SIKKA ASSOCIATES Vs. AIRPORTS AUTHORITY OF INDIA

JUDGEMENT

(1.) THE present appeal has been filed by the appellant above-named being aggrieved from the judgment of the learned judge of this Court passed in OMP no. 179 of 2000 whereby the arbitral award dated 12th June, 2000 awarding an additional sum of Rs. 12,25,575/- in favour of the appellant as fees @ 4. 5% on the cost of the project against the tender cost and also upon the amount of escalation charges payable to the architects and a further sum of Rs. 40,000/- as interest on the delayed payment of bill has been set aside.

(2.) BRIEFLY, the facts of the present case are : i) That the appellant had submitted its offer vide letter dated 5th january, 1989 relating to the work of providing consultancy services for the work of construction of New International Block, Domestic Departure / Arrival block and associated work at Goa Airport. It was accepted by the respondent vide letter dated 22nd February, 1989 at the remuneration payable to the appellant for such work at 4. 5% of the executed cost of the project. ii) That while accepting the said offer given by the appellant vide its letter dated 5th January, 1989, the respondent vide its letter dated 22nd february, 1989 categorically stated that for the services to be rendered by the appellant, the appellant would be paid 4. 5% of the executed cost of the project and other terms and conditions were also attached to the said letter accepting the said offer. The relevant term is Clause 3 of the terms and conditions of agreement which relates with the Mode of Payment and reads as follows :-

(3.) MODE OF PAYMENT for each of the services in the scope of the work the consultant shall be paid in the following stages consistent with the work done plus reimbursable expenses as agreed upon. Payments made to the Consultants are on account and shall be adjusted against the final amount payable : preliminary STAGE stage 1 on submitting conceptual designs and preliminary estimates of costs 10% of the total fees payable based on cost estimates as per Clause 2. 03 stage 2 on submitting the final preliminary drawings/designs and model along with the modified estimates. 20% of the total fees payable less payment already made cost. Stage 3 on submitting preliminary drawings for obtaining approval from statutory bodies. 25% of the total fees payable less payments already made. WORKING DRAWING STAGE stage 4 on preparation of basic working drawings and details sufficient for preparing item-wise estimates of costs. 35% of the total fees payable less payments already made. Stage 5 on submitting detailed specifications, bill of quantities detailed architectural working drawings structural and services designs together with estimates of costs and to invite tenders. 55% of the total fees less payments already made based on the cost estimate as given in this stage. Stage 6 on submission of complete set of working drawings and details. 65% of the total fees payable less payments already made. CONSTRUCTION STAGE stage 7 during the course of construction of work at site. Further 25% to be paid in instalments consistent with the value of work done. Stage 8 on completion of (to be paid within six months of completion of the work)Balance payment 10% making the total equivalent to 100% of the fees payable based on the actual cost of the work. 3. That it is not disputed before us that the tender cost for the civil work was Rs. 5,31,09,985/-, while the actual cost when the work was completed came to Rs. 6,58,35,000/ -. The appellant was paid 4. 5% on Rs. 5, 31, 09,985/-, but was not paid this amount on the actual cost upon completion of the work which became a root cause of the disputes between the parties.