Delhi High Court
Union Of India (Cpwd) vs Shapoorji Palonji & Co Pvt Ltd on 24 April, 2019
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 24th April, 2019
+ LPA 206/2019 & CM Nos. 13660-63/2019
UNION OF INDIA (CPWD) ..... Appellant
Through : Mr. Rajesh Gogna, Standing Counsel
for UOI.
versus
SHAPOORJI PALONJI & CO PVT LTD ..... Respondent
Through : None.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
JUDGMENT
ANUP JAIRAM BHAMBHANI, J. (ORAL)
CM Nos. 13662-63/2019 (for exemption)
Allowed, subject to just exceptions.
CM No. 13660/2019 (for condonation of delay)
For the reasons stated in the application, the delay of 38 days in filing
the appeal is condoned.
The application stands disposed of.
LPA No. 206/2019 page 1 of 24
LPA 206/2019 & CM No. 13661/2019 (for stay)
1. The Central Public Works Department ("CPWD"), Ministry of Urban
Development, Union of India has filed the present Letters Patent Appeal
("LPA") under Clause 10 of the Letters Patent of the Delhi High Court
challenging judgment dated 13.12.2018 rendered by the learned single Judge
in W.P.(C) No. 9281/2017. The writ petition was filed by M/s. Shapoorji
Palonji & Co. Pvt. Ltd. ("Shapoorji"); and allowing the writ petition, the
single Judge quashed communications dated 18.08.2017, 05.09.2017,
20.09.2017 and 12.10.2017 issued by CPWD demanding that Shapoorji
pay-up a sum of Rs.30.80 crores. The single Judge also quashed
Memorandum dated 09.10.2017 whereby CPWD had called upon various
other CPWD regional offices and establishments to withhold the sum of
Rs.30.46 crores from any amounts that may be due and payable to
Shapoorji.
2. The demand made by CPWD was premised on its interpretation of
Clause 29 of the General Conditions of the Contract in relation to a bid
given by Shapoorji for construction of „fixed tensile membrane roofing‟
over the seating area of the Jawaharlal Nehru Stadium, New Delhi,
including civil and electrical works, as part of the upgradation/renovation
and new construction of the stadium for hosting the Common Wealth
Games, 2010 at New Delhi.
3. Shapoorji's bid was accepted and the work was awarded for a lump
sum amount of Rs. 3.08 crores. Disputes arose between the parties by reason
of delay in execution of the work awarded, with each party contending that
the delay was attributable to default on the part of the other.
4. It is relevant to mention that Shapoorji sought extension of time for
LPA No. 206/2019 page 2 of 24
completion of the project milestones from time-to-time, which extension
was granted by CPWD. Shapoorji sought extension of time last by letter
dated 18.01.2011, in response to which CPWD granted extension by its
reply dated 14.12.2011, which reply said thus :
"Dear Sir,
Extension of time for completion of the above mentioned
work is granted upto 26.08.2010 (actual date of
completion) without levy of compensation by the
Competent Authority.
Provided that notwithstanding the extension hereby
granted, time is and shall still continue to be the essence of
the said agreement."
(Emphasis Supplied)
As recorded in letter dated 14.12.2011 the project was actually
completed on 26.08.2010 ; and therefore ex-post-facto extension was
in fact granted by CPWD in terms of the letter.
5. It is relevant at this point to extract the provisions of Clause 29 of the
General Conditions of the Contract which reads as under:
"CLAUSE 29
i) Whenever any claim or claims for payment of a sum of
money arises out of or under the contract or against the
contractor, the Engineer-in-Charge or the Government
shall be entitled to withhold and also have a lien to retain
such sum or sum in whole or in part from the security, if
any deposited by the contractor and for the purpose
LPA No. 206/2019 page 3 of 24
aforesaid, the Engineer-in-Charge or the Government shall
be entitled to withhold the security deposit, if any,
furnished as the case may be and also have a lien over the
same pending finalization or adjudication of any such
claim. In the event of the security being insufficient to
cover the claimed amount or amounts or if no security has
been taken from the contractor, the Engineer-in-Charge or
the Government shall entitled to withhold and have a lien
to retain to the extent of such claimed amount or amounts
referred to above, from any sum or sums found payable or
which may at any time thereafter become payable to the
contractor under the same contract or any other contract
with the Engineer-in-Charge of the Government or any
contracting person through the Engineer-in-Charge
pending finalization of adjudication of any such claim.
It is an agreed term of the contract that the sum of money
or moneys so withheld or retain under the lien referred to
above by the Engineer-in-Charge or Government will be
kept withheld or retained as such by the Engineer-in-
Charge or Government till the claim arising out of or
under the contract is determined by the arbitrator (if the
contract is governed by the arbitration Clause) by the
competent court, as the case may be and that the
contractor will have no claim for interest or damages
whatsoever on any account in respect of such withholding
or retention under the lien referred to above and duly
notified as such to the contractor. For the purpose of this
clause, where the contractor is a partnership firm or a
limited company, the Engineer-in-Charge or the
Government shall be entitled withhold and also have a lien
to retain towards such claim amount or amounts in whole
or in part from any sum found payable to any
LPA No. 206/2019 page 4 of 24
partner/limited company as the case may be, whether in his
individual capacity or otherwise.
(ii) Government shall have the right to cause and audit and
technical examination of the works and final bills of the
Contractor including all supporting vouchers, abstract, etc.
to be made after payment of the final bill and if as a result
of such audit and technical examination any sum is found
to have been over paid in respect of any work done by the
contractor under the contract or any work claimed to have
been done by him under the contract and found not to have
been executed, the contractor shall be liable to refund the
amount of over payment and it shall be lawful for
Government to recover the same from him in the manner
prescribed in sub-clause (i) of this Clause or in any other
manner legally permissible and if it is found that the
contractor was paid less than what was due to him under
the contract in respect of any works executed by him under
it, it amount of such under payment shall be duly paid by
Government to the contractor without any interest thereon
whatsoever.
Provided the Government shall not be entitled to recover
any sum overpaid nor the contractor shall be entitled to
payment of any sum paid short where such payment has
been agreed upon between the Superintending Engineer or
Executive Engineer on one hand and the contractor on the
other under any term of the contract permitting payment
for work after assessment by the Superintending Engineer
or the Executive Engineer."
(Emphasis Supplied)
LPA No. 206/2019 page 5 of 24
6. As part of the audit of various contracts relating to work done for the
Common Wealth Games 2010, an audit was also conducted by the
Comptroller & Auditor General of India ("CAG") of the project awarded to
Shapoorji ; and the report placed by the CAG before the Public Accounts
Committee of Parliament ("PAC") in relation to many such projects
contained inter-alia a report on Shapoorji‟s contract that is subject matter of
these proceedings. On the CAG‟s report, the Public Accounts Committee
(2016-17) (Sixteenth Lok Sabha) made the following observations in
relation to the contract awarded to Shapoorji :
"5.46 According to Audit, CPWD in December 2007
awarded a lump sum contract for construction of fixed
tensile membrane roofing over the seating area in
Jawaharlal Nehru stadium at a cost of ₹308.08 crore to
Shapoorji Pallonji & Co. Ltd. (SPCL) for completion by
September 2009. Completion of work was delayed by over
eleven months due to various reasons, attributable at least
partly on the contractor/sub-contractors such as three
months delay due to rectification of the defective geometry
of the alignment of head plates of the erected columns; non
resolving of the issues regarding fabrication and erection
of ramps and cat walk, erection of cable, casting of
staircase, fixing of railing, drainage pipeline, etc. as of
December 2009; non-installation of about 61 curbed
beams, 40 RT1 beams, RB beams, flood light most and
some catwalk structure units and the entire parapet even as
of 4 January 2010; flaws in laying of cable; inadequate
deployment of manpower, tools and machinery; inadequate
expertise for fabric installation etc. The site became
hindrance free by January 2010 and CPWD issued several.
notices including on 28th April 2010, 5 May 2010 and 16
LPA No. 206/2019 page 6 of 24
August 2010 holding the contractor responsible for
slippages, slow progress of work and non-achievement of
revised milestones: However, CPWD apartfrom issuing
notices for imposition of penalty/compensation, never
enforced contractual remedies against the contractor to
levy compensation estimated at a maximum of ₹30.80
crore. CPWD also made payment of ₹7.02 crore, as of
September 2010 towards escalation of costs for periods
beyond the stipulated date of completion i.e. 3rd September
2009.
XXXXX
"5.52 Asked to spell out the steps taken to impress upon the
contractor to expedite the work and achieve the milestones,
CPWD stated that notices were served on the contractor as
an administrative measure to accelerate the work and to
achieve the milestone, even though the delay was not on the
part of the contractor. The main objective of issuing such
notices was for early completion of the work as required.
Irrespective of good speed and progress of work, notices
were served on the agency for accelerating the work and
putting constant pressure to achieve the target and have
better performance. Since, this project was time bound, and
lot of other activities were to be carried out after the roof
work, CPWD had no option but to adopt the above method
for better results by serving several letters and notices to
the contractor time and again.
XXXXX
LPA No. 206/2019 page 7 of 24
"23. ... Considering all the above factors, it is
inappropriate on the part of CPWD to say that the
contractor was not liable for recovery of compensation
upto maximum of Rs.30.80 crore. While deploring inaction
in the matter, the Committee recommend that the CPWD
recover the compensation from the contractor at the
earliest. As for the failure of the Sports Authority of
India/Organizing Committee in ensuring timely availability
of hindrance free site which had also contributed to time
and cost overruns, the Committee desire that the total
amount paid towards cost escalation for periods beyond
the stipulated date of completion (3rd September 2009), if
admissible, be recovered from them."
(Emphasis Supplied)
7. On the basis of the PAC report, CPWD issued to Shapoorji letters
dated 18.08.2017, 05.09.2017, 20.09.2017 and 12.10.2017 purporting to be
recovery notices, the relevant portions whereof have been extracted here for
ease of reference:
"As regards the above noted work executed by you for
CWG-2010, it is submitted that as per PAC's Seventy
Fourth Report received recently, You are liable to pay Rs.
30.80 crore to the Govt.
In view of above, as per provision contained in Clause-29
of the contract, I hereby serve a notice to you to deposit the
said amount in this office in the form of DD/Pay order in
favour of Executive Engineer, SMCD, CPWD, New Delhi,
within seven days after issue of this notice, failing which
LPA No. 206/2019 page 8 of 24
the department shall recover aforesaid amount by taking
legal action under relevant clause of contract."
(extract from letter dated 18.08.2017)
"With reference to above mentioned letter vide which you
were requested to deposit Rs. 30.80 crore in compliance of
PAC's Seventy Fourth Report but till date you have not
deposited the same to this office.
In view of the above you are once again requested to
deposit the same to this office within 7 days after issue of
this notice. Failing which the department shall recover
aforesaid amount by taking legal action under relevant
clause of contract."
(extract from letter dated 05.09.2017)
" ... As per provision contained in para No. (ii) of Clause-
29 of the Contract, the govt. has right to recover
excess/over payment if any found letter on (after final bill)
during technical examination/statutory audit by the
competent authority."
(extract from letter dated 20.09.2017)
"Please refer to the enclosed memorandum of the Executive
Engineer, SAI Maintenance Civil Division, Indira Gandhi
Stadium Complex, New Delhi - 110002 in which it is stated
that an amount of Rs. 30,46,80.865 is due from you to the
Government of India towards recovery on account of
delayed completion of your work "Upgradation, renovation
and new construction for commonwealth Games-2010 in JN
LPA No. 206/2019 page 9 of 24
Stadium Sports Complex, New Delhi (SH: Construction of
New Fixed Tensile Membrane Roofing over the Seating
Area of JN Stadium, New Delhi: Agreement No.
01/EE/CWGD-II/2007-08) at New Delhi. Copy from the
executive engineer is enclosed herewith for your ready
reference.
In this regard, reference is made to clause 29 A of the
general conditions of contract of the agreement wherein
"Any sum of money due and payable to the contractor
(including the security deposit returnable to him) under the
contract may be withheld or retained by way of lien by the
Engineer-in-Charge or the Government or any other
contracting person or persons through Engineer-In Charge
against any claim of the Engineer-In-Charge or
Government or such other person or persons in respect of
payment of a sum of money arising out of or under any
other contract made by the contractor".
You are requested to remit the amount of Rs.30,46,80.565
to the EE, SAI Maintenance Civil Division and submit the
proof of the same to this office within 15 days of receipt of
this letter, failing which this office shall withhold the
amount due to you in respect of the contract under
agreement number 03/CE/IIMTPD/2014-15 as per the
above mentioned provisions of the agreement."
(extract from letter dated 12.10.2017)
8. As stated in the extract from letter dated 12.10.2017 quoted above,
CPWD also issued a Memorandum dated 09.10.2017 to its regional offices
LPA No. 206/2019 page 10 of 24
and establishments calling upon them to withhold a sum equivalent to the
amount claimed to be due from Shapoorji or any partial amount thereof from
other dues that may be owed by such regional offices of CPWD to Shapoorji
in the following words :
"A sum of Rs.30,46,80,565 (Rupees Thirty Crores Forty
Six Lakh Eighty Thousand Five Hundred Sixty Five only)
towards the recovery on accounts of delayed completion of
the subject work as per Public Accounts Committee (PAC)
{2016-17} Seventy Fourth Report (Sixteenth Lok Sabha)
has become recoverable from M/s. Shapoorji Pallonji and
Company Private Ltd. formerly known as M/s. Shapoorji
Pallonji Co. Ltd. ...
XXXXX
"It is, therefore, requested that under Clause 29 of the
agreement, the said amount/Partial amount whatever is
available may please be withheld from the dues of "M/s.
Shapoorji Pallonji Company Private Limited" and be
intimated to the under signed. In case nothing is due to the
said Agency in the Division(s) under your control, an nil
report may please be sent to this office."
(Emphasis Supplied)
9. For purposes of the present appeal it is not necessary for us to delve
any further into the factual disputes between the parties, except to say that
one of the essential elements of such disputes was CPWD‟s claim that it had
suffered losses on account of delay in completion of work by Shapoorji; and
arising therefrom, CPWD claimed damages from Shapoorji.
LPA No. 206/2019 page 11 of 24
10. On the other hand Shapoorji disputed that there was delay on its part
in completing the work; and also contended that in any case CPWD had
granted extension of time for completion of work, inter-alia by letter dated
14.12.2011 as extracted above, with the express understanding that no
compensation would be levied for such extension.
11. However in the aforesaid circumstances, the final bill raised by
Shapoorji was not paid by CPWD in its entirety, whereupon Shapoorji made
a claim in arbitration for the balance amount on various counts, including a
claim for damages towards alleged loss suffered by Shapoorji by reason of
delay in completion of work attributable to CPWD.
12. Counsel for CPWD confirms that arbitral proceedings initiated by
Shapoorji against CPWD are still pending and that CPWD has also made
counter-claims against Shapoorji in the arbitral proceedings.
13. As is clear from the above, CPWD had claimed the amount of Rs.
30.80 crores from Shapoorji on the premise that the Government was
entitled to demand such monies straightaway on the basis of the audit
objection raised by the CAG as affirmed by the PAC.
14. In the writ petition, Shapoorji sought quashing of demand letters
dated 18.08.2017, 05.09.2017, 20.09.2017 and 12.10.2017 as also
Memorandum dated 09.10.2017 issued by CPWD in relation to the claim.
Shapoorji‟s stand was that demand letters dated 18.08.2017, 05.09.2017,
20.09.2017 and 12.10.2017 were untenable ; and prayed that no amount due
by CPWD to Shapoorji against other projects and works be withheld on the
basis of Memorandum dated 09.10.2017.
15. The claim made in the writ petition was dealt with by the single Judge
in the impugned judgement dated 13.12.2018 in the following way :
LPA No. 206/2019 page 12 of 24
"17. The aforesaid contentions are unmerited. A plain
reading of Sub clause (ii) of Clause 29 of the GCC
indicates that the Government has the right to cause an
audit and technical examination of the works and final bills
of the contractor. If, as a result of such audit and technical
examination, any sum was found to be paid in respect of
the work done or any work claimed to have been done, the
contractor is liable to refund the same. In the present case,
the audit has not found that any sum has been overpaid in
respect of the works executed by the petitioner. The
respondent is not claiming refund of any overpaid amount.
The claim made by the respondent is for compensation for
the alleged breach of the contract on the part of the
petitioner in delaying the execution of the works. This is,
essentially, a claim for damages and is, clearly, not
covered under Clause 29(ii) of the GCC.
"18. In the present case, the disputes relating to the
contract are pending adjudication before the Arbitral
Tribunal. It is relevant to note that although the petitioner
has raised the claim of loss for delay in completion of the
works, the respondent has not raised any counter claim in
this regard. Sub-clause (i) of Clause 29 of the GCC,
enables the Government to withhold sums due and payable
to the contractor on account of any claim pending
adjudication of such claims. In the present case, the
respondent has not taken any steps for adjudication of its
claim and, therefore, it could not have recourse to Sub-
clause (i) of Clause 29 of the GCC for recovering any such
sum.
LPA No. 206/2019 page 13 of 24
"19. Mr Gogna had contended that the levy of
compensation was excepted matter and, therefore, could
not be referred to arbitration. He further submitted that the
report of PAC was received by the CPWD on 12.04.2017
and the disputes relating to the contract had been referred
to the Arbitral Tribunal much earlier. He submitted that,
therefore, the said disputes could not be referred to
arbitration.
"20. The said contentions are also unpersuasive. The
import of Subclause (i) of Clause 29 of the GCC is to
enable the Government to withhold sums due to a
contractor pending adjudication of a claim for such sums.
It is clearly incumbent on the Government to take steps for
adjudication of such claims and in the absence of taking
any such steps the question of invoking Clause 29(i) of the
GCC for withholding any amount would not arise.
Notwithstanding that the respondent had received the
report of the PAC after the reference of disputes to
arbitration, it was still necessary for the respondent to take
steps for adjudication of such claim. The claim made by the
respondent is in the nature of damages for breach of
contract which is disputed by the petitioner. Plainly,
neither the PAC report nor the communications sent by the
respondent are binding on the petitioner and it would be
necessary for the respondent to take steps for adjudication
of its claim.
XXXXX
"23. It is also relevant to mention that in the present case,
the competent authority had granted extension of time for
LPA No. 206/2019 page 14 of 24
completion of the work from time to time. The final
extension of time was granted after works had been
completed and it was expressly provided that such
extension was without levy of compensation by the
competent authority. The letter dated 14.12.2011 as set out
below :- ...
"24. It is relevant to state that the aforesaid letter has not
been withdrawn or cancelled. It is doubtful whether it is
open for the respondent to now resile from its agreement to
extend time without levy of compensation. However, it is
not necessary to examine the said issue in any detail, as
this Court is not called upon to decide the merits of the
claim now sought to be raised by the respondent. However,
suffice it to state that it is not debt due from the petitioner,
as the question whether the petitioner is responsible for the
delay in completion of the works has not been
adjudicated."
(Emphasis Supplied)
and on the above ratiocination the single Judge disposed of the
writ petition; however, reserving for CPWD the liberty to initiate
proceedings for adjudication of its claim in accordance with law in the
following words :
"29. The impugned memorandum is, accordingly, set aside.
The impugned letters calling upon the petitioner to pay a
sum of ₹30.80 crores is also set aside leaving it open for
the respondent to initiate such proceedings for
LPA No. 206/2019 page 15 of 24
adjudication of its claim as may be available in accordance
with law."
16. To be sure, a perusal of Chapter XXVI of the Rules of Procedure and
Conduct of Business in Lok Sabha shows that the Public Accounts
Committee, formally known as the Committee on Public Accounts, is one of
the Standing Committees of the Lok Sabha. On point of law, the probative
and evidentiary value of a Parliamentary Standing Committee report has
been considered in detail in a recent judgment of a Constitution Bench of the
Supreme Court in the case titled Kalpana Mehta & Ors. vs. Union of India
& Ors. reported as (2018) 7 SCC 1. In three separate but concurring
judgments authored by Hon‟ble Mr. Justice Dipak Misra the then Chief
Justice of India, Hon‟ble Dr. Justice D.Y. Chandrachud and Hon‟ble Mr.
Justice Ashok Bhushan, speaking for the Constitution Bench, have opined as
under :
"3. ... The factual score that has given rise to the present
reference to be dealt with by us is centred on the issue as
to whether a Parliamentary Standing Committee (PSC)
report can be placed reliance upon for adjudication of a
fact in issue and also for what other purposes it can be
taken aid of. ...
XXXXX
"9. ..., the two-Judge Bench framed the following
questions for the purpose of reference to the Constitution
Bench: (Kalpana Mehta case, SCC p. 322, para 73)
"73.1. (i) Whether in a litigation filed before this
Court either under Article 32 or Article 136 of the
Constitution of India, the Court can refer to and place
LPA No. 206/2019 page 16 of 24
reliance upon the report of the Parliamentary Standing
Committee?
73.2. (ii) Whether such a report can be looked at
for the purpose of reference and, if so, can there be
restrictions for the purpose of reference regard being
had to the concept of parliamentary privilege and the
delicate balance between the constitutional institutions
that Articles 105, 121 and 122 of the Constitution
conceive?"
Because of the aforesaid reference, the matter has been
placed before us.
XXXXX
"159. In view of the aforesaid analysis, we answer the
referred questions in the following manner:
159.1. XXXXX
159.2. Judicial notice can be taken of the Parliamentary
Standing Committee report under Section 57(4) of the
Evidence Act and it is admissible under Section 74 of the
said Act.
159.3. XXXXX
159.4. Where the fact is contentious, the petitioner can
always collect the facts from many a source and produce
such facts by way of affidavits, and the court can render its
verdict by way of independent adjudication.
159.5. XXXXX "
(Emphasis Supplied)
In his concurring judgment, Hon‟ble Dr. Justice DY Chandrachud
holds as under:
"166. The issue which arose before the Court was whether
a report of a Parliamentary Standing Committee can be
relied upon in a public interest litigation under Article 32
LPA No. 206/2019 page 17 of 24
or Article 226. If it could be adverted to, then an allied
issue was the extent to which reliance could be placed
upon it and its probative value. The then Attorney General
for India, in response to a request for assistance,
submitted that reports of Parliamentary Standing
Committees are at best an external aid to construction, to
determine the surrounding circumstances or historical
facts for understanding the mischief sought to be remedied
by legislation. The Union Government urged that reports
of Parliamentary Standing Committees are meant to guide
the functioning of its departments and are a precursor to
debates in Parliament. However, those reports (it was
urged) cannot be utilised in court nor can they be subject
to a contest between litigating parties.
XXXXX
"265. There may, however, be contentious matters in the
report of a Parliamentary Committee in regard to which
the court will tread with circumspection. For instance, the
report of the committee may contain a finding of
misdemeanour involving either officials of the Government
or private individuals bearing on a violation of law. If the
issue before the court for adjudication is whether there
has in fact been a breach of duty or a violation of law by a
public official or a private interest, the court would have
to deal with it independently and arrive at its own
conclusions based on the material before it. Obviously in
such a case the finding by a Parliamentary Committee
cannot constitute substantive evidence before the court.
The Parliamentary Committee is not called upon to decide
a lis or dispute involving contesting parties and when an
occasion to do so arises before the court, it has to make its
determination based on the material which is admissible
before it. An individual whose conduct has been
commented upon in the report of a Parliamentary
Committee cannot be held guilty of a violation on the basis
of that finding. In Jyoti Harshad Mehta v. Custodian, this
Court held that a report of the Janakiraman Committee
LPA No. 206/2019 page 18 of 24
could not have been used as evidence by the Special Court.
The Court held: (SCC pp. 582-83, para 57)
"57. It is an accepted fact that the reports of the
Janakiraman Committee, the Joint Parliamentary
Committee and the Inter-Disciplinary Group (IDG)
are admissible only for the purpose of tracing the legal
history of the Act alone. The contents of the report
should not have been used by the learned Judge of the
Special Court as evidence."
XXXXX
"267. In Lok Shikshana Trust v. CIT, a three-Judge Bench
of this Court, while construing Section 57(4) made a
distinction between the fact that a particular statement is
made in Parliament and the correctness of what is stated
on a question of fact. The former could be relied upon.
However, the truth of a disputable question of fact would
have to be independently proved before the court. H.R.
Khanna, J. observed thus: (SCC p. 272, para 33)
"33. We find that Section 57 clause (4) of the
Evidence Act not only enables but enjoins courts to
take judicial notice of the course of proceedings in
Parliament assuming, of course, that it is relevant. It is
true that the correctness of what is stated, on a
question of fact, in the course of parliamentary
proceedings, can only be proved by somebody who had
direct knowledge of the fact stated. There is, however,
a distinction between the fact that a particular
statement giving the purpose of an enactment was
made in Parliament, of which judicial notice can be
taken as part of the proceedings, and the truth of a
disputable matter of fact stated in the course of
proceedings, which has to be proved aliunde, that is to
say, apart from the fact that a statement about it was
made in the course of proceedings in Parliament (see
LPA No. 206/2019 page 19 of 24
Rt. Hon'ble Gerald Lord Strickland v. Carmelo Mifsud
Bonnici ; and "The Englishman" Ltd. v. Lajpat Rai ."
A statement made by the Finance Minister while proposing
amendment could, it was held, be taken judicial notice of.
Judicial notice would be taken of the fact that "such a
statement of the reason was given in the course of such a
speech".
XXXXX
"274. ... The correctness or validity of the report of a
Parliamentary Committee is not a matter which can be
agitated before the Court nor does the Court exercise such
a function. Where an issue of fact becomes contentious, it
undoubtedly has to be proved before a court independently
on the basis of the material on the record. In other words,
where a fact referred to in the report of the Parliamentary
Committee is contentious, the court has to arrive at
its own finding on the basis of the material adduced before
it."
(Emphasis Supplied)
In the third judgment, Hon‟ble Mr. Justice Ashok Bhushan
concurs with the same view in the following words :
"393. ... When a party relies on any fact stated in the
report as the matter of noticing an event or history, no
exception can be taken on reliance on such report.
However, no party can be allowed to "question" or
"impeach" report of Parliamentary Committee. The
parliamentary privilege that it shall not be impeached or
questioned outside Parliament shall equally apply both to
a party who files claim in the court and other who objects
to it. Both parties cannot impeach or question the report.
Insofar as the question of unfair disadvantage is
concerned, both the parties are free to establish their
LPA No. 206/2019 page 20 of 24
claim or objection by leading evidence in the court and by
bringing materials to prove their point. The court has the
right to decide the "lis" on the basis of the material and
evidence brought by the parties. Any observation in the
report or inference of the Committee cannot be held to be
binding between the parties or prohibit either of the
parties to lead evidence to prove their stand in court of
law. Unfair disadvantage stands removed in the above
manner.
XXXXX
"448. The apprehension of the respondents that their case
shall be prejudiced if this Court accepts the Parliamentary
Committee report in evidence, in our opinion is misplaced.
By acceptance of a Parliamentary Committee report in
evidence does not mean that facts stated in the Report
stand proved. When issues, facts come before a court of
law for adjudication, the court is to decide the issues on
the basis of evidence and materials brought before it and
in which adjudication Parliamentary Committee report
may only be one of the materials, what weight has to be
given to one or other evidence is the adjudicatory function
of the court which may differ from case to case. The
Parliamentary Committee reports cannot be treated as
conclusive or binding of what has been concluded in the
Report. When adjudication of any claim fastening any civil
or criminal liability on an individual is up in a court of
law, it is open for a party to rely on all evidence and
materials which is in its power and court has to decide the
issues on consideration of the entire material brought
before it. When the Parliamentary Committee report is not
adjudication of any civil or criminal liability of the private
respondents, their fear that acceptance of report shall
prejudice their case is unfounded. We are, thus, of the
opinion that by accepting Parliamentary Committee report
on the record in this case and considering the Report by
this Court, the respondents' right to dispel conclusions and
LPA No. 206/2019 page 21 of 24
findings in the Report is not taken away and they are free
to prove their case in accordance with law."
(Emphasis Supplied)
And thereby, the Supreme Court concludes as follows:
"449. XXXXX
"449.5. That mere fact that document is admissible in
evidence whether a public or private document does not
lead to draw any presumption that the contents of the
documents are also true and correct.
"449.6. When a party relies on any fact stated in the
Parliamentary Committee report as the matter of noticing
an event or history no exception can be taken on such
reliance of the report. However, no party can be allowed
to "question" or "impeach" report of Parliamentary
Committee. The parliamentary privilege, that it shall not
be impeached or questioned outside Parliament shall
equally apply both to a party who files claim in the court
and other who objects to it. Any observation in the report
or inference of the Committee cannot be held to be binding
between the parties. The parties are at liberty to lead
evidence independently to prove their stand in a court of
law.
XXXXX
"449.11. Admissibility of a Parliamentary Committee
report in evidence does not mean that facts stated in the
Report stand proved. When issues of facts come before a
court of law for adjudication, the court is to decide the
issues on the basis of evidence and materials brought
before it."
(Emphasis Supplied)
17. It therefore stands authoritatively concluded that a lis between parties,
where there are disputed questions of facts, cannot be decided merely on the
LPA No. 206/2019 page 22 of 24
basis of what is contained in the report of a Parliamentary Standing
Committee. Therefore, the claim made by CPWD merely on the basis of
what is contained in the PAC report is unsustainable in view of the fact that
Shapoorji has denied the claim and has in fact filed arbitral proceedings
against CPWD seeking the recovery of monies under various heads of
claims. It is of course open to CPWD to cite the observations in the PAC
report as evidence in support of its claim against Shapoorji; but the
observations in the PAC report alone would not be dispositive of the
demand made by CPWD against Shapoorji.
18. On a conspectus of the foregoing, the following position emerges :
(a) the claim of Rs.30.80 crores made by CPWD against
Shapoorji is towards alleged delay in completion of work;
(b) admittedly, CPWD had granted extension of time as
sought by Shapoorji from time-to-time; and letter dated
14.12.2011 issued by CPWD even recorded in so many words
that extension was being granted "without levy of compensation
by the Competent Authority".
(c) a claim by CPWD for delay in completion of work
would, at the highest, be a claim for damages towards alleged
loss suffered by CPWD by reason of such delay;
(d) whether there was delay in completion of work ; and if
so, what was the extent of the delay ; on whose account;
resulting in what loss to CPWD ; and whether CPWD had
waived its claim for compensation for such delay, are all
disputed questions of fact and/or law which have not yet been
LPA No. 206/2019 page 23 of 24
adjudicated as between the parties;
(e) the contents of the CAG report and observations made
thereon in the PAC report do not constitute adjudication of
CPWD‟s claim against Shapoorji ; nor do they afford reason for
CPWD to invoke Clause 29 of the General Conditions of
Contract.
19. Accordingly, we are of the view that on the strength of Clause 29 of
the General Conditions of the Contract and based merely on the audit
objection raised by the CAG as approved by the PAC in its report, CPWD
could not have claimed any amount from Shapoorji by issuing demand
notices dated 18.08.2017, 05.09.2017, 20.09.2017 and 12.10.2017 or
through Memorandum dated 09.10.2017. Neither the CAG report nor the
PAC report amounts to adjudication of CPWD‟s claim against Shapoorji.
20. We also note that while disposing of the writ petition, the single Judge
has left it open for CPWD to initiate appropriate proceedings for
adjudication of its claim in accordance with law and thereby CPWD‟s right
has neither been pre-judged nor foreclosed.
21. Accordingly, finding no infirmity in the impugned judgment, the
present appeal is dismissed; without however, any order as to costs.
22. All the pending applications, if any, stand disposed of accordingly.
ANUP JAIRAM BHAMBHANI, J
CHIEF JUSTICE
APRIL 24, 2019/j
LPA No. 206/2019 page 24 of 24
