M/s. URC Construction (P) Ltdrep. By its Executive DirectorS. PalanisamyH-102 v. Nandanam

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 18-08-2007CORAM :THE HONOURABLE MR. JUSTICE A. KULASEKARANW.P. No. 24925 of 2006andM.P. No. 2 of 2006M/s. URC Construction (P) Ltdrep. By its Executive DirectorS. PalanisamyH-102, Periyar NagarErode – 630 001.. Petitioner Versus1. Bharat Heavy Electricals Limited rep. By its Managing Director BHEL House, Siri Fort New Delhi – 110 0492. Bharat Heavy Electricals Limited rep. By its Senior Dy. General Manager Power Sector – Southern Region No.474, Anna Salai Nandanam, Chennai – 600 0353. Bharat Heavy Electricals Limited rep. By its Senior Manager Power Sector – Southern Region HPCL, Visakh Refinery Malkapuram Post Visakapatnam – 530 011.. RespondentsPetition filed under Article 226 of The Constitution of Indiapraying for a Writ of Certiorari as stated therein.For Petitioner :Mr. A.L. Somayaji, Senior Advocate for Mr. V.P. SengottuvelFor Respondents :Mr. Ramachandran, Senior Advocate for Dr. Anita SumanthORDERThe petitioner has come forward with this writ petitionpraying for a Writ of Certiorari to call for the entire records ofthe respondents which culminated in the impugned proceedings of thethird respondent in Ref.BHEL/HPCL/CVL/101 dated 27.07.2006 andquash the same as illegal. https://hcservices.ecourts.gov.in/hcservices/

2.The petitioner company is one of the engineeringcontractors. The respondents herein invited tenders for the workof construction of civil and structural work for CPP expansionproject at HPCL, Visakapattinam in which the petitioner company hasparticipated and became successful and the work order was alsoissued by the second respondent to the petitioner on 09.09.2004.The time granted for completion of the work was 10 months.According to the petitioner, the respondents delayed in releasingthe drawings, work front etc., and therefore, they could notcomplete the work in time. It is the case of the respondents thatthe delay is on the part of the petitioner in mobilising itsresources in time, which has affected the work progress. Thepetitioner approached the respondents by way of representationdated 05.05.2006 alleging that due to the delay in releasing thework front to it by the respondents and due to heavy rain in Vizag,the work could not be completed within the stipulated time orextended time, in the meanwhile huge increase in the price ofconstruction materials and gave two options for completion of thework entrusted to them. Subsequently, the petitioner and therespondents had a meeting at Chennai and the relevant portion ofthe discussions recorded in the minutes of the meeting held on16.05.2006 is extracted below:-"BHEL further stated that the project is to becompleted as per the commitment made to customerhence we have come to an understanding how tocomplete the work. As URC is expressing thefinancial burden on the works, BHEL suggestedthat the area of work where URC is doing atpresent can be continued and the balance work canbe executed by BHEL through alternativearrangements as per the provision of Contract.The area of the work are listed in the Annexureand requested URC to arrange the materials andlabour to complete the said works in all respectswith in 30.06.2006 to facilitate BHEL to carryout further erection work. BHEL also repeatedURC to carry out all the balance piling works andstructural steel works (Fabrication & Erection)URC agreed for the above but are not acceptingfor any liability due to the above alternativearrangements. If BHEL shall not press and putthe liability, URC has agreed to withdraw all theclaims proposed so far on BHEL and also will notraise any future claims in respect of theContract SCT 1100. M/s. URC further requestedBHEL to make the pending payments at theearliest.The above will be implemented only after theapproval of Competent Authority of BHEL." https://hcservices.ecourts.gov.in/hcservices/

3.Mr. A.L. Somayaji, learned senior counsel appearing forthe petitioner submitted that in the meeting held on 16.05.2006,the petitioner has categorically stated that the works mentioned inAnnexure-I alone would be completed by them, rest of the works canbe allowed to be completed by the respondents through third partyagency as they suggested, for which the petitioner has agreed,however, while giving such consent, it is stipulated by thepetitioner that they are not accepting any liability due to theabove alternative arrangement of engaging third party agencies forcompletion of other works except the works mentioned in theAnnexure I of the minutes; that after the said meeting and afterapproval of the minutes by higher authority, the respondents sent aletter dated 05.06.2006 requesting the petitioner to complete theworks which are listed in Annexure I to the minutes of the meetingdated 16.05.2006, which amounts to concurrence for the agenda ofminutes including one of the conditions of not accepting theliability when third party agencies are engaged to complete therest of the work. It is further submitted by the learned seniorcounsel for the petitioner that by the conduct of the parties, thedispute has been settled and thereafter, the respondents alsoallowed the petitioner to complete the works mentioned in Annexure-I, which was also executed, hence, no dispute at all foradjudication and prayed for allowing of the writ petition.4.Mr. Ramachandran, learned senior counsel appearing forthe respondents submitted that in the meeting held on 16.05.2006certain discussions were made by the petitioner and the respondentsbut nothing was concluded, particularly the conditions stipulatedby the petitioner that the petitioner cannot be made liable forconsequences of executing the other works by third parties and thatthe petitioner has misconceived the wordings contained in theminutes of the meeting and filed the present writ petition and thatthe contract between the parties contains arbitration clause, thedispute involved in this case has to be adjudicated only by thearbitrator, hence, the writ petition filed, seeking thediscretionary relief is not maintainable. 5.This Court carefully considered the argument of thecounsel for both sides and perused the material records. It isadmitted by both sides that after the meeting dated 16.05.2006, theonly communication sent by the respondents was dated 05.06.2006,which is extracted below:- "Please find enclosed herewith the copy ofMOM drawn between BHEL & M/s. URC Constructions(P) Ltd., for the meeting held at Chennai on16.05.2006 along with the list of works to becarried out by M/s. URC before 30.06.2006, whichis shown as Annexure-I to MOM dated 16.05.2006.You are requested to take necessary actionto complete the works as in Annexure-I to MOMdated 16.05.2006 without fail. In the event ofnot completing the works for any reason, BHELshall complete the same at your cost and risk. https://hcservices.ecourts.gov.in/hcservices/ This is for your information please."6.In and by the said communication, the respondentsreferred to the MOM dated 16.05.2006 and mentioned the annexure-Iwherein the works to be carried out by the petitioner were foundmentioned and requested to take necessary action to complete thesaid works without fail, in the event of not completing the worksfor any reason, it was informed that they would complete the sameat the cost and risk of the petitioner. It is stated by thepetitioner that the said letter dated 05.06.2006 was sent after theMOM was approved by the competent authority of the respondents,which was not specifically denied by the respondents in theircounter.7.A joint reading of the letter dated 05.06.2006 of thethird respondent along with the minutes of the meeting dated16.05.2006 makes it clear that the respondents agreed to permit thepetitioner to complete the works mentioned in Annexure-I withoutreserving their right to make any claim against the petitionerrelating to liability, if any arise when third parties are engagedfor carrying out rest of the works. It is further mentioned in theMOM that if the respondents not press or shift the liability on thepetitioner, the petitioner agreed to withdraw all claims proposedagainst the respondents and also not raise any future claim inrespect of the contract. While stipulating the said condition, thepetitioner requested the respondents to make the pending paymentsat the earliest. In the letter dated 05.06.2006 the respondentsunconditionally requested the petitioner to complete the worksmentioned in Annexure-I of MOM, hence, the respondents cannotapprobate and reprobate because on whom certain benefit isconferred has option either to accept or to reject, cannot do bothin respect of the very same transaction.8.In view of the above discussion and the fact that therespondents, by their letter dated 05.06.2006 elected to agree theMOM thereby prevented the petitioner from claiming any damagesagainst them and permitted the petitioner to complete the worksmentioned in Annexure-I, re-opening the settled things, that tooafter passage of time by issuing the impugned proceedings dated27.07.2006 is untenable in law, hence, the same is liable to bequashed and accordingly it is quashed.9.In the result, the writ petition is allowed as prayedfor. No costs. Consequently, connected miscellaneous petition isclosed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.rsh https://hcservices.ecourts.gov.in/hcservices/ To1. The Managing Director Bharat Heavy Electricals Limited BHEL House, Siri Fort New Delhi – 110 0492. The Senior Dy. General Manager Bharat Heavy Electricals Limited Power Sector – Southern Region No.474, Anna Salai Nandanam, Chennai – 600 0353. The Senior Manager Bharat Heavy Electricals Limited Power Sector – Southern Region HPCL, Visakh Refinery Malkapuram Post Visakapatnam – 530 0111 cc to Mr.V.P.Sengottuvel, Advocate, SR. 520531 cc to Mr. Anita Sumanth, Advocate, Sr. 51890WP No. 24925 of 2006KSJ (CO)kk 29/8