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Judgment
SUVIR SEHGAL, J. (Oral):
Petitioner has approached this Court under Articles 226/227 of the Constitution of India for a writ of certiorari to quash communication dated 22.06.2023 (Annexure P-1) whereby a request for constitution of Standing Empowered Committee under Clause 19.3 of the conditions of the contract appended to agreement dated 07.03.2008 (Annexure P-3) was declined. A consequential direction has been sought to the respondents to constitute the said Committee for adjudication of the claims.
A brief resume of facts leading to the filing of the petition deserve to be noticed. An agreement dated 07.03.2008 (Annexure P3) was executed between the petitioner and respondent No.2 for executing the work of construction of Koshallia Dam and its appurtenant works in District Panchkula for an estimated cost of Rs.56.28 crores. Petitioner completed the work and on 22.05.2012, addressed a communication to respondent No.2 raising diverse claims under the agreement amounting to Rs.63.51 Crores (Annexure P-4). A completion certificate (Annexure P-5) was issued by the petitioner but the claims were rejected by the respondents vide communications dated 11.06.2012 and 29.08.2012 (Annexure P-7) (Colly) as well as a communication dated 30.10.2012 (Annexure P-8). On dated 06.12.2012 (Annexure P-9), petitioner requested respondent No.3 to form a Standing Empowered Committee for resolution of dispute. Respondent No.1 issued a communication on 02.06.2014, asking petitioner to deposit 2% of the claim amount as a condition precedent for reference of the dispute to the Committee. By a subsequent communication dated 09.08.2016 (Annexure P-12) respondents raised a claim of Rs.14,31,476/- from the petitioner. Petitioner scaled down its claims to Rs.18,61,81,612/- and by communication dated 12.02.2019 (Annexure P-13) indicated that the requisite fee will be deposited on receipt of response from respondents, however, by communication dated 13.04.2020, respondent No.1 rejected the request for reference which was challenged by the petitioner by filing a writ petition before this Court. On 19.05.2022, petitioner withdrew the writ petition with liberty to approach the respondents-authorities by filing, afresh application along with requisite amount for the purposes of constituting the Standing Empowered Committee. Thereafter, petitioner submitted applications dated 16.06.2022 and 01.08.2022 (Annexure P-16 and Annexure P-18) respectively, along with the requisite demand draft, (Annexure P-17). By intimation dated 28.09.2022, (Annexure P-19), request was rejected by the respondents on the ground that the claim has been made after eleven years of the completion of work. Impugned communication dated 22.06.2023, (Annexure P-1) was received by the petitioner informing it about the refusal to constitute the Standing Empowered Committee.
Learned Senior counsel for the petitioner contends that the respondents could not have themselves adjudicated upon the issue of limitation while declining to constitute the Standing Empower Committee. It is urged by him that the Committee alone was competent under the contract to examine all objections including limitation and maintainability. Reliance has been placed by him upon the liberty granted by this Court vide order dated 17.08.2020, as well as the decision of the Hon’ble Supreme Court in Union of India and another Vs. Indusind Bank Limited and another (2016) 9 SCC 720.
Opposing him, learned State counsel has argued that the petitioner’s claim have already been rejected vide communications dated 11.06.2012 and 30.10.2012 (Annexures P-7 and P-8) which were never challenged by him. By making a reference to clause 19.3 of the condition of the contract, he has urged that request for Standing Empowered Committee was required to be made within 45 days along with deposit of 2 % of the claim amount by way of unconditional FDRs, but neither of the two requirements were complied with by the petitioner. He asserts that the claim raised by the petitioner vide subsequent communications, (Annexures P-16 and Annexure P-18) were barred by limitation.
We have heard learned counsel for the parties and given our thoughtful consideration to their rival submissions besides examining the documents relied upon by them.
The genesis of the dispute between the parties is an agreement (Annexure P-3) executed by them which contains a clause-19, which provides for Disputes Redressal System in place of arbitration. It is apposite to notice the said clause which is reproduced here under:-
“19.1If any dispute or difference of any kind what so ever shall arise in connection with or arising out of this Contract or the execution of work or maintenance of the works there under, whether before its commencement or during the progress of the works or after the termination, abandonment or breach of the Contract, it shall, in the first instance be referred for settlement to the competent authority, descried along with their powers in the Contract Data above the rank of the Engineer. The competent authority shall, within a period of forty five days after being requested in writing by the contractor to do so, convey his decision to the contractor. Such decision in respect of every matter so referred shall, subject to review as hereinafter provided, be final and binding upon the Contractor. In case the work is already in progress, the contractor shall proceed with the execution of the works, including maintenance thereof pending receipt of the decision of the authority as aforesaid, with all due diligence.
Either of the parties are barred from making reference to the competent authority after 120 days from completion of work i.e. the claims will be time barred if the reference to the complete authority 'is not made within 120 days from the completion of work.
19.2Either party will have the right of appeal against the decision of the competent authority, to the Standing Empowered Committee.
19.3The composition of the Empowered Standing Committee will be:-
a)For the Claim up to 10 Lakhs
i.One official member, Chairman of the Standing Empowered Committee, not below the rank of Chief Engineer appointed by the Haryana Govt.
ii.One Official member not below the rank of Superintending Engineer.
iii.One non-official member who will be technical expert of Superintending Engineer's levels selected by the Contractor from a panel of three persons given to him by the Employer.
b. For the Claim above 10 Lakh
i.One Official member, Chairman of the Standing Empowered Committee, not below the rank of Special Secretary to Govt. of Haryana.
ii.One official member not below the rank of Chief Engineer and.
iii.One non-Official member who will be technical Expert of Chief Engineers level selected by the Contractor from a panel of three person given to him by the Employer.
Either of the parties who is not satisfied with the decision of the competent authority will request to Engineer-in-Chief, Haryana Irrigation Department, Panchkula for termination of the Standing Empowered Committee within 45 days of receipt of such decision and will have to deposit 2% of the claim amount in the form of an unconditional FDR pledged in the name of the claimant. The Engineer-in-Chief will get the Standard Empowered Committee constituted from Govt. Either of the parties can appeal to the Standard Empowered Committee within 45 days after the constitution of the Standard Empowered Committee is intimated in the parties.
19.4.The Contractor and the Employer will entitled to present their case in writing duly supported by documents. If so requested, the Standing Empowered Committee may allow one opportunity to the Contractor and the Employer for oral arguments for a specified period. The Empowered committee shall give its decision within a period of ninety days from the date of appeal, failing which the Contractor can approach the appropriate court for the resolution of the dispute.
19.5.The decision of the Standing Empowered Committee will be binding on the Employer for payment of claims up to five percent of the initial Contract Price. The Contractor can accept and receive payment after signing as "in full and final settlement of all claims". If he does not accept the decision, he is not barred from approaching the courts. Similarly, if the Employer does not accept the decision of the Standing Empowered Committee above the limit of five percent of the initial Contractor Price, he will be free to approach the courts applicable under the law”.
Clause 19.3 of the agreement specifically contemplates that a party dis-satisfied with the decision of the competent authority can seek constitution of the Standing Empowered Committee within 45 days of the receipt of such decision and shall simultaneously deposit 2% of the claim amount in the prescribed manner. The clause makes invocation of the mechanism for dispute redressal, conditional upon the fulfillment of these requirements. Petitioner’s claim was rejected in the year 2012 yet it did not submit a request within the stipulated period in terms of clause 19.3 nor did it furnish the mandatory deposit. After one decade, petitioner sought constitution of the Standing Empowered Committee, pursuant to liberty granted by this Court vide order dated 17.08.2020. These applications were submitted by the petitioner in the year 2022 with the requisite deposit but they were clearly beyond the limitation mentioned in the clause 19.3 or even under Limitation Act, 1963 and have been rightly rejected by the respondents by impugned communication (Annexure P-1). This Court is unable to accept the argument that respondents were bound to constitute the Standing Empowered Committee irrespective of limitation. Clause 19.3 reproduced above contemplates the invocation of the remedy of appeal subject to the deposit of 2% of the claimed amount. As petitioner did not adhere to the time frame nor did it make the mandatory pre deposit within prescribed period of limitation, respondents cannot be compelled to constitute the abovesaid Committee. Their refusal is neither arbitrary nor without jurisdiction. Reliance placed by the petitioner upon Indusind Bank’s case (supra) does not come to its aid. The judgment does not lay down that timeline laid down under the Limitation Act 1963 can be ignored. In this backdrop, no direction can be passed to respondents to constitute the Committee.
Moreover, controversy is essential contractual in nature. Petitioner has not been able to establish breach of any statutory provision so as to warrant interference under Article 226 of the Constitution of India. Extraordinary jurisdiction of this Court cannot be exercised for reviving contractual remedies which have become unavailable by reason of party’s own default.
For the reasons recorded above, this Court does not find any illegality in the impugned communication (Annexure P-1). Writ petition is hereby dismissed with no order as to cost.
Pending miscellaneous application(s), if any, shall stand disposed of.