O.M.P.(I) (COMM.)/279/2017 of ITD CEMENTATION INDIA LTD. Vs PUBLICE WORKS DEPARTMENT GOVT. OF NCT DELHI

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*IN THE HIGH COURT OF DELHI AT NEW DELHI+O.M.P.(I) (COMM.) 279/2017ITD CEMENTATION INDIA LTD...... Petitioner

..... PetitionerThroughMr.SandeepSethi,Sr.Adv.withMr.Krishna Vijay Singh and Mr.Shidant Kaushik,Advs.

versus

PUBLICE WORKS DEPARTMENT GOVT. OF NCT DELHI

..... RespondentThroughMr.Siddhartha Shankar Ray, Adv.

CORAM:HON'BLE MR. JUSTICE JAYANT NATH

O R R%26.07.2017

1.Present petition is filed under section 9 of the Arbitration andConciliation Act, 1996 seeking to direct the respondent to release the allegedliquidated damages of Rs.11,08,68,659/- to the petitioner against submissionof Bank Guarantee of an equivalent amount. The bid of the petitioner wasaccepted for Comprehensive Development of Corridor at the Outer RingRoad between Mangolpuri to Madhuban Chowk. As per the respondent thesaid work was completed by the petitioner on 4.8.2016 whereas thescheduled date of completion was 9.4.2015. The respondents have nowcommunicated to the petitioner on 17.11.2016 that the petitioner isresponsible for delay of 78 days subsequent to 18.5.2016 on account ofwhich the petitioner was held liable to pay sum of Rs.11,08,68,659/-.2.I have heard learned senior counsel for the petitioner and learnedcounsel appearing for the respondents. Learned senior counsel for thepetitioner has relied upon the order of this courtdated 14.04.2017 inOMP(I) (Comm.)108/2017 pertaining to the same parties where it is urged

that under similar facts this court had restrained the respondent fromdeducting liquidated damages subject to the petitioner furnishing bankguarantee. It is urged that the Division Bench subsequently has upheld theorder, subject to liberty granted to the respondent to seek modification orvariation of the said order before the learned Arbitrator. He submits thateven in the present case prima facie case is made out in favour of thepetitioner.

Learned counsel for the respondent has vehemently stated that theseissues being raised by the petitioner regarding the liability to pay on accountof delay will have to be adjudicated upon by the learned Arbitral Tribunaland it is not for this court to adjudicate upon the same.

3.A perusal of order of this court dated 19.4.2017 in OMP (I) (COMM)108/2017 would reveal that this court had on the facts of the case come to aprima facie conclusion that the petitioner therein was not liable to payliquidated damages. The court held that it would be manifestly unfair if therespondent therein is permitted to recover the entire amount of liquidateddamages without final adjudication. Accordingly, the said order was passed.

4.The facts of this case are that the flyover was scheduled to becompleted on 9.4.2015. As per respondents the flyover was completed on4.8.2016. The petitioners refute the date of completion stated by therespondents. It is urged that the flyover was actually completed on21.12.2015. It is admitted fact that the Chief Minister inaugurated theflyover on 17.1.2016 though as per the respondent the entire work was notcompleted till then. It is further submitted that the flyover becameoperational from the date of the inauguration.

5.A perusal of the communication dated 17.11.2016 issued by the

respondent would show that they have noted the calculations of thepetitioner stating there was justifiable hindrance of 519 days. The letteraccepts that the actual delay was of 483 days. The communication furthercomes to conclusion that the petitioner is responsible for delay of 78 daysafter 18.5.2016, namely, after 17.1.2016 when the flyover was inauguratedand is said to have come into use.

6.In my opinion, the above facts show that once the flyover has becomefunctional, this fact would have strong bearing on the claim of therespondent for liquidated damages i.e. whether they suffered any damageswhatsoever on account of the fact that the flyover was functioning.Accordingly, in my opinion, in the facts of the case the petitioner has madeout prima facie case. Following the order of this court in OMP (I)(Comm.)No.108/2017,therespondentsarerestrainedfromdeducting/withholding any amount on account of liquidated damages subjectto the petitioner furnishing an appropriate bank guarantee to the respondents.The said payment shall be released by the respondent on furnishing of anappropriate bank guarantee by the petitioner. The bank guarantee shall bekept alive during pendency of the interim order.7.Learned counsel for the respondent states that the respondent wouldsoon constitute the arbitral tribunal. Once the arbitral tribunal is constituted,liberty is granted to the respondents to apply to the Tribunal as per law forappropriate modification or variation or recall of the present interim order asper law. Petition stands disposed of. All pending applications, if any, alsostand disposed of.

JAYANT NATH, J

JULY 26, 2017/n