicate disputes regarding payment delays and contract terms, dismissing objections based on prior Section 34 dismissals, alleged estoppel from an undertaking, and delay in filing. The matter was disposed of under Section 11 of the Arbitratio

What did the court decide?

The present arbitration applications allowed; Hon'ble Mr. Justice Alok Sharma appointed as the sole Arbitrator to adjudicate the dispute.

M/S Prl Projects and Infrastruture Ltd. Vs State of Rajasthan… — Arbitration | Rajasthan HC (2023)

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[2023/RJJP/011487]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Arbitration Application No. 26/2022

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M/s PRL Projects And Infrastructure Ltd., Having Its Registered Office At Pooja House, 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi 110026, Through its Authorized representative Kuldeep Yadav S/o Late Shri Namonarayan Yadav, Aged 32 Years, R/o Pooja House 34/1, Vikas Apartments, East Punjabi Bagh, New Delhi-110026

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----Applicant

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Versus

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State of Rajasthan Through Chief Engineer, (NH), Public Works Department (P.W.D) Head Office, Jacob Road, Jaipur, Rajasthan - 302006

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Superintending Engineer, Public Works Department, (NH Circle), Jaipur, P.W.D. Head Office Jacob Road, Jaipur Rajasthan - 302006

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Executive Engineer, Public Works Department (NH Division-I), P.W.D Head Office, Jacob Road, Jaipur Rajasthan-302006

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----Respondents

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Connected With

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S.B. Arbitration Application No. 30/2022

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M/s PRL Projects And Infrastructure Ltd., Having Its Registered Office At Pooja House 34/1 Vikas Apartments East Punjabi Bagh, New Delhi 110026 Through Its Authorized Representative Kuldeep Yadav S/o Late Shri Namonarayan Yadav Aged 32 Years East Punjab Bagh New Delhi 110026

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----Applicant

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Versus

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State of Rajasthan Through Chief Engineer (NH) Public Works Department (P.W.D.), Government of Rajasthan P.W.D. Head Office, Jacob Road, Jaipur Rajasthan.302006

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Superintending Engineer, Public Works Department (NH Circle), Jaipur P.W.D Head Office Jacob Road, Jaipur Rajasthan- 302006

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[ARBAP-26/2022]

Executive Engineer, Public Works Department (NH Division-I), Jaipur, Jaipur P.W.D Head Office Jacob Road, Jaipur Rajasthan- 302006

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----Respondents

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For Petitioner(s) : Mr.Amit Lubhaya, Adv. For Respondent(s) : Mr.Pankaj Choudhary, Adv. for Mr.Rohit Choudhary, Dy.G.C.

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HON'BLE MR. JUSTICE ASHOK KUMAR GAUR

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Order

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19/05/2023

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The instant arbitration applications have been filed by the applicant under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter read as ‘the Act of 1996’) for appointment of an arbitrator.

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Learned counsel for the applicant submitted that the applicant had participated in the tender process initiated by the respondents for Construction of High Level Bridge Across River (Km.49) on Dausa-Manoharpur Road NH-11A by issuing Bid No.17/2007-08 dated 21.02.2008.

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Learned counsel submitted that the applicant was found to be the most eligible bidder and as such the contract came to be granted in favour of the applicant. Learned counsel submitted that as per the terms of the contract, total value of work awarded to the applicant was Rs.759.95 Lacs and stipulated date of completion was 20.08.2009.

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Learned counsel submitted that as per Clause 18 of the General Conditions of Contract, the applicant was required to submit the designs and drawings to the Engineer for approval and

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the same was issued by the Executive Engineer, P.W.D. vide letter dated 21.11.2008.

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Learned counsel submitted that the respondents thereafter informed the applicant that approval of the designs and drawings were to be done by Malviya Nagar Institute of Technology (MNIT) and subsequently work was to be allotted to the applicant.

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Learned counsel submitted that when the applicant raised the running bills, the respondents did not take any action and on the contrary the designs and drawings, were approved subsequently by the Authorities.

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Learned counsel submitted that on account of delay being caused by the respondents, the project was delayed initially for more than 7 months and later on caused a delay of nearly 16 months 20 days, as such the applicant was not able to start the work.

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Learned counsel for the applicant submitted that the applicant was also communicated to provide their approval for execution of extra 21.24% of the work amounting to Rs.1,65,41,356/-. Learned counsel for the applicant submitted that on account of several lapses on the part of the respondents, since work was not completed within a stipulated time, the respondents had granted extension of work of Rs.7,59,95,369/after due approval by the Executive Engineer.

¶39

Learned counsel submitted that the respondents did not fulfill their obligation of releasing payment as per Clause 47 of the General Conditions of Contract and as such the applicant had sent several letters to the Authorities to clear the necessary bills and

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Price Escalation Clause was also required to be adhered to as per the Contract by the respondents.

¶44

Learned counsel submitted that the applicant after holding several meetings, when did not receive payments, the respondents in order to clear the pending bills, asked the applicant to sign an affidavit on 28.03.2019 relinquishing right to invoke the provisions of Clause 25.3(c) of the Special Conditions of Contract for arbitration.

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Learned counsel for the applicant submitted that the applicant sent a communication dated 12.03.2020 to the respondents for appointment of an arbitrator as per Clause 25.3(c) of the Special Conditions of Contract.

¶46

Learned counsel submitted that after receipt of notice sent by the applicant, the respondents vide communicated dated 03.06.2020, rejected the request for appointment of an arbitrator.

¶47

Learned counsel submitted that the respondents in spite of due communication to them, rejected the request for appointment of an arbitrator and forcefully under coercion asked the applicant to sign an affidavit, then in such situation, the applicant is left with no other choice, except to approach this Court.

¶48

Learned counsel for the respondents have filed reply to the arbitration application.

¶49

Learned counsel for the respondents submitted that the dispute which is raised by the applicant, has already been agitated by them by filing application under Section 34 of the Act of 1996 on two occasions and such applications have been dismissed by the Competent Courts and thereafter the present application may not be entertained by this Court.

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Learned counsel for the respondents further submitted that the applicant has not placed complete facts before this Court and he is wrongly referring to Clause 25.3(c) of the General Conditions of Contract.

¶54

Learned counsel submitted that the applicant has not placed on record the original conditions of the contract and Clause Nos.25 & 26 were deleted at the time of signing the contract, between the applicant and the respondents.

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Learned counsel submitted that once the procedure of dispute itself was not a part of the contract, the applicant cannot invoke Clause 25(c) of the General Conditions of Contract to seek appointment of an arbitrator.

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Learned counsel for the respondents further submitted that the applicant was duly informed by a letter dated 09.04.2019 that the applicant had submitted an undertaking on stamp paper for not claiming any price escalation and not to raise any dispute in future including litigation.

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Learned counsel further submitted that finally the extension of time to the applicant of 772 days was given without any compensation and the same was duly accepted under Section 28 of the agreement by the then Chief Engineer.

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Learned counsel submitted that the contract, which was awarded to the applicant itself has been concluded way back in the year 2011 and now belatedly raising a dispute after inordinate delay of about 12 years to appoint an arbitrator, is a sheer misuse of the power conferred in this Court to appoint an arbitrator.

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(6 of 7)

Learned counsel submitted that the dispute which is raised by the applicant for raising bills of outstanding amount has already been considered and examined and further applications were twice filed & dismissed under Section 34 of the Act of 1996, no indulgence may be granted by this Court.

¶63

In rejoinder, learned counsel for the applicant has referred to the document filed along-with rejoinder as Annexure A-1. Learned counsel submitted that as far as Procedure for Disputes as contained under Clause 25 is concerned, the same was deleted, however, the issue with regard to the dispute pending between the parties was required to be referred to the Dispute Review Expert Committee within 14 days of the Notification of the Engineer’s decision.

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Learned counsel for the applicant further submitted that as far as General Condition of Contract under Clause 25.3(c) relating to the arbitration is concerned, the procedure for arbitration is still applicable to both the parties.

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Learned counsel further submitted that even if some affidavit has been signed by the applicant in order to get the final payment and such undertaking if was given under coercion, cannot be detrimental to the right of the applicant for redressal of their grievance.

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I have heard the submissions made by learned counsel for the parties and perused the material available on record.

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This Court finds that as far as objection of the respondents relating to the application of the applicant dismissed under Section 34 of the Act of 1996 is concerned, the same will not have any

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effect for invoking the power for appointment of an arbitrator under Section 11 of the Act of 1996.

¶72

This Court finds that only on account of an undertaking given by the applicant in order to get the final bills settled, the same cannot be an estoppel against the applicant to raise grievance in respect of dispute, which has arisen in respect of the terms of the contract entered into between the parties.

¶73

The objection of learned counsel for the respondents that the procedure for appointment of an arbitrator has been initiated by the applicant belatedly, this Court finds that if any objection is to be raised regarding any delayed claim, it will be for the arbitrator to take a view in the matter and it would not be possible for this Court to express any view on such belated claim or claim not filed within the stipulated time.

¶74

This Court, accordingly, allows the present arbitration applications filed by the applicant, while exercising the power conferred under Section 11 (5) read with Section 11(6) of the Act of 1996, appoints Hon’ble Mr. Justice Alok Sharma, (Former Judge), K-39, Income Tax Colony, Tonk Road, Jaipur, as the sole Arbitrator to adjudicate the dispute between the parties. The payment of cost of arbitration proceedings and arbitration fee shall be made as per the 4^th Schedule appended to the Act of 1996.

¶75

The intimation of appointment, as aforesaid, may be given by the counsel for the parties as well as by the Registry to Hon’ble Mr.Justice Alok Sharma, (Former Judge), K-39, Income Tax Colony, Tonk Road, Jaipur.

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(ASHOK KUMAR GAUR), J

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Monika/37-38

M/S Prl Projects and Infrastruture Ltd. v. State of Rajasthan through Chief Engineer, (Nh)

Case brief

What is this about?

What did the court decide?

M/S Prl Projects and Infrastruture Ltd. v. State of Rajasthan through Chief Engineer, (Nh)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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