Calcutta High Court (Appellete Side)
M/S. Malda Construction Company ... vs Union Of India & Ors on 17 May, 2023
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Appellate Side
Present :-
The Hon'ble Justice Moushumi Bhattacharya
W.P.A 27966 of 2022
M/s. Malda Construction Company and Anr.
Vs.
Union of India & Ors.
With
W.P.A 28412 of 2022
M/s. Malda Construction Company and Anr.
Vs.
Union of India & Ors.
With
W.P.A 28415 of 2022
Subham Enterprise & Anr.
Vs.
Union of India & Ors.
With
W.P.A 28417 of 2022
Gouri Construction and Anr.
Vs.
Union of India & Ors.
With
2
W.P.A 28419 of 2022
Gouri Construction and Anr.
Vs.
Union of India & Ors.
For the petitioners : Mr. Subhabrata Datta, Adv.
Mr. Debashis Sarkar, Adv.
For the respondent nos. 2-6 : Mr. Sarwar Jahan, Adv.
Mr. Maidul Islam Kayal, Adv.
Mr. Shahzad Noor Thander, Adv.
Mr. Asif Mehdi, Adv.
For the UOI : Ms. Ashima Roy Chowdhury, Adv.
Mr. Ramen Bose, Adv.
Last Heard on : 16.05.2023.
Delivered on : 17.05.2023.
Moushumi Bhattacharya, J.
1. All five writ petitions involve similar facts and are against the same
respondents, namely, Ghani Khan Choudhury Institute of Engineering and
Technology and the Union of India through Secretary, Ministry of Human
Resource Development, Department of Higher Education. There are minor
factual differences including in the dates of the correspondence exchanged
between the parties but the contentions can be dealt with in one judgment.
2. The five writ petitions are therefore being disposed of by this
judgment.
3. The petitioners were declared the successful bidders in terms of a
Notice Inviting Tender dated 27.1.2014 issued by the Institute for certain
construction and development work. The work order was issued on
28.2.2014 by the competent authority. The petitioners were paid the first
and second running account bills which were raised by the petitioners in
accordance with the work order and memo submitted by the petitioners. The
Completion Certificate for the work done and performed by the petitioner
was also issued on 7.1.2015. The Certificate issued by the Superintending
Engineer of the Institute is a Final Certificate of completion for the work of
"Land development by earth filling on low land ditches..."of the Institute at
Malda, Narayanpur, Main Campus.
4. The Certificate states that there are "no noticeable defects in the
work". The petitioners thereafter requested for release of the final payment
against the executed work. The request was made on 23.2.2015 and the
petitioners raised the 3rd running account and final bill on the respondent in
terms of the work order.
5. The present writ petition has been filed for a mandamus on the
respondents particularly the respondent no. 3 being the Director, Ghani
Khan Choudhury Institute of Engineering and Technology and NIT, to
release the 3rd running account and final bill amounting to Rs. 43,23,760/-
and the security deposit along with interest.
6. The objection raised on behalf of the respondent Institute is that the
Institute was under the mentorship of NIT Durgapur and further that the
Tender was floated by an incompetent authority through improper
advertisement in newspapers having low circulation in the area.
7. These objections have been taken by the Institute for the first time in
the Report filed by the Institute pursuant to a direction of the Court. The
other objection to release of the amount claimed by the petitioners is of
certain objection made by the Assistant Engineer (Civil) of the Institute
appointed by NIT, Durgapur on 3.6.2016 in connection with the bills in
question. According to the Institute, NIT, Durgapur did not release the
payment towards the petitioners and returned the original file to the
Institute.
8. It has also been submitted on behalf of the Institute that the
Inspection Report on the accounts of the Institute for the period of 1.4.2014
to 31.3.2017 contains certain adverse observations and that the Director
General of Audit (Central), Kolkata in the Audit Query of the Institute for
1.4.2019 - 31.3.2020 advised that long pending liabilities should be treated
as lapsed.
9. The admitted factual position is that the petitioners successfully and
satisfactorily completed their work which was the subject matter of the
tender floated by the respondent Institute. This would be corroborated from
the fact that the first and second running account bills that were raised by
the petitioners were fully paid by the respondents. This would also appear
from the Completion Certificate issued by the Superintending Engineer of
the Institute on 7.1.2015 unequivocally stating that the work has been
found to be carried out to specifications and completed satisfactorily and
that there are no noticeable defects in the work.
10. Significantly, the Ministry of Human Resource Development,
Government of India issued a letter to the Director, National Institute of
Technology (NIT), Durgapur, on 18.3.2015 observing that an amount of Rs.
82.20 crores has been released to NIT, Durgapur, for facilitating the
Institute to carry out its development activities besides other recurring
expenditure. The letter further records that NIT has transferred an amount
of Rs. 67.20 crores to the Institute from 2009-10 to 2013-14. More
important, the letter records that NIT, Durgapur is requested to immediately
clear all pending bills which have been submitted by OSD of the Institute.
11. Since there is no contemporaneous complaint with regard to the
petitioners' work or the work being incomplete, there can be no conceivable
reason as to why the respondent Institute would withhold the petitioners'
dues in respect of the third and final running account bill amounting to Rs.
43,23,760/- along with security deposits. Admittedly, the Institute was
under the mentorship of NIT, Durgapur during the tender process; this is
the stated position of the respondents. The letter of the Ministry of Human
Resources also records that sufficient funds were released by the Ministry to
NIT, Durgapur for undertaking the development work of the Institute and
NIT was further requested to clear all the pending bills that were submitted
by the Institute. The Institute has not denied the fact of having received the
payment from NIT, Durgapur for the development work undertaken vide the
tender process. The Institute has not given any justification with
corroborating material or otherwise to deny the claim of the petitioners for
the work done to the satisfaction of the Institute.
12. The objection now sought to be taken in respect of the tender being
floated by an incompetent authority or through improper advertisement are
clearly after-thoughts since they do not find any corroboration from any
material disclosed before the Court.
13. The point with regard to the observation made by the Director General
of Audit is also a later defense since the Inspection Report has been made
part of the pleadings of the Institute filed on 6.4.2023 following the direction
of the Court. The observation made in the Report is of an alleged "irregular
land fillings". This is compounded by the fact of the Institute admitting that
the petitioners have successfully completed the work as stated in the
Completion Certificate issued by the Institute on 7.1.2015. The Institute
also admits that the final bills submitted by the petitioners were in turn
submitted before the NIT, Durgapur for releasing the payment and that the
Institute requested NIT to clear the pending bills on several dates including
on 4.3.2015. Significantly, the Institute noted the liabilities along with other
pending bills in 2015-16 annual accounts of the Institute.
14. The above facts indicate that the Institute has no real defense to the
petitioners' claim and as an entity amenable to Article 226 of The
Constitution of India, non-payment of the petitioners' bills despite the
petitioners' completing the work to the satisfaction of the Institute amounts
to arbitrary and unreasonable conduct. In this context, the decision of the
Supreme Court in Arun Kumar Agrawal v. Union of India; (2013) 7 SCC 1 is
relevant. In that decision, the Supreme Court held that the CAG's Report is
subject to parliamentary debates and that the Public Accounts Committee
can accept the Ministry's objection to the CAG's Report and reject the
Report. In Surya Constructions v. State of Uttar Pradesh; (2019) 16 SCC 794,
the Supreme Court disagreed with the view of the High Court in rejecting the
writ petition on the ground of disputed question of facts. The Supreme Court
proceeded to hold that the State has a duty to act fairly even in the realm of
contract and the High Court can interfere under Article 226 of the
Constitution in fit cases. The Supreme Court in that case directed the Uttar
Pradesh Jal Nigam to make necessary payment to the petitioner within a
fixed time period along with interest for the period of delay. The recent
decision of M.P. Power Management Company Limited, Jabalpur v. Sky Power
Southeast Solar India Private Limited; (2023) 2 SCC 703 reiterated that the
State can be called upon its obligations of making payment unless there is a
serious and genuine dispute raised by the State relating to its liability. The
Supreme Court clarified that the dispute ordinarily would include the
aggrieved party not fulfilling its obligations.
15. In the present case, the respondent Institute did not raise any dispute
with regard to the work performed by the petitioners and documented that
the work was done to the satisfaction of the Institute. The first and second
running account bills were also made by the petitioners as testimony to this.
All the objections raised are subsequent defenses and that too by way of a
Report filed before the Court. The observation in the CAG's Report is of little
consequence as stated in Arun Kumar Agrawal.
16. This Court accordingly finds that the writ petitioners have made out a
case for grant of the relief prayed for. There has also been substantial delay
in payment of the third and final running account bill which was raised in
2015 and the petitioners requested for the payment of the same in March,
2015. The petitioners are hence entitled to interest for the delay of 8 years in
between.
17. WPA 27966 of 2022, WPA 28412 of 2022, WPA 28415 of 2022, WPA
28417 of 2022and WPA 28419 of 2022 are allowed for the above reasons
and are disposed of with a direction on the respondents particularly the
respondent no. 3 being the Director, Ghani Khan Choudhury Institute of
Engineering Technology to release an amount of Rs. 43,23,760/- in WPA
27966 of 2022, Rs. 51,88,108/- in WPA 28412 of 2022, Rs. 43,74,500/- in
WPA 28415 of 2022,Rs. 8,66,740/- in WPA 28417 of 2022 and Rs.
66,66,031/- in WPA 28419 of 2022 along with security deposits furnished
by the petitioners and with interest at 6% per annum on each of the
aforesaid amounts from the dates on which the third and final running
account bills were raised to the dates of payment. The five individual
payments should be made by the respondents to the petitioners within 10
weeks from the date of this judgment.
Urgent photostat certified copies of this judgment, if applied for, be
supplied to the parties upon fulfillment of requisite formalities.
(Moushumi Bhattacharya, J.)
