M.M. Construction vs Secretary, Nainital Lake Region Special Area Development Authority and Others

Tarun Agarwala, J.—Heard Mr. Pardeep Hairiya, the learned Counsel for the Petitioner and Mr. Rahul Consul, the learned Counsel for the Respondents.

The Nainital Lake Region Special Area Development Authority issued a public notice inviting tenders for the construction of building and development work of new bridges-cum-bypass, IInd Phase, Tallital, Nainital from eligible contractors. The Petitioner submitted his tender and was accepted by the authority and a contract dated 12.08.2010 was executed between the parties. The contract stipulated a time frame within which the work was required to be completed, namely, nine months from the date of execution, i.e., from 18.10.2010 to 17.07.2011. Since time was the essence of the contract, the Petitioner alleged that certain hindrances came in the way, which did not allow the Petitioner to complete the contract within the stipulated period. Certain examples were placed before the court, namely, that there was a high tension line going above the road and that the high tension line was required to be shifted. Further, necessary drawings were not supplied by the Respondents and, therefore, the Petitioner could not make adequate progress. Since the Petitioner could not even complete 25% of the bridge, the Respondents passed an order dated 20.07.2011 terminating the contract.

The Petitioner, being aggrieved, has filed the present writ petition contending that in view of the unforeseen events and hindrances caused by not removing the electricity lines and non-supply of the drawings, the Petitioner was unable to complete the work and, in this regard, had also filed an application dated 12.07.2011 before the competent authority for the extension of the period of the contract as stipulated under Clause 5 of the contract.

For facility, Clause 5 of the contract is quoted hereunder:

Clause 5: If the contractor shall desire an extension of the time for completion of the work the ground of his having been unavoidably hindered in its execution, or any other grounds, he shall apply in writing to the officer accepting the contract on behalf of the department through, the Eng.-in-charge and a copy thereof is sent to the Eng.-in-charge within 30 days of the hindrance on account of which he desires such extension as aforesaid and the officer accepting the contract on behalf of the department shall, if in his opinion (which shall be final) reasonable grounds be shown therefore, authorize such extension of time, if any, as may in his opinion, be necessary or proper, provided that the extension of time should be limited to 50% of the total, period of the contract but in no case exceeding 6 month. The case of expansion of time beyond such period shall be submitted to the authority next higher to the officer accepting the contract on behalf of the department. Provided always that if the contractor continues to perform the work beyond date of completion or the extended date as the case may be without obtaining approval for extension as aforesaid the right of the department to claim compensation under clause-3 shall not be deemed to have been waited.

The fact that the Petitioner has made an application dated 12.07.2011 has been alleged in para 17 of the writ petition, which has not been denied in para 15 of the counter affidavit. The Respondents however contend that since the Petitioner was not serious in completing the work and had only completed less than 25% of the contract, the question of extension of the contract did not arise.

Be that as it may. The fact remains that the Petitioner had moved an application within the stipulated period before the competent authority for extension of time as provided under Clause 5 of the contract. The competent authority was required to consider the plea of the Petitioner and was required to pass an order either extending the time or rejecting the application of the Petitioner. This has not been done so far.

The learned Counsel for the Respondents has pointed out Clause 32(c) of the contract, which stipulates that any matter arising out of the contract is required to be referred to an arbitrator and, consequently, the Petitioner has an efficacious remedy of raising the dispute before the arbitrator since factual controversies are involved in this matter, it would not be appropriate for the writ court to dwell into such factual disputes.

In the light of the aforesaid, the court is of the opinion that the Respondents are required to pass an order on the application of the Petitioner dated 12.07.2011 filed under Clause 5 of the contract.

The writ petition is accordingly disposed of with the direction to the competent authority to take a decision on the application of the Petitioner dated 12.07.2011 (Annexure-10 to the writ petition) within three weeks from the date of the production of a certified copy of this order and act accordingly. In the event, the competent authority is not inclined to grant extension of period to complete the work, it would be open to the Petitioner to raise his grievance before the competent authority invoking the arbitration clause contemplated under Clause 32(c) of the contract.