GVV Constructions Private Limited Vs Union of India & Ors. (Supreme Court of India)
Referral Court Cannot Restrict Arbitrator’s Jurisdiction Through Prejudicial Directions; Arbitrator Must Determine Whether Contract Termination Is an Excepted Matter; Court Referring Dispute Cannot Predetermine Its Arbitrability or Merits; Section 16 Empowers Tribunal to Decide Scope of Excepted-Matters Clause: Supreme Court
Facts of the case
South Central Railway invited tenders on 21.02.2017 for doubling the railway track between Guntur and Guntakal. The work included earthwork, blanketing, construction of bridges, road underbridges and other allied works.
The bid submitted by M/s GVV Constructions Pvt. Ltd. was accepted, and a formal agreement was executed on 30.11.2017. The stipulated date for completion was 23.10.2018.
The work was not completed within the prescribed period. On 10.06.2022, the Railway terminated the contract u/clause 62 of the Indian Railways Standard General Conditions of Contract. The performance guarantee and security deposit were forfeited, and the contractor was declared disentitled to compensation for any loss.
The contractor challenged the termination before the Telangana High Court u/Article 226, alleging that the Railway had not followed the procedure prescribed under the GCC. It also sought a direction requiring the Railway to follow clause 17.
Writ dismissed—but termination was simultaneously approved
