M/S. Mitra Guha Builders (India) ... vs Oil And Natural Gas Corporation Limited

2. Brief facts which led to filing of these appeals are as follows:- Date: 2019.11.08 16:49:28 IST Reason: 1

3. The designated authority vide its order dated 03.01.2002 appointed Justice P.K. Bahri (Retd.) as the sole Arbitrator to adjudicate upon the claims of the parties. The learned Arbitrator vide award dated 01.07.2005 allowed the claim of the claimant and disallowed the liquidated damages/compensation and rejected the 2 counter claim of respondent-ONGC. Various claims made by the contractor and the amount awarded by the learned Arbitrator in both the arbitration cases are as under:-

2. Amount allegedly withheld Rs.9,00,000/- Rs.9,00,000/-

Petitioner as per provisions of the contract

4. Losses and damages Rs.21,60,375/- Claim rejected incurred by the Petitioner in by the Ld. the shape of overheads due Arbitrator to prolongation of contract

5. Loss of turnover suffered by Rs.55,58,428/- Claim rejected the Petitioner due to by the Ld. prolongation of contract Arbitrator

Petitioner as per provisions of the contract

4. Losses and damages Rs.18,23,613/- Claim rejected incurred by the Petitioner in by the Ld. the shape of overheads due Arbitrator to prolongation of contract

5. Loss of turnover suffered by Rs.46,91,973/- Claim rejected the Petitioner due to by the Ld. prolongation of contract Arbitrator

11. ONGC’s claim of liquidated damages in terms of Clause 2 of the agreement:- The salient features of the contract in Arbitration Case No.297A/2002 are that the work was to commence on 22.02.1996 and was stipulated to be completed by 21.08.1997. But the work was completed only on 24.05.1999. Insofar as Arbitration Case No.297/2002, the work was to commence on 21.02.1996 and was stipulated to be completed by 21.08.1997. But the work was completed only on 24.05.1999. In its statement of 9 defence, the respondent-ONGC asserted that there has not been any significant delay caused by the respondent-ONGC which could delay the work of the claimant. In its statement of defence, the respondent-ONGC mentioned that total delay which has occurred was 640 days out of which claimant is responsible for the delay of 39 weeks (39 × 7 = 273 days) and on this account, the claimant is liable to pay compensation in terms of Clause 2 of the contract which stipulate compensation payable @ ½% per week subject to maximum 10% of the cost of the executed work and the decision of the Superintending Engineer in this regard is final. The respondent- ONGC has thus claimed Rs.32,79,828/- in Arbitration Case No.297A of 2002 and Rs.42,08,940/- in Arbitration Case No.297 of 2002 recoverable from the claimant as compensation for the delay caused by the claimant in completing the work.

12. After reference to various correspondences between the respondent-ONGC and the appellant and after a detailed discussion, the learned Arbitrator recorded a finding of fact that the respondent-ONGC was responsible to an extent for the prolongation of the contract and the claimant was also to some extent responsible which resulted in slow progress of the work. Considering the delay alleged by the respondent-ONGC, the 10 learned Arbitrator has observed that there was delay of 640 days and both the respondent-ONGC and the appellant were responsible for the delay and observed as under:-

In the present case, the parties themselves have agreed that the decision of the Superintending Engineer in levying compensation is final and the same is an “excepted matter” and the determination shall be only by the Superintending Engineer and the correctness of his decision cannot be called in question in the arbitration proceedings and the remedy if any, will arise in the ordinary course of law.

26. As per the chart filed by the respondent-ONGC, total amount awarded by learned Arbitrator in favour of the appellant is Rs.1,24,47,416/- (Rs.66,36,252/- + Rs.58,11,164/-). Total amount of compensation/liquidated damages withheld by ONGC is Rs.66,99,117/- (Rs.36,80,142/- + Rs.30,18,975/-). Towards satisfaction of the arbitral award, ONGC has deposited an amount of Rs.2,10,41,965/-. As per the order of the Division Bench of the Delhi High Court, the appellant was directed to refund an amount of Rs.74,88,768/- (amount withheld by ONGC + accrued interest). In compliance of the order of the Supreme Court dated 09.04.2009, the appellant has deposited Rs.75,00,000/- before the Supreme Court and the same has been invested in a nationalised bank. The 25 amount of Rs.74,88,768/- along with accrued interest is ordered to be paid to the respondent-ONGC. The balance of Rs.11,232/- (Rs.75,00,000 – Rs.74,88,768/-) along with accrued interest be refunded to the appellant.

27. In the result, the appeals are dismissed. No order as to cost.

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