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TMI Blog2023 (10) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... MRTS Project of Phase-III'. 3. The respondent (hereafter, 'DMRC') invited bids for the said work, which was awarded to the Contractor vide Letter of Award dated 17.02.2015 for a total contract value of INR 153,65,61,349/- + USD 72,65,823/-. The Contract period was of 24 months with scheduled date of start as 23.02.2015 and scheduled date of completion as 22.02.2017. A formal Contract was also executed between the parties. The work was completed on 06.08.2018 i.e., after a delay of 18 months. DMRC had granted extensions of time (hereafter, 'EOT') for the entire prolongation of contract without levy of any liquidated damages. DISPUTES BEFORE THE AT 4. The Contractor filed its statement of claims (hereafter, 'SOC') thereby raising as many as 12 claims. Claim Nos.2, 3, 4 and 12, that are in issue in the present proceedings, are extracted hereinbelow:- Claim No. Description of Claim Amount 2(a) Claim on account of extra Cost on increased Establishment Cost including Overheads, Salary of Regular and Contractual Staff, Inspection Vehicle hire Charges, etc. due to prolongation of contract Rs. 6,05,50,281.00 2(b) Claim on account of extra cost due to payment of bank charges for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th payment of price escalations in terms of Clause No. 11.1.3 of Special Conditions of Contract (hereafter, 'SCC'). Insofar as the aspect of the design was concerned, DMRC contended that the same was, as per clause 5.1 of General Conditions of Contract (hereafter, 'GCC'), within the scope of the work awarded to the Contractor. The design was to be in conformity with the criteria of fastening system laid down by the Ministry of Railways which formed part of the Contract. The design proposed by the Contractor was subject to approval by the Engineer/Employer, who could propose changes thereto as per the requirement of the overall design. It was contended that the change in design sought by the EIC was attributable to the Contractor. DMRC also challenged the variation of quantity of work under Item 8 of BOQ pertaining to "Supply of Track Fitting". It was contended that the BOQ rate for Item 8 were neither sought for by DMRC on the basis of number of bolts nor the same was quoted by the Contractor. The BOQ rates were differentiated for two sub-items namely for track with radius flatter than 1750 metres under BOQ Item 8.1 and for curved tracks under BOQ Item 8.2. Item 8.2 had further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos.3 and 4 were taken up together for consideration as both pertained to Ballastless Track Fastening System. Claim No.3 related to change in design and Claim No.4 related to abnormal variation in the quantity of Ballastless Track Fitting System. AT observed that the claims related to deviation in quantity of Item No. 8 in BOQ. AT observed that under Clause 5.1 of the Contract, the design was in Contractor's scope, who was obligated to submit the same in accordance with Clause 6.3.2 of the Contract. The first technical design submitted by the Contractor on 03.06.2015 was found to be technically deficient with number of non-compliance issues as indicated by DMRC in its letter dated 08.06.2015 and a reminder dated 02.07.2015. The Contractor changed the complete design and resubmitted new bolt calculations vide its letter 19.09.2015. This aspect as stated in SOD was not specifically denied by the Contractor in its rejoinder. On the aspect of ETAG001 (European Guidelines), AT observed that the Contractor did not place any document on record evidencing its objection that the same did not form part of the Contract. AT also observed that vide its Procedure Order No. 13, though the Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six months, returned a perverse finding that in seeking EOT on the first, second and fourth occasion, the Contractor had not reserved its right to seek compensation, which amounted to a waiver. AT wrongly relied only upon Section 55 of the Indian Contract Act, 1873 (hereafter, 'ICA') instead of reading it in conjunction with Section 73, ICA. The rejection of Claim Nos. 3 and 4 is also hit by the vice of patent illegality. AT overlooked that the insistence of DMRC to use four bolts instead of two on certain curves was in departure from International and National practice. Further, AT failed to appreciate that Clause at S. No. 31 of SCC had replaced the earlier Clause No. 12.5(ii)(f). The replaced new provision provided that positive variations above 25% in individual or group of items would be considered for negotiation of rates. AT also overlooked that the replaced new clause had equated group of items with individual items. Contractor also called into question AT's finding w.r.t. Claim No. 12 being patently illegal. It contended that GST ought to have been granted @12%. 12. DMRC negated Contractor's contentions and defended the impugned award. It denied that Clause 31 of SCC bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasions without imposing any liquidated damages. Indisputably, the Contractor reserved its right to seek compensation only at the time of seeking third EOT vide its letter dated 26.12.2017, and in the earlier requests it did not claim any monetary compensation due to the extensions. 16. AT declined to compensate the Contractor for the remaining 12-month period holding that the Contractor had accepted EOT granted by DMRC without compensation and no right to claim the same was reserved by the Contractor, unlike the third EOT sought for the period 01.01.2018 to 30.06.2018. According to the Contractor, the AT committed a judicial error amounting to patent illegality in denying compensation on the ground that the Contractor had forgone its right to claim compensation for the extension sought on the other three occasions. 17. Contractor has referred to judgments in K.N. Sathyapalan vs State of Kerala (2007) 13 SCC 43, Asian Techs Ltd. vs Union of India (2009) 10 SCC 354, Bharat Drilling vs State of Jharkhand (2009) 16 SCC 705 and Simplex Concrete Piles (India) Pvt. Ltd. vs Union of India 2010 (115) DRJ 616 to contend that even though Clause 4.4 of the Contract and Clauses 2.2 and 8.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Rate in Foreign Currency Amount in Indian Rupees (INR) Amount in Foreign Currency 8.1 For Straight Track & curve having radius flatter than 1750m Set 160000 Item 8.2 for Curved Track Item No. Description of Items Unit Total Quantity Rate in Indian Rupees (INR) Rate in Foreign Currency Amount in Indian Rupees (INR) Amount in Foreign Currency a. Fastening for curve track radius between 1750m to 1000m (including) Set 1500 b. Fastening for curve track radius between 1000m to 500m (including) Set 4500 c. Fastening for curve track radius between 500m to 300 m (including) Set 19000 d. Fastening for curve track radius less than 300 m Set 1500 21. AT rejected the claims by observing that the BOQ specified in the Contract was not based on number of bolts to be used but on the radius of the curve. AT also observed that the Contractor was unable to convince that the increase in number of bolts was due to the new design that the DMRC required the Contractor to follow. According to the AT, the DMRC's ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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