Himachal Pradesh E-Mail/ Regd. Public Works Department: NO - SRJ/AB/PMGSY/HP-08-39A/2018-19-Dated: - To

Himachal Pradesh e-mail/ Regd.
Public Works Department

NO.SRJ/AB/PMGSY/HP-08-39A/2018-19- Dated:-
To
The Superintending Engineer

Ist Circle HP.PWD.Mandi
Subject: Settlement of Dispute relating to the work M/T on Chhatri to

Thach (Gadagosain Bagra Chhatri road) Km 0/000 to 15/00
under PMGSY-I (Batch-II, 2016-17) Stage-II (Package No. HP-08-
39A.)
Reference: Engineer-in-Chief HP.PWD. Shimla letter No. PW-CTR-29-

SEC(HP-08-39A)MZ/2019(211)11453-56 dated 09.09.2019
In compliance to the Engineer-in-Chief HP.PWD. Shimla letter No.

PW-CTR-29-SEC(HP-08-39A)MZ/2019(211)11453-56 dated 09.09.2019 vide which the point
wise reply/calculate the claim if admissible was desired on the subject cited above.
In this connection it is submitted that the subject the cited work
was awarded to Sh. Bhupinder Paul Mahjan Govt. Contractor vide Executive Engineer Karsog
Division HP.PWD. Karsog letter No. KSG-PMGSY-HP-08-39A/2017-7672-75 dated 10.10.2017
(Now the work falls under the jurisdiction of Seraj Division) amounting to Rs. 7,35,50,854/-
Only (Agreement No. 03 for 2017-18). The time allowed for completion of work is 18 months
which is to be reckoned from 15 th day after award letter. The work is required to be completed
by the contractor on or before 20.04.2019.The contractor has executed the work to the tune of
Rs.217.54 Lakh to date only and balance work is in progress. In between the contractor has
raised dispute under clause 24 of the contract agreement and appealed in the office of the Chief
Engineer (MZ) HP.PWD. Mandi for dispute redressal, regarding wrong and unlawful deduction
of amount from the contractor’s bill in the name royalty, wrong interpretation and applicability
of GST. Act. 2017 and interest on due payment from the date of action under section 31(7) (a) of
arbitration and conciliation act 1996. The hearing under section 24 of the contract agreement
for redressal of disputes raised by the contractor was held in the chamber of Chief Engineer
HP.PWD. Mandi on dated 02.02.2019 at 11.00AM to settle the dispute.
The point wise reply of dispute as raised by the contractor is as under:
Dispute No.I Wrong and unlawful deduction of amount from the contractor’s bill in the
name of royalty.
In this connection it is submitted that the royalty has been deducted from the
contractor as per the provision contained in the clause 41.1 of the contract
agreement. The clause 41.1 says that the rates quoted by the contractor shall be
deemed to be inclusive of the sales and other levies duties royalties, cess, toll, taxes
of Central and State Governments, local bodies and authorities that the contractor
will have to pay for the performance of this contract. The Employer will perform
such duties in regard to deduction of such taxes at source as per applicable law. The
Mining Department has made it mandatory that the mining material or material
converted from mining should be used and transported only through valid
countersigned X-forms. X-form is initially a proof that the material has been brought
from approved source and after paying the royalty. If the contractor fails to prove
that the material has been brought from approved source and after paying the
royalty then this office is duty bound to deduct the royalty. Moreover an amount of
Rs. 3,81,299/- has been deducted upto 3 rd running bill of contractor after adjusting
the Bill/ X/W- Forms and in addition to above Rs. 2,27,103/-was with held from the
4th R/bill of contractor due to non furnishing of security as per the decision of
hon’ble high court on dated 08.04.2019. If the contractor submit the X/W-form
issued by the Mining department no royalty is to be deducted from the contractor’s
bill. In pursuance to the guidelines issued by the Director of Mining Department H.P.
Letter No.5-49,79-Ind.Voll.III-10955 dated 16/12/2016 non submission of W/X
Forms, the royalty is being deducted from the contractors bills. In view of the above
this office is duty bound to deduct the above amount on account of royalty charges
because the contractor did not give any proof/documents that the royalty charges
has already been deposited in to Govt. Account.
Dispute No.2. Wrong interpretation and applicability of GST 2017.
In this connection it is intimated that as per guideline conveyed by NRIDA. Ministry

of Rural Development the Govt. of India vide letter No. NRRDA-G021(17)/32017-
FA/1793-1821 dated 06.06.2018 all the construction work have been divided into
four categories (ABCD). As per guidelines above work comes into category “A” i.e.
the DPR of above work was sanctioned before July 2017 and the work was awarded
after 01.07.2017. As per guideline for category “A” the contractor has to prepare the
component wise variation of rates after taking the impact of GST and submit the
same to this office after vetting the same from Charted Accountant. But the
contractor did not do so. Moreover this office has worked out the impact of GST of all
PMGSY works and has already been sent to the your office vide this office letter
No12339-41 Date. 24.01.2019 for necessary approval. In view of above the
contractor may submit his claim on account of impact of GST. As detailed in the
guidelines issued by NRRDA (Copy enclosed).However this office has requested to
the contractor vide letter No. 13261-68 dt. 08.02.2019, 19479-81 dt. 14.03.2019,416-18
dt. 24.04.2019, 1119-22 dated 24.05.2019, 3727-29 dt. 06.07.2019 5455-58 dt.
06.08.2019 and 5803-05 dated 08.08.2019 to submit the copy of invoices and statement
of input taxes duly certified by a Chartered Accountant, but the contract has failed to
submit the same as per the guidelines of NRIDA.
Depute No, 3. Loss of efficiency in the performance of the contract.
In this connection it is submitted that all the due payments have been made to the
contractor well in time i.e. within 30 days of submitting the bill/detail of
measurement. The contractor did not submit any bill on account of impact of GST as
per NRIDA. guidelines as such his claim could not be verified. No tax invoices have
been submitted as such it is impossible to calculate the net impact of GST.
Dispute No.4. Interest on due payment from the date of cause of action under section 31
(7) (a) of Arbitration and reconciliation Act 1996.
In this connection it is intimated that all the payment has been made to the
contractor well in time as such the question of interest does not arise. The payment
on account of GST. Impact could not be released as the contractor did not submit the
complete case as per NRRDA guidelines.
Dispute No.5. Interest on the awarded amount with effect from the date of award till the
date of realization of payment under Section 31 (7) (b) of Arbitration Act. 1996
with amendment 2015.
The contractor did not submit his claim on account of GST. Impact as per NRRDA
guidelines as such this department is not at fault as such the contractor is not
entitled for any interest.
D.A. As above
Executive Engineer
HP.PWD. Division
Seraj at Janjehli
Copy to the Engineer-in-Chief HP.PWD. Shimla for information
w.r. to his office letter No. 11453-56 dated 09.09.2019, please.
Copy to the Chief Engineer (MZ) HP.PWD. Mandi for information

and necessary action w.r. to the Engineer-in-Chief HP.PWD. Shimla letter No. 11453-56 dated
09.09.2019, please.
Copy to Sh. Bhupinder Paul Mahajan Govt. Contractor R/o Vill&
P.O. Ratti Distt. Mandi H.P. for information w.r. to his letter No. 983-86 dated 25.02.2019.
Executive Engineer
HP.PWD. Division
Seraj at Janjehli

Himachal Pradesh E-Mail/ Regd. Public Works Department: NO - SRJ/AB/PMGSY/HP-08-39A/2018-19-Dated: - To

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Himachal Pradesh e-mail/ Regd.

Public Works Department

The Superintending Engineer

Subject: Settlement of Dispute relating to the work M/T on Chhatri to

Reference: Engineer-in-Chief HP.PWD. Shimla letter No. PW-CTR-29-

In compliance to the Engineer-in-Chief HP.PWD. Shimla letter No.

The point wise reply of dispute as raised by the contractor is as under:

Dispute No.2. Wrong interpretation and applicability of GST 2017.

In this connection it is intimated that as per guideline conveyed by NRIDA. Ministry

Depute No, 3. Loss of efficiency in the performance of the contract.

Copy to the Chief Engineer (MZ) HP.PWD. Mandi for information

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