HINDUSTAN STEELWORKS CONSTRUCTION LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The Respondent, Union of India represented through the Deputy Chief Engineer Construction, Northern Railways issued a Notice Inviting Tenders for earth work in filling for embankment with contractor's own earth and cutting to required profile, including compaction by vibratory roller, construction/ extension of retaining wall, platforms, station buildings, S & T room, gate huts, and other allied work between Garhmuktesar Pul (excluding) and Kuchesar Road (excluding) stations (Chainage 10050 to 24700) in connection with Hapur, Kankather doubling (Zone - II) (hereinafter referred to as "the said works")

(2.) The Petitioner, Hindustan Steelworks Construction Limited, a Government of India owned company, submitted its bid in response to the tender notice and the same was duly accepted vide letter of intent dated 18th August, 2004. Though the initial value of the contract was Rs. 6863 lakhs, as per the site availability, the scope of work was later restricted to Rs. 340 lakhs.

(3.) Contract dated 11th November, 2004 was entered into between the parties. The date of commencement was from the letter of intent i.e. 18th August, 2004 and the date of completion was 17th April, 2006, which was subsequently extended to 15th July, 2006. According to the Petitioner, it faced various difficulties in the execution of the work as the Respondent was not performing its obligations. The scope of work having been reduced, it is the case of the Petitioner that it could not mobilize adequate resources on the ground. On the other hand, it was the Respondent's contention that there was insufficient mobilization by the Petitioner, and in fact, the work was progressing very slowly. After various meetings and correspondence between the parties, the scope of work was revised and the value of the contract was further reduced. The Respondent then issued a letter dated 9th May, 2006, by which it called upon the Petitioner to make immediate arrangements to improve the progress of the work, failing which, action would be liable to be initiated under clause 62 of the General Conditions of Contract. This notice was given under clause 26 of the General Conditions. Thereafter, on 7th July, 2006, the Railways rescinded the work.