ESCORTS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner in this writ petition has, inter alia, questioned the orders dt. 5th Jan., 1988, 18th Jan., 1988 and 11th Aug., 1987, passed by the respondent Nos. 2 & 3 respectively. The basic fact of the matter is as follows : The petitioner is a public limited company registered and incorporated under the Companies Act, 1956. It entered into an agreement with Smit Tak Towage and Salvage(s) (P) Ltd., a Singapore based company in terms whereof the mooring job of the floating dock at Port Blair was entrusted to the latter. The said company was incorporated at Nhava Sheva Port near Bombay. The said contract was entered for at lump sum price of US $ 1,73,500.

(2.) HOWEVER , in terms of cl. 7 thereof, the work was to be completed within an estimated period of

(3.) ACCORDING to the petitioner, although expression 'demurrage' has been used therein in truth and substance, it was fee for technical services. In support of the said contention, the petitioner has relied upon a letter of the said company dt. 3rd Sept., 1987, which is to the following terms : The sum of US $ 24,375 is claimed from Escorts Ltd., on account of the change orders' work performed, in pursuant to the Mooring Contract of Escorts Ltd. floating dock "Escorts 1" at Port Blair, Andaman Islands between 17th May, 1987, and 7th June, 1987. The sum of US $ 24,375 herewith claim covered an additional work period beyond the stipulated work period of sixteen days, for which a lump sum of US $ 1,73,500 was separately specified in the contract. The additional work required and carried out with the concurrence of Escorts Ltd., was due to unexpected technical deficiencies at the site and for rectifying these deficiencies, Smit Tak provided additional services of identical nature as was provided for earning the lump sum fee of US $ 1,73,500 under the same Mooring Contract. The change orders described herein (which under marine contracts, are also referred as demurrage) are standard marine contractual provisions and these change orders occurrences are normal for such nature of work or in any other such type of mooring work. The claims put forward to Escorts Ltd. are reasonable when compared to various other marine contracts of this nature completed by Smit Tak