Andhra Pradesh High Court - Amravati
Narra Constructions Pvt.Ltd., vs The Government Of Ap on 15 November, 2022
Bench: Subba Reddy Satti
HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION Nos.42236 of 2017 and 39288 of 2018
WRIT PETITION No.42236 of 2017
Between:
Narra Constructions Pvt Ltd., Rep. by its
Managing Director Narra Srinivas, S/o
N.V.Subba Rao, Hindu, aged 48 years, Occ:
Contractor, R/o Flat No.202, Kanthi Sikhara
Apartment, Panjagutta, Hyderabad.
... Petitioner.
Versus
State of Andhra Pradesh, Rep. by its Prl.
Secretary (R&B), Secretariat, Velagapudi,
Amaravathi and three others.
... Respondents.
Counsel for the petitioner : Sri P.Veerraju
Counsel for respondents : GP for Roads & Buildings
WRIT PETITION No.39288 of 2018
Between:
Narra Constructions Pvt Ltd., Rep. by its
Managing Director Narra Srinivas, S/o
N.V.Subba Rao, Hindu, aged 48 years, Occ:
Contractor, R/o Flat No.202, Kanthi Sikhara
Apartment, Panjagutta, Hyderabad.
... Petitioner.
Versus
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State of Andhra Pradesh, Rep. by its Prl.
Secretary (R&B), Secretariat, Velagapudi,
Amaravathi and three others.
... Respondents.
Counsel for the petitioner : Sri P.Veerraju
Counsel for respondents : GP for Roads & Buildings
COMMON ORDER
These writ petitions were filed by the petitioner Private
Limited Company represented by its Managing Director.
Since the reliefs claimed in both the writ petitions are inter-
linked, they are dealt with jointly and disposed of by a
common order.
WRIT PETITION No.42236 of 2017
2. This writ petition is filed seeking Writ of Mandamus
declaring the action of 4th respondent in terminating the
contract under Clause 62.3 of GCC and not following the
procedure contemplated under Clause 63 of GCC as illegal,
arbitrary and against the terms of agreement and
consequently direct the respondents to release the
petitioner's amount due under contract bearing
CR.No.91/2013-04 dated 14.02.2014.
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3. (a) In the affidavit filed in support of the writ petition, it
was contended interalia that the Government of Andhra
Pradesh called for tenders on 10.12.2013 through e-
procurement for construction of multi-storied building after
demolishing the sub-court building at Vijayawada; that bid
was submitted on behalf of petitioner on 31.01.2014 and the
petitioner's company stood as lowest; that estimated value is
Rs.43,26,72,948/- and petitioner quoted the bid amount at
Rs.39,31,26,640.55/-, 9.14% less than estimated value; that
3rd respondent-Superintendent Engineer, R&B sent
communication to the petitioner to sign the agreement,
accordingly, agreement bearing No.CR.No.91/2013-14 was
signed by 3rd respondent and authorized representative of
petitioner; that site was handed over to petitioner on
14.02.2014, however designs and drawings were not made
ready.
(b) Stipulated time for completion of contract is 36
months from the date of agreement; that entire site was not
handed over; that designs and drawings were not supplied till
20.06.2015; that 3rd respondent concluded supplemental
agreement after supply of designs and drawings and hence,
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the petitioner could not show work progress in initial period,
in fact letters were addressed to 3rd respondent on
23.05.2015, 29.08.2016, 30.11.2016, 18.01.2017,
07.02.2017 and 27.02.2017 explaining the reasons for slow
progress of work.
(c) On 10.02.2016 letter was addressed to 3rd
respondent to arrange funds for making payment; that
another letter dated 01.02.2017 was addressed stating that
site is located adjacent to the Hon'ble Chief Minister's Officer
and hence, the police did not allow to ply vehicles; that police
also did not allow to do contract work during day time in view
of Pushkarams; that structural designs and drawings were
handed over on 20.06.2017 and there is variation of work by
more than 200%.
(d) Stipulated time for completion of contract was
expired by 14.02.2017; that in letter dated 28.02.2017, a
request was made to extend the time upto 31.08.2018
without liquidated damages and also submitted a revised
programme; that 2nd respondent by letter dated 16.03.2017
extended the currency of contract upto 30.06.2018 by
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imposing liquidated damage of Rs.11 lakhs; that as per
Clause 54 of GCC, the department has to impose liquidated
damages only, when there is no possibility of extending
currency of contract.
(e) 4th Respondent sent letter No.Court Complex @ VJA
/A3/2013 dated 26.07.2017 terminating the contract as per
Clause 62.3 of GCC and requested to take immediate action
as per Clause 62.4 of GCC; that though the order is dated
26.07.2017, it was communicated to petitioner on
30.07.2017; that even after expiry of four months, neither 3 rd
respondent nor 4th respondent issued any certificate for the
value of work done by petitioner as per Clause 63.1 of GCC.
(f) 3rd Respondent issued paper publication inviting
tenders from the eligible contractors for the left over work,
since the contract was terminated, petitioner is entitled to get
the amount due to him from the department as per Clause
63.1; that nearly 4.5 crores was held up with the department,
apart from bank guarantees and deposits submitted by the
petitioner at the time of tenders and hence filed the writ
petition.
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(g) Along with writ petition, I.A was filed for grant of
stay of all further proceedings of 3rd respondent's notice
inviting tenders vide NIT.No.25/TO/2017-18 dated
05.02.2017, however no interim stay was granted by this
Court.
4. (a) 4th Respondent filed counter affidavit and contended
interalia that the Government issued G.O.Rt.No.92 Law
(LA&J) Home-Courts.A1 department dated 06.05.2013 and
accorded administrative sanction for construction of multi-
storied building complex after demolishing the old sub court
building at Vijayawada for Rs.5800.00 lakhs; that tender
notification was issued and the petitioner was successful
bidder; that agreement was concluded vide C.R.No.91/2013-
14 dated 14.02.2014; that site was handed over to petitioner
on 14.02.2014 and the work has to be completed within 36
months i.e. by 13.02.2017; that petitioner commenced the
work and the progress of the work was very slow; that the
authorities issued letter on 28.10.2015 to speed up the work
and, in turn, letter was addressed on behalf of petitioner
promising to accelerate the rate of progress, however,
petitioner has not taken up the work properly.
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(b) Time and again, respondent authorities requested
the petitioner to speed up the work; that the authorities
proposed to impose liquidated damages vide letter
No.1209/Court Complex @Vja/AEE2/2013-2014 dated
18.08.2016, 21.10.2016 and 18.11.2016; that notices were
also issued to the petitioner under clause 60-C of APDSS
dated 06.05.2016, 20.08.2016 and 29.11.2016; that in spite
of letters and notices, petitioner has not chosen to complete
part of Grade slab and Stilt floor slab; that extension of time
was recommended duly imposing liquidated damages of
Rs.11.00 lakhs for slow progress of work; that the Engineer-
in-Chief (R&B) Buildings has granted extension of time upto
30.06.2018 vide Memo No.DEE2/AE6/ CTS&Res
Qtrs/25646/2010 dated 16.03.2017.
(c) As there is complete change of time as per the
agreement and as per the approved designs, supplemental
agreement to be concluded for making payment to the
agency; that deviation statement upto stilt floor level has
been prepared and approved by the competent authority and
bills were paid; that 2nd deviation statement for all floors was
submitted along with financial implication and it is to be
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approved; that the Executive Engineer (R&B) issued notice to
the petitioner under 60(A) of APDSS dated 23.06.2017.
(d) After reviewing the work, the Registrar
(Administration) vide Roc.No.1333/2012-DII (BLDGS) dated
18.07.2017 directed to terminate the contract forthwith and
to assess the total quantum of work and quality of work done
and value of work done so far by JNTU, Kakinada and
further, JNTU has to give a detailed estimate of the work to
be completed for fixing new agency; that accordingly, the
Executive Engineer (R&B) terminated the contract vide letter
No.Court [email protected]/A3/ 2013-2014 dated 26.07.2017 as
per Clauses 62.3 and 62.4 of the conditions of contract of
agreement; that the Chief Engineer (R&B) was requested to
ratify the action taken by the Executive Engineer; that the
JNTU, Kakinada was entrusted with the work of assessment
and the value of work done by the agency and the balance of
work to be done; that JNTU, Kakinada submitted report on
the value of work done by the agency as Rs.11,08,28,199/-
after deducting TP @ 9.14% less on the balance of work to be
done for Rs.68.50 crores and the same was submitted to the
Chief Engineer (R&B) Buildings vide T.O. Lr.No.1209/Court
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[email protected]/AE2/2013-14 dated 29.9.2017 and
31.10.2017; that the Chief Engineer (R&B) Buildings vide
Memo No.DEE3/AE6/CTS&ResQtrs/25646/2010 dated
28.07.2017 instructed to call for tenders and accordingly, the
tenders were called vide Nit.No.25/TO/2017-18 dated
15.12.2017 of the Superintending Engineer (R&B) Circle,
Vijayawada.
(e) Balance work was entrusted to M/s Sri Satya Sai
Constructions, Visakhapatnam vide C.R. Agreement
No.36/2018-19 dated 17.05.2018 at 13.59% less over the
estimate contract value of Rs.43.96 crores within the
agreement period of 15 months; that site was handed over to
the agency on 17.05.2018; that agency grounded the work
and the work is in progress; that 4th respondent followed
Clauses 62.3 and 63 of GCC and thereafter terminated the
contract following the procedure; that petitioner requested
release of amount due under contract bearing
C.R.No.91/2013-14 dated 14.02.2014; that the petitioner had
an alternative remedy for recovery of amount and the writ
petition is filed with false allegations and thus, prayed to
dismiss the writ petition.
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5. (a) Reply affidavit was filed on behalf of petitioner on
07.09.2021. In reply affidavit, it was contended that without
waiting, after grant of extension, respondents illegally and
unlawfully terminated the contract; that new agency accepted
the contract for the remaining work of building at 13.59%
less over the estimated value and as such no loss was caused
to the Government either by termination of contract or re-
entrustment of remaining work, thus, deductions from the
amount payable to the petitioner under the guise of
compliance of clause 63.1 etc. would not arise; that in fact,
the petitioner is entitled to interest at 18% and deduction of
Rs.88,59,649/- is illegal and unlawful and even as per the
letter of 3rd respondent, the net amount due as on
26.07.2017 is Rs.2,15,66,370/-, however, 3rd respondent by
letter dated 10.05.2018 alleged that an amount of
Rs.1,67,06,467/- was due as on 26.07.2017, after deducting
statutory dues.
(b) 3rd Respondent-Superintending Engineer, R&B in
Lr.No.1269/Court [email protected]/AEE2/2017 dated
10.05.2018 addressed to the Chief Engineer, R&B, admitted
that amount payable to the petitioner after deducting
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recoveries is Rs.1,67,06,467/-; that the said amount is not
inclusive of withheld amount of 7.5%, which the Government
will hold as security deposit; when the contract is terminated,
the said amount is also liable to be paid and if the said
amount is included, the total amount payable would be
Rs.2,15,66,370/- and thus, the respondents are liable to pay
Rs.2,15,66,370/- with subsequent interest at 18% from the
date of termination till realization; that as per clause 63.2, for
belated payments interest @12% is payable.
6. Additional affidavit was filed on 23.08.2022 on behalf of
petitioner. It was contended interalia that at the time of
termination of contract, under Clause 62.3, the amount due
to the petitioner is Rs.2,21,12,698/- (Rs.1,67,06,467/- +
Rs.74,34,631/- i.e. 7.5% withheld amount) after deducting
Rs.20,28,400/-, however, the dues wrongly calculated and
the respondents have shown an amount of Rs.2,15,66,370/-
is only due to petitioner, instead of Rs.2,21,12,698/-; that
petitioner is also entitled for pendente lite and post lite
interest; that respondents have not acted fairly and
reasonably even though the petitioner discharged part of the
contract most honestly and loyally and vacated the premises
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as directed by the respondents despite pendency of the writ
petition; that delay in completing the construction of building
was occurred since the Court canteen building and the site at
front portion thereof was not handed over to the petitioner's
company, even by the date of termination of contract; that
drawing and structural designs were not supplied 16 months
after commencement of contract and eventually, prayed to
allow the writ petition.
WRIT PETITION No.39288 of 2018
7. This writ petition is filed seeking Writ of Mandamus
declaring the inaction of 3rd respondent in not issuing correct
certificate for work done by the petitioner as illegal and
arbitrary.
8. (a) In the affidavit, it was contended interalia that after
closure of contract, the department has recorded
measurements, checked, verified the recorded measurements;
that W.P.No.19733 of 2018 was filed on behalf of petitioner to
direct the respondents to issue work done certificate and the
same was disposed of directing the respondent authorities to
supply certificate and accordingly, the 4th respondent sent
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certificate through letter No.DEE2/AEE7/CTS/Res/25546/
2010 dated 24.07.2018; the said certificate indicates that the
department is entitled to recover an amount of
Rs.88,59,649/- from the petitioner; that in the said
certificate, 4th respondent deducted an amount of
Rs.3,04,26,019/- towards tender premium under clause 63.1
of GCC.
(b) 4th Respondent having terminated the contract by
invoking clause 62.3 of GCC, has proposed recovery under
clause 63.1 of GCC. Clause 63.1 deals with termination of
contract for fundamental breach, whereas clause 62.3 deals
with termination of contract for convenience and thus, clause
63.1 has no relevancy to the facts of the case and hence, the
certificate issued by 4th respondent is not valid; that legal
notice dated 24.03.2018 was issued to 3rd respondent,
however, the authorities did not choose to reply to the notice.
Hence, the writ petition was filed.
9. (a) 4th Respondent filed counter affidavit denying the
averments in the writ petition and contended interalia that
pursuant to issuance of drawings, petitioner started
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construction work and the building can be constructed
without constructing portico, which can be constructed at a
later stage; that columns are not connected to the main
building work and it was brought to the notice of petitioner
several times; that the contract agency has given the revised
milestone programme on 06.05.2016, however the petitioner
failed to stick on to the revised milestone programme; that
the petitioner is proceeding with slow progress of work and
the same was brought to the notice of agency by letters dated
18.11.2016 and 29.11.2016.
(b) Pursuant to the disposal of W.P.No.19733 of 2018,
whereby this Court directed the Engineer-in-Chief to issue
certificate as envisaged under clause 63 of terms and
conditions of contract between the parties, recoveries due to
be made by the petitioner agency as per clause 63.1 comes to
Rs.3,04,26,019/-; that the petitioner has to pay
Rs.88,59,649/- to the department; that the completion
certificate was issued as per clause 63 of the agreement and
prayed the Court to dismiss the writ petition.
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10. Reply affidavit filed on behalf of the petitioner and
contended that the respondents having assessed the value of
work done by the petitioner at Rs.2,15,66,370/- could not
pay the amount immediately within 28 days after termination
of contract; that an amount of Rs.7,68,467/- was deducted in
7th and Part Bill dated 20.03.2017; that respondents are not
entitled to charge Rs.2,83,97,620/- against the total value
amount after termination of contract, since the remaining
work was given to another contractor at an amount less than
13.59%.
11. With the consent of the both the parties the writ
petitions were disposed of.
12. Both these writ petitions were filed in connection with
termination of contract entered by petitioner with respondent
authorities vide agreement No.C.R.No.91/2013-14 dated
14.02.2014 and as such, they are disposed of by a common
order. In fact, learned counsel for the petitioner and
respondent also agreed since the issue involved in the writ
petitions is more or less one and the same and they are
interconnected.
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13. Undisputed facts going by the pleadings are that an
agreement was entered into by the Superintendent Engineer
(R&B), R&B Circle, Vijayawada and the petitioner M/s Narra
Constructions Private Limited, Hyderabad represented by its
Managing Director for construction of multi-storied court
building complex after demolishing the old sub-court building
at Vijayawada. Estimate contract value is Rs.43,26,72,948/-
and the petitioner became lowest tenderer for
Rs.39,31,26,640.55, which is 9.14% less than estimate value.
Period for completion of work is 36 months.
14. According to the petitioner, though the site was handed
over on the date of agreement, however, the designs and
drawings were not supplied till 20.06.2015. Respondents by
filing counter affidavit denied allegations and would contend
that as per M.Book recordings, GSB work is completed in the
month of May, 2015 and thus, the authorities denied the
allegations of the petitioner regarding non-supply of drawings
and designs.
15. A perusal of material papers filed along with the
counter affidavit would indicate that letters were issued to
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the petitioner about slow progress of work and in fact, in
some of the letters it was also indicated that action will be
initiated as per Clause 60 (C) of APDSS and as per agreement
conditions. In letter dated 29.11.2016 issued by the
Executive Engineer (R&B) to the petitioner, it was directed to
accelerate and show considerable progress of work as per the
programme, otherwise the department will not hesitate to
take penal action as per Clause 60 (C) of APDSS.
16. The said letter is extracted hereunder for better
appreciation.
GOVERNMENT OF ANDHRA PRADESH
ROADS AND BUILDINGS DEPARTMENT
** ** **
From To
Sri M.Satyanarayana Rao, B.Tech, MBA, M/s Narra Construcitons Pvt Ltd
Executive Engineer, FAC, Flat No.202,
(R&B) Division, Kranthi Sikhara Apartments,
Vijayawada. Panjagutta, Hyderabad.
Lr.No.A3/CR.Agt No.91/2013-14/VJA2015, dt. -11-2016.
Gentleman,
Sub: (R&B) Division, Vijayawada - Construction of multistoried
court building complex after demolishing the old Sub-Court
building at Vijayawada - Est Rs.58.00 crores - Slow progress
of work - remarks called for - Regarding.
Ref: 1) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015,
dt.06-10-2015.
2) Review meeting on 01.05.2016 by the Hon'ble District
Judge, Krishna, Machilipatnam.
3) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015,
dt.05-05-2016.
4) Your letter No.NCPL/MCBC-VJY/2016 dt.06.05.2016.
5) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015,
18
dt.20-08-2016.
6) District Level Monitoring Committee meeting held on
10.09.2016 by Hon'ble District Judge, Machilipatnam.
*****
During District Level Monitoring Committee meeting held on
05.05.2016, headed by the Hon'ble District Judge, Krishna,
Machilipatnam, you have given revised programme of work on
06.05.2016 for speedy progress of the above work. But you have not
adhered to the milestone. Owing to slow progress of the work, you have
been reminded vide ref 5th cited to speed up the progress of the work. But
the work is not put on track and you have defeated the assurance given
by you.
Again the District Level Monitoring Committee meeting held on
10.09.2016, headed by the Hon'ble District Judge, Krishna,
Machilipatnam. During the meeting you have promised in the presence of
the Hon'ble District Judge, Krishna, Metropolitan Sessions Judge,
Vijayawada and other judicial officers that tremendous progress would
be shown then onwards as Krishna Pushkarams were already completed
and there are no hurdles for transportation of materials. During the
meeting all the Judicial officers and R&B officers have been impressed by
your words and agreed for you consent given and instructed to speed up
the work. After promise made by you on 10.09.2016, you have completed
only a meagre amount of work till today.
By this time, you would have been completed Part-B, Slab 1 as per
the programme of work given by you on 06.05.2016. It shows that your
progress of work is behind the stipulated target. You have neither stick
on to the revised programme nor stick on to the promise made by you
during the District Level Monitoring Committee meeting held on
10.09.2016. Since this project is very prestigious project and it is need
to accommodate all the 23 courts and judicial officers, offices, the motive
of the project is defeated due to your slow progress and invites very
much criticism from the Government and Judicial Officers. The image
and decorum of the department has become shameful in the public as
well as in the judicial department due to your slow progress of work only.
Hence, you are directed to accelerate and show considerable progress
of work as per the programme given by you within a week. Otherwise the
department will not hesitate to take penal action as per clause 60 (C) of
APDSS.
Yours faithfully,
Sd/- M.Satyanarayana Rao
Executive Engineer, FAC,
(R&B) Division, Vijayawada
17. To the above letter, reply was sent on behalf of the
petitioner. This is one of the letters among other
communications in between the officials and writ petitioner.
18. The Executive Engineer (R&B), Vijayawada addressed
letter to the petitioner on 23.06.2017 and requested to speed
up the progress of work. By issuing said letter, the petitioner
was directed to show cause as to why action shall not be
initiated against the petitioner under Clause 60 (a) to APDSS
by determining the contract. Eventually, basing on the
representation made on behalf of the petitioner seeking
extension of time upto 31.08.2017, time was extended till
30.06.2018 by imposing liquidated damages of Rs.11 lakhs.
As the matter stood thus, by letter No.Court Complex @ VJA
/A3/2013 dated 26.07.2017, the Executive Engineer
terminated the contract as per Clause 62.3 conditions of
contract and requested the petitioner to vacate the site as per
Clause 62.4 of agreement conditions.
19. Learned counsel for the petitioner contended that since
contract was terminated under clause 62.3, deductions made
by the authorities does not arise.
20. Clauses 62 and 63 of General Clause and Conditions
are extracted hereunder:
62. Termination:
62.1. The department may terminate the Contract, if the
contractor causes a fundamental breach of the Contract.
62.2 Fundamental breaches of Contract include, but
shall not be limited to the following:
a) The Contractor stops work for 28 days when no
stoppage of work is shown in the current program
and the stoppage has not been authorized by the
Engineer-in-Charge.
b) The Contractor is made bankrupt or goes into
liquidation other than for a reconstruction or
amalgamation.
c) The Engineer-in-Charge gives Notice that failure to
correct a particular Defect is a fundamental
breach of Contract and the Contractor fails to
correct it within a reasonable period of time
determined by the Engineer-in-Charge; and
d) The Contractor does not maintain a security
which is required and
e) The Contractor has delayed the completion of
works by the number of days for which the
maximum amount of liquidated damages can be
paid as defined.
f) If the contractor, in the judgment of the
Department has engaged in corrupt or fraudulent
practices in competing for or in the executing the
contract.
g) The contractor has contravened Sub-Clause 5 of
Conditions of Contract and sublet the work.
h) The contractors does not adhere to the agreed
construction program (Clause 24.1, 24.2, 24.3,
24.4 of Conditions of contract) and also fails to
take satisfactory remedial action as per the
agreements reached in the managerial meeting
(Clause-31) for a period of 15 days.
i) The Contractor fails to carry out the instructions
of Engineer-in-charge within a reasonable time
determined by the Engineer-in-charge.
For the purpose of this paragraph: "corrupt
practices" means the offering, giving, receiving or
soliciting of anything of value to influence the action of a
public official in the procurement process or in contract
execution. "Fraudulent practice" means a
misrepresentation of facts in order to influence a
procurement process or the execution of a contract to the
detriment of the Government and includes collusive
practice among Tenderers (prior or after Tender
submission) designed to establish Tender prices at
artificial non-competitive levels and to deprive the
Government of the benefits of free and open competition.
62.3 Notwithstanding the above, the Department may
terminate the contract for convenience. (emphasis is
mine)
62.4. If the Contract is terminated, the Contractor shall
stop the work immediately, make the site safe and
secured leave the site as soon as reasonably possible.
63. Payment upon Termination:
63.1. If the Contract is terminated because of a
fundamental breach of Contract by the Contractor, the
Engineer-in-Charge shall issue a certificate for the value
of the work done less advance payments received upon
the date of the issue of the certificate, less other
recoveries due in terms of the Contract, less taxes due to
be deducted at source as per law applicable and less the
percentage to apply to the work not completed.
Additional liquidated Damages shall not apply. If the
total amount due to the Department exceeds any
payment due to the Contractor the difference shall be a
debt payable to the department.
63.2. In case of default for payment within 28 days from
the date of issue of notice to the above effect, the
contractor shall be liable to pay interest at 12% per
annum for the period of delay.
21. Learned counsel for the petitioner would submit that
the contract was terminated for convenience of the
department and not due to breach of contract. Thus, the
authorities shall not make deductions as per Clause 63.1.
However, learned Government Pleader for Roads and
Buildings would submit that once the contract is terminated,
the department is entitled to recover the dues in terms of
Contract, less taxes due to be deducted at source as per law
applicable law and less the percentage to apply to the work
not completed etc. If the total amount due to the Department
exceeds any payment due to the Contractor the difference
shall be a debt payable to the department. In case of default
for payment within 28 days from the date of issue of notice to
the above effect, the contractor shall be liable to pay interest
at 12% per annum for the period of delay.
22. Learned counsel for the petitioner would submit that as
per the letter addressed by 3rd respondent to the Chief
Engineer vide Lr.No.1269/Court [email protected]/AEE2/2017
dated 10.05.2018, total value of work done by the petitioner
is Rs.11,32,39,290/- including the price adjustment as per
G.O.Ms.No.94. The net amount payable after deducting the
recoveries due in terms of contract is Rs.1,67,06,467/-.
Though the said letter contained statement of detailed
calculation as per G.O.Ms.No.94, the said calculation was not
filed along with the said letter. In fact, letter was addressed
by Superintending Engineer to the Chief Engineer.
23. Along with the counter affidavit in W.P.No.39288 of
2018, report of JNTU, Kakinada was filed which would
indicate that the total value of work done is
Rs.11,32,60,158/-. Certificate, issued pursuant to the
directions of this Court in W.P.No.42236 of 2017, would
indicate that after deducting amounts under various Heads,
an amount of Rs.88,59,649/- is to be recovered from the
agency. In the said statement, the amount to be recovered
under various Heads is shown as Rs.3,04,26,019/- and the
balance to be paid to the petitioner as per the statement is
Rs.2,15,66,370/-.
24. Learned counsel for the petitioner would submit that
the writ petition under Article 226 of the Constitution of India
is maintainable and placed reliance in the judgment of the
Apex Court in ABL International Ltd. and another Vs.
Export Credit Guarantee Corporation of India Ltd. and
others1. Learned Government Pleader would contend that
the calculation filed by the Government is not under
challenge in the writ petition. The prayer sought for in the
two writ petitions (1) to declare the action of respondents in
terminating the contract as illegal and arbitrary and
consequential relief of payment of amount (2) to direct the
respondents to issue correct certificate for the work done.
According to the learned Government Pleader, the petitioner
did not specify amount and the petitioner developed the case,
after filing of counter by the Government, by filing reply and
additional affidavit. In view of disputed questions of fact
involved, writ petitions under Article 226 of the Constitution
of India are not maintainable. In view of the disputed
questions of facts, necessary evidence is to be lead by the
parties before Civil Court.
25. Learned counsel for the petitioner, on the other hand,
would submit that there are no disputed questions of fact
involved in the writ petition. The material placed before this
Court would prima facie indicate that the contract was
(2004) 3 SCC 553
terminated by invoking Clause 62.3 for convenience and not
on the ground of breach of contract. Thus, the deductions
made by the respondents invoking clause 63 does not arise.
Thus, he would submit that there are no serious disputed
questions of facts involved in the writ petitions and hence,
the writ petitions are maintainable under Article 226 of the
Constitution of India. In support of his contention, he relied
on judgment of the Apex Court in A.V.Venkateswaran,
Collector of Customs, Bombay Vs. Ramchand Sobhraj
Wadhwani and Anr.2 and ABL International (supra).
Learned counsel for petitioner would submit that petitioner is
also entitled for interest and in that connection, he relied on
the judgment of the Apex Court in Bhagawati Oxygen Ltd.
Vs. Hindustan Copper Ltd.3
26. In A.V.Venkateswaran's case, the Apex Court held as
follows:
"9. We see considerable force in the argument of the
learned Solicitor-General. We must, however, point out
that the rule that the party who applies for the issue of a
high prerogative writ should, before he approaches the
Court, have exhausted other remedies open to him under
the law, is not one which bars the jurisdiction of the
High Court to entertain the petition or to deal with it, but
AIR 1961 SC 1506
AIR 2005SC 2071
is rather a rule which Courts have laid down for the
exercise of their discretion. The law on this matter has
been enunciated in several decisions of this Court but it
is sufficient to refer to two cases : In Union of India Vs.
T.R.Varma, 1958 SCR 499 at pp.503-504: ((S) AIR 1957
SC 882at p.884). Venkatarama Ayyar, J., speaking for
the Court said:
"It is well-settled that when an alternative and
equally efficacious remedy is open to a litigant, he
should be required to pursue that remedy and not
invoke the special jurisdiction of the High Court to
issue a prerogative writ. It is true that the
existence of another remedy does not affect the
jurisdiction of the Court to issue a writ; but, as
observed by this Court in Rashid Ahmed Vs.
Municipal Board, Kairana, AIR 1950 SC 163, 'the
existence of an adequate legal remedy is a thing to
be taken into consideration in the matter of
granting writs'. Vide also K.S.Rashid and Son Vs.
The Income-tax Investigation Commission, AIR
1954 SC. And where such remedy exists, it will be
a sound exercise of discretion to refuse to interfere
in a petition under Art.226 , unless there are good
grounds therefore."
There is no difference between the above and the
formulation by Das, C.J., in The State of Uttar Pradesh
Vs. Mohammad Nooh [1958] 1 SCR595 , where he
observed:
"............ It must be borne in mind that there is no
rule, with regard to certiorari as there is with
mandamus, that it will lie only where there is no
other equally effective remedy. It is well
established that, provided the requisite grounds
exist, certiorari will lie although a right of appeal
has been conferred by statute. The fact that the
aggrieved party has another and adequate remedy
may be taken into consideration by the superior
court in arriving at a conclusion as to whether it
should, in exercise of its discretion, issue a writ of
certiorari to quash the proceedings and decisions
of inferior courts subordinate to it and ordinarily
the superior court will decline to interfere until the
aggrieved party has exhausted his other statutory
remedies, if any. But this rule requiring the
exhaustion of statutory remedies before the writ
will be granted is a rule of policy, convenience and
discretion rather than a rule of law and instances
are numerous where a writ of certiorari has been
issued in spite of the fact that the aggrieved party
had other adequate legal remedies."
After referring to a few cases in which the
existence of an alternative remedy had been held not to
bar the issue of a prerogative writ, the learned Chief
Justice added:
"It has also been held that a litigant who has lost
his right of appeal or has failed to perfect an
appeal by no fault of his own may in a proper case
obtain a review by certiorari."
In the result this Court held that the existence of other
legal remedies was not per se a bar to the issue of a writ
of certiorari and that the Court was not bound to relegate
the petitioner to the other legal remedies available to
him.
10. The passages in the judgments of this Court we
have extracted would indicate (1) that the two exceptions
which the learned Solicitor-General formulated to the
normal rule as to the effect of the existence of an
adequate alternative remedy were by no means
exhaustive, and (2) that even beyond them a discretion
vested in the High Court to have entertained the petition
and granted the petitioner relief notwithstanding the
existence of an alternative remedy."
27. In Whirlpool Corporation, Vs. Registrar of Trade
Marks, Mumbai and others4, the Apex Court held as follows:
"20. Much water has since flown beneath the bridge,
but there has been no corrosive effect on these decisions
which though old, continue to hold the field with the
AIR 1999 SC 22
result that law as to the jurisdiction of the High Court in
entertaining a Writ Petition under Article 226 of the
Constitution, in spite of the alternative statutory
remedies, is not affected, specially in a case where the
authority against whom the Writ is filed is shown to have
had no jurisdiction or had purported to usurp
jurisdiction without any legal foundation.
21. That being so, the High Court was not justified in
dismissing the Writ Petition at the initial stage without
examining the contention that the show cause notice
issued to the appellant was wholly without jurisdiction
and that the Registrar, in the circumstances of the case,
was not justified in acting as the "TRIBUNAL"."
28. In ABL International (supra), the Apex Court
considered the maintainability of writ petition for
enforcement of contractual obligation of State and its
instrumentality. The Apex Court came to the conclusion that
if the State or its instrumentality acts in arbitrary manner in
the matter of contract, it being contrary to the constitutional
guarantees under Article 14 of the Constitution of India, the
person aggrieved can invoke extraordinary jurisdiction under
Article 226 of the Constitution of India. The Apex Court
further held that the writ petition involving consequential
relief of monetary claim is also maintainable. The Apex Court
held at Paragraphs 27 and 28 thus:
"27. From the above discussion of ours, following legal
principles emerge as to the maintainability of a writ
petition:-
(a) In an appropriate case, a writ petition as against a
State or an instrumentality of a State arising out of a
contractual obligation is maintainable.
(b) Merely because some disputed questions of facts
arise for consideration, same cannot be a ground to
refuse to entertain a writ petition in all cases as a
matter of rule.
(c) A writ petition involving a consequential relief of
monetary claim is also maintainable.
28. However, while entertaining an objection as to the
maintainability of a writ petition under Article 226 of the
Constitution of India, the court should bear in mind the
fact that the power to issue prerogative writs under
Article 226 of the Constitution is plenary in nature and is
not limited by any other provisions of the Constitution.
The High Court having regard to the facts of the case,
has a discretion to entertain or not to entertain a writ
petition. The Court has imposed upon itself certain
restrictions in the exercise of this power [See: Whirlpool
Corporation v. Registrar of Trade Marks, Mumbai and
Ors. MANU/SC/0664/1998MANU/SC/0664/1998: AIR
1999 SC 22 . And this plenary right of the High Court to
issue a prerogative writ will not normally be exercised by
the Court to the exclusion of other available remedies
unless such action of the State or its instrumentality is
arbitrary and unreasonable so as to violate the
constitutional mandate of Article 14 or for other valid
and legitimate reasons, for which the court thinks it
necessary to exercise the said jurisdiction."
29. There is no dispute regarding the proposition of law
enunciated by the Apex Court. In fact, the ratio laid down by
Apex Court binds this Court in view of Art 141 of the
Constitution of India. However, whether the writ petitioner in
the case on hand is entitled to Rs.2,21,12,698/- with
interest, as claimed, in the additional affidavit requires any
evidence to let in or is admitted amount. If it is admitted
amount, without any dispute, in view of the expression of
Apex Court writ petition under Art 226 of the Constitution of
India is maintainable.
30. As narrated supra, contract was terminated by invoking
clause 62.3. Though the writ petition was filed challenging
the termination of contract, however, no interim order was
granted by this Court. The petitioner vacated the premises
and the work was entrusted to another agency and in fact the
work was completed.
31. According to the writ petitioner, JNTU, Kakinada
assessed the work done by the petitioner and valued at
Rs.11,32,60,157.85. Petitioner was paid Rs.9,16,93,788/-
and the balance payable is Rs.2,15,66,370/-. It is pertinent
to mention here that the estimate of JNTC is not final. After
the estimate, authorities issues communication to the writ
petitioner that the total amount due by petitioner after
deductions comes to Rs.3,04,26,019/-. Thus, according to
respondents, petitioner is still liable to pay Rs.88,59,649/-.
In fact challenging the same, writ petitioner filed the second
writ petition seeking a direction to the authorities to furnish
correct certificate.
32. Some of excerpts in the affidavits, reply affidavits are
here with extracted, according to this court, are disputed
questions of facts need evidence to be let in competent Civil
Court.
a) In the affidavit filed in W.P.No.42236 of 2017, it was
contended that drawings and designs were not supplied
by the department till 20.06.2015.
b) According to the petitioner, letters explaining the slow
progress of work were addressed on 23.05.2015,
29.08.2016, 30.11.2016, 18.01.2017, 07.02.2017 and
27.02.2017.
c) The site is located adjacent to the Chief Minister's Office
and the police did not allow the vehicles to ply and the
police also did not allow to do concrete works during
day, in view of Pushkarams.
d) In Paragraph-9 of the affidavit, it was contended that
nearly 4.5 crores are held up with the department,
apart from the bank guarantees and deposits.
e) In the additional affidavit filed by the petitioner, it was
contended that at the time of termination of contract,
the amount due to petitioner is Rs.2,21,12,698/-.
f) It was further contended that due to wrong calculation,
respondents have shown in impugned notice an
amount of Rs.2,15,66,370/- only.
g) Petitioner also contended that the claim of respondents
for Rs.88,59,649/- is grossly illegal and unlawful and
even if it is accepted, it would be wagering contract
which is prohibited under Section 30 of the Contract
Act.
33. In the facts and circumstances of the case, unless
evidence is let in regarding the delay in completion of work;
termination of contract; deductions to be made by the
authorities and other communication before Civil Court,
these being serious disputed questions of law, writ petition
under Article 226 of the Constitution of India is not
maintainable. In State of Bihar Vs. Jain Plastic and
Chemicals Ltd.5, the Hon'ble Apex Court observed that
serious disputed questions or rival claims of the parties with
regard to the breach of contract are to be investigated and
determined on the basis of evidence which may be led by
parties in a properly instituted civil suit rather than by a
Court issuing prerogative writs.
34. This Court is conscious that merely because one of the
parties to the litigation raises a dispute with regard to the
facts of the case, the Court entertaining such writ petition
under Article 226 of the Constitution of India is not always
bound to relegate the parties to a suit. As per the
expressions of Hon'ble Apex Court writ petition is not a bar.
However, in case of serious disputed questions of facts, it is
always desirable to the parties to approach the civil Court.
The main prayer in the W.P.No.42236 of 2017 is to declare
the action of the 4th respondent in terminating the contract
under Clause 62.3 of GCC and not following the procedure
under Clause 63 of GCC as illegal and arbitrary. Unless, this
(2002) 1 SCC 216
Court comes to conclusion about the main prayer, granting of
consequential relief does not arise.
35. As pointed out supra, in the first place, petitioner itself
is not clear as to the amount payable to it by respondent
authorities. A perusal of affidavit, reply affidavit and
additional affidavit make the things more than discernable
that on every point both the petitioner and respondent are
disputing. Apart from that by filing counter respondent
authorities are asserting that the petitioner is liable to be pay
the amount after statutory deductions. In view of the serious
disputed questions of facts, in the considered opinion of this
Court, the prerogative writ under Article 226 of the
Constitution of India will not be issued in favour of petitioner.
Thus, W.P.No.42236 of 2017 is not maintainable and is liable
to be dismissed.
36. Accordingly, W.P.No.42236 of 2017 is dismissed. No
costs.
37. Since W.P.No.39288 of 2018 is filed to declare the
inaction of 3rd respondent in not issuing correct certificate for
work done by the petitioner as illegal and arbitrary, in view of
discussion made supra, it is evident that pursuant to order in
W.P.No.19733 of 2018, 4th respondent sent certificate vide
letter No.DEE2/AEE7/CTS/Res/25546/2010 dated
24.07.2018. In fact, the relief sought for in the writ petition is
to direct the respondents to issue correct certificate for the
work done by the petitioner. However, in view of serious
disputed questions of fact, as observed supra, no relief can be
granted by this Court in exercise of jurisdiction under Article
226 of the Constitution of India and hence, the writ petition
is liable to be dismissed.
38. Accordingly, W.P.No.39288 of 2018 is dismissed. No
costs.
After pronouncement of the order, learned counsel for
the petitioner sought permission to approach Civil Court by
invoking Section 14 of the Limitation Act.
It is open to the petitioner to invoke Section 14 of the
Limitation Act and if the petitioner approaches Civil Court by
invoking the said Section, the same shall be considered since
petitioner was bona fide in prosecuting the matter before this
Court.
As a sequel, all the pending miscellaneous applications
shall stand closed.
_________________________
SUBBA REDDY SATTI, J
15th November, 2022
PVD
