M/S. Vijay Electrical ... vs The State Of Andhra Pradesh,
2021 Latest Caselaw 4127 AP

             THE HON'BLE SRI JUSTICE A.V.SESHA SAI

                    WRIT PETITION No.10421 OF 2021
ORDER:

This Writ Petition, filed under Article 226 of the

Constitution of India, calls in question the order passed by

the Superintending Engineer, Operation Circle, APCPDCL,

Ongole, respondent No.3 herein, vide Letter bearing

LR.No.SE.O.OGL.TECH.E.DOC.E.No. 261047/2021 dated

12.05.2021, terminating L.S.Agreement No.105/2020-21

dated 18.09.2020.

2. According to the petitioner, it is a Proprietory

concern and the deponent of the writ affidavit, who is the

Proprietor of the petitioner-Proprietory concern, has been

eking out his livelihood by executing electrical work

contracts. The Andhra Pradesh Electrical Licencing Board,

Government of Andhra Pradesh, issued electrical contract

licence Grade-A in favour of the petitioner and the same is

being renewed from time to time, enabling the petitioner to

undertake operation and maintenance works at 33/11 K.V.

Sub-Stations. In response to a tender floated by respondent

No.2 for carrying out Manning of Sub-Stations, Operation

and Maintenance including Watch and Ward at 33/11 K.V.

Sub-Stations, the petitioner herein participated in the said

process of tenders and emerged as successful bidder for the

Sub-Stations at Adusumilli, Karamchedu, Swarna,

Edupulapadu, Motupalli, Vallapalli, Uppumaguluru,

Vemavaram, Komminenivari-palem, Velamvaripalem. The

Superintending Engineer, respondent No.3 herein, executed

L.S.Agreement on 18.09.2020, covering all the above said

Sub-Stations in favour of the petitioner herein for

undertaking the works for a period of two years, commencing

from 01.09.2020 to 31.08.2022. According to the petitioner,

he appointed the Shift Operators/Watchmen and intimated

the same to respondent Nos.3 to 5 to take necessary steps for

verification of certificates by duly fixing the dates. The

Executive Engineer, Chirala, respondent No.4 herein issued a

notice dated 07.12.2020, asking the petitioner to produce the

following:

(1) Validity of Original Grade-A Electrical Contract Licence cum original permit books.

(2) Supervisor in person along with Original permit certificate and Book.

(3) Wireman in person along with Original permit certificate.

(4) Equipment along with test certificate.

3. It is pleaded by the petitioner herein in the

affidavit filed in support of the Writ Petition that by way of a

reply dated 24.12.2020 (acknowledged by the office of

respondent No.4 on 28.10.2020), he produced the entire

information sought.

4. The Executive Engineer, Addanki, respondent

No.5 herein issued a notice dated 07.12.2020, asking the

same information as sought by respondent No.4 in the above

mentioned notice dated 07.12.2020 and according to the

petitioner, vide reply dated 16.12.2020, he produced the

entire information sought and the office of respondent No.5

also acknowledged the same on the even date.

5. Subsequently, vide letter dated 05.02.2021,

respondent No.3/Superintending Engineer instructed the

petitioner to attend his office on or before 11.02.2021 with

relevant documents, pertaining to Wireman permit No.0-

304244 along with the persons during office working hours of

any working day between 10.30 a.m. and 5.00 p.m. and also

directed the petitioner to produce the following

documents/information:

1. Original Appointment Letters issued to Supervisor & Wiremen.

2. Attendance Register of Supervisor and Wiremen.

3. Salary particulars paid to supervisor and Wiremen including E.P.F., E.S.I./Insurance Register numbers.

4. List of contract works done by the agency along with Purchase Orders/Work Orders details.

5. Performance Certificate issued by the department.

6. Ownership/Rental receipts paid by the agency for the address location specified.

6. In reply to the same, according to the petitioner,

he submitted explanation dated 11.02.2021, enclosing the

following:

1) Valid A grade licence original.

2) Supervisor and wireman competency certificates original.

3) Super permit book upto 33KV original book.

4) Wire man permit book copies.

5) Superviser in person.

6) Wireman in person - two persons.

7) Insulation megger 2.5KV, 0.5000 M ohm.

8) Insulation megger 1000 volts, 0-500 M ohm.

9) Insulation megger 500 volts, 0-100 m ohm.

10) Earth megger 0-10 M ohm, 0-1000 M ohm.

11) Tong Tester voltage 0-750 volts Amps 0-1000 amps Resistance 0-20 K ohm

12) 7 to 11, Equipment test certificates enclosed.

13) Attendance Register of Supervisor and Wireman's.

14) Salary particulars paid to supervisor and wireman's including E.P.F., ESI/Insurance Register Numbers.

15) List of contract works done by the agency along with purchase orders/work order details.

16) Ownership/Rental receipts paid by the agency for the address location specified.

7. Vide letter bearing No.LR.No.SE.O.OGL.TECH.F.

DOC.E.No.257476/2021 dated 03.04.2021, the

Superintending Engineer, respondent No.3 herein, issued a

final notice, pointing out the following alleged lapses on the

part of the petitioner herein:

1. The Particulars of E.P.F., ESI in respect of 2 Nos working wire men namely R.Bala Krishna and K.Sambasiva Rao for the period 01.09.2020 (i.e., date of Agreement) to 31.12.2020 are not submitted.

2. The particulars of Salary payment made through Bank along with proof of Bank Account details in respect of 2 Nos working wire men namely R. Bala Krishna and K.Sambasiva Rao for the period 01.09.2020 (i.e., date of Agreement) to 31.01.2021 are not submitted.

3. As per the Attendance Register 2 Nos working wiremen were not engaged full time for the said work as given below.

8. In response to the above letter, the petitioner herein

submitted a reply dated 07.04.2021 and eventually, the

Superintending Engineer-respondent No.3 herein, vide letter

dated 12.05.2021, terminated the L.S.Agreement dated

18.09.2020. This Writ Petition filed under Article 226 of the

Constitution of India assails the validity and legal sustainability

of the said order of termination.

9. The respondents herein have filed counter affidavit

and a reply is also filed by the writ petitioner.

10. Heard Sri V.Venugopal Rao, learned counsel for the

petitioner and Sri Y.Nagireddy, learned Standing Counsel for the

respondent-Corporation, apart from perusing the material

available on record.

11. Contentions/submissions of Sri V.Venugopal Rao,

learned counsel for the petitioner:

(1) The order impugned in the present Writ Petition is

highly illegal, arbitrary, unreasonable, malafide, discriminatory

and violative of Articles 14 and 19(1)(g) of the Constitution of

India.

(2) The grounds assigned by the respondent-authorities for

terminating the L.S.Agreement are neither sustainable nor

tenable in the eye of law.

(3) The reason assigned in the impugned order that there

was no valid Grade-A Electrical Contractor's Licence as on date

of tender is contrary to the orders dated 30.03.2021 and the

respondent ought to have seen that the deemed suspension was

on account of Covid-19 pandamic and the licence stood extended

with retrospective effect.

(4) The competent authority to issue A-Grade Licence is the

A.P.Electrical Licencing Board, which granted licence renewal

upto14.07.2021 and the Board issued the licence on production

of one Supervisor permit and 2 Wiremen permit and the Board

alone is competent to verify and take action and respondents, if

have any doubt as regards the licence and requirements

contained therein cannot initiate action on their own, but can

report the same to the Board for necessary action, if any.

(5) The respondents herein have absolutely no jurisdiction

to ask information about EPF/ESI, Salary payment and other

particulars as regards the salary payments and the attendance

registers.

12. Contentions/submissions of Sri Y.Nagireddy, learned

Standing Counsel for the respondents:

(1) The present Writ Petition filed under Article 226 of the

Constitution of India is not maintainable as the issue raised in

the Writ Petition pertains to contract.

(2) The contention that the respondents have no

jurisdiction to verify EPF and ESI payments is not tenable in

view of Clauses 6(iii) and 7(ii) & (vi) of the L.S.Agreement.

(3) The contention as regards the alleged harassment and

discrimination is neither true nor has any basis and the

petitioner herein has utterly failed to prove the same by

adducing evidence.

(4) At the time of entering into contract, the petitioner

herein had no valid A-Grade contract licence in his favour and

no intimation was furnished to the respondents about the letter

of the Chief Electrical Inspector dated 30.03.2021.

(5) Clause 36 of the L.S.Agreement mandates filing of

returns before the EPF authorities.

(6) As per Clause 33(T) of the L.S.Agreement, all disputes

arising out of the contract are to be decided in the Courts

situated in the geographical limits of the respective Operation

Circles, as such, the petitioner herein has to file a Civil Suit

before the jurisdictional Civil Court for reddressal of grievances,

if any.

13. In the above background, now the issue which this

Court is called upon to answer in the present Writ Petition is

"Whether the petitioner is entitled for any relief from this Court

under Article 226 of the Constitution of India, having regard to

the facts and circumstances of the case?

14. It is very much manifest from a reading of the

impugned order that on four grounds, the Superintending

Engineer-respondent No.3 herein terminated the L.S.Agreement.

They are:

(1) As per the report received from CEIG (Chief Electrical

Inspector to Government), the "Grade A" Electrical Contractors

Licence issued in favour of the petitioner was deemed to be

under suspension and the petitioner submitted an invalid Grade-

"A" Electrical Licence at the time of submission of the tenders

and the petitioner violated the terms and conditions of the tender

specifications.

(2) Particulars of E.S.I., E.P.F., in respect of 2 Nos. working

Wiremen, namely, R.Balakrishna and K.Sambasiva Rao for the

period 01.09.2020 i.e., the date of agreement, till 31.12.2020

were not submitted.

(3) Particulars of Salary Payment made through Bank along

with proof of Bank account details in respect of 2 Nos. working

Wiremen, namely, R.Balakrishna and K.Sambasiva Rao for the

period from 01.09.2020 i.e., the date of agreement till

31.01.2021 were not submitted.

(4) As per the attendance register 2 Nos. working Wiremen

were not engaged full time for the work as given below:

No. of days engaged Sl.No. Month R.Balakrishna K.Sambasiva Rao

15. In order to consider and adjudicate the validity and

the sustainability of the above said grounds assigned in the

impugned order for terminating the L.S.Agreement, it would be

apposite and appropriate to refer to the notices issued by

respondent No.3 prior to issuing the impugned order and the

explanations offered by the petitioner in response to the same. It

is very much evident from a reading of the letter bearing

No.LR.NO.SE.O.OGL.TECH.F.DOC.E.No.749499/2021 dated

05.02.2021 of the Superintending Engineer-respondent No.3

that respondent No.3 in the said letter indicated only about the

letters of respondent Nos.4 and 5 dated 01.02.2021 and

02.02.2021, wherein respondent Nos.4 and 5 alleged to have

stated that 1 No. Wireman permit No.0-304244 pertaining to 'A'

Grade licence was not produced and respondent No.3 in the said

letter dated 05.02.2021 also instructed the petitioner to produce

as many as 6 documents, namely:

1. Original Appointment Letters issued to Supervisor & Wiremen.

2. Attendance Register of Supervisor and Wiremen.

3. Salary particulars paid to supervisor and Wiremen including E.P.F., E.S.I./Insurance Register numbers.

4. List of contract works done by the agency along with Purchase Orders/Work Orders details.

5. Performance Certificate issued by the department.

6. Ownership/Rental receipts paid by the agency for the address location specified.

16. In response to the said letter dated 05.02.2021,

the petitioner herein submitted a reply dated 11.02.2021,

enclosing as many as 16 documents as mentioned in the

preceding paragraph. Thereafter, vide letter dated

03.04.2021, the Superintending Engineer-respondent No.3

herein issued another notice and the petitioner submitted a

reply dated 07.04.2021 and both the replies dated

11.02.2021 and 07.04.2021 were duly acknowledged by the

office of respondent No.3 and the respondents have not

denied the submission of the said explanations and the

documents enclosed. A perusal of the said

explanations/replies dated 11.02.2021 and 07.04.2021

reveal, in clear and unequivocal terms, that the petitioner

herein enclosed all the relevant documents as regards the

alleged lapses indicated in the show cause notices dated

05.02.2021 and 03.04.2021.

17. With regard to Grade-A Contractor's Licence, both

the petitioner as well as the respondents herein seek to place

reliance on the letter bearing No.Lr.No.EI/Gnl/APELB/D.No.

209 dated 30.03.2021.

18. The specific contention advanced on behalf of the

respondents herein is that at the time of tender process

including L.S.Agreement, the Grade-A Contractor's Licence of

the petitioner was under deemed suspension, as such, the

very tender submitted by the petitioner herein was invalid

and liable for rejection.

19. In order to resolve the issue as regards Grade-A

Contractor's Licence, it may be highly essential to verify the

letter dated 30.03.2021 of the Electrical Inspector. According

to the said letter dated 30.03.2021, there is absolutely no

controversy as regards the permit of one Wireman, namely,

K.Sambasiva Rao and the controversy is only with regard to

the Wireman permit of one Sri R.Balakrishna. According to

the said letter dated 30.03.2021, permit of R.Balakrishna, a

Wireman, bearing No.0-302766 was valid during the period

from 22.06..2015 to 21.06.2020 and subsequently, the

permit holder did not approach the office of the Electrical

Inspector for renewal of his permit within the time, but

subsequently, the said permit came to be revalidated from

14.12.2020 to 13.12.2025. The Electrical Inspector also

opined that in view of the same, the Contractor's Licence was

deemed to be under suspension from 21.03.2020 as the said

Wireman permit holder did not renew his permit within one

month from the date of expiry of his permit. According to the

respondents' version, since the subject tender process took

place during the above said interregnum period and as the

licence of the petitioner herein was under deemed

suspension, the very participation of the petitioner in the

said tenders was impermissible. A significant aspect which

this Court cannot lose sight of is that during the above said

interregnum period, the entire world was under a

tremendous agony due to Covid-19 pandemic and obviously,

due to the said ground reality, the Electrical Inspector

ordered revalidation of the permit of Sri R.Balakrishna. It is

also significant to note in this context that Electrical

Inspector, Guntur Division, Guntur, who is the authority

competent to issue Grade-A Contractor's Licence, also

informed the Superintending Engineer, Operation Circle,

Ongole, in the letter bearing No.Lr.No.EI/Gnl/APELB/D.No.

209 dated 30.03.2021 that the office of the Chief Inspector

would not give any suspension order for the Contractor's

Licence and the same was deemed to be suspended during

that period and would be revoked after the permit holder

renewed the permit. In the said letter, the Electrical

Inspector also made it very much clear that such relaxation

had been given in view of the Covid-19 pandemic situation

and as there was no transportation during the period from

March, 2020 to December, 2020. In view of the above

reasons, the contention contra advanced by the respondents

herein that the petitioner herein participated in the tender

process without valid Grade-A Contractor's Licence cannot

stand for judicial scrutiny. Therefore, the ground assigned in

the impugned order to the said effect is neither sustainable

nor tenable in the eye of law.

20. As regards the other grounds, namely, non-

submission of ESI, EPF pertaining to 2 Nos. Wireman, Salary

Payment and Attendance Register, it is required to be noted

that in response to the notices dated 05.02.2021 and

03.04.2021, the petitioner herein submitted elaborate

replies/explanations dated 11.02.2021 and 07.04.2021 duly

enclosing various documents including the documents

sought by the petitioner herein, but the Superintending

Engineer-respondent No.3 herein in the impugned order

conveniently mentioned that only certain details were

furnished by the petitioner, but did not mention the details of

the said information. Having called for the information, vide

notices dated 05.02.2021 and 03.04.2021 and having

acknowledged the replies/explanations dated 11.02.2021

and 07.04.2021, this Court does not find any valid reason/

justification on the part of respondent No.3-Superintending

Engineer in not referring to and not considering the contents

of the said explanations and the documents enclosed

therewith. This exercise undertaken by respondent No.3, in

the considered opinion of this Court, is patently arbitrary and

infringes the fundamental right guaranteed to the citizens

under Article 14 of the Constitution of India and this Court

does not find any justification on the part of respondent No.3

in undertaking the process of termination of the

L.S.Agreement in such an arbitrary manner. It is a settled

and well-established principle of law that when the impugned

action is patently arbitrary and illegal, the Writ Petition is

maintainable even in contractual matters in view of the law

laid down by the Hon'ble Supreme Court in Tata Cellular Vs.

Union of India1. In the case on hand, this Court finds such a

contingency, as such, the contention contra advanced by the

learned counsel for the respondents as regards the

maintainability of the Writ Petition is not sustainable. In the

considered opinion of this Court, the judgment of the Hon'ble

Supreme Court dated 21.11.2001 passed in Appeal (Civil)

No.7932 of 2001 in the case of State of Bihar and others Vs.

Jain Plastics and Chemicals Limited, on which reliance is

placed by the learned counsel for the petitioner, would not

render any assistance to the petitioner, having regard to the

facts and circumstances of the present Writ Petition.

21. For the aforesaid reasons, the Writ Petition is

allowed, setting aside the impugned order passed by the

Superintending Engineer-respondent No.3 herein, vide Letter

bearing LR.No.SE.O.OGL.TECH.E.DOC.E.No.261047/2021

dated 12.05.2021 and the matter is remanded to respondent

No.3 for fresh consideration of the issues and for passing

appropriate orders/taking appropriate action strictly in

accordance with law after giving opportunity of hearing to the

petitioner herein and taking into account the contents of the

1996 AIR 11 = 1994 SCC (6) 651

explanations/replies submitted by the petitioner dated

11.02.2021 and 07.04.2021 and in the light of the

observations made supra. There shall be no order as to costs

of the Writ Petition.

Interlocutory applications pending, if any in the Writ

Petition, shall stand closed.

__________________ A.V.SESHA SAI, J

21.10.2021 siva

THE HON'BLE SRI JUSTICE A.V.SESHA SAI

WRIT PETITION No.10421 OF 2021

21.10.2021 siva