The High Court of Karnataka has directed the Anti-Corruption Bureau (ACB) to conduct an investigation into cases where contractors have claimed crores of rupees as cost escalation and compensation from the Bangalore Development Authority (BDA) for delay in execution of works related to formation of layouts by handing over lands in bits and pieces.
A Division Bench comprising Justice Ravi Malimath and Justice M. Nagaraprasanna passed the order on December 17 on an appeal filed by the BDA challenging an award of ₹10.81 crore passed by an arbitrator in November 2018 in favour of one B.K. Gangadhar, a class-1 contractor. The BDA also challenged the September 2019 order of a commercial court, which had dismissed the BDA’s suit against the arbitration award on the ground of enormous delay in filling the suit.
Apart from the contract awarded to Mr. Gangadhar, the Bench said that ACB should probe whether officials of the BDA were hand-in-glove with the contractors in similar cases, seeking compensation from BDA for deliberately causing delay in completion of works, which are pending before the BDA, and either pending or disposed of before the courts of law.
The ACB is at liberty to go into the matters in the pending files before the courts of law as well as the disposed matters in order to ascertain whether the officials are in hand-in-glove in any of the cases, the Bench said, while directing the ACB to submit investigation reports in six months.
The Advocate-General, whose view the Bench had sought on ordering probe into such claims made by the contractors and to know whether BDA’s officials connived with contractors to cause deliberate delay, suggested that the ACB could probe such cases.
In the present case, Mr. Gangadhar was awarded with the contract of works related to Arkavathi layout Block 7 by the BDA during August 2012 by accepting his lowest bid for ₹4.37 crore against the estimated cost of ₹6.06 crore. The works, which were required to be completed by November 2012, were completed only in May 2016 due to delay in handing over of lands for execution of works.
After BDA cleared his bills in September 2016, the contractor invoked arbitration clause in the contract agreement and the High Court appointed a retired engineer-in-chief of the Public Works Department as the arbitrator. The contractor submitted a claim for payment of compensation of around ₹19.71 crore before the arbitrator, who after considering BDA’s contentions, awarded ₹10.81 crore in favour of the contractor.
The BDA, which had 90 days time to challenge the award under the Arbitration & Conciliation Act, 1996, filed the suit only after 157 days citing that its officials were busy in general elections and a new set of officers who were posted after the elections had decided to challenge the award.
