RL CONSTRUCTION Vs. NORTH EAST FRONTIER RAILWAY

JUDGEMENT

(1.) Heard Mr. GN Sahewalla, learned Senior counsel assisted by Mr. M Sahewalla, learned counsel for the petitioner. Also heard Ms. B Sarma, learned CGC.

(2.) The present application is filed under Sec. 11 (6) of the Arbitration and Conciliation Act, 1996. The background fact of the present case can be summarised as follows: I.Pursuant to a tender process issued by the respondent Railways for execution of work "construction of Sub-structure over pile foundation for major bridges No. 37 (24.4 X 3 Composite Girder) at Ch.13.831 km & Construction of ROB No. 18 at Km 6.1 (Span 1X8.7 m RCC Box), including other ancillary works in between stations Bairabi and Sairang in connection with the construction of new BG Railway Line from Bairabi to Sairang (Mizoram)", on 1/3/2019 a letter of acceptance was issued by the Railways. II. Accordingly, a contract was executed into between the parties on 10/1/2020. III. Subsequently, a dispute regarding the progress of the work was raised by the respondent Railways and accordingly on 10/3/2021, a 7 days notice under Clause 20 of Standard General Condition of contract was issued asking the petitioner to commence the work/ to make good the progress work. It was further provided in the said notice that on failing to adhere to the demand on expiry of the 7 days period the contract will be rescinded and the contract work under the contract will be carried out independently without the participation of the petitioner and it was further proposed in the event of failure, the security deposit shall be forfeited. IV. On 9/3/2020, the Railways advised the petitioner to extend the contract as contract was supposed to expire on 30/4/2020 and it was further advised to submit an application with proper justification for consideration of the extension. V.Subsequently, by an order dtd. 30/4/2020, an extension for completion of the work was granted up to 31/3/2021. VI. Thereafter, by another communication dtd. 23/7/2020, the Railways instructed the petitioner to apply for work permit to the Government of Mizoram through the Office of the Railway so as to facilitate movement of the staff and labour at Mizoram from outside. Such communication reflects that in the meantime, the ongoing construction in Bairabi Sairang project has been hampered due to Covid-19 and subsequent lockdown. VII. Thereafter, by a communication dtd. 9/3/2021, the petitioner issued a communication to the respondent for foreclosure of the works due to applicability of force majeure under Clause 17 of the GCC, in view of Covid-19 pandemic and the border unrest between Assam and Mizoram and abnormal increase in materials and labour cost in connection with the work. VIII. Accordingly, a prayer was made for foreclosure of the work under Clause 17 of the GCC sympathically without risk and cost. XI. Thereafter, by a communication dtd. 1/3/2021, the Railways issued a notice under Clause 62 of the GCC to start the work. X. Subsequently, on 10/3/2021 alleging that the petitioner could not start the work within the demanded period of 7 days under the notice dtd. 1/3/2021, a notice of 48 hours in terms of Clause 62 of GCC was issued to the petitioner to commence the work. XI. Subsequently, by yet another communication dtd. 15/3/2021, the contract was rescinded in terms of Clause 62 of the GCC in view of the failure of the petitioner to resume work even after the 48 hours notice and a decision was taken by the Railways that the contract will be carried out independently without participation of the petitioner and the petitioner as an individual or a partnership firm / JV was debarred from participating in the tender process for execution of the balance work and it was further decided to forfeit the security deposit and performance guarantee. XII. Thereafter, an application under Sec. 9 of the Arbitration and Conciliation Act, 1996 was preferred by the petitioner, which was registered as Misc Arbitration Case No. 13/2021. XIII. The learned trial court granted a status quo by its order dtd. 16/3/2021 as an interim measure. XIIV. Thereafter, in terms of Clause 63 of the GCC, the petitioner raised a claim on 25/3/2021. XV. Thereafter, on 3/3/2022, the petitioner issued a notice under Sec. 21 of the Arbitration and Conciliation Act, 1996 read with Clause 64 (1)(I) of GCC to adjudicate the dispute in relation to the contract dtd. 10/1/2020. When no arbitrator was appointed, the present application was filed.

(3.) Mr. GN Sahewalla, learned Senior counsel submits that the petitioner has invoked Clause 17 of the GCC by its communication dtd. 18/2/2021. However, without giving any reply to the petitioner, the respondent authorities have issued 7 days notice. Mr. Sahewalla further submits that in reply to such notice the petitioner again requested the respondents for foreclosure of the contract. But the respondent without furnishing a proper reply to the petitioner issued a 48 hours' notice. Mr. Sahewalla contends that the respondent thereafter terminated the contract by the communication dtd. 12/3/2021 and finding no alternative, the petitioner invoked Clause 63 of the GCC with a representation dtd. 25/3/2021 along with the claim of the petitioner to the respondent authorities. It is further submitted by Mr. Sahewalla that the outer limit for making a decision by the respondent on such representation is 120 days as provided under Clause 63 of the GCC but the petitioner is yet to receive any reply. Mr. Sahewalla finally submits that the petitioner thereafter invoked Clause 64 of the GCC as the respondent failed to communicate any reply to the petitioner within 120 days. Thereafter, the petitioner preferred the present application under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an independent and impartial arbitrator to adjudicate the disputes as raised in this application.