SANJIB BANERJEE, J. - (1.) THE employer assails the award in excess of Rs. 10 crore, inclusive of interest, obtained by the contractor in the construction of an office building that is a prominent landmark near the Ultadanga Crossing in the city. Videsh Sanchar Nigam Limited (the employer or the petitioner) complains that Shapoorji Pallonji and Company Limited (the contractor or the respondent) failed to finish the work within the time permitted despite the original time being extended and the Arbitral Tribunal completely misdirected itself not only in assuming that it had authority to grant further extension of time till the date of virtual completion of the construction, but also to compensate the contractor for the contractor having to overstay at the site. The employer assails every bit of the award beginning the procedure adopted by the Arbitral Tribunal, right up to the quantum of interest awarded.
(2.) A letter of intent was issued by the petitioner on March 28, 1995 for construction of the building. It stipulated that the work was to commence upon issuance of such letter and was to be completed within 21 months therefrom. The formal agreement was executed sometime in August, 1996. On April 26, 1996, the contractor requested that the date of commencement of work should be reckoned to be July 1, 1995 as the mobilisation advance was paid by the petitioner only on May 29, 1995 and the contractor lost a further month on account of labour unrest. The employer responded by a letter of May 21/22, 1996, indicating that it was agreeable to extend the date of completion of the contract by two months rather than push back the date of commencement by about 14 weeks as sought by the contractor. The employer stipulated that no bonus could be claimed by the contractor for the extended period of two months. Thus, the original date of completion now became February 27, 1997. Shortly before the extended date of completion, the contractor sought a further extension by its letter of January 9, 1997. The contractor requested for extension for a period of six months beyond the stipulated date and cited a loss of 511 work days as the basis for the request. The contractor asserted that guided by its past experience, it was of the view that it needed 'at least 180 days against 511 days..lost..provided there is no hold -up from the CMC in according House Drainage Plan sanction, non -obstruction front is available and..timely payments (made by) VSNL as per terms of Contract.' In issuing such letter, it would appear that the contractor took into account all the obstructions that it may have suffered prior to that such date and it only sought an extension of six months from the stipulated date of completion. The contractor thus represented that it would complete the work by the extended period of six months, subject to the house drainage plan being sanctioned by the corporation, there being no obstruction in obtaining work fronts and timely payments in accordance with the agreement being made by the petitioner.
(3.) THE petitioner's response to such request was issued on the stipulated date of completion of the work, February 27,1997. Such letter referred to various correspondence exchanged between the parties between November, 1996 and early February, 1997 and the petitioner agreed to extend the period not exceeding 180 days subject to the two conditions that the contractor would not be entitled to payment of bonus as per Clause 9.10 of the agreement should it complete the work before the extended period and the contractor would not claim for idle labour charges, if any, incurred by it upto December 27, 1996. Though the petitioner's letter of February 27, 1997 would imply that the time stood extended by a period of six months or 180 days from February 27, 1997, the parties and the Arbitral Tribunal proceeded as if the extension was till end - June, 1997. But the petitioner accepts (at page 7, paragraph 7 of the setting aside petition) that the period was extended for 180 days beyond 27th February, 1996 (should be 1997) while the contractor's last letter for extension issued on April 28, 1999 reveals that it understood the period to have been extended till June, 1997. It is also not clear as to whether the contractor accepted the two conditions imposed by the petitioner's letter of February 27, 1997 or the petitioner subsequently insisted that such conditions stood accepted by the contractor's conduct. The first of the conditions is irrelevant as the work was neither completed within the further extended period of 180 days nor was the contractor eligible for any bonus for early completion. The second condition does not appear to have been pressed by the petitioner nor has the award on account of compensation been challenged to the extent it falls foul of such second condition. What is significant, however, is that, implicit in the second condition was the petitioner's acceptance of the contractor's entitlement to idling charges.;