Penalty under clause 2 and 3c by housing board haryana
Prateek
(Querist) 17 August 2013
This query is : Resolved
My firm is carrying out various Housing Development Projects in different locations in Haryana all under the Housing Board Haryana.
The Executive Engineer has invoked a maximum penalty amount to 10% of the total amount of agreement due to slow progress under clause 2 on one of our projects. The Chief Engineer has confirmed the same. The board is taking immediate action as per clause 3c of the agreement by taking final measurements and applying risk and cause when it is on completion stage. As per board we have completed 47% of work under total agreement time of 27 months.
The main reasons for delay in work:
1. Non-availability of drawings for around 7-8 months by the board.
2. Change in nature of work from Load Bearing wall to RCC frame structure which requires a longer time duration and huge quantity variations from original bond.
3. Uneven surface of land and land 9-10 feet below the surface, hence construction activities take time.
4. Heavy rains led to problem of water logging and work was affected.
5. Ban by Supreme Court on Mining and excavation activities led to shortage of materials.
6. Non – payment of running bills on time by the board and a huge amount held by board in part rates and withheld in measurements.
We have discussed the above said issues with department but without taking them in consideration and on one sided hearing, they have imposed heavy penalty on us. Also no such penalty or notice has been issued to other agencies working under Housing Board whose progress is even slower than our agency. In our other projects under the housing board, we have got time extensions which are under different Executive Engineers but same Chief engineer. Despite of High Rise in market rate, our agency is still willing to complete the project by July, 2014. Also I have approach high court of Chandigarh, which have asked me to take recourse to the appropriate civil remedy in accordance with law and as per the terms of contract, the remedy of arbitration for the dispute is excluded. What are the possible options for me ? Should I stop all the work as all projects are affected? What are the chances of case in our favor?
Chattopadhyay Arghya
(Expert) 18 August 2013
I am giving some forms of communications--
1. To the Exec.Engineer,...... Sir, vide workorder No./contract No./ ref. etc. I would like to draw your attention that during last 48 hours heavy shower has washed away the staged earth,and stone chips on the work site. It has caused almost loss of Rs.100,000 lakhs approx. Therefore intermediate allocation of fund is necessary in excess as contingent matter. Besides this the processing will take some time, as now quarries are submerged in water, and site is moist to the over saturated limit. So we have to wait for sun to come and make all usable. It is regretted that we have stopped work being compelled due to act of nature such delay is caused. It is beyond my control. N.B- No reserve material or drying machines have been contracted to be used . It is for your kind information and necessary action so that unwanted penalty be not imposed.
2. To E.E......
vide ref.....
Sir I hereby inform you that some household occupants have started violence on work site alleging that their own land property has been included in the map of project and is under modification, whereas no notice was served for acquisition,and no compensation is given. They have set up obstruction on work site, and we are not in a position to resolve this without departmental intervention and security by police. So you are requested to take necessary steps for removal of obstruction. This circumstances have caused injury to some of my workers at the instance of the local people, and we already reported the incident to local SHO;but he has not yet taken effective measure for safe operation.This will cause enormous delay if any suit is filed by OP so until you response and other decision is taken among us the period of ceased work is not due to my fault and apparently government failed to secure ready work site and deliver it for construction. Our contract does not include resolving of such problems.
3. E.E....
ref- vide....
Sir as per contract terms our firm is entitled to receive intermittent payments for expenditure it being a huge project . For this intermediate bill was submitted, but no processing is carried out. The stipulated time of 3months for payment has passed; now I have been suffering from acute financial crisis, and cannot make payments to labourers and therefore I will be bound to stop work due to breach of contract terms facility on you part if payments not made in 7days from today. The delay would be solely on your risk and responsibility as no liquid damage would be affecting , no penalty shall be acknowledged, as I have no fault.
Chattopadhyay Arghya
(Expert) 18 August 2013
I am not going in detail correlations between clauses and the facts. A general line of solution is better in this regard. Legal technicality would be time taking and expansive in acute stage. You have already applied to Appellate authority and it is in vain .Your reasons for delay are common reasons Such incidents occur in case of all civil construction contractors or firms. I have experience of preventing such penalties in more than 10 construction companies and more than 20 individual contractors. But your problem is as in majority of the business org. or individuals that you appoint a regular taxing expert,a regular technical expert,a technically experienced coordinator and managers; but you ignore advocates. the loss you have incurred by penalty is almost unavoidable if you do not go for a decree suit or if you have arbitration provision in contract ; you may go to writ petitions on the ground of arbitrariness in taking decision and decision making process(complied/not complied as per administrative principles and associated special clauses if any with a biased focus on principle natural justice.But to do such you need an experienced technical consultant who has dealt with such matter and your advocate should consult the technical consultant before filing so as to put viable and judicially noticeable facts; technical persons will be able to put proper explanation as to the delay as unavoidable. If department has issued prior notice and you have not replied then the matter is going to be a bit more difficult. However my advice in business point of view is 1. Increase interaction and communication with the authorities and treat them accordingly as Indian Officers and send some good executive trouble shooting officer of you company or by hiring or the officer who manages tender matters before authorities. 2. Get a part timer advocate and aligned technical supervisor so that both together monitor the projects or you report and they work regularly working out explanation and reporting to authority on any occassion which delays work so that the responsibility can be fixed upon the authorities; it will prevent such incidents. we have a firm and we are an advocate, a C.A and an Experienced retired P.W.D engineer who served in relevant matter as technical personnel in government. So we do many works relating to construction business by contractors, tenders,financial documentation for transaction report,B.Sheet, Audit,Turn Over certificate, arranging Tools and Plans display papers,arranging work experience certificates. From next time you will be benefited.
Rajendra K Goyal
(Expert) 18 August 2013
Without going through all the details of agreement, work order, correspondence nothing can be advised. Contact your legal adviser and some retired PWD Engineer.
Raj Kumar Makkad
(Expert) 18 August 2013
It iis not practical to go through in such detailed query. Either cut short it or personally meet either of the experts of your choice for help.
