Case Law Details
J.G. Engineers Pvt. Ltd. Vs. Union of India & ANR. – The Supreme Court has set aside the judgment of the Gauhati high court and upheld the award of the arbitrator in the dispute over delay in the construction of the extension of the Guwahati airport terminal. The contracted period for completion of the project was 21 months, but it was extended twice. The contractor and the government blamed each other for the delay, and ultimately the government cancelled the contract. The dispute was referred to arbitration and the award was in favour of the construction firm. However, the high court set aside the award, leading to the appeal in the Supreme Court (J G Engineers Ltd vs Union of India). The court held that the contractor was entitled to extension of the period for completion of the work, as the delay was caused by the government. The firm was also entitled to escalation costs for the work done during the extended period. It cannot be imposed penalty for the delay. Moreover, since the delay was caused by the government, it cannot make counter-claims against the firm, the judgment said.
M/s. J.G. Engineers Pvt. Ltd. Vs. Union of India & ANR.
R.V.RAVEENDRAN, J.
1. This appeal is directed against the judgment dated 8.2.2005 of the Guwahati High Court allowing Arbitration Appeal No.1/2004 filed by the respondents and setting aside the judgment dated 12.12.2003 passed by Additional District Judge, Kamrup, Guwahati (by which the District court had dismissed the petition filed by respondents filed under section 34 of Arbitration & Conciliation Act, 1996 and affirmed the Award passed by the Arbitrator dated 5.9.2001, with clerical corrections made on 22.9.2001).
2. On 26.3.1993 the respondents awarded the work of “extension of terminal building” at Guwahati airport to the appellant. As per the contract, the date of commencement of work was 10.4.1993 and the period of completion of the work was 21 months, to be completed in different stages. As the appellant (also referred to as the `contractor’) did not complete the first phase of the work within the stipulated time, the respondents terminated the contract by order dated 29.8.1994.
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