Andhra Pradesh High Court - Amravati
M/S. Shiva Chemicals vs The Government Of India on 20 September, 2022
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P.No.11616 of 2021
ORDER:
The petitioner is in the business of manufacturing of paints, and
supply of painting services. He was registered as a vendor with the 2 nd
respondent-Corporation with vendor Code No.200372 for the past 10
years.
2. The case of the petitioner is as follows: the petitioner had
been awarded a contract bearing No.4410003330, on 24.07.2019 by the
2nd respondent-Corporation. This contract was for carrying out repairs of
various structures in SMS-1 area for a value of Rs.70,00,000/-. This work
was to be started from 01.09.2019 and to be completed by 01.08.2020.
The petitioner had taken immediate steps for commencement of execution
of work. However, the work could not be started because the Engineer in
Chief had not processed the application of the petitioner for issuance of
gate passes to the persons, who would have to carry out the work. The
the Engineer in Chief had, in fact, directed the petitioner to give the
names of the workers who were already working on other contracts, given
to the petitioner by the respondent-corporation. Thereafter, the petitioner
submitted a fresh application with names of 9 existing workers. Due to the
said delay, work could be commenced only from November, 2019. During
the course of the work, the petitioner was called upon to complete other
works on priority basis, and therefore, the execution of the work covered
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by the above contract got delayed. While the matters stood thus, the work
had to stop on account of the Covid-19 pandemic from March, 2020.
3. The petitioner sought extension of the contract and the said
extension was granted, from 01.08.2020 to 13.09.2020 to 14.09.2020 to
31.01.2021 and thereafter, till 30.04.2021. However, only 50% of the
work had been completed by the extended deadline and the petitioner
sought further extension of three more months along with late fee to
complete the contract. Respondents 2 to 4 had not shown any inclination
to give further extension and on the contrary issued show cause notice on
05.04.2021 to which the petitioner replied on 19.04.2021. Thereafter, the
impugned final order bearing reference No.VSP/WC/Sted.2021/
4410003330/edak-331 dated 25.05.2021 has been passed debarring the
petitioner from entering into the future business with the respondent-
corporation, and canceling the registration of the vendor code of the
petitioner and completion of the balance quantities in the above contract
at the risk and cost of the petitioner.
4. The petitioner has approached this Court impugning the
above order on the ground that the petitioner was unable to complete the
contract on account of the non-cooperation of the Engineer in Chief of the
respondent-corporation and the subsequent Covid-19 pandemic and the
restrictions imposed by the authorities due to this pandemic. The
petitioner submits that the entire business of the petitioner is executing
contracts with the respondent-corporation and cancellation of the vendor
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code of the petitioner as well as barring the petitioner from conducting
business with the respondent-corporation for a period of two years would
effectively take away the livelihood of the petitioner and as such would be
an illegal and arbitrary order.
5. The respondent-corporation had filed a counter affidavit
stating that the value of the contract is not Rs.70,00,000/- but
Rs.70,49,973/-. The respondent-corporation denies the allegation that the
Engineer in Chief had not granted temporary gate passes expeditiously. It
is stated that an application for gate passes was filed on 05.09.2019 and
the same was issued on 17.09.2019 for nine workers. However, these
workers attended the training programme for executing this work only on
30.10.2019 and actual work was commenced by only 8 workers from
22.11.2019. It is further stated that apart from this application, the
petitioner has applied for 4 additional passes only on 11.07.2020 and the
same was approved on the very same day. But the petitioner did not
collect the passes till 30.07.2020. However, no workers were engaged
after these gate passes had been issued and the petitioner himself had
sought cancellation of these passes on 29.09.2020. Thereafter, the
petitioner again applied for additional gate passes for 9 workers on
01.10.2020, which was approved on the same day. In the circumstances,
the contention that the petitioner was not able to take up the work on
account of the non-availability of gate passes for the workers is incorrect.
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6. The contention of the petitioner that the workers engaged
for this contract had to be redeployed at the direction of the Engineer in
Chief is answered by the respondent-corporation by stating that Clause
2.3 of the contract itself provided a right to the Engineer to direct the
petitioner to redeploy the workers depending on the priority of the work.
The counter states that the painting of slag yard was critical for the unit
and therefore the said direction to redeploy does not in any manner
violate the terms of the contract. It is further stated that the contract
period was extended for a period of nine months, on the application of the
petitioner after the Covid-19 lockdown period despite which the petitioner
could only complete only about 49% of the work as of 30.04.2021.
7. It is submitted that in the circumstances, impugned order of
the respondent-corporation is in accordance with Clause 12.0(b) of the
tender document and Clause 14.1(c) and (d) of the General Conditions of
Contract, which permits such termination.
8. Smt. S.A.V. Ratnam, learned counsel for the petitioner,
would submit that the petitioner has four running contracts, including the
cancelled contract and the impugned order affects the execution of the
workers of the other three contracts and the same is impermissible and
arbitrary. She further submits that the respondent-corporation after taking
into account the past performance of the petitioner should have taken a
lenient view in the matter keeping in view the fact of the Covid-19
pandemic. She submits that termination of contract and other penalties
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imposed in the impugned order, are clearly disproportionate to the alleged
breach of contract and requires to be set aside.
9. Sri V. Subrahmanyam, learned Standing Counsel appearing
for the respondents 2 to 4 would point out that the petitioner was unable
to complete the contract despite extension of about nine months after the
Covid-19 lockdown period and there is no reason why the terms of the
tender document and general conditions of contract cannot be enforced.
He relies upon the judgments of this Court dated 01.09.2021 in
W.P.No.15385 of 2021; judgment dated 07.10.2020 in W.P.No.10241 of
2020; and judgment dated 19.04.2022 in W.P.No.16594 of 2020 to
contend that the writ petitions raising similar challenges had been rejected
by this Court.
10. The challenge raised in the present writ petition, relates to a
contractual matter. The scope of judicial review in such matters is
restricted to the extent of ascertaining whether the action of the
respondent(s) has been unfair, arbitrary and violative of the fundamental
rights of the petitioner. In the present case, no such situation has been
made out by the writ petitioner.
11. Shorn of the details, the essential fact is that the petitioner
was granted one year's time to complete the contract by 01.08.2020. The
petitioner was granted an extension of nine months up to 31.04.2021 to
complete the contract. Though the petitioner raises some complaints of
delay on account of the non-issuance of gate passes, the said delay, even
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if it were to be put on the respondents, is more than adequately
compensated by the extension of nine months given by the respondent-
corporation. In such a situation, the action of the respondent-corporation
in invoking the terms of the contract, as contained in the tender and
general conditions of contract, cannot be faulted.
12. Sri V. Subrahmanyam, learned Standing Counsel reiterates
the pleadings in the counter that the impugned order does not in any
manner affect the remaining three contracts in the hands of the petitioner
and the same are being continued.
13. In the circumstances, no case has been made out for this
Court to interfere with the writ petition. Accordingly this writ petition is
dismissed. There shall be no order as to costs. As a sequel, pending
miscellaneous petitions, if any, shall stand closed.
_________________________
R. RAGHUNANDAN RAO, J.
20th September, 2022
Js.
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W.P.No.11616 of 2021
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P.No.11616 of 2021
20th September, 2022
Js.
