BABA BUILDERS Vs. IRCON INTERNATIONAL LTD

JUDGEMENT

(1.) Cm. No. 45654/2018 (for exemption)

(2.) The facts as noted from the record are, a notice inviting tender for construction of 317 dwelling units for Married Accommodation Projects, Ministry of Defence at Old Cantonment (Works) was issued by the respondent IRCON International Limited (IRCON in short). The appellant was found successful for the award of the contract and accordingly LOI was issued to the appellant on 17th February, 2005. As per the contract, the period of completion of work was 18 months from the date of issue of LOI, i.e., 16th August, 2006. It is noted from the record that notice dated 24th August, 2005 was issued by IRCON to the appellant stating that the progress of the work is very slow inasmuch as instead of completing 25% of the total work, only less than 3% of the work has been executed. A show-cause notice was issued to the appellant seeking reply within 7 days as to why action under Clause 50 of the General Conditions of Contract be not initiated against the appellant. The aforesaid show-cause notice was followed by a letter dated 16th September, 2005, wherein it was recorded that no improvement was found at the site and accordingly 48 Hrs. notice was issued. Finally, on 21st September, 2005, a notice was issued "partially withdrawing works". The aforesaid action of the IRCON resulted in forfeiture of performance security as well.

(3.) It appears that in December, 2006, IRCON demanded a sum of Rs. 248.54 Lacs as risk purchase cost. On 10th February, 2007, after adjusting an amount of Rs. 47.22 Lacs, a balance of Rs. 201.3 Lacs was demanded by IRCON. That apart, time period for executing the part of the contract, which remained with the appellant was extended till 30th June, 2010. On 8th August, 2011, arbitration was invoked by the appellant who raised various claims. IRCON also raised its counter-claims. The sole Arbitrator rendered the Award on 07th March, 2004, whereby he has allowed the claims of the appellant in the following manner: