IRCON INTERNATIONAL LIMITED Vs. BABA BUILDERS

JUDGEMENT

(1.) Ircon International Limited (hereinafter 'Petitioner') was awarded a contract for the construction of 317 dwelling units for Married Accommodation Projects, Ministry of Defence at Old Cantonment (Works) on 17th February, 2005 to M/s Baba Builders (hereinafter 'contractor') which was the Claimant before the Arbitrator. The notice inviting tender (hereinafter 'NIT') for the said works was issued on 22nd November, 2004 in response to which the bid was awarded to the contractor which thereafter resulted in letter of intent (hereinafter 'LOI') being issued on 17th February, 2005. The period of completion of work was 18 months from the LOI i.e.16th August, 2006.

(2.) Within a few months, after the work was awarded i.e. on 24th August, 2005, notice was issued by Ircon to the contractor that the progress of the work was very slow. The said notice records that instead of 25% of work which ought to have been completed as per the milestones, less than 3% of the work was in fact executed. Accordingly, show cause notice was issued seeking a reply within 7 days as to why action ought not to be initiated under Clause 50 of the General Conditions of Contract (hereinafter 'GCC').

(3.) This letter was followed by letter dated 16th September, 2005 wherein it was recorded that no improvement was found on site and accordingly 48 hours notice was issued.