AIRPORT AUTHORITY OF INDIA Vs. FRICK INDIA LIMITED

JUDGEMENT

(1.) IA No. 6080/2003 (u/S.30 and 33 of the Arbitration Act, 1940) The petitioner entered into a contract with the respondent for installation of the air conditioning equipment at the Bombay Airport. The contract was executed on 30.07.1997. The equipment was installed and the petitioner issued a completion certificate dated 06.07.1982 in terms of Clause 6 of the conditions of contract. The plant was taken over on 07.07.1982. The effective portion of the completion certificate reads as under:

(2.) The petitioner however specified certain matters to be rectified by the respondent enumerated thereafter. The aforesaid certificate, as noticed above, was in pursuance to the requirement of Clause 6 which provided that within ten days of completion of work, the contractor was to give a notice of completion to the Engineer In Charge and within 10/30 days of the receipt of such notice, the engineer in charge was to inspect the work and if no defect in the work was found, to furnish the contractor with a certificate of completion otherwise a provisional certificate to be made available at reduced rates. The liability of the contractor for damages is specified in Clause 17 which reads as under:

(3.) A reading of the aforesaid clause 17 thus shows that the defect liability period in terms of Clause 17 is specified as a period of 12 months. The petitioner after issuing the certificate of completion continued to grant maintenance contract to the respondent till 1985. It appears that a show cause notice was issued on 17.06.1985 by the petitioner to the respondent which culminated in the letter dated 06.11.1985 of the petitioner alleging that the respondent had failed to complete the work by the extended date of completion and thus the contract was determined/rescinded and the works were taken out of the hands of the respondent insofar as they remained executed for giving it to another contract for completion at the cost of the respondent. This letter was replied to by the respondent vide letter dated 24.12.1985. The said letter states as under: