Amended Reply to SOC - 100511

8/6/2019 Amended Reply to SOC - 100511

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BEFORE THE ARBITRAL TRIBUNAL OF

Shri K.K. Verma Presiding Arbitrator

Shri. V.D. Gautam Arbitrator

Shri. S.K. Jain Arbitrator

In the matter of Arbitration between:

M/s. MBL Infrastructures Limited : Claimant/Contractor

And

National Highways Authority of India : Employer/Respondent

In the matter of Arbitration under the provisions of Arbitration andConciliations Act 1996 in Short Term Improvement and RoutineMaintenance work for Chilakaluripet to Vijayawada (Km. 355.00 to Km.

434.150) and Vijaywada to Eluru (Km.3.400 to Km. 81.600) Section of NH-5

INDEX

S.No. DESCRIPTION PAGE No.

1 Statement of Defence of the Respondentincorporating amendments to the replies inrespect of Claim Nos. A-1, A-5, A-6, A-7 & A-8

1-

Filed by: EMPLOYER/RESPONDENT

Through

M. V. KINI & CO.Advocates & Solicitors

KINI HOUSE6/39, JANGUPRA B

NEW DELHI 110 014

Dated:

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BEFORE THE ARBITRAL TRIBUNAL OF

1. Shri K.K. Varma, : Presiding ArbitratorAdditional Director General,(CPWD),Retd. EA-290, DDA-SFS FlatsMaya Enclave, New Delhi-110064

2. Shri. V.D. Gautam : ArbitratorIDSE, Retd.B-44, Jalvayu Vihar, Pocket 4,Plot # 8, Greater Noida 201308

3. Shri. S.K. Jain : ArbitratorJain-Lok, Kothi Gate,Hapur- 245101

IN THE MATTER OF ARBITRATION BETWEEN:-

M/s. MBL Infrastructures Limited

23A, N.S. Road,3rd Floor, Room No.14,Kolkata Claimant

AND

NATIONAL HIGHWAYS AUTHORITY OF INDIA,G-5 & G-6, Sector 10,Dwarka,New Delhi. Respondent

(ARISING OUT OF AGREEMENT DATED 24TH AUGUST, 2006)

In the matter of Arbitration under the provisions of Arbitration and

Conciliation Act, 1996 in Short Term Improvement and Routine

Maintenance work for Chilakaluripet to Vijayawada (Km. 355.00 to

Km. 434.150) and Vijayawada to Eluru (Km.3.400 to Km. 81.600)

Section of NH-5

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STATEMENT OF DEFENCE OF THE RESPONDENT INCORPORATINGAMENDMENTS TO THE REPLIES IN RESPECT OF CLAIM NOS. A-1, A-5, A-6, A-7 & A-8

MOST RESPECTFULLY SHOWETH:

1. That the contents of the SOC to the extent not specifically adverted

to and replied herein shall be deemed to have been traversed in

extenso and denied by the Respondent save and except those

which are specifically admitted hereinafter.

2. That wherever applicable, the Respondent has placed copies of

correspondence/documents as annexure to the reply and reserves

its right to rely on the same and further reserves the right to file

such other correspondence/documents as may be deemed

appropriate and to make detailed submissions at an appropriate

time.

3. That the Respondent reserves its right to add, to vary, modify or

otherwise elaborate its reply, averments, contentions and

submissions and to submit further documents as may be required.

Further, the Respondent hereby reserves its right to lead oral as

well as documentary evidence as may be required in support of its

contentions.

OBJECTIONS ON THE MAINTAINABILITY & ARBITRABILITY

That the Claimant has sought to make certain alleged claims

before this Ld. Tribunal, which are either beyond the terms of the

Contract or are clearly barred by the terms of the Contract and therefore

are not maintainable or arbitrable, the details whereof are as under:

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i) Claim No. A-1 Rs. 33,74,980/- towards loss on account of delay in

issue of letter to proceed (initial expenditure between 19.05.2006

to 29.08.2006).

ii) Claim No. A-5 Rs. 18,17,803/- towards losses on account of price

rise due to delays.

iii) Claim No. A-6 Rs. 5,94,88,788/- towards loss due to prolongation

of Contract period (Claim due to overheads and establishments).

iv) Claim No. A-7 Rs. 2,07,15,978/- towards loss of profit due to

reduction on account of Contract which could not be executed.

v) Claim No. A-8 Rs, 1,00,00,000/- towards loss of Goodwill,

Reputation, mental harassment etc..

The aforesaid claims are clearly de hors the Contract and for the samereason not maintainable or arbitrable before this Ld. Tribunal. This

objection may kindly be treated to have been raised u/s 16 (2) of the

Arbitration and Conciliation Act, 1996.

PRELIMINARY OBJECTIONS:

1. That the present Contract was entered into between the Claimant

and the Respondent for the purposes of short term improvement

and routine maintenance of NH-5 from Chilakaluripet to

Vijayawada and Vijayawada to Eluru. As per the terms of the

agreement, the Claimant was required to execute the work as

mentioned in the Scope of Works. According to Clause 27.1, the

Engineer shall issue the Indents of the works in stages and the

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Claimant shall submit the program to the Engineer for its approval.

The language of the Clause 27.1 is reproduced herein below;

The Engineer shall issue the Indent of work instages specifying the time limit for the same asand when required. The Contractor shall submit tothe Engineer for approval a programme showingthe general methods, arrangements, order, andtiming for all the activities in the works, along withmonthly cash flow forecasts.

Thus from the above it will be clear that the Claimant was toexecute the works in accordance with the Indents issued to him by

the Engineer from time to time within the time prescribed for

completing the Indent. After execution of the Contract dated

24.08.2006, the Letter to proceed with the work was issued by the

Respondent to the Claimant on 29.08.2006. It is relevant to submit

that in accordance with Clause 27.1 of Part-I of GCC read with the

Implementation Manual and Maintenance Intervention Levels

(Section-6), it is clearly laid down under clause 6.3.1 that the

maintenance programme planning shall be in two stages, and it is

the primary responsibility of the Contractor to submit the first stage

program within 28 days of issuance of the letter of commencement

by the Employer. In spite of the said requirement under the

Contract, the Claimant failed to give any programme to the

Respondent within the stipulated period of 28 days.

2. On 11.09.2006 the Engineer, after the joint inspection and in

consultation of the Claimant issued the First Indent to the

Claimant, a copy of which has been furnished by the Claimant as

Document C-14 at pg.72 of the Statement of Claim. On

09.10.2006, a review meeting was held, which was represented by

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the representatives of both the parties wherein it was pointed out

to the Claimant that the scientific laboratory to carry out various

tests had still not been established by the Claimant even though

under Clause 53(i) read with Clause 15 (a) of the Contract, the

Claimant was bound to establish a fully equipped laboratory within

a period of thirty days. Thereafter, again in a Review meeting on

09.11.2006, it was pointed out that the Claimant had again failed to

establish the laboratory. In the said meeting it was brought to the

notice of the Claimant the poor rate of execution of the work, in as

much as the Claimant had achieved only 5% against the required

67%. Copies of the minutes of the review meetings dated

09.10.2006 and 09.11.2006 are annexed hereto and marked as

Exhibit- R-1 & R-2, which will show that the Claimant initiated the

breach of the Contract right from its inception.

3. That as a matter of fact the Claimant had failed to provide even the

vehicles for routine maintenance and site management till as late

as 18.09.2006 Exhibit R-33. The claim of the Claimant that they

had mobilized the heavy machinery and other staff and labour for

commencement right from the beginning of June 2006 is totally

bereft of any truth in as much as the Claimant has miserably failed

to place any document in support thereof. Contrary to this, the

Claimant on his own admission had taken on lease an area of land

measuring 3.84 acres only on 19.01.2007 whereas the work under

the Contract had commenced on 12.09.2006 and the Contract

period was to end on 11.09.2007. The copy of Claimants letter dt.

05.02.2007 is appended hereto and marked as Exhibit R-41. As

per conditions of the Agreement, after signing of the same,

Claimant has to mobilize required machinery. As it transpired, the

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Claimant failed to do so in spite of a number of notices by the

Engineer. Copies of some of the MOMs and notices are appended

hereto and marked as Exhibit -R-1 to R-6 as well as R-34 & R-35.

4. That as already submitted no equipment/machinery whatsoever

was available at site even after signing of the Contract to attend

even ordinary / routine maintenance. The failure of the Claimant in

this regard and on various other issues was brought to the

Claimants notice by the Consultant from time to time through his

letters dated 07.11.2006, 16.11.2006, 04.12.2006 and 18.12.2006,

copies whereof are appended hereto and marked as Exhibit R

-36 to R- 39.

5. That That on 22.11.2006 the Engineer placed the Second Indent

on the Claimant. It is pertinent to submit that the Claimant, in gross

violation of the requirement under Clause 6.7.3 of the Contract,

failed to install the Hot Mix plant despite notice in this behalf during

the review meeting on 14.10.2006, a copy of whose minutes is

appended hereto as Exhibit R-3. The Engineer again in letter

dated 8.11.2006 to the Claimant emphasized the need and the

urgent requirement of the Hot Mix plant at the site. A copy of the

letter dt. 08.11.2006 is annexed hereto and marked as Exhibit R-

4. Thereafter, again during the review meetings held on.

29.11.2006 and 09.12.2006, the Respondent expressed concern

over the non execution of the balance work in the First Indent. A

bare perusal of the minutes of said meeting would reveal that the

Claimant was unable even to start the work in terms of the

provisions of the agreement. Copies of the minutes of the review

meetings dt. 29.11.2006 and 09.12.2006 are annexed hereto andmarked as Exhibit- R-5 & R-6.

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6. That it is submitted that the Claimant had continued with his

lackadaisical approach in executing the work and submitted only a

draft of the work program, that too belatedly after a delay of 70

days on 22.11.2006. Since the work program was only in the form

of draft, the Engineer made certain remarks vide letter dated 4th

December, 2006 annexed hereto as Exhibit R-7 and gave a

further reminder on 20th December, 2006, annexed hereto as

Exhibit R-8 regarding yearly maintenance program. Thereafter,

the Claimant resubmitted a back-dated work program on

11.12.2006 and the same was received by the Engineer only on

30th December, 2006 (at the end of the first quarter). The Engineer

in his letter dt. 06.01.2007 (Document C-34 of the Statement Of

Claim), pointed out to the Claimant his non- compliance of

submission of Work Programme to the Engineer for approval as

per the Contract. In the said letter, the Engineer further pointed out

to the Claimant about his non-compliance with the requirement of

Work Manual under Clause 6.3.1(b)-(iii) under section 6 of the

Contract, which is extracted herein below;

A comprehensive documentation shall be prepared

separately by Engineer and Contractor mentioning their

assessment of various types of defects in each km of road.

As per the above clause, the Claimant is required to prepare a

comprehensive document mentioning the assessment of various

types of defects in each KM of road, which was again not complied

with by the Claimant.

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7. That right from the date of commencement of work, the Claimant

exhibited lethargy in executing the work, despite repeated notices

and reminders of the Engineer/ Respondent on numerous

occasions. Respondent vide its letter dt. 04.12.2006 (Document C-

36 in the Statement Of Claim) requested the Claimant to expedite

the work mentioned therein. Again vide letter dt. 18.12.2006

(Exhibit R-9) the Respondent pointed out to the Claimant that

despite repeated reminders through various letters and

discussions in the monthly review meetings, the Claimant had

failed to even complete the balance work under Indent No. 1 and

the value of the works executed by the Claimant was a dismal

9.79% against the required 87.91% as per the approved Work

Indent No. I/2006. In the said letter, the Respondent also listed the

failures of the Claimant in brief in executing various works. The

Respondent also sought the explanation from the Claimant as to

why LD should not be levied.

8. That though the Claimant sought to furnish reasons for their

various failures in a letter dt. 22.12.2006, the same were absolutely

imaginary and unconvincing lame excuses. The delay and

dithering in the execution of the work led to numerous complaints

from the Public regarding the deteriorating condition of the road

owing to lack of maintenance and repairs. The Respondent

through its letters from time to time had consistently apprised the

Claimant regarding the complaints and emphasized the need for

speed and expedition in the execution of the Work in a timely

manner. However, the said requests and entreaties fell on deaf

ears in as much as there was no discernible improvement in the

work performance of the Claimant. Copies of some of the

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complaints received from the Public are annexed hereto and

marked as Exhibit R-10.

9. The gross negligence on the part of the Claimant will be eloquent

from the fact that the lawn in a traffic island around the Rotary at

Km. 3.460 on Visakhapatnam side caught fire in the month of

January 2007 despite the responsibility of the Claimant under the

Contract to conserve all trees, shrubs and similar plantation within

the right of the way as per provisions of clause 4.2.1. As if this was

not enough, the Claimant even failed to redevelop the lawn till

19.04.2007, which fact was brought to the notice of the Claimant in

a review meeting held on 19.04.2007. A copy of the minutes of the

review meeting dt. 19.04.2007 is annexed hereto and marked as

Exhibit R-11. The said incident of fire is a pointer to the gross

neglect on the part of the Claimant in watering, manuring, trimming

of the said area as per Contract in as much as the dry plantation

became susceptible to fire. The callous attitude of the Claimant

would be evident from the fact that instead of taking remedial steps

as requested by the Respondent time and again through number

of letters and reminders, the Claimant sought to disown their

responsibility and resort to Arbitration proceedings.

10. In the review meeting held on 09.01.2007 Exhibit R-12 the

Respondent informed the Claimant about non-compliance of

various provisions of the Contract Viz., deployment of qualified

nursing staff, deployment of Ambulances, removal of hoardings,

submission of Monthly progress reports etc. Not only did the

Claimant fail to comply with the provisions of the Contract, but also

miserably failed to fulfill the undertakings given by them in the

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review meetings from time to time such as establishment of

laboratory, providing of mobile maintenance unit etc.

11. That as per the provisions of the Contract, the Claimant was

required to establish the fully operational laboratory within a period

of 30 days. However, till the date of termination of the Contract, the

Claimant failed to establish the site laboratory. Copies of various

letters on this subject from the Respondent to the Claimant are

annexed hereto and marked as Exhibit -R- 13 & R-14.

12. The Claimant was extremely lackadaisical in its approach in

executing the work. On 08.02.2007 a management meeting was

held in the office of the Project Director. In the said meeting the

Claimant was informed that the overall progress of the work was

only 1.88% against the targeted 35% until 31.01.2007. A bare

perusal of the various Minutes of the review Meetings will reveal

that the Claimant had even failed to complete the First Indent in

spite of the assurance that the same will be completed by

20.03.2007. Apart from the non-completion of the First Indent, the

Claimant did not even commence the work against Indent No.3,

the due date of which was 28.02.2007. A copy of the minutes of

the meeting dated 08.02.2007 is annexed hereto and marked as

Exhibit R-15. Again during the review meeting held on 9.03.2007Exhibit R-16 it was observed by the Respondent that the Claimant

was still to start execution of work under Indent No. 3, the due date

in respect of which had already expired on 28.02.2007.

Furthermore, despite several letters from the Respondent, the

Ambulance services were operated without the qualified staff.

From the above it will be evident that there was overall and

comprehensive failure on the part of the Claimant in executing any

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work as per the terms of the Contract and the untenable claims

raised in the Statement of Claim are totally false and frivolous.

13. That despite repeated promises to execute the work in terms of the

Contract given during the various review meetings and in response

to the numerous letters from the Respondent, the Claimant

brazenly breached all such promises and undertakings, thus

leaving no options to the Respondent except to levy Liquidated

Damages on the Claimant as per terms of the Contract and

accordingly, by a letter dt.24th May 2007 (Exhibit R-17) the

Respondent conveyed the same to the Claimant. Thereafter, in the

month of June when the monsoon was already active, the

Claimant brought Hot Mix plant and Milling machinery to the site.

Notwithstanding this, the progress of work still remained dismal.

14. That a meeting was held on 29.08.2007 at NHAI Headquarters. In

the said meeting the Claimant proposed non execution of certain

BOQ items in view of a proposal for 6-laninig of the whole stretch

of road between Chilakaluripet to Gundugolanu. The Claimant

further requested the Respondent to reduce the value of the work

under the contract. The Claimant further made a request not to

recover Liquidated Damages in the future bills citing cash-flow

problems and further undertook to furnish an unconditional BankGuarantee in lieu of Liquidated Damages until finalization of

Extension of Time as well as the quantum of Liquidated Damages

to be decided by the Respondent. However, no decisions were

taken in respect of the Claimants proposals in the said meeting

and no promise was held out to the Claimant regarding any

reduction in the value of works or items except the subject of the

bank guarantees to be provided by the Claimant and extension of

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BGs already provided. A copy of the Minutes of the Meeting dated

29.08.2007, which is self explanatory is appended hereto and

marked as Exhibit R-18.

15. That the Respondents site inspection in the month of September

revealed that the progress of work achieved by the Claimant till

then was a dismal 12.69% vis--vis the requirement of 100% as on

11.09.2007. The Claimant, in a bid to cover up his failures/

lapses unilaterally decided not to execute certain BOQ items on

the excuse that the whole stretch of road between Chilakaluripet to

Gundugolanu was proposed for six laning. It is a matter of record

that no instructions whatsoever were issued by the Respondent or

the Engineer to stop or suspend any work at any point of time.

Having failed to achieve the required progress in the work as

scheduled, the Claimant submitted a revised work programme

through a letter dated 10.09.2007 unilaterally indicating a reduction

in the scope of work under the Contract to Rs.19,60,38,117/-. As

per Clause 36.1 of Contract, the Engineer shall, having regard to

the scope of the Works and the sanctioned estimated cost, have

power to order only after approval from NHAI / as per NHAI

guidelines, in writing, Variations within the scope of the Works he

considers necessary or advisable during the progress of the

works. The above revised work programme, was not approved by

the Headquarters of the Respondent who returned the same with

the remark that the same shall have to be submitted as per Clause

36.1 of Contract as a variation proposal. Hence, the revised work

programme submitted by the Claimant is of no relevance

contractually and the value of the work to be executed under the

Contract remained as Rs.31,44,10,140.65/- only.

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progress, bringing the case squarely within the provisions of

Clause 53.2(h) of the General Condition of Contract, there by

amounting to fundamental breach of Contract under Clause 53.2.

Clauses 53.2 and Clause 53.2(h) are reproduced herein below.

53.2: Fundamental breaches of Contract include,but shall not be limited to, the following:

53.2 (h): If the contractor has not completedatleast 30% of the value of work required to

be completed after half of the completionperiod has elapsed

19. That it is germane to state that the Engineer gave a notice vide

letter dated 07.02.2007 wherein the Engineer had recorded that

the Contractor had failed to perform the Contract as per Clause

No.53.2(h) and 15(c) of Contract Data of General Conditions of

Contract which amounted to fundamental breach of the Contract

as per Clause No.53.2(i) of General Conditions of the Contract and

demanded an explanation to show cause as to why the Contract

cannot be terminated for his default. A copy of the notice dated

07.02.2007 is enclosed as Exhibit-R-54

20. That in view of the fundamental breach of Contract committed by

the Claimant the Respondent was within its rights under the

Contract to terminate the same under Clause 53. In the present

case, the Claimant failed to complete even 30% of the total value

of work even after grant of EOT up to 31.12.2007. Furthermore,

the Claimant completely failed to setup a field laboratory with

prescribed instruments in accordance with Clause 53.1 of the

General Condition of Contract read along with Item 15 (a) of the

Contract Data. In view of the said circumstances, the Respondent

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future interest and the cost of arbitration proceedings and such

relevant costs as may be deemed fit by this Ld. Tribunal.

PARA WISE REPLY ON MERITS

1.4 That the contents of Para 1-4 of the Statement of Claim are

matters of record and need no reply.

5. That the contents of Para 5 of the Statement of Claim, only to the

extent that the Claimant had furnished performance security in theform of bank guarantee within 10 days, are matters of record. It is

pertinent to submit here that the said performance securities

furnished by the Claimant are meant to be kept valid till the end of

the defect liability period and/or till conclusion of any arbitral

proceedings, if applicable as per provisions of clause 25.3 (e) of

the Contract. As it transpired, the Claimant has allowed the said

performance securities given by way of Bank Guarantees to lapse

and has failed and neglected to renew the same beyond the defect

liability period stipulated in the Contract, on account of which the

Respondent has already moved an application u/s 17 of the

Arbitration and Conciliation Act, 1996 before this Ld. Tribunal for

appropriate reliefs as prayed therein.

6. That the contents of Para 6 of the Statement of Claim are disputed

and denied. It is specifically denied that there was any

unreasonable delay in the issue of the letter of acceptance as

contended or at all. The tender conditions under ITB nowhere

stipulate any time limit for issue of letter of acceptance. The

contentions that the road was badly maintained by the Respondent

in the mean time is also totally unsubstantiated and false in as

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much as the claimant even at the time of taking over the road after

the contract was finalized never recorded anything in writing with

respect to the alleged bad quality of the road which is being raked

up now solely with the intention to make illegal gains. It is pertinent

to submit that the complaints were received by the Respondent

regarding road condition from the road users only after arrival of

the Claimant at site on 03.10.2006. Copies of the documents are

appended hereto and marked as Exhibit R-10.

7. That the contents of Para 7 of the Statement of Claim are matter of

record and needs no reply.

8. That the contents of Para 8 of the Statement of Claim are

irrelevant and immaterial and therefore disputed and denied. The

allegations contained herein are totally unsubstantiated in as much

as the Claimant has not placed on record any document to show

that this issue was ever raised by the Claimant at the relevant point

of time. It is further submitted that signing the formal Contract was

not a mere ritual as contended by the Claimant in as much as

before signing of any such contract, it is customary for the

Respondent to seek the confirmation from the bankers who have

provided the bank guarantees towards performance securities to

ascertain the veracity of the bank guarantees provided by the

contractors. Only after satisfying itself with regard to the

genuineness of such securities, the contract is signed by the

Respondent with the concerned contractors. This step was also

followed in the instant case and only after receipt of such

confirmation from the claimants bankers the present contract was

signed between the parties. The details of other contractsexecuted by the Claimant and referred to are of relevance to

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establish any standard for the time limit for execution of the

contract reckoned from the date of the letter of acceptance. It may

be added here that the said contracts referred to by the Claimant

were entered into for the purpose of maintenance wherein the

earlier contracts given to other contracts had already expired and

therefore there was urgency and priority for executing the further

contracts immediately after expiry of the earlier contracts. The

stretch under this Contract was all along being maintained by the

Respondent departmentally/ piecemeal contracts and as such

there was no urgency and priority to finalize the instant Contract. It

is also a pertinent to submit that as per terms of the ITB, the bids

invited for the subject work or to be kept valid for a period of 90

days from the date of submission as per Para 15 of the Tender

Conditions and for any further extentions of validity beyond the

said period, the same was solely at the discretion of the bidder and

it is a matter of record that the Claimant willingly extended the

validity of his bid for a period of more than 3 months.

9 & 10 That the contents of Para 9 of the Statement of Claim are

denied and disputed. As a matter of fact the Claimant had failed to

provide even the vehicles for routine maintenance and site

management till as late as 18.09.2006 Exhibit R-33. The claim of

the Claimant that they had mobilized the heavy machinery and

other staff and labour for commencement right from the beginning

of June 2006 is totally bereft of any truth in as much as the

Claimant has miserably failed to place any document in support

thereof. Contrary to this, the Claimant on his own admission had

taken on lease an area of land measuring 3.84 acres only on

19.01.2007 whereas the work under the Contract had commencedon 12.09.2006 and the Contract period was to end on 11.09.2007.

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The copy of Claimants letter dt. 05.02.2007 is appended hereto

and marked as Exhibit R-41. As per conditions of the Agreement,

after signing of the same, Claimant has to mobilize required

machinery. As it transpired, the Claimant failed to do so in spite of

a number of notices by the Engineer. Copies of some of the

MOMs and notices are appended hereto and marked as Exhibit

-R-1 to R-6 as well as R-34 & R-35.

11-12. That the contents of Para 11&12 of the Statement of Claim are

disputed and denied as false and concocted. It is a matter of

record that the Claimant addressed the letter dated 2006. It is also

a matter of record that the Contract was executed between the

parties on 24.08.2006 and the letter to proceed with a work was

also issued on the same date. With regard to the empty claims of

the Claimant that they had provisioned the machinery and

equipment for executing the work even prior to the date of the

Contract, the same claims are totally divide up any proof

whatsoever regardless of the fact that even if the same were true,

the Claimant can not hold the Respondent responsible for any

action or inaction prior to the date of the Contract. As already

submitted no equipment/machinery whatsoever was available at

site even after signing of the Contract to attend even ordinary /

routine maintenance. The failure of the Claimant in this regard and

on various other issues was brought to the Claimants notice by the

Consultant from time to time through his letters dated 07.11.2006,

16.11.2006, 04.12.2006 and 18.12.2006, copies whereof are

appended hereto and marked as Exhibit R -36 to R- 39.

13. The content of Para 13 of the Statement of Claim only to the extentthey are part of the record are admitted, rest of the contentions

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which are surmises of the Claimant are disputed and denied. It is

further submitted that the Respondent is not answerable to any

actions taken by the Claimant prior to the execution of the

Contract.

14. With respect to Para 14 of the Statement of Claim it is submitted

that the actual monsoon Seasons in the area of works starts from

June to September and dry season will start from the October. In

as much as the Contract was signed on 28.08.2006, the monsoon

was already coming to an end by that date and the dry season was

to start by October. It is also a matter of record that the first indent

of items to be completed by Claimant related to simple

maintenance of the stretch and had no nexus or connection with a

monsoon and therefore, it is denied that the Claimant could not

commence the works due to the Monsoon season. Moreover the

actual rainfall data as obtained from the Meteorological

Department would substantiate the fact that most of the month of

September 2006 was without rainfall and there was ample scope

for the Claimant to carry out the work. The copy of rainfall data as

obtained from Meteorological Department is annexed as Exhibit

R-40. The Exhibits of Claimant i.e., C10 & C11 are matters of

record and have no nexus or connection with the allegations

contained therein.

15. With respect to Para 15 of the Statement of Claim it is submitted

that as per the agreement entered into between the parties, Clause

27.1 of Part-I of GCC and Section-6 implementation manual and

maintenance intervention levels under clause 6.3.1, the

maintenance program planning shall be in two stages, where it isvery clearly specified and it is the primary responsibility of the

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Contractor to submit the first stage program within 28 days of

issuance of the letter of commencement by the Respondent.

However, the Claimant admittedly failed to provide any program to

the Respondent, therefore, any plea of the Claimant disputing the

program is mischievous and mala fide.

Further it is submitted that the first indent was finalized by the

Engineer after a joint inspection of the site by the contractor and

consultant. After the joint inspection the Engineer had even

requested the contractor for his comments and suggestions as

substantiated by the copy of the Engineer letter dt. 15.09.2006

appended hereto as Exhibit R-42

16. That the contents of Para 16 of the Statement of Claim are totally

devoid of any substance and hence disputed and denied.

17-18. That with respect to the contents of Paras 17 & 18, the

same are disputed and denied for the reasons that they have no

nexus or connection with the work undertaken by the Claimant

under the Contract. In as much as the actions on the part of the

Respondent referred to in the said paragraphs are concerned, they

were no way connected with the work performance under the

Contract and the Respondent was totally at liberty to take whatever

action with respect under the Contract beyond the Contract period

and for the same reasons the contents thereof deserve to be

dismissed summarily.


disputed and denied. Further, it is submitted that the Respondent

has already explained the failure of the Claimant and the othercommissions and omissions on the part of the Claimant in the

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Preliminary Submissions, which are not repeated here for the sake

of brevity. As it transpired, the Claimant himself submitted the

revised the work programme and requested for deletion of certain

works from the Claimants scope on the plea that the same are not

required due to the proposed 6-lanning of the stretch. The said

request of the Claimant was forwarded by the Engineer to the

Project Director of the Respondent, who in turn had forwarded the

same to NHAI Headquarters, New Delhi for necessary approval as

laid down in the Contract under Clause 36.1 of the Contract. In

furtherance of the said request vide Exhibit R-48, the Claimant

held out an undertaking that he will complete the balance work as

per his revised work programme for a value of Rs.19,43,90,225.2

by 31.12.2007, which was forwarded by the then Project Director

to NHAI Headquarters. As it transpired, the Claimant miserably

failed to execute the work even to the promised reduced value as

undertaken by them. Even otherwise, the said proposal of the

Claimant (referred Exhibit R-48) was rejected by NHAI

headquarters which clearly pointed out that any variations to the

work under the Contract can be considered only after completion

of the work under the Contract as enjoined therein and there was

no scope to accede to the request of the Claimant. As such

request for reduction of the Contract value to Rs. 19,43,90,225.2

did not have the approval of NHAI as enjoined by Clause 36.1

referred to above and the Engineer did not have any authority

whatsoever to approve the same and the Claimants reliance

thereon is contractually invalid.


baseless and preposterous and therefore strongly disputed anddenied. It is submitted at the cost of prolixity that the stand of the

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NHAI headquarters had been consistent right from the beginning

that in the scheme of the Contract and under the circumstances at

that point of time, there was no question of accepting any revised

work programme from the Claimant as sought to be made out by

the Claimant. It was emphasized by the NHAI headquarters that

the Claimant was bound to complete the work under the different

indents and upon completion thereof, make a request to the

Engineer/Respondent for extension of time, which may be granted

with or without levy of Liquidated Damages as the case may be. In

view of the aforesaid consistent stand of the Respondent, there

was no need for submission of any revised work programme by the

Claimant or its approval by the Respondent. Thus the alleged

delay complained of by the Claimant on the part of the Respondent

is without any basis whatsoever. Respondent reserves its rights to

make further detailed submissions at an appropriate time in

rebuttal of the contents of Para 20.

It is further submitted that the Claimants letter dt. ______(Exhibit

C-58) that the work could be completed only to the extent stated

therein itself is an admission on their part to the Claimants

inefficiency to perform the work in accordance with the terms of the

Contract, their bald denials notwithstanding. In as much as the said

failure of the Claimant qualified for termination of the Contract by

the Respondent, the Respondent was constrained to do so vide its

letter dt. 31.12.2007 (Exhibit R-32). The inefficiency of the

Claimant is compounded by the fact that all the activities stated in

the Claimants letter Dt. 22.12.2007 (Exhibit C-58) are very simple

and minor maintenance works which can be done by even a petty

contractor through simple planning. The very fact the Claimant was

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unable to do so deservedly called for termination of their services

which was done by the Respondent.


disputed and denied. As already stated, the failure on the part of

the Claimant to execute the work in accordance of the terms of the

Contract amounted to Fundamental Breach of the terms thereof

and therefore the respondent rightly terminated the Contract on

31.12.2007. As admitted by the Claimant in C-60, the only dispute

which remained to be settled between the Claimant and the

Respondent as on 29.12.2007 was limited to adjustment of

payment for variations in the actual percentage of bitumen in terms

of Clause 507.9 & 509.9 of MORT & H specifications. This

tantamounts to show that the claims as made by the Claimant

under the SOC under reply are false, concocted and imaginary.

The said claims, though are admissible as per terms of the

contract have been kept in abeyance in as much as the Claimant

invoked arbitration even before settlement of the same.

22. That the contents of Para 22 of the statement of claim are admitted

only to the extent they are matters of record and anything which is

not part of the record is disputed and denied. It is a matter of

record that the Claimant failed to submit any inventory of items

executed by them or any as built drawings as mandated by

clause 52.1 of the Contract pursuant to termination of the Contract.

In the absence thereof, the Engineer was constrained to measure

the work and determine the inventory and made recoveries from

the claimants dues accordingly, which are final and binding on the

Claimant. With regard to the contentions of the Claimant that thetermination notice dated 31.12.2007 is illegal, null and void, it is

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submitted that under Clause 53 which has been quoted by the

Claimant, the Employer is within his rights to terminate the

Contract if the Contractor causes a Fundamental Breach of the

Contract. The contents of notice dated 11.12.2007 (Exhibit R-55)

from the Engineer to the Claimant is explicit enough to forewarn

the Claimant that if the Claimant claimed to complete the work by

31.12.2007, the same will invite the consequences under Clause

53 of the Contract, which dealt with the conditions under which the

Contract can be terminated. Not only the Claimant failed to

complete the work as stipulated but also failed to take any

cognizance of the said warning and even failed to address the said

subject in any of his letters subsequent thereto. The termination of

the Contract was accordingly resorted to by the Respondent and it

is also a matter of record that the Claimant did not seek to

challenge the said action before the Engineer at any point of time

thereafter. The failure of the Claimant to raise any dispute in

respect thereof shall tantamount to a waiver and the Claimant is

estopped from raising any incostinent dispute pertaining thereto

before this Ld. Tribunal.

23-25. That the contents of Para 23-25 of the statement of claim

save and except those which are already matters of record are

disputed and denied. The Engineers notice dated 11.12.2007

(Exhibit R-55) was itself a prior warning to the Claimant of the

impending termination. The Claimant was also given an

opportunity by the said notice to improve his performance, which

he failed to do. The Contract does not make any stipulations as to

the timing of the termination and therefore the Contractors

contention to the contrary are de hors the Contract and

inadmissible. As already stated if the Claimant wanted to challenge

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the said termination, the Claimant had all the opportunities to raise

the said objections before the Engineer soon after the termination

which the Claimant failed to do. It is the scheme of the Contract

under Clause 53 that the Contract can be terminated for

Fundamental Breaches on the part of the Claimant, which subject

matter, by virtue of the language of the said Clause is entirely

within the domain of the Engineer and it is a matter of record that

the Claimant did not care to raise any dispute in respect thereof

before the Engineer at the relevant point of time. In as much as a

dispute, duly raised under the Contract is amenable for arbitration

under the terms of Clause 25.3 of the Contract, the present alleged

dispute sought to be raised by the Claimant is clearly not

maintainable. As already stated the said failure to raise a dispute in

respect thereof amounts to a waiver and the Claimant is estopped

from raising any dispute with respect thereto. It is a matter of

record that by a letter dated 03.03.2008 (Exhibit C-67) after a

lapse of 2 months, the Claimant elected to call the said termination

in question address to the Project Director of the Respondent

whereas in accordance with the Contract, it ought to have been

addressed to the Engineer. The said letter even otherwise can not

be taken cognizance of in as much as the same was not signed by

an authorized signatory as enjoined by the Contract.


disputed and denied. After termination of the Contract, the

Claimant submitted the bill on 13.02.2008 to Engineer and the

Engineer, in turn submitted the same to Respondent on

29.02.2008 Exhibit R-51. However, even while the said bill was

under scrutiny, the Claimant initiated proceedings under section 9of the arbitration and Conciliation Act, 1996 before the Honble

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High court of Calcutta and despite the orders for maintaining status

quo given by the Honble Court, illegally allowed the Bank

Guarantees provided by way of Performance Security to lapse. In

view of the said directions of the court to maintain status Quo, the

said bills of the Claimant were not processed. It is a matter of

record that subsequent thereto, the present Ld. Tribunal was also

constituted on 06.06.2008 pursuant to invocation of arbitration by

the Claimant. In view thereof, the allegations of the Claimant to the

effect that the Respondent has acted unfairly, unreasonably and

illegally do not hold water.

27. In view of the above explained facts, the claims raised by the

Claimant are not eligible and reasons are placed also in further

paras.

Claim No.A-1 :

Claim No. Description Amountclaimed

(Rs.)

Claim No.A-1

a) Loss on account of delay in issue ofletter to proceed (Initial expenditurebetween 19.05.2006 to 29.08.2006)

2650158.00

b) Additional Bank Guarantee Charge

due to delay

460847.00

c) Differential interest on Margin Moneyof BG

263975.00

Total 3374980.00

1. That the averments of the Claimant, being in a narrative form, are

not capable of any para-wise replies. It is therefore submitted that

the contents whereof, save and except those which are already

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matters of record, may be deemed to have been traversed in

extenso and rebutted by the Respondent.

2. That the above alleged claim, by the Claimants own showing,

pertains to certain alleged losses purported to have been incurred

by the Claimant during a period prior to the execution of the

Contract. In as much as the Contract was executed on 24.08.2006,

any claim which is prior to the said date is de hors the Contract

and for the same reason is not maintainable before this Ld.

Tribunal.

3. That the present untenable claim has been built-up purportedly on

account of costs and expenses incurred on account of (i) idle plant

& machinery, (ii) idle manpower, (iii) extra charges for bank

guarantees due to delay and (iv) extra differential interest on

margin money for issuance of bank guarantees, totally devoid of

any contemporary documents in support thereof and is entirely

based on the Claimants bald claim that in expectation of the Letter

to Proceed, beginning from June 2006, the Claimant had mobilized

all the plant, machinery and manpower at the site and owing to the

delay on the part of the Respondent to issue the Letter to Proceed,

they had to be demobilized and redeployed at considerable costs

and expenses, which are being claimed.

4. That the very fact that such a claim has been set up totally in the

absence of any contemporary correspondences, log books, way

leaves and permits issued by concerned Govt. authorities for

movement of such heavy machinery, payment receipts etc., in

support thereof, militates against its veracity and credibility of thealleged claim. Since the onus of proving the claim is squarely on

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the Claimant, the Claimant has failed to discharge the said

onerous obligation.

5. The agreement provisions are as under :

(i) Clause 15.2 In exceptional circumstances, prior to expiry of the

original time limit, the Employer may request that the bidders may

extend the period of validity for a specified additional period. The

request and the bidders responses shall be made in writing or by

cable. A bidder may refuse the request without forfeiting his bid

security. A bidder agreeing to the request will not be required or

permitted to modify his bid, but will be required to extend the

validity of his bid security for a period of the extension and in

compliance with Clause 16 in all respects.

(ii) Clause 31.1 : Notwithstanding Clause 30, the Employer reserves

the right to accept or reject any Bid, and to cancel the bidding

process and reject all bids, at any time prior to the award of

Contract, without thereby incurring any liability to the affected

Bidder or bidders or any obligation to inform the affected Bidder or

bidders of the grounds for the Employers action.

(iii) Unless and until a formal Agreement is prepared and executed this

Bid, together with your written acceptance thereof, shall constitute a

binding contract between us (Item No.4 of P-80 of Agreement).

6. That the partial reliance placed by the Claimant on Clause 32 of

the ITB in general and Sub- Clause 32.2 in particular is misplaced

in as the said provision imposes a further condition for effective

implementation of work under the Contract. To be more explicit,

the said sub- Clause reads as The notification of award will

constitute the formation of the Contract, subject only to the

furnishing of a performance security in accordance with the

provisions of Clause 33. Clause 33 referred in Sub-Clause32.2

enjoins the successful bidder to provide the performance security

within 10 (Ten) days after receipt of the Letter of Acceptance.

Whether the Claimant complied with the said requirement or not

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will be elucidated by the chronology of events as detailed

hereinafter:

(i) Bid was submitted by Contractor in the name of

Maheshwari Brothers Ltd on 24.12.2005 Refer pages

80 & 81 of Contract.

(ii) Maheshwari Brothers Ltd offered a rebate of 1.7% during

evaluation of bid on 03.05.2006 Refer page 105 of the

Contract.

(iii) Letter of Acceptance was issued by NHAI in the name of

Maheshwari Brothers Ltd on 19.05.2006 Refer page 05

of the Contract.

(iv) Under para-33, sub-para 33.1 of the ITB, the successful

bidder is required to furnish Performance Security within

10 days after receipt of the LOA. Refer page 18, para

33 of ITB.

(v) Performance Security in the form of Bank Guarantee was

provided by the Contractor on 27.05.2006 in the name of

Maheshwari Brothers Ltd and confirmed by the bank by

letter dated 06.06.2006 and received by NHAI on

12.06.2006 Refer page 116 of the Contract.

(vi) As per internal correspondence in NHAI Headquarters

the Competent Authority discussed for the above subject

work and it was decided to keep the file pending till

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obtaining legal opinion in respect of the work of

Barwadda-Panagarh Section of NH-2 Package-II.

(vii) On the request of the Claimant, the issue, whether in the

light of the change in the name of the bidder i.e.,

Maheshwari Brothers Ltd to MBL Infrastructures Ltd, it

would be appropriate for the Respondent to enter into

Agreement with MBL Infrastructures Ltd was referred for

legal opinion by the Respondent vide letter dated

30.06.2006 Ref Exhibit- R-67.

(viii) Legal Opinion was received from M.V.Kini & Co.,

Advocates, vide letter dated 25.07.2006 Ref Exhibit-R-

68.

(ix) After receival of legal opinion, the file was put up for

signing of the Contract Agreement with M/s. Maheswari

Brothers Ltd., on 26.07.2006 by the concerned Manager

in Headquarters. The same was discussed by the then

Chairman on 31.07.2006, it has been desired by the

Chairman that the file be submitted to his successor. The

new Chairman has discussed and approved to sign the

Contract on 17.08.2006.

(x) By a letter dated 07.08.2006, Contractor formally

informed NHAI regarding the change of name of the

company with relevant documents from the ROC.- Refer

pages 120, 121 & 122 of the Contract.

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(xi) On 19.08.2006 Bank issued amendment to the BG dated

27.05.2006 in the name of MBL Refer page 112 of the

Contract.

(xii) On 22.08.2006 the Bank confirmed the Amended Bank

Guarantee Refer page 118 of the contract.

(xiii) On 23.08.2006, Contractor wrote in continuation of earlier

letters dated 07.08.2006 and 21.08.2006 enclosing

copies of MOA & AOA of MBL and Maheshwari Brothers

Ltd Refer page 124 of the Contract.

(xiv) Contract was signed on 24.08.2006 Refer page 03 of

Contract.

7. That the Claimants averments about massive mobilization are

hollow and without substance. Contract stipulates mobile

maintenance unit and minimum equipment to be deployed at site-

Refer pages 73 and 74 of the Contract. It is also relevant to refer to

the Claimants admission regarding its inability to mobilize heavy

equipment in Exhibit C-23 at page 116. It is a matter of record that

even the field laboratory, setting up of which was mandatory,

immediately after execution of Contract could not be set up by the

Claimant in time. Even otherwise, the work under the First Indent

did not call for mobilization of manpower, plant & equipment etc. to

the extent claimed by the Claimant. Refer page 68 of the Contract

and the First Indent (Exhibit R-70) placed on the Claimant.

8. That it is therefore submitted that there was no delay on the part ofthe Respondent to sign the Contract once the performance

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security, in accordance with Clause-33 of the ITB was provided by

the Claimant and the reasons for signing the Contract on

24.08.2006 vis--vis the Letter of Acceptance dated 19.05.2006

was solely attributable to the Claimant. The alleged claim therefore

merits summary dismissal.

Claim No.A-2 (a, b, c & c1) for Rs.4,17,37,012/- :

Description Amount (Rs.)

(a) Work done accepted, certified but notpaid

(i) IPC-8 16307725.00

(ii) IPC-9 15854841.00

(iii) Work done but not certified 4924020.00

(b) Wrongful deductions for alleged non

compliances

3392964.00

(c) Amount deducted for non acceptable

recoveries

1257462.00

Total = 41737012.00

The analysis of the deductions made by the Engineer is correct

and the reasons for the said deductions are as under:

a) BOQ Item No.2.1 Recovered Amount Rs.9,37,832.64/- :

b) BOQ Item No.4.2 Recovered Amount Rs.15,40,794/- :

c) BOQ Item No.4.3 Recovered Amount Rs.9,14,337/- :

Other recoveries amount Rs.12,27,462/-

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The Engineer had brought to the Claimants Notice to the said

deductions as and when the same was effected from the monthly

statements/IPCs it happens regarding various non-conformance

and recoveries were made accordingly. The recovery towards non-

conformance for BOQ Items 2.1, 4.2 & 4.3 were made as per the

Scope of Work, the documentary proof whereof have been

furnished in Exhibit-R20 to R31. The recovery calculations were

made by the Consultant Engineer is herewith enclosed as

Exhibit:R-64. The total recovery amount shown in the Exhibit:R-

50/A (Amended).

Other recoveries for an amount of Rs.12,27,462/- was

recommended by the Consultant to Respondent towards various

non-conformance of BOQ items as under.

Non lettering of distance measuring stone of BOQ item 2.2,

recovery towards surface unevenness of BC was made as

per section 6 of Agreement implementation manual and

maintenance intervention level Clause No.6.8.

Recovery towards casualties of median plantation done as

per the survey report, median plantation, survey report on

termination of the contract was prepared and submitted tothis office is herewith enclosed and based on that the

recovery was made and it is correct.

Recovery towards photographs and video graph has been

made as per the agreement conditions.

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Recovery towards non-carrying out roughness measurement

has been made as per Standard Specification of

MOST/IRC/IS Specification, the Contractor has to conduct

roughness index for the work done. There is no rule that BT

has continuous stretch for conducting the roughness index,

hence it can be done even for 100m also therefore

Claimants argument is herewith denied and recovery made

by the Consultant is correct.

Claim No.A-2(c-1) :

ClaimNo.

Description Amountclaimed (Rs.)

ClaimNo.A-2(c1)

Liquidated damages accounted intotal payment due

3,14,41,014.00

The deduction of Liquidated Damages as well as deduction of 20%

from balance work to be executed as per Clause 54 of the

Agreement were resorted to by the Respondent strictly in

accordance with the provisions of the Contract. The Respondent

reserves its right to make detail submissions in support of the

same at an appropriate time.

PARA-WISE REPLIES ON MERITS:

1-2. That the contents of Paras are disputed and denied.

3. The contents of the Para 3 are disputed and denied. That as per

Clause 27.1 Part-I of GCC read along with Clause No. 6.3.1 of

Section 6 of the Contract, the contractor and the consultant within

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a period 28 days from the date of issuance of letter of

commencement by the employer shall firstly, identify the activities

of routine maintenance. It is clearly mentioned that the inspection

was made on 7th & 8th September 2006 by the consultant and

contractor for finalization of the works which were undertaken

under 1st quarter only.

In view of the non submission of work programme by the Claimant,

the Engineer was constrained to finalize and issue the indents

even in the absence of the required details in the interest of work.

It is a matter of record that the Claimant eventually submitted the

work programme on 22.11.2006 i.e., after lapse of 70 days from

the date of commencement of work whereas in accordance with

Clause No. 27.1 of Para-I of GCC the same was required to be

submitted within 28 days from the date of commencement of work.

It is submitted that the Claimant was to execute the work during

the currency of the contract period which was 12 months. The work

was programmed and indents were finalized keeping in mind, the

monsoon season which will affect the work in the months of June,

July and August. Therefore, the dry spell is available from

September, 2006 to May, 2007. Based on the above, the Engineer

finalized the work program and issued the indents to the Claimant

for execution.

4-5. It is submitted the in the minutes off the meeting held on

08.09.2006 (A copy of the same is marked as Document C/12) it is

expressly mentioned that Having identified the works to be taken

up on priority in the Ist quarter, detailed discussions were held bythe Team Leader with the contractor on the work indent to be

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finalized. The views of the contractor were taken into consideration

.The contractor was explained in detail about the items of works to

be executed during the Ist quarter and to ensure the safety of

traffic and to avoid inconvenience to the road users. Finally the

draft work indent was prepared and presented to the contractor

duly requesting the contractor to once again go through it and to

offer their comments any. Also the contractor was requested to

submit the methodology / method statement for the items finalized

now and to quantify the items of work.

Thus from the above it will be clear that the Ist Indent was

finalized only after detailed discussions with the contractor, infact,

the Engineer had requested the contractor to go through the Indent

again and give its suggestions. The same was accepted and

signed by the both the parties and therefore, there is no question

of any discrepancy in finalization of first indent.

It is submitted that most of the works finalized under indent No.1

for the period of 12.09.2006 to 11.12.2006 for the first quarter (3

months) are general and ordinary works and which required no

need of heavy machinery. Further it is stated that the contractor

has mentioned preparation of yearly maintenance program which

is not correct (refer the claimants document C/12) where it is

clearly mentioned that the inspection was made on 7th & 8th

September 2006 by the consultant and contractor for finalization of

the works which were undertaken under 1st quarter only.

6. The contents of Para 6 are disputed and denied. That as per

Clause 27.1 Part-I of GCC read along with Clause No. 6.3.1 ofSection 6 of the Contract, the contractor and the consultant within

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Document C/16 in the written statement) the Engineer has

informed the Contractor about the absence of their Project

Manager and the Vice President due to which the execution of the

work was severely affected. Therefore, contents of the present

letter are sufficiently evident to prove beyond doubt that the

contractor was lackadaisical in its approach in executing the work.

10. That the contents of the Para 10 are disputed and denied. It is

submitted that the contents of letter dt. 20.12.2006 shows that the

contractor had failed to even complete the balance work of Indent

No.1 for the quarter ending with 11.12.2006. In the said letter the

consultant also recommended penalty on the contractor up to

completion. Therefore, the negligent attitude of the Claimant is

clearly borne out from the letter. It is denied that the Claimant had

brought any machinery at the site for carrying out the works as

contended. As a matter of fact the Claimant had taken the site on

Lease and Submitted the lease documents to the Respondent only

on 05.02.2007 as clearly recorded in Exhibit R-41. Thus the claim

of the Claimant with regard to mobilization of machinery at site is

clearly false and fictitious.


submitted that all the indents can not be issued at the same time in

as much as the same have to fit in the work program and

accordingly issued as and when the work under the earlier indent

is accomplished. However, a forecast of the future indents are

issued to the Claimant for the purposes of the advance planning.

It is pertinent to submit that except for the 1st

indent, the Claimantfailed and neglected to cooperate with the consultant for

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finalization of further indents. Non cooperation of the Claimant was

also brought to the notice of the Claimant during various

Management meetings. However, the Claimant had deliberately

and intentionally continued with its non cooperation for reasons

best known to them.

12 & 13. That the contents of Para 12 & 13 are disputed and

denied. The Claimant never complied with the requirements of

Clause No. 27.1 of Para-I of GCC, after the first indent even

though the Consultant had initiated, finalized and issued further

indents. The Claimant failed to carry out even simple maintenance

of the reach, on account of which the Respondent received as

many as 70 complaints from the road users during the period of

Claimants services under the Contract, a list whereof is appended

hereto as Exhibit R-10.

Whit regard to the contents of sub paras a, b, c, d & e, it is

submitted that all the indents contain the details of the locations as

well. The contractor did not raise any of these issues at the

relevant point of time. It is further submitted that the details of work

to be performed as stated in C/17 (the items proposed from 1st

December, 2006 to 30th April, 2007) corresponds to the work which

was supposed to be completed by the Claimant under the 2 nd

indent. Even though the Contractor has failed to cooperate with the

Consultants in this regard, the indents were issued from time to

time in accordance with the work programme with proper notice to

the Claimant giving a forecast of future work.

14. That the contents of the Para 14 are to the extent they are matterof record are admitted. Rest of the Para is wrong and denied.

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15. That the contents of the Para 15 are denied. It is submitted that 2nd

indent commencement date was fixed as 01.12.2006, 3rd indent

commencement date was fixed on 01.12.2006, 4th indent

commencement date was fixed on 20.12.2006. Therefore, all the

indents issued based on the requirement of the site condition and

available time factor. Almost all the above three indents fall in 2nd

quarter. The indents issued on various dates during the

agreement period are annexed as Exhibit R-42 to R-47.

It is submitted that after signing of agreement, the Respondent

gave the letter to proceed with the work without any delay.

Therefore, there is no delay on the part of Respondent. The

Claimant failed to plan and programme the work which was also

brought to their notice during various monthly meetings.

16. That the contents of the Para 16 are false, mischievous and denied

in entirety.

(a) The premises of the Inspection Bungalow are not meant for

establishing the Contractors work site. Hence, same cannot

be allotted.

b) As per the requirement to fulfill the agreement condition, the

Respondent had requested the Claimant to submit required

documents.

c) As per agreement condition, the crane must be 15 ton

capacity, for the same the consultant had requestedclarification.

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d) The claimant has appointed i) Shri Anju Maheshwari, ii) Shri

Suryanarayana Murthy, iii) Shri Riyazuddin Pasha as

authorized persons by the Directors of its Company. But no

such power of attorney in this regard had been submitted to

Respondent. For the same the Respondent has requested to

submit the authorization duly certified with notary as the

names of above said persons are not included in the

Agreement.

e) As per the applicable Labour laws, the Consultants have

rejected to work on public holiday. If the Claimant wanted to

work on public holiday, they should have obtained

permission from Labour Department. The same was brought

to the Claimants notice. Further, it is stated that preparatory

work was to be carried out for doing specified work i.e., the

kerb painting works to be done after the repairs, are to be

carried out. Due to the said reasons, the RFI was not

approved by the Consultants which is correct as per

agreement conditions. Like wise, some of the RFIs are not

approved on the same lines and reasons were mentioned by

the Consultants there itself. Hence, it seems that the

Contractor is not carrying out the work properly as per

standards.

f) That it is a matter of record that the entire site was handed

over to the Claimant on 28.08.2006, the date from which the

work was to be proceeded with. This issue was never raised

by the Claimant during the period of contract.

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denied that the Claimant was prevented by the Respondent from

executing the work. The Consultant had brought to the Claimants

notice from time to time their lapses during the management

meetings as well as through correspondence on 7th November,

2006 and 16th November, 2006 as the due date of completion. A

bare perusal of these letters would reveal that the Claimant had

failed to mobilize its machinery in time at site and as a result

thereof could not execute even the indented work in time.

18. That the contents of the Para 18, except those which are matters of

record are disputed and denied. The original date of completion of

work under Indent No.1 was 11 th December 2006 and not 2007.

Further, the Claimant had sought EOT on 02.07.2007 and

02.08.2007, but did not give any cogent reasons for non-

completion of the work within the stipulated period. In view thereof,

the request for EOT could not be finalized by the Respondent.

However on 31st October, 2007 the Claimant represented with

details and requested EOT and the same was granted up to

31.12.2007 on certain conditions as per the meeting held at the

Head Quarters of the Respondent. In the said meeting, the

Claimant had promised to complete the work within the extendedperiod. However, despite the said assurance the Claimant at the

time of request for extension of time dated 13.08.2007 marked as

Exhibit: R-56 and once again failed to execute the work as per the

terms of the Contract.

19 & 20. That the contents of paras 19 & 20, except those which are

matters of record are disputed and denied. it is submitted that dueto the inability of the Claimant to execute the work, a meeting was

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held at the Respondents Head Quarters wherein the Claimant

requested for reduction in the scope of work in view of the tenure

of the Contract and to exempt certain work on account of the

prospect of 6-laning. Subsequent to the meeting, the Claimant

submitted a revised work programme dt. 10.09.2007 on account of

which the revised value of work was shown by the Claimant as

Rs.19, 60, 38,117/-. However, the said revised work programme

was rejected by the Headquarters of the Respondent and

accordingly the Claimant was requested to submit a detailed

variation proposal. Hence, the reliance of the Claimant on the

impugned revised work programme and revised value of work is

de hors the Contract and have no sanctity whatsoever. The value

of work to be executed under the Contract was

Rs.31,44,10,141.65/- and remained so till the date of termination of

the Contract. The Engineer, vide his letter dt. 31.10.2007 had

informally revised the indents as per the request of the Claimant

without seeking prior approval from the Employer and the reliance

of the Claimant on the said letter of the Engineer is totally

misplaced and inadmissible. A copy of the Contractors letter dt.

10.09.2007 is annexed hereto and marked as Exhibit - R-48.

However, the intended completion date of the work was

31.12.2007 as approved by NHAI pursuant to the request of the

Claimant subject to the Claimant submitting a revised work

programme for completion by that date and levy of Liquidated

Damages by Respondent. However, the Claimant again committed

breach of the condition to complete the works within the revised

date of completion (31.12.2007).

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21. That the contents of the Para 21 are matter of record and needs no

reply.

22. That the contents of the Para 22 are false, frivolous and hence

denied. The indents 5 & 6 were issued as per site requirements

and the Claimant failed to co-operate with the Consultant for

finalization of the indents and also certain items of works which did

not need any machinery. The Claimant failed to perform even such

activities, The failure and inability of the Claimant were willful and

wanton and the Claimants efforts to foist the blame on the

Respondent are mala fide and misplaced.

23. That the contents of the Para 23 are disputed and denied as false.

The Claimant never challenged the validity of Indent nos. 5 & 6

before the Respondent. Therefore, the Claimant cannot absolve

himself from the liability to execute the work envisaged in Indent

no. 5&6, much less to claim any compensation for the work

executed.

24. That the contents of the Para 24 are disputed and denied. As a

matter of fact the Claimant never submitted any bills in time and if

submitted, they were without the necessary documents.Resultantly, the bills had to be returned to the Claimant several

times due to insufficient information. It is pertinent to state herein

that IPC 8 was submitted by the Claimant at the end of the

extended period and IPC 9 was submitted after the termination of

the Contract. Therefore, the Respondent was unable to release the

bills as the final account has to be settled and also various

recoveries are to be made.

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25. That the contents of the Para 25 only to the extent they are matters

of record are admitted.

26 & 27. That the contents of the Paras 26 & 27 are disputed and denied.

The liquidated damages were imposed and calculated IPC wise as

per details given in Exhibit R-50 & 50/A (Amended) appended

hereto. However, the recovery of liquidated damages became

impossible due to the minor value of work executed by the

Claimant and the priority for recovery of mobilization advance.

Thus, the Respondent was unable to recover whatever amounts

were shown in the Measurement Books for future recovery. It is a

matter of record that the extension of time was granted on the

specific condition that the LDs would be imposed. It is emphatically

denied that the Respondent prevented the Claimant from

completing the work under the indents. In fact the Claimants did

not need anybody to prevent them from completing any work in as

much as the Claimant themselves are eminently capable of not

completing any work assigned to them on their own.

28 That the contents of these Paras 28 are disputed and denied. The

Contract entered into between the parties was for maintenance

and under any maintenance contract it is unlikely that the work will

be executed only in continuous stretches. The Claimant was well

aware that the contract was for the repair and maintenance and

quoted the price accordingly. Therefore, any claim of the Claimant

regarding the additional cost is wholly misconceived and liable to

be dismissed. Further it is submitted that as perExhibit:R-43 the

stretches covered in the indents were more than 400mts and it is amatter of record that in the revised work programme, the Claimant

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himself submitted his work plan for stretches varying from 100m to

400m length for BC laying as will be evident from Exhibit:R-59.


submitted that after the First Indent, the Claimant failed to

cooperate with the consultant in finalizing the Indents. However,

the Consultant has finalized indents as per site requirement as well

as the available dry spell i.e. from 12/06 to 04/07 because the

monsoon generally commences from June onwards. As regards

the 2nd indent, the commencement date was fixed as 01.12.2006,

after the lapse of 80 days of original commencement of work.

Hence the Consultant has taken in to the consideration that the

minimum period has to be given to the Claimant for mobilization of

heavy machinery and also keeping in mind that the onset monsoon

may start from June, 2007.

30-35. That the contents of the Paras 30 to 35 are based on conjecture

and surmises and therefore are disputed and denied in entirety.

The Respondent has narrated in detail the true and correct

sequence of events in the Preliminary Submissions which are

relevant to the present untenable claims and the same clearly

negate the misconceived theories sought to be advanced by the

Claimant in support of the untenable claim. The Claimant

consciously entered in to Contract with the Respondent for the

work covered therein and the extraneous considerations which are

clearly outside the Contract cannot justify the failure of the

Claimant in the faithful execution of the work. It is very obvious that

the Claimant has sought to invent reasons to cover up their

inefficiency and ineptitude to handle a contract of this magnitude.The contentions therefore merit summary rejection.

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50/72

40. That the contents of Para 40 are baseless and preposterous and

therefore strongly disputed and denied. The averments containedin the Preliminary submissions are reiterated and reaffirmed.

41 to 43. That the contents of Para 41 to 43 are disputed and denied.

The untenable and far-fetched reasoning devoid of rationale

adverted to by the Claimant cannot negate the evident fact that the

execution of the work was too slow and the Claimant failed to

execute the work in consonance with the work program. The

Respondent in its letter dated 18.04.2007 had informed the

Claimant that the Claimant failed to achieve a minimum of 30%

progress when in fact half of the Contract period was already over.

The Respondent further informed the Claimant about its failure to

establish the lab with all the prescribed equipment.

44 & 45. That the contents of Paras 44 & 45 are disputed and denied.

The establishment of field laboratory was not only for the

bituminous works but also required as per the Contract conditions

to test and verify the quality of work of various items of works

which were under BOQ. In the Contract, it was very clearly

specified that within 30 days from commencement of work the field

laboratory was to be established.

46 & 47. That with respect to the contents of Paras 46 & 47 of the

Statement of claim it is submitted that the work was revised and

submitted by the Claimant for approval due to the failure of the

Claimant to complete the work within the time prescribed under the

Indents. It is emphatically denied that the Respondent had

extended the time frame in view of its default. It is further denied

that due to the extension of time frame the Respondent lost its

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53-57 That the contentions contained in Paras 53 to 57 are baseless and

preposterous and therefore strongly disputed and denied. The

Respondent will refer and rely upon the Preliminary submissions

and explanations made in paras 19-20 in this claim.

58. That the contents of Para 58 are disputed and denied. The work

was not completed in time due to reasons totally attributable to the

Claimant. Therefore the Contract was terminated by the

Respondent on 31.12.2007.

59. That the contnts of the Para 59 are disputed and denied. Due to the

breach of the Contract by the Claimant, the work was terminated

on 31.12.2007.

60. That the contnts of the Para 60 are disputed and denied. That the

Claimant failed to complete the work on or before 11.09.2007,

original date of completion as per agreement condition and once

again failed to complete the revised work program within extended

time period i.e., 31.12.2007 as promised by the Claimant.

Therefore, on account of continuous and consistent failures by the

Claimant, the Contract was not extended further.

61. That the contents of Para 61 are disputed and denied. The

Liquidated Damages are imposed as per the terms of the Contract

and any contention to the contrary is emphatically repudiated. The

contents of sub-paras (a) to (j) are also candidly disputed and

denied and the Respondent reserves its right to make detailed

submissions in rebuttal thereof at an appropriate time before the

Ld. Tribunal.

Claim No.A-2(f) :

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That the contentions of the Claimant with regard to their alleged

eligibility for the above misconceived claim are vebose and without

any para numbers to facilitate any point-wise or para-wise Replyby the Respondent. Suffice it would to state that the said recovery

was made by the Respondent wholly in accordance with the

Contract for the reasons and grounds already stated in the

Preliminary Submissions and para-wise replies, which are not

repeated herein for the sake of brevity. It is further submitted that

the contents of the SOC with respect to the above untenable claim,

to the extent not specifically adverted to and replied herein

specifically shall be deemed to have been traversed in extenso ,

disputed and denied by the Respondent save and except those

which are specifically admitted herein. Further, the Respondent

reserves its right to make detailed submissions in rebuttal thereof

at an appropriate time before the Ld. Tribunal.

Claim No.A-3 :

Claim No. Description Amountclaimed

(Rs.)

Claim No.A-3 Amount withheld from IPC-1 to IPC-9. 53,62,518/-

That the contents of this para are disputed and denied. After

termination of the Contract, the Claimant submitted the bill on

13.02.2008 to Engineer and the Engineer, in turn submitted the

- 53 -

Claim

No.

Description Amount claimed

(Rs.)

ClaimNo.A-2(f)

Deduction in IPC 9 on amount of20% of the balance work to becompleted

1,77,51,022.00


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same to Respondent on 29.02.2008 Exhibit R-51. However, even

while the said bill was under scrutiny, the Claimant initiated

proceedings under section 9 of the Arbitration and Conciliation Act,

1996 before the Honble High court of Calcutta and despite the

orders for maintaining status quo given by the Honble Court,

illegally allowed the Bank Guarantees provided by way of

Performance Security to lapse. In view of the said directions of the

court to maintain status Quo, the said bills of the Claimant were not

processed. It is a matter of record that subsequent thereto, the

present Ld. Tribunal was also constituted on 06.06.2008 pursuant

to invocation of arbitration by the Claimant.

Claim No.A-4 :

ClaimNo.

Description Amountclaimed

(Rs.)

Remarks ofthe

Respondent

ClaimNo.A-4 Charges on Bank Guarantee forLDs and Differential interest onMargin Money of BG

15,49,748.00 Disallowed

That the contents of the Para are disputed and denied.

The Respondent had already withheld the amount towards

liquidated damages in running bills as a paper adjustment in

accordance with clause 45.1 of the GCC of the Contract as the

value of work done by the Claimant was meagre during the initial

period of the Contract and the amount was hardly sufficient to

recover mobilization advance. Therefore the Respondent recorded

the LDs in the Measurement Book [Exhibit R-50 & 50/A

(Amended)] to adjust the same in future bills due to negative value

of work done. However, the Claimant offered to submit

unconditional BGs in lieu thereof in as much as the Claimant was

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under financial crisis and requested the Respondent not to recover

the amount of LD from the payments. The Respondent agreed in

good faith and with a view to help Claimant to complete the work,

accepted the same. Thus, the extra Bank Guarantees were

submitted by the Claimant at their own option and therefore the

above claim is clearly misconceived and untenable. Even

otherwise the present claim cannot lie against the Respondent

under the terms of the Contract.

Claim No.A-5 :

1. That the present untenable claim, which is clearly an after thought,

has also been raised on account of the alleged delay between the

date of the Letter of Acceptance and the actual date of signing of

the Contract, which has been dealt with in extenso in reply to

Claim No. A-1 and therefore is not being repeated for the sake of

brevity. The contents of the reply to the said claim, to the extent

applicable, may be treated as reply to the averments of the

Claimant contained herein.

2. That the tenure of the services under the present Contract was

limited to 12 months only and as per practice, such short-term

contracts do not qualify for price adjustments, which again, as per

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ClaimNo.

Description Amountclaimed

(Rs.)

ClaimNo.A-5

Losses on account of price rise due todelays

18,17,803.00

8/6/2019 Amended Reply to SOC -

Amended Reply to SOC - 100511

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