HANS CONSTRUCTION COMPANY Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) This is a petition under section 20 of the Indian Arbitration Act, 1940. The facts as reflected in the petition are as under:- The petitioner, a registered partnership firm, entered into a contract with respondent Delhi Development Authority for the work of construction of multi- storeyed building at plot No.1,2 and. 5 of the District Centre, Janakpuri, New Delhi. Work was awarded to the petitioner on February 13, 1990 and was to be completed within a period of six months from the date of the commencement of the work which was to be reckoned from the 10th day of the award of the work. It is not disputed by the petitioner that the work could not be completed within the stipulated date viz. August 22, 1990. It is however, the case of the petitioner that the work was delayed because of the various hindrances created by the respondent in the execution of the work. The concerned Executive Engineer by letter dated April 9, 1992 granted provisional extension of time for completion of the work uupto April 30, 1992 subject however, to the right of the respondent to levy compensation on the petitioner under clause 2 of the agreement. According to the petitioner Superintending Engineer had agreed to the grant of provisional extension for completing the work without levy of compensation. Ultimately the work was rescinded by the respondent under clause 3 of the agreement on April 30, 1992. On September 15, 1992 the Superintending Engineer in exercise of powers under clause 2 of the agreement, held the petitioner liable to pay a sum of Rs.5,89,034.00 by way of compensation for the delay in the execution of the work. The petitioner by letter dated September 22, 1992 called upon the respondent to withdraw the letter dated September 15, 1992 and in the event of failure to withdraw the same, it required the respondent to refer the matter to arbitration. On failure of the respondent to react to to the aforesaid request, the petitioner moved the instant application under section 20 of the Arbitration Act.

(2.) The petitioner in para 13 of the application has raised two disputes, which are as follows:- A) Whether the respondent/Delhi Development Authority is entitled to levy compensation under Clause 2 of the Agreement having rescinded the contract under clause 3 prior to the invocation of Clause 2? * The Arbitrator is to determine the dispute in question. Justified or not, if so, to what extent? B) Whether the respondents are justified in levying of Rs.5,89,034.00 by way of compensation under clause 2 when having not reserved any right, and having not following the requisite ingredients of the said clause when there being no breah of contract by the petitioner firm?

(3.) As is apparent, these two disputes raised by the petitioner are matters which are connencted with clause 2 of the agreement. Learned counsel appearing for the petitioner urged that the above mentioned disputes should be referred to Arbitration in accordance with clause 25 of the agreement. He submitted that disputes raised by the petitioner are covered by the said clause.