Pioneer Properties and Construction Co. vs Govt. of NCT Delhi and Others

Manmohan Singh, J.—The present petition has been filed by the petitioner u/s 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. On the basis of a request from the MCD, Counsellor Ward No. 127, Rejender Nagar, a scheme amounting to Rs. 21.92 lac was framed and submitted to the Urban Development Department in the month of February 2005. The Principal Secretary, Department of Urban Development sanctioned Rs. 20 lac for the reconstruction of a chaupal at village Dashgehra vide letter No. F. No. 18A(67)/5/UD/Chaupal/Plg./2004-05/18900 dated 9th March, 2005.

In pursuance of the above, a tender for the "Demolishing and re-construction of General Chaupal at village Dasghera" was floated. On completion of the tender process, M/s. Pioneer Properties and Construction Co. was awarded the work for an amount of Rs. 20,32,278/-. The stipulated date of commencement of work was 6th January, 2007 and the date of completion of work was 5th July, 2007.

Notice of the petition was issued to the respondents. Reply by way of affidavit of Sh. Raveender Kumar was filed by the respondent No. 1 in which it is stated that an Ayurvedic Dispensary under the aegis of the Health Department was in existence at the above said chaupal. The said dispensary was not removed or shifted despite of various communications to the Chief Medical Officer. The respondent No. 1 was left with no option but to cancel the contract under clause 3(A) of the agreement to avoid any disputes with the contract. A decision for cancellation of the contract was communicated to the contractor who was requested to collect the amount of earnest money and performance guarantee deposited for the work by letter dated 24th June, 2008. The petitioner thereafter collected the amount of earnest money as well as performance guarantee deposited for the work in the month of July 2008. After two years i.e. 11th August, 2010, the petitioner raised some claims on the respondent No. 1 and on 3rd January, 2011, the petitioner asked the Chief Engineer (Irrigation and Flood Control Department) to appoint an Arbitrator. The relevant clause 25(ii) of the agreement provides that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing within 120 days of receiving the intimation from the Engineer-incharge that the final bill is ready for payment, the claims of the contractor shall be deemed to have been waived and absolutely barred and the Government shall be discharged and released of all liabilities under the contract in respect of these claims.

In the present case, the petitioner/contractor was asked to collect his earnest money deposit and performance guarantee on 24th June, 2008 and it collected the same in the month of July 2008. Thus, it is clear that the claims of the petitioner after a lapse of more than two years on 11th August, 2010 have been waived and barred. The petitioner is now estopped from raising any such claims in terms of clause 25(ii) of the agreement. I also agree with the learned counsel for the respondent that the respondent, in view of the said clause, is absolved of all the liabilities. The petition is not maintainable. The same is dismissed.