M/s MBL Infrastructure Limited vs State Of Uttarakand & Another

Sudhanshu Dhulia, J

The petitioner before this Court is a Public Limited Company which is engaged in the business of civil engineering works. According to the averments made in paragraph no. 1 of the writ petition, the petitioner has a Pan India presence and has executed number of works in the States of Assam, Bihar, Delhi, Haryana, Karnataka, Madhya Pradesh, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal.

A contract was awarded to the petitioner for the execution of "improvement/strengthening of State Road in Districts of Nainital and Udham Singh Nagar under Contract Package No. 05 for an amount of Rs.34,90,92,216.57/-(Rupees Thirty Four Crore Ninety Lakh Ninety Two Thousand Two Hundred Sixteen and Fifty Seven Paisa Only)." According to the petitioner, the entire work was completed within the stipulated period of time of 18 months. After the completion of the work, however, certain defects were pointed out which were also removed and the work was completed.

The case of the petitioner is that although he has been paid the amount of the work but there is still a balance of Rs.1,94,94,371/- (Rupees One Crore Ninety Four Lakh Ninety Four Thousand Three Hundred Seventy One Only), with the respondents, which they have to pay. The petitioner would also argue that this is an undisputed liability which is admitted by the respondents and consequently the respondents are liable to pay the same.

The respondent Public Works Department and the State have filed their counter affidavit where they have denied the claim of the petitioner. Their case is that the work was not completed in time, and on inspection it was also found that the petitioner who has violated the conditions of the contract, and therefore, he is liable to pay as damages to the State authorities.

It is though an admitted fact that the State has not raised its claim before the petitioner for recovery of the amount as yet, but at the same time there does not seem to be an admitted liability of the State as alleged by the petitioner.

For his claim to the alleged admitted liabilities, the petitioner relies upon certain correspondences, which are between the State Government officials and the officials of the Public Works Department where there is a request to the State Government (by the Engineers of PWD) that amount be released in favour of the petitioner.

This, however, is only an internal correspondence between State officials. There is no admission on the part of the State Government which is communicated to the petitioner. To the contrary, they have clearly denied the claim of the petitioner in their counter affidavit. In fact, this Court vide its order dated 14.06.2019 had directed the Project Director/Chief Engineer, PMU, ADB, PWD to remain present in person before this Court on 05.07.2019. In his place the Executive Engineer, Sri Deep Chandra Joshi was present before this Court who has denied department even admitting the liability.

The respondents have denied the liability and in fact on the contrary the learned State Counsel has said before this Court that they shall be raising a demand shortly against the petitioner.

Learned counsel for the petitioner has relied upon the two decisions of the Hon'ble Apex Court in the case of Ram Barai Singh vs. State of Bihar, passed in Civil Appeal No. 11465 of 2014 and Surya Constructions vs. the State of Uttar Pradesh and others passed in Civil Appeal No. 2610 of 2019, where it has been held that the undisputed claims before the Government are liable to be given and a person should not be running from pillar to post in order to get his just compensation.

In the present case, however, the petitioner has not been able to establish that the claim which he makes was ever admitted by the respondent authorities. Moreover, it is an admitted position that the contract on the basis of which the work was executed by the petitioner has an arbitration clause, under which the petitioner can invoke the arbitration in accordance with law.

The learned State Counsel on these set of facts that admittedly there is an arbitration clause would rely upon the decision of the Division Bench of this Court passed in Special Appeal No. 945 of 2018 decided on 28.11.2018, where the Division Bench of this Court has refused to entertain such matters and it was further said that the parties would always be at liberty to approach the competent civil court or the parties can invoke the arbitration clause, as the case might be.

In the present case, admittedly there is an arbitration clause. Since there is an arbitration clause in the contract, no interference is liable to be made by this Court in a writ petition.

The writ petition stands dismissed. However, the petitioner would always be at liberty to invoke the arbitration clause.