PRINCIPAL, MADRAS CHRISTIAN COLLEGE Vs. SARCAR CONSTRUCTIONS

JUDGEMENT

(1.) Challenging the Award passed by the Sole Arbitrator dated 09.02.2016 the present petition has been filed.

(2.) The petitioner invited tender for the project towards construction of Women Hostel in Madras Christian College premises. On 07.09.2008, the respondent invited tender for the project. The respondent as per tender quoted 2,69,49,279.00 which was higher than the estimate of the consultant. Thereafter, on 15.05.2005, the respondent revised the tender value to Rs.3,87,61,031.00. On 31.10.2008, the construction agreement came to be executed between the petitioner and the respondent. The tenderers were required to quote the total amount worked out on the basis of the given quantity against each item of work. The Clause 5 of the Construction Agreement mandated the claimant to execute the entire work under the supervision of the Consultant and also to his entire satisfaction. It is also stipulated that the schedule of the accepted rates, invitation to tender and General Condition of the Contract shall form part of the construction agreement. The Claimant referred various drawings, specifications and scope of work in detail and also referred to running bills submitted to the respondent. However, the fifth running bill submitted on 12.06.2009 was declined to be entertained by the respondent. The Building Committee formed by the respondent held a meeting on 15.06.2009 . The changes introduced and effected after finalization of tender were also furnished in detail along with the letter dated 17.06.2009. The Consultant analysed projected cost statement submitted by the Claimant. In pursuance of the same, the Consultant wrote a detailed letter to the petitioner on 26.06.2009 and justifying reasons for increased cost of Rs.1,18,11,752.00 from the tender cost. As the petitioner had paid only Rs.11,92,772.00 stating that the said payment is towards full and final settlement of the bills, the respondent invoked Arbitration clause. An Arbitrator was appointed at the instance of this Court.

(3.) It is the case of the respondent denying various allegations that the Claimant has fraudulently enriched itself under forged invoices by stating that it had purchased steel at higher price and subsequently failing to effectuate the price adjustment clause with regard to steel and cement. The Claimant in contravention of the Contract has billed items of work towards which it was not entitled for any payment. For instance, the cost of clearing the site and incidental cost on clearing the debris, which contravenes Clause (29) of the invitation of tender. According to the respondent, the Consultant failed to exercise due diligence in discharge of duty and there is a collusion between the Consultant and the Claimant. Hence, repudiated the claim.