Radha Construction Company Vs. New Delhi Municipal Committee - Court Judgment

Excerpt:
a contract was entered into by the petitioner and the respondent under sections 20 and 8 of the arbitration act, 1940, for the construction of an under ground tank - it was observed that the petitioner failed to start working as the site was not handed over to him by the respondent during the contracted period - as a result, the respondent refused to pay the amount in the lieu that the contract period expired on its own - again a fresh tender was passed and the work was allotted to another contractor - on this ground, disputes were raised between the petitioner and the respondent - on this basis it was adjudged that as the respondent breached the contract by not providing the site to the petitioner on time, thereforee, the disputes should be referred to the arbitrator - - the petitioner came to know that the committee was not allowing the petitioner to execute the work immediately and he submitted his final bill dated 20.1.1983. the committee refused to pay the amount on the ground that the contract bad died its own death because no vacant site was made available to the petitioner. disputes bad arisen between the petitioner and the committee which had already been submitted to the committee along with letter dated 26.8.85. the claims have been specified in the affidavit of the petitioner dated 16.9.87 which arc in the following terms :claimno. 4 satisfied. according to him he bad brought all the machinery and shuttering material to start the work but the committee did not perform its part of the contract and failed to deliver the site. or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the president ndmc at the time of disputes or if there be no president, the administrative head of the ndmc, at the time of such appointment.c.l. chandhry, j.(1) m/s. radha construction company filed this petition under section 20 read with section 8 of the arbitration act seeking direction to the respondent to file arbitration agreement in court and for reference of disputes for arbitration. the case of the petitioner is that they are building contractors. the ndmc invited tenders for the following work: construction of underground tank and boosting arrangement in sarojni nagar (phase ii) sb : construction of 4.5 lakhs gallon capacity under-ground tank and pump house. (2) the petitioner submitted a tender which was accepted by the committee and acceptance was conveyed vide letter dated 4.3:82. the accepted value of the tender was rs. 9,06,842.00 . the work was to be completed within eight months from 9.4.82. the petitioner could not start the work as the committee did not hand over the land during the contracted period. by letter dated 18.9.82 the committee was requested to hand over the site but no reply was received. the petitioner came to know that the committee was not allowing the petitioner to execute the work immediately and he submitted his final bill dated 20.1.1983. the committee refused to pay the amount on the ground that the contract bad died its own death because no vacant site was made available to the petitioner. the respondent called for fresh tender and allotted the work to another contractor. in these premises, it is claimed that.disputes bad arisen between the petitioner and the committee which had already been submitted to the committee along with letter dated 26.8.85. the claims have been specified in the affidavit of the petitioner dated 16.9.87 which arc in the following terms : 'claimno. 1. gross amount of profit which the firm was last assessed by income tax authority was 9% of total contract value. total contract value of ab6ve work rs. 9,05,842.00 9% of rs. 9.05.842.00 rs. 81485.78 38 claim no. 2. hire charges for machinery, shuttering and centering : (a) two mixers @ rs. 100.00 per day which equals to rs. 6000.00 per month total amount of 4 months : rs. 24000.00 (b) hire charges of 2 vibrators @rs. 100.00 per day : rs. 6000.00 total amount of (b) rs. 24.000.00 (c) shuttering material of 444 sq. ft area planck's at 0.02 per sq.ft per day i.e. rs. 80.00 per day. rs. 2400.00 and total rental charges comes out to be rs. 9,600.00 - (d) 2000 ball is which were at the site of work at 10 paise each balli i.e. rs. 200.00 per day ; rs. 6000.00 per month hence total charges comes to be rs. 24,000.00 total amount of claim no. 2. a, b, e, and d. is ===rs. 8?,600.00 claim no. 3. loss of productivity for the' further period after the date of completion of work in which entire shuttering and centering material along with machinery remained ideal as the same could not be utilised by the petitioner in other jobs. rs. 81,600.00 claim no. 4 satisfied. claim no. 5. head office overheads : it is in the form of interest at the rate of 16% upon the entire amount of the final bill which was submitted by the petitioner and date 20th jan. 1983 till the time of appointment of arbitrator to cover up the head office overheads. rs. 8 4,428.6 3 claim no. 6 cost of arbitrator rs. 5,000.00 rs. 3,33,918.40 claim no. 7 : interest at the market rate from 26.8.85. till realisation.'(3) despite request a copy of the agreement was not supplied to him, the committee was asked to appoint arbitrator which the committee has not done and that is why this petition has been filed. (4) the committee has contested the claim of the petitioner. in the written statement it is stated that the disputes in question are not referable. under clause 25 there is a flamed arbitrator and matters can only be referred in terms of clause 25 of the agreement. the petition does not disclose any cause of action as the petitioner has not specified the disputes to be referred for arbitration. it is further stated that the site was not made available to the contractor because of the dispute between some local residents and l & do, nor during the course of stipulated date of start and completion of the work the contractor ever asked for hanging over the site to start the work. the claims are superfluous and speculative. the agreement thereforee, died on its own natural death on or about 18.11.1982 i.e. the stipulated date of completion of the work. a copy of the agreement can be supplied to the contractor on deposit of costs of the copy of agreement. it is further stated that the petitioner was not prepared to start the work. even if the committee had handed over the site the petitioner had not made agreements. the letter dated 18.9.82 was never received by the committee. it has been admitted that the work has been allotted to some other agency. the petitioner is not entitled to any claim nor can deprive the respondent from reanimation of the tenders. on these allegations prayer has been made for dismissal of the petition. (5) the petitioner has filed a rejoinder wherein the stand of the committee has been repudiated and allegations made in the petition have been reiterated. (6) i have heard the counsel for the parties. the petitioner was awarded the work. the case of the petitioner is that the site was not made available to him, though he was ready and willing to perform his part of the agreement. according to him he bad brought all the machinery and shuttering material to start the work but the committee did not perform its part of the contract and failed to deliver the site. in nutshell, the case of the petitioner is that he suffered losses on account of the breach of the contract by the committee. this fact is admitted by the committee that the site could not bs made available to the petitioner because of disputes between some local residents and l & do. the case of the committee is that since the site was not made available to the petitioner, thereforee, the contract died its natural death on 18.11.82, i.e. the date of completion. the arbitration clause reads as under :- 'clause25. settlements of disputes by arbitration : except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other questions, claim, right matter or things whatsoever, in any way arising out of or relating to the contract designs, specification, estimates, instructions orders or these conditions or otherwise concerning the work.or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the president ndmc at the time of disputes or if there be no president, the administrative head of the ndmc, at the time of such appointment...'(7) i do not agree with the contention of the committee that the agreement died its natural death. the committee had not provided the site to the contractor and committed breach of the agreement. if on that account, the petitioner has suffered any loss or damages, the committee is bound to compensate the petitioner. the arbitration clause provides that all questions and disputes as to claim, right, matter or thing whatsoever in any way arising out of or relating to the contract are required to be referred for arbitration. the petitioner asserts that his claim and right arises out of and relates to the contract. he is entitled to recover certain amount on account of breach of the contract by the committee. i agree with the contention of the petitioner and hold that the petitioner's case is within the purview of the arbitration clause. i have perused the claims. in my opinion, the claims 1, 2 and 7 are covered under arbitration agreement. claim no. 6 is not a claim which can be referred for arbitration. in view of the above finding, the petition succeeds and the petitioner is entitled to the relief asked for. as a result, i direct the respondent to file the arbitration agreement in court. the administrator ndmc is directed to appoint an arbitrator and refer the disputes 1, 2 and 7 for arbitration.. he should do so within two months of the receipt of this order. parties are left to bear their own costs.