HIGH COURT OF UTTARANCHAL AT NAINITAL (Court’s order whether the case is or not approved for reporting.) (Chapter VIII Rule 32 (2)(b) Description of the case. A.O. No. 1055/01 (Old No.1011 of 1986) State of U.P. Vs M/S Kohinoor Transporters Approved for reporting. ______________________ Not approved for reporting Date of decision 15.12.2006 Initial of Judge HIGH COURT OF UTTARANCHAL AT NAINITAL A.O. NO. 1055 OF 2001 (Old No.1011 of 1986) State of U.P. through Superintending Engineer, Yamuna Civil Construction Circle, Dehradun. …….Appellant. Vs. M/s Kohinoor Transporters, 10 Saharanpur Road, Dehradun. ……..Respondents. 15.12.2006 Coram: Hon’ble Rajesh Tandon, J. Hon’ble B.C. Kandpal, J. Per Rajesh Tandon, J. Heard Standing Counsel for the State and S.K. Jain, counsel for the respondent. 2. Present appeal has been filed against the judgment and order dated 30.08.1986 passed by Sri J.C. Sharma, P.C.S. (J), IV Civil Judge, Dehradun in Original Suit No. 346 of 1984 M/s Kohinoor Transporters v. State of U.P. and connected Misc. Case No. 123 of 1984 State of U.P. Vs. M/s Kohinoor Transporters whereby the Court has refused to set aside the award given by the Arbitrator in the case which was referred to the Arbitrator to decide the dispute between the parties. 3. Briefly stated, an agreement was entered for excavation of foundation of Khara Power House between the respondent and the appellant through the Superintending Engineer Yamuna Civil Construction Circle, Dehradun. The Contractor submitted claim for Rs. 1,11,12,500/- for the work done by him. 4. The Executive Engineer, Power Channel Construction Division-II invited tenders for the work of excavation of the power house site of Khara Project. Consequent to this, agreement No. 2/SE/80-81 was signed between the claimant and the respondent no. 2 on 22.09.1980. Thereafter, the claimant has started the work of excavation at the site given by the respondent no. 3 on 11.10.1980. Initially the work was started by the claimant at the site as provided under the agreement, later on Central Line of the power line was established by 50 metres upstream of the site provided in the agreement after few months of actual start of work. 5. As a result of the shifting of the power line by 50 metres, the same has changed the entire scope of the work and the basic conditions as mentioned in the agreement were completely changed and this change was immediately brought to the notice of the authorities by the claimant by sending several reminders in writing, but no reply was received. 6. As a result of the change of the site by 50 metres upstream pushed the location of power house from high into the hills and into the hard rocks necessitated excavation in strata other than specified in the agreement. The excavation work consists of removal of power, hard rocks, which needed the use of drilling, planting, ripping, use of explosives and use of excavators, which increased the cost of excavation tremendously. 7. The Contractor brought to the notice of the appellants and inspections were also carried out but no decision was taken by the appellants and the claimant was forced to continue the work. 8. According to the claimant soon after the site was shifted by 55 metres upstream impressed upon the respondent no. 2 and 3 time and again both verbally and in writing that the change of site rsulted in the change of the entire scope of work and thus all work done which was not provided in the agreement is an extra item of work. Superintending Engineer Yamuna Civil Construction Circle, and Executive Engineer, Khara Project Constn. Division-I neither agreed nor refused the above fact but verbally they had agreed that the change of the site by 55 metres upstream would mean that all work so done would be an extra item of work and would be settled as a claim. The claimant has stated that the change also resulted in the character of excavated material. The excavated material changed from that of excavation mixed with sand, shingle, boulders etc. to that excavation in pure hard rock. 9. Complainant has further stated that this change was also brought to the notice of Superintending Engineer as well as Executive Engineer, but due to in action on their part, the matter could not be sorted out and they were forced to continue the work of excavation. The change of excavation in shifting the hard rock is recorded in level book by the Executive Engineer and can be verified at site inspection even now. Complainants have excavated through large mass of solid hard rock in the shifted reach. 10. The Contractor, therefore, on account of the change of the site has claimed himself to be entitled for extra item of work and lot of difficulties having been found during excavation work at out places than provided in the agreement. The claim was made by the Contractor to the following effect: “17. That the claimant therefore is entitled for the following reliefs on account of this change of site and consequent change of scope of work. (A)- In the reach not covered by agreement from the time of starting excavation till 25.10.1983, 2.5 lacs Cu.M. of hard rock has been excavated. The excavation involves the use of drilling, blasting and ripping. The claims on this account is worked out below:- (i) Additional cost involved due to use of process of blasting ripping etc. at Rs. 20.70/Cu.M. Rs. 20.70/ _______Cu.M. C.O. Rs. 20.70/Cu.M (ii) Additional cost due to extra lifts, a total of 76 lifts are involved in the process of excavation in the extended reach. The cost/lift works out to Rs. 0.195/lift. Therefore An additional expenditure For 76 lifts =76X0.195=Rs. 14.82/Cu.M.Rs. 14.82/Cu.M (iii) Expenditure on transportation On account of lead involved in shifted reach is Rs. 8.40/Cu.M. and Rs. 2.34/Cum. For 2 Km. Of Kachha lead/ton of material Hauled. Therefore, the additional amount payable is =Rs. 8.40+Rs.2.34=10.74/M.T. of material hauled. 1 cum. Of material weighs two M.T. Therefore additional rate/ Cu.M. works out to Rs.10.74X2 =21.48/Cu.M. Rs.21.48/Cu.M The amount payable on 2.5 lacs Cum. of excavation in the shifted reach will be the total of that calculated on the basis of rates provided above in (i) (ii) and (iii) i.e. ….Rs. 57.00/Cu.M (iv) Cost of 2.5 lacs Cu.M. of excavation at Rs. 57.00/Cu.M Rs.1,42,50,000/- (v) against above we are being paid Rs. 15.60/Cu.m. Thus the total payment received is :- Rs. 39,00,000.00 (vi) Thus the nett amount due to us = 1,42,50,000 (-) Rs. 39,00,000= Rs. 1,03,50,000/- Rs. 1,03,50,000.00 11. The claimant, therefore, has claimed to the following effect from the Arbitrator: “Since the scope of work has changed entirely and the conditions of the agreement do not apply due to change of site, anything which effects the cost of excavation need be compensated to us by payment of such additional cost effecting the excavation. These factors are due to rise in cost of:- (a) Labour (b) Petrol Oil, lubricants and diesel fuel. (c) Increase in the cost of tyres and tubes. (d) increase in the cost of establishment. The increase/Cu.M. in the cost of excavation on account of the above factors are worked out below:- (a) increase in the cost of excavation due to increase in the cost of labour … Rs.2.00/Cum. C.O. Rs.2.00/Cum. (b) increase in the cost of excavation due to increase in the cost of petrol oil, lubricants and diesel fuel …Rs.3.00/Cu.M. (c) Increase in the cost of excavation due to increase in the cost of tyres and tubes …..Rs.0.75/Cu.M. (d) Increase in the cost of excavation due to increase in the cost of spare parts of earth moving machinery ……..Rs. 1.50/Cu.M. (e) Increase in the cost of excavation due to increase in the cost of maintenance of establishment. …..Rs. 0.50/Cu.M. Total Rs. 7.75/Cu.M. The total increase in the cost of excavation due to increase of prices of various ingredients enumerated above is Rs. 7.75/Cu.M. This amount of Rs. 7.75/Cu.M. is payable to us on the excavation done by us. 18. That upto date excavation till 25.10.83 is 7.0 lacs Cu.M. The amount payable to us on account of this claim is (Rs. 7,00,000-Rs. 2,50,000)X 7.75=Rs. 34,87,500.00 which kindly be awarded to us by the Hon’ble Arbitrator. To sum up it is respectfully prayed that :- (i) An award of Rs. 1,03,50,000.00 be given against the Oppoiste Parties to the claimant on account of excavation of 2.5 lacs Cu.M. of hard rock. (ii) An award of Rs. 34,87,500.00 be given against the Opposite Parties to the claimant on account of rise in prices of various ingredients which go; into the excavation. This claim arises out due to the delay in the completion of work, the responsibility of which is solely of respondents. (iii) sanction of a rate of Rs. 57.00/Cu.M. for excavation done after 25.10.1983. (iv) Pendentilites and interest on the above amount of work calculated at the rate of 24% per annum which is the usual money lending rate in the market. (v) All cost of proceedings of arbitration to be paid by the Opposite Parties to the claimant. (vi) Any other reliefs which the Hon’ble arbitration thinks fit.” 12. Counsel for the appellant has relied upon Clause 16 of the agreement on the ground that no claim can be allowed to the contractor for the additional work. Few Clause of the agreement are quoted below: “That he started the work of excavation as per drawings attached with the agreement on 11.10.1980. As soon as he was informed (verbally) by the site engineers about the shift of the centre line of power house on the upstream by 55 m and enlargement of the pit etc. he brought to their notice that the strata of the extended reachw as very hard (hard rock) and required heavy blasting and that depth of excavation at the centre line was about 20-15 meters more than provided in the agreement. That the …….hard rock and additional 20-25 meters cutting was nto provided for by him while submitting his tender rate. That this shift had changed the entire scope of work, and it had affected the financial aspects and the progress as well. That in his contracted rate this hard strata and 20-25 meters of additional cutting was not included. This he brought to the notice of the authorities repeatedly in his letters dated 25.3.1981, 19.5.1981 and 2.8.1981. That the Executive Engineer in his reply dated 29.5.1981 and 29.6.1981 did not refute the contentions of the claimant regarding shifting of the centre line of the power house on the upstream by 55 m, extra hard nature of the rock in the extended reach and the additional 20-25 ms. depthof excavation. The Executive Engineer merely stated that as per condition 4.01 of the detailed specifications the drawing had been modified; and further that as per para 3.01 no claim was admimssible to the contractor for the changes. The contractor further submitted that on accouint of the hard nature of rock in the extended reach he borrowed from the department on rental D355-A Kamatsu Tractor for ripping purpose and used it for one month although its further ruse was not permitted. That he time and against submitted to the department for additional rate for excavation in the extended reach, stating that the content of rock encountered in the extended reach was 80% against 35-40% in the original reach (22.3.1982). That this fact was ot disputed/refuted by the Respondent. The Respondent only mentioned (30.4.1982) that site of work was defined in para 3.01 of the detailed specifications of the agreement and that it had not been changed. The contractor again represented to the Department on 25.5.1982 and 4.7.1982 for additional rate, details fro which were given. The Executive Engineer on 2.9.1982 asked the contractor for detailed analysis of rates with full justification for extra rates etc. and that this was done by the contractor by his letter dated 22.9.1982. This claim was not admitted by the Executive Engineer vide his letter dated 7.10.1982. It was on a further representation dated 23.10.1982 by the contractor, that the Executive Engineer by his letter dated 4.11.1982 asked the contractor to apply for arbitration in respect of this dispute. The Contractor has further submitted that the Respondent at no stage, either before the arbitration proceedings or during the proceedings has refuted the facts of the case, (extra hard nature of the rock and 80% rock contest in the extended reach and that depth of excavation at new centre line of the power house had exceeded by 20-25 Meters). That the respondent has only held that the said shift of the centre line etc. was permissible as per terms of the contract and that no extra claim was admissible to the contractor on this account. The contractor has further s8ubmited that the department as follow up of the decisions made in the 29.12.1980 meeting must have carried out exploration by drilling of holes up 35 meters depth below foundation level (at the changed site of Power House) and logs of geological Data prepared. The Respondent has purposely held back from the Arbitrator this information as it would otherwise prove the cotnractor’s case regarding extra hard nature of rock, and rock content in the excavation being 80% in the extended reach. The Contractor has quoted authorities from the Supreme Court where it has been held that the W.S. must deal specifically with each allegation of fact in the plaint…..if his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted……… The court may draw an adverse inference if he withholds important documents in his possession, which can throw light on the facts of the issue.’ The Respondent has made his submission in respect of both portions A and B of the issue together. He has submitted that the site of work is defined in para 3.01 of the detailed specifications and it reads: 3.00 SITE OF WORK 3.01 The Site of work is located about 60Kms. from Dehradun R.S. (NR) and 50 Km. From Saharanpur R.S. (NR). The site is connected by metalled pucca road 6 Km. Long from Badshahibagh on Saharanpur Chakrata Road. The site is on the left bank of River Yamuna downstream of Khara Inspection House at abouit 13.00 Km. Of the power Channel.’ After shifting centre line of the power house on the upstream by 55M the new site comes at Km. 13.087 of the power channel, and the same is well within definition of ‘Site of Work’ as given in the contract. The provisions for Drawings in thue agreement is given in para 4.00 and 4.001 and is as below: 4.00 DRAWINGS 4.01 The following drawings shall form part of the agreement. (i) Index map. (ii) Excavation plan. (iii) Typical cross section. (iv) Proposed disposal plan. (v) Logs of drill holes at Power House Site. The above drawings may be modified/supplemented by detailed drawings to be supplied by the Engineer-in-Charge from time to tome. No claim shall be admissible to the contractor on account of change of drawing. The Respondent has submitted that the drawings attached with the tender/agreement were tentative. These were modified and final drawings were supplied to the contractor for execution of work in course of time. The substitution of the tentative drawings by final drawings did not entitle the contractor any claim on this account. The Respondent has submitted that the centre line of the power house was shifted on the upstream by 55 M. on account of proper foundation requirements and the size of the power house pit was enlarged on design considerations, including requirements of hydromechanical equipment. Clause 16:Alternations specifications and design do not invalidate contract: The Engineer-in-Charge shall have power to make such alterations to the original specifications, drawings, designs and instructions as may appear to him to be necessary or advise during the progress of work and the contractor shall be bound to carry out the work in accordance with any instructions which may b e given to him in writing signed by the Engineer-in-Charge and such alterations shall not invalidate the contract and any additional work which the contractor may be so directed to be shall be carried out by contractor on the same conditions in all respect on which he agreed to do the main work and at the same rate as per specified in the tender for the main work. The time for the completion of the work shall be extended in the proportion that the additional work bears to the original contractor work and the certificate of the Engineer-in-Charge shall be conclusive as to such proportions. If the additional work includes any item for which no rate is specified hereunder then the contractor shall carry the work at the rate entered in the Schedule of rate of the District but if the Schedule does not contain any rate for such work than the contract shall notbeing such work until a rate in respect of such work has been settled by mutual agreement between him and the Engineer-in-charge with the approval of the officer accepting the contract and if they are unable to agree upon a rate within two weeks from the date when the contractor received the order the Engineer-in-charge may be a notice in writing cancel the order for such work and carry it out in such manner as he may think best in the event of dispute the decision of this Superintending Engineer shall be final and binding on the contractor.” 13. Counsel for the respondent in reply to the agreement has submitted that it has not been treated to be an additional work either by the Arbitrator or by the Civil Court while treating the award as a Rule of the Court. He has placed reliance on various letters by which, the change of site, which resulted in the extra works. One of the letters is described as under: “(i) Letter dated 9th August, 1983 shows that it was brought to the notice of the Executive Engineer from time to time regarding the change of the site. The contents of the letter shows as under: “That no coming to the actual progress of work, the following facts are once again brought to you kind notice:- (a) The site of work was changed and was pushed back into the hill is not the site provided in the agreement. Hence the condition provided in the agreement are simply not applicable and needs suitable modifications to suit the present day condition of working by mutual agreement of both the parties. (b) The time period provided in the agreement for completion of the work has expired since long and the department has not; done any favour to us by giving us extension of time as the delay in completion of the work, if any, has been due to total indecision on the part of the department. Similarly the rates which needed revision on account of change of site has not been granted to us as yet, which needs an immediate decision. The department has failed to take speedy action in the matter of decision, required for day to day working at site. There has been complete discard between the field staff and the design staff. Frequent delays have occurred due to ignorance of the field staff as t what they have to do at site in the absence of construction drawings not forth-coming form the design office. (c) The contract was for 6.0 lacs Cu.M. of excavation in mixed type of strata and we have already done more than that. You asked us to do 10.0 lacs Cu.M. of excavation, only part of which is in mixed strata and most of which is in pure hard rock, you refuse to pay us for excavation in pure hard rock and even refuse to measure the same in your measurement books according to correct classification of strata. (d) The agreement not being binding on us due to an entirely different site than what has been provided in the agreement which changed the entire scope of work and you asked us to do the work at the rates provided in the agreement signed in 1980, in the year 1983, when the cost of ingredients which go into the excavation has almost doubled, and deny us to compensate for the same is a denial of natural justice and is not only illogical but amounts to coercion. In the end we pray to your goodself to take a balanced and just attitude on the subject while pressing for us to maintain the progress. You should equally be effective in settling the problems and pay us what is genuinely due to us and do not deny us the justice. We confirm again that we shall maintain the best possible progress at site inspite of the denial of justice to us from you end. We request you again to take speedy action in the matter of settlement and payment of what is due to us. Claims if not speedily settled amount to justice delayed and consequent denial of the same. Your interest on this part of the subject will go a long way in meeting your aspiration regarding the completion of work. We have continued the work at site practically the same speed inspite of so many barriers created by the department, the Chief barrier, change of site in hill, payment of reduced rates though work has been completed, dishonouring of cheques and non settlement of our claims. In the matter of disposal and dressing of heeps the same would be taken up as soon as the monsoon are over because the same are not possible at the moment due to very difficult working conditions. We have also received a Chart along with your letter under reference, detailing the progress of work you desire from us to maintain. We are also very desirous to maintain progress better than this which was fully capable do but we cannot possibly do it for want of settlement of our claims and denial of natural justice.” 14. The claimant has also explained in paragraphs 11 and 12 of the rejoinder affidavit regarding regular correspondence, which was made due to the change of the site. The same are quoted below: “Para 11:- The reply of the respondent against this para is wrong. A few examples of the letters addressed to the Respondent NO. 2 is given below which did not receive their attention as no reply was received for the same. (a) Our letter dated 4.7.82 appearing as Annexure-XXIV of our claim petition. (b) Our 3 page letter dated 7.8.82 copy enclosed now as Annexure-X. (c) Our letter dated 16.11.82 appearing as Annexure-XXXIV of our claim petition. (d) Our letter dated 17.11.82 sent as reminder to our letter dated 7.8.82 photo copy enclosed now as Annexure-XII. (e) Our letter dated 17.11.82 sent as reminder to our letter dated 4.7.82 as Annexure-XXXVI of our claim petition. (f) Our letter dated 9.1.83 sent as reminder to our letter dated 4.7.82 , 7.8.82, 16.11.82 and 17.11.182 photocopy enclosed as Annexure- XV. (g) Our letter of 6 pages dated 13.5.83 photocopy enclosed now as Annexure XVIII. These are the some examples of our letters which has been un-replied. Hence the contention of the respondent that they have given suitable reply to all our letter, is wrong. Para 12:- The reply of the respondent against this para is not admitted. Our contention that the entire scope of work changed due to shifting of site stand un-disputable and we maintain the same. Difficulties and hazards faced in excavating pure hard rock can be very well understood and needs no discussions. Here lot of excavation involves blasting which itself is a hazardous operations. How the respondent has said that it involves no hazard is to be judged by the Hon’ble Arbitration. It is further to confirm that we have been time and again writing to respondent No. 2 & 3 in the matter of shifted reach. Correspondence would clear the subject. In this