Tender Dispute Legal Analysis

Make the Statement of argument in * words with relevant case laws before the honble court for the first issue in this moot proposition Apex Co. Ltd (Apex) is a renowned construction company in Midland (country) with its head office in the State of Laine. The company enjoys the repute for being a real estate sector giant in Midland and constructor of world class residential and commercial facilities in several states of Midland. Apex wanted to establish a position in public construction works and participated in a tender floated by National Highways Authority of Midland (NHAM) on 1st December, * for construction of a flyover on National Highway-* which passed through several cities of Laine. This * km long flyover was constructed to provide a separate passage to the city public and inter-city travelers without affecting the trucks, industrial machine carriers and dumpers of industrial area along that part of the National Highway-*. The flyover was a resolution to prevent long traffics on the national highway and overall environmental and architectural development of the nearby area. Despite being the last applicant in the tender process and having no previous record of public construction, Apex won the tender by quoting the minimum asking price of *.* Crore Midland National Rupee for constructing * km of this *-lane fly over as per the specifications of the NHAM. Several construction companies outraged against NHAM and Apex regarding the contract allotment because as per the practice, experienced roadways construction companies used to be allotted the tender. Thereafter, on 1st January *, Apex entered into a construction agreement with NHAM which specified the terms of construction, payment schedules, performance period and liabilities of the parties. Some of the prominent terms of the construction agreement between NHAM and Apex are as follows: • That Apex shall complete the project within specified time of *.5 years from the signing of the agreement. • That Apex shall utilize standard construction materials and adhere to the architectural standards of public roads in Midland. • That Apex shall procure building supplies and construction materials from any of the several suppliers recommended by NHAM. (These building material suppliers were joint venture companies between Govt. of Midland and other private establishments.) • That NHAM shall be liable for timely payment of agreed monetary consideration to Apex as per the schedule of payment agreed between the parties. • That Apex shall be in charge of maintenance and repair work of the flyover post completion of construction for 2 years; Apex started the construction of the flyover in 1st July, * but failed to complete the construction within the agreed deadline and requested an extension of 3 months in July, *, to which NHAM agreed. NHAM allowed the extension after payment of a specified cost by Apex knowing very well firstly, that cost of project would substantially get affected now because of increase in prices of essential raw materials used for construction and secondly, there is an apprehension that heavy monsoon would have severely affected the quality of the project. The project got completed in October, *. Post completion of construction and before handing over of the flyover, Apex strictly warned NHAM that the load capacity of flyover is limited only to two-wheelers and light motor vehicles since the flyover was designed to benefit the local citizens and inter-city travelers. The flyover was inaugurated and opened for public use from January, * and solved traffic grievances of locals of Laine. After barely 3 months, trucks, dumpers and other heavy motor vehicles started using the flyover owing to potholes on the National Highway-*. Locals reported to the local office of State PWD that few pillars of the flyover were developing crevices and cracks at several places and could be repaired. They were informed that the flyover’s maintenance is in the hands of NHAM. Later, an NGO named RAHATHELP was approached by local citizens to raise this concern before NHAM and Apex. RAHATHELP sent formal notices to head offices of NHAM and Apex regarding the same on 10th July, *. In reply to which Apex notified that NHAM shall be duly notified of this issue from their end. Apex sent official notice to head-office of NHAM on 15th July, * and requested them to conduct full scale assessment of the construction so that Apex can make necessary repair work in timely manner. NHAM made no reply to the said notice. On 5th March, *, few pillars of the construction collapsed, bringing down a part of the flyover. It led to causing death of * citizens and hundreds of human casualties along with huge damage to public and private infrastructure around the underlying part of National Highway-*. Aggrieved by this tragic incident, RAHATHELP filed a PIL in the High Court of Laine against NHAM and Apex alleging the poor construction and lack of diligence by NHAM and Apex. In addition, it also prayed for compensation to the victims. Following this, NHAM also filed a case against Apex in the civil court stating deficiency in service to which Apex alleged that lack of diligence by NHAM in regulating the traffic and conducting timely repair work has caused this huge tragedy. The Civil Court adjudged that Apex breached the agreement by their deficiency in construction service. Aggrieved by this decision, Apex moved to Hon’ble Hight Court of Laine in appeal to the said decision. The issues before the High Court of Laine, in this matter, are as follows: • Whether the matters before Hon’ble High Court and civil court be clubbed together? • Whether NHAM is liable for mismanagement of the flyover leading to loss of lives and property? • Whether Apex Co. Ltd. be held liable for breach of construction contract and deficiency in service? (All the relevant laws of State of Midland are pari materia to Indian laws.)