KB Enterprises Vs UOI

Communications from UOI

26/08/2016 -UOI issues letter claiming the KB hasn’t procured labour license and hasn’t submitted
integrated program chart, as not submitted before 15 days from commencement of tender ,a fine of
5000 per day will be charged as per agreement.

03/09/2016 – UOI states that due constant delay by KB , it requires a show cause to not take action
under sub clauses 3a and 3b of the contract and also reiterating the fine of 5000 per day amounting
to 110000.

14/09/2016- UOI claims that Kb was not allowed to start work before the granting of labour license
but only after 1.5 months did KB apply for the licenses and none of the details which are required to
be updated in the CPWD Website have been. UOI claims that program chart 2 level programme
submitted on 2/8/16 is false as it isn’t relevant to the scope of work and 4 level program chart was
actually submitted a day later than claimed by KB. Uoi claims that the excuse of the shortage of
bricks by kb is false and due to non payment of advance to the brick supplier by Kb is causing the
delay. The cement Gowdown constructed is not per GCC specifications according to UOI. The main
site engineer Manikandan N has fallen ill according to KB and as replacement they have replaced him
with MD Vimalanthen which is in violation of clause 36 according to UOI. Uoi claims that due to
improper action by KB ,the mumty room remains unfinished which can cause interior damage to the
building and such damages must be liable to KB. Uoi denies any claims of external forces playing a
part in KB’s delay. It should be noted that on inspection by the observation of the chief engineer ,
multiple violations were found. UOI calls for a show cause within 7 days or subclause 14 of the
contract will be implemented and proof of advance payment for bricks and order of lift, wooden
frame and grill should be submitted.

26/10/16- UOI claims that work is very slow after site inspection 2 days prior. It was noted that 75
days of 120 labour days had passed but not even 15 percent of work was completed. Promise of
labour shuttering materials is false and entrusted mumty room and terrace work to another
contractor at risk and cost, proof of order has not been furnished. KB’s statement that 90 percent of
brick work being completed is false and statement of monopoly brick supplier Asian paints is also
false. No proof of orders are taken as false statements by UOI even if stated in previous mails in
regard to its completion. Barchart still not received and only one graduate engineer present at site
since 20th of October.

27/1/17- Clause 3 is invoked of the contract, giving engineer in charge the power to take action . In
his opinion KB will not be able to finish the work in time even with the extension of time given from
16/12/2016 to 30/3/2017. UOI reserves the right to recover compensation in accordance of clause 2.
KB provided a revised program on this day promising completion on 25 th feb.

14/03/17- Engineer in charge proceeds to invoke clause 14 and chooses to ‘take out such part of
work out of your hand’ to be given to another contractor due to incompletion within the stipulated
time.

6/12/17- UOI states that the extension of date was provided by EIC from 29/03/17 to 31/05/17 and
was completed on 12/05 but under clause 2 KB is liable to pay compensation of 150 days and gives
notice of 10 days to provide show cause.
19/12/17 (MUD TO superintendent engineer)- Claims Kb fails to procure materials ,men, has sublet
the contract which was denied by main agency. Labour payments should’ve been made from banks
which was violated ,denies the claim of cyclone vardah has caused a hinderance on work.

15/03/18( Superintendent engineer to kb)- UOI states that the work has finally been completed on
12/05/17 with a delay of 150 days allowing the government to recover the agreed compensation
without prejudice under sub clause 5 in accordance with sub clause 2 of the agreement and the EIC
had given an EOT until 31/05/17. The superintendent engineer finds KB solely liable for 109 days of
the 150 and charges a fine of 25,34,938.

22/7/20- Executive engineer- EE claims that the 25l doesn’t come under the lens as the amount was
recovered and adjusted as a levy on compensation in final grant of EOT UNDER CLAUSE 2, reply to
show cause on 6/12/17 was considered and rejected. Kb agreed to the compensation through a
letter on 21/3/18 , hence as per clause 9 of the agreement no further claims are admissible and
claim denied. The 15percent claim is unjustified as under clause 14 as it was at risk and cost on kb
and have made itself liable even with repeated reminders from the department and hence is denied

Communications from KB

24/10/16 – Communicated to the executive engineer at cpwd that labour ,shuttermaterial for
mumty room and terrace works and parapet work partly completed. Postponement of balance
parapet and khurras work due to Diwali. States that 90 percent of brick work completed and internal
and external plastering started. Kb also clarifies that purchase orders for tiles,granite and plumbing
works .Requests foe UG sump location drawing and external development work so then resources
can be released accordingly in 7 days time from clearance and plan for timely completion along with
other works .Conveys the the revised program will be released on 28 th oct 16 in consideration with
the release of the development works and UG works drawing details.

14/12/17- (KB to superintendent engineer) , KB states the even though work could’nt be completed
on time it was due to factors the weren’t under their control and have completed the work with all
the requirements, standards and achieved good quality and also states that the work has been
completed to the satisfaction of the department despite losing out financially. Value for subhead 1
estimation was 71,20,361 but costed 8621216 which included an extra item work which was 10
percent higher than its estimated value. Kb also states that the work for cement concrete road,
drainage, rain water harvesting was started by them on 1 st week of feb but was stopped by the
department and was executed by another ageny even though was protested by kb under clause 14.
Pleads to sanction EOT case without the levy of compensation.

29/09/18- (superintendent engineer) , In relation to the compensation of 25,34,938 claimed by

CPWD , KB states that an EOT should be for 168 days due to the legitimate hinderances and in
respect to this only 109 days were acyually hindered and hence the work was completed with the
EOT. The parts of the work that was contracted to other agencies under clause 14 (risk and cost)
53,09,953 and 52,38,567 respectively has caused huge losses for KB and requests additional money
recovered from them. Also requests 15 percent of all the work taken as kb accepts no fault in this
part.

29/11/18- (superintendent engineer) – Kb requests withdrawal of the order and release of

15percent of work given away. Reiterates that only 109 days of 168 days of EOT used.
12/2/19- ( chief engineer)- Request to appoint arbitrator.

27/5/19- (Chief to Kb)- Request denied as perclause 25 , as no claim has been referred to the
executive engineer it is denied.

08/7/20- ( executive engineer) – Due to illegal termination of the contract kb has claims against
executive engineer

1. Refund of 25,34,938 recovered from bills towards compensation under clause 2 of the
agreement
2. 15 percent due to loss of profit from sublet of work
3. Interest amount on the 25 l at 18 percent.

Issues

1. Did Kb not meet the requirements of the agreement?

2. Has CPWD illegally terminated the agreement ?
3. Does KB have a claim to the compensation levied for delay and interest on the
amount?
4. Does Kb have a claim to 15 percent of total value of work done by other
agencies?