DIBYENDU BOSE Vs. SOUTH EASTERN RAILWAY

JUDGEMENT

(1.) In this application filed under Sections 14 and 15, read with Section 11 of the Arbitration and Conciliation Act, 1996, as amended by the Act No. 3 of 2016 (hereinafter referred as "the Act of 1996") the petitioner has prayed for an order terminating the mandate of the arbitrator, a retired Chief Engineer of the South Eastern Railway and appointment of a fit and proper person as the arbitrator, in place and stead of the present arbitrator.

(2.) Shortly stated, the facts leading up to this application are that the petitioner is engaged in the business of supply, erection, testing and commissioning of power supply installation and allied activities. In response to a notice inviting tender issued by the South Eastern Railway for a project envisaging supply, erection, testing and commissioning of power supply installation, modification/shifting of fitter line and conversion/modification of overhead power line into underground cable between HIJ-NYA in connection with construction of new 3rd line between Kharagpur (Hijli) to Narayangarh of Kharagpur Division (hereinafter referred to as "the said project"), the petitioner submitted its tender. The petitioner became the successful tenderer and by a letter of acceptance dated March 23, 2015 (hereinafter referred to the "said letter of acceptance") the Deputy Chief Engineer (Construction) of the South Eastern Railway Kharagpur (hereinafter referred to as the "Deputy Chief Engineer"), for and on behalf of the President of India, accepted the offer/tender of the petitioner in respect of the said project. As per the said letter of acceptance the petitioner had to submit the security deposit amounting to 5% of the contract value, that is, Rs. 14,14,639/. The earnest money deposited by the petitioner along with its offer for Rs. 2,80,000/- would be retained by the Railway as security deposit and balance amount of the security deposit of Rs. 11,34,639/- would be deducted from the petitioner's running on account bills. The said letter of acceptance further required the petitioner to furnish a performance guarantee at the rate of 5% of the contract value amounting to Rs. 14,14,639/- . The period of completion of the said project by the petitioner was stipulated within six months from the date of the said letter of acceptance. The terms and conditions under which the petitioner was to execute the said project were mentioned in the said letter of acceptance, the agreement dated August 04, 2015 as well as in "the General Conditions of Contract" issued by the respondent Railway (hereinafter referred to as "the General Conditions of Contract ").

(3.) The respondent railway, from time to time, extended the time for completion of contract till October 15, 2016. According to the petitioner, the respondent railway for its own latches extended the time for completion of the contract. The respondent railway, however, alleges that it was the petitioner who was responsible for the delay in completion of the contract and he was not in a position to complete the contract even within October 15, 2016. By a notice dated July 28, 2016 the Deputy Chief Electrical Engineer terminated the contract of the petitioner under clause 62 of the the General Conditions of Contract. By the said notice the Deputy Chief Electrical Engineer further stated that the security deposit of the petitioner shall be forfeited and the performance guarantee furnished by him shall also be encashed. As per clause 64 of the General Conditions of Contract all disputes between the parties relating to the said contract which cannot be settled under clause 63 are to be adjudicated upon by an arbitrator in arbitral proceeding under the Act of 1996.