Basant Bagde vs M/S Hindustan Prefab Ltd.
2009 Latest Caselaw 2298 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                LPA No. 182 OF 2009 & CM Nos.5894/2009 &
                 5897/2009


        BASANT BAGDE                              ..... Appellant
                           Through: Dr.A.M. Singhvi, Sr. Advocate with
                           Mr. Amit Anand Tiwari, Mr. Vivek Singh and
                           Mr. Amit Bhandari, Advocates.

                                versus

        M/S HINDUSTAN PREFAB LTD.           ..... Respondent
                      Through: Mr. Manoj Sharma, Advocate.

CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE NEERAJ KISHAN KAUL

                            ORDER

% 28.05.2009

1. The present appeal arises out of the order of the learned single

Judge dated 19th March, 2009. Briefly, stated the facts of the case

are; the respondent No.1 issued notice on 20th March, 2008 inviting

sealed tenders for construction of houses with infrastructure in

Raipur city. Under clause 5 of the Special Conditions of Contract,

the tenderer was required to quote rates on percentage basis

below/at par/above the SOR of 1999. On 1st April, 2008, the

competent authority amended the SOR of 1999 and increased the

rate of item No.8 of Chapter 4 (steel) from Rs.24 per kg. to Rs.50 per

kg. As per the appellant( the original petitioner in the writ petition),

the tender document stated that the bid was to be made on

percentage basis of SOR of 1999 and its amendments are applicable

for such tenders and, therefore, once an amendment of a scheduled

item is made ipso facto same would apply to the tender in question.

2. On 3rd April, 2008 the petitioner submitted its tender on

percentage rate basis of SOR of 1999 after taking into account the

amended rates. The respondent No.1 entered into an agreement with

the appellant at Delhi awarding 5 packages to the appellant.

Pursuant to the award of the said contract the appellant commenced

work. The appellant submitted its running account bill for the work

executed on 18th September, 2008 to respondent no.1. In the said

bill the appellant while calculating the rate of steel took into account

the rate of steel as amended on 1st April, 2008 by the competent

authority. The respondent No.1 vide its letter dated 18th September,

2008 refused to calculate the bill on the basis of the revised rates of

steel on the ground that though the Engineer-in-Chief, Public Works

Department, Chhattisgarh has left the decision to respondent no.1

HPL with respect to implementation of the said revised rates, the

same had not been done by HPL till date. Accordingly, as per the

petitioner, it was left with no alternative but to file the writ petition

out of which the present appeal arises.

3. By our order dated 21st May, 2009, State of Chattisgarh was

impleaded as respondent. Notice was issued and served on the State

of Chattisgarh. However, no one appeared on behalf of the State of

Chattisgarh today.

4. The learned single Judge dismissed the writ petition of the

appellant on the ground of alternative remedy as also on the ground

that this High Court have no territorial jurisdiction. The learned

single Judge while dismissing the writ petition imposed a cost of Rs.

50,000/- on the appellant.

5. The senior counsel for the appellant has drawn our attention to

letter dated 1st April, 2008 (page 38 of the paper book) issued by the

Public Works Department, Raipur whereby the rates were increased

from Rs.24/- to Rs.50/- per kg. The learned senior counsel then

drew our attention to letter dated 2nd September, 2008 written by

respondent No.1 to the Public Works Department, Chattisgarh,

Raipur whereby respondent No.1 sought directions as to whether rate

should be fixed at Rs.50/- per kg. according to the amendment order

or at Rs.24/- per kg. The learned senior counsel also relied on the

letter dated 10th September, 2008 (page 64 of the paper book)

wherein the Public Works Department, Chattisgarh, Raipur

categorically stated that the rate had been increased from Rs.24/- to

Rs. 50/- per kg. and directed respondent No.1 to take a decision at

its level in respect of bills as per the contract. Our attention was also

drawn to letter dated 18th September, 2008 (page 44 of the paper

book) written by respondent No.1 wherein the respondent No.1 had

stated that the Public Works Department, Chattisgarh, Raipur had

directed that the appropriate decision be taken by respondent No.1.

However, no decision had been taken by respondent No.1 on the said

issue.

6. In view of the categorical stand of the respondent no.1 that

they had been directed by the Public Works Department, Chattisgarh

to take a decision in the matter, we fail to understand as to why the

said decision has not yet been taken by them. We, accordingly,

deem it fit to direct respondent No.1 to take a decision in the said

matter within a period of two weeks. We may also add here that we

are unable to agree with the view of the learned single Judge that this

Court does not have any territorial jurisdiction to entertain the

matter. It is pertinent to mention that the entire tender process took

place in Delhi, the work order was issued from Delhi, all securities

and EMDs were deposited at Delhi by the appellant, agreement was

entered between the parties at Delhi and bills were made from Delhi.

As per clause 5 of the agreement, dispute between the parties was

subject to jurisdiction of the Delhi courts. Thus, clearly part of the

cause of action had arisen in Delhi and this High Court does have the

territorial jurisdiction to entertain the writ petition. We also do not

agree with the finding of the learned single Judge that being a

contractual matter the appellant could not invoke the writ

jurisdiction. It is well settled that even in contractual matters if the

action of the State and its instrumentalities is arbitrary,

unreasonable and illegal, the Court can exercise its extraordinary

jurisdiction under Article 226 of the Constitution of India. In A.B.

International Ltd. Vs. Export Credit Guarantee Corpn. Of India

Ltd.,(2004) 3 SCC 553 the Supreme Court observed that the

question whether a writ petition under Article 226 of the Constitution

of India is maintainable to enforce a contractual obligation of the

State or its instrumentality, by an aggrieved party is no more res

integra and is settled by a large number of judicial pronouncements

of the Supreme Court. On a given set of facts if 'the State' acts in an

arbitrary manner even in a matter of contract, an aggrieved party can

approach the court by way of writ under Article 226 of the

Constitution and the court depending on facts of the said case is

empowered to grant the relief. In the present case there has been an

amendment to the rates on the basis of which the appellant has

raised its demand. No decision has been taken on the bills raised by

the appellant as per the revised rates. This indecision and inaction

clearly is unacceptable and unreasonable. We have, accordingly,

directed respondent No.1 which had floated the tender enquiry on

behalf of the State of Chattisgarh to take a decision within a period of

two weeks. It will be open to the appellant to take appropriate

remedies in accordance with law in case it is aggrieved by the

decision of the respondent no.1. With these observations, the

present appeal as also the writ petition stand disposed of as nothing

further survives in the same.

7. We also deem it fit and proper, in the light of our above

discussion, to waive the costs imposed on the appellant by the

learned single Judge. It is ordered accordingly.

CHIEF JUSTICE

NEERAJ KISHAN KAUL, J.

MAY 28, 2009 RS