P.Thyagarajan vs The Executive Engineer
2021 Latest Caselaw 2349 Ker

              IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

                THE HONOURABLE SMT. JUSTICE P.V.ASHA

     THURSDAY, THE 21ST DAY OF JANUARY 2021 / 1ST MAGHA, 1942

                     WP(C).No.27862 OF 2020(G)


PETITIONER:

              P.THYAGARAJAN, AGED 60 YEARS, S/O.S.PANKAJAKSHAN,
              VRINDAVAN, PERINGAMALA, KALLIYOOR P.O.,
              THIRUVANANTHAPURAM-695 742.

              BY ADV. SRI.S.SACHITHANANDA PAI

RESPONDENT:

              THE EXECUTIVE ENGINEER,
              CENTRAL PUBLIC WORKS DEPARTMENT,
              OFFICE OF THE EXECUTIVE ENGINEER, C WING,
              1ST FLOOR, CGO COMPLEX, POONKULAM, VELLAYANI P.O.,
              THIRUVANANTHAPURAM-695 522.

              BY ADVS.SRI.P.VIJAYAKUMAR, ASG OF INDIA
                      SRI.GIRISHKUMAR.V., CGC
                      SRI.CGC.SMT.KRISHNA,

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
21.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.27862 OF 2020(G)

                                   -2-

                             JUDGMENT

Dated this the 21st day of January 2021

The petitioner, who is an A class civil

works contractor, has filed this writ

petition aggrieved by Ext.P6 order dated

8.12.2020 of termination of the contract. He

seeks a direction to the respondent to permit

him to complete the construction within a

reasonable time.

2. As per Ext.P1 letter dated 16.7.2018

the respondent accepted the e-tender

submitted by petitioner for the work of

"construction of 0.75 unit dormitory (G+1)

for girls at Navodaya Vidyalaya, Vithura,

District Thiruvananthapuram, Kerala including

water supply, sanitary installations,

drainage and internal electrical

installations, fans and fittings." It is WP(C).No.27862 OF 2020(G)

stated that after furnishing performance

guarantee on 25.7.2018, he started the work

in August 2018; but he was unable to complete

the work within the stipulated time because

of the outbreak of Covid-19 pandemic. He has

further stated that, in answer to a show

cause notice from the respondent, he had

submitted Ext P2 explanation on 4.6.2020,

undertaking to complete the work by

30.9.2020. It is his further case that the

Principal of the School, where the

construction was going on, had requested him

as per Ext.P3 letter, dated 29.07.2020, to

stop the work due to the fear of spread of

Covid-19, pointing out that the teachers were

residing there with family. It is also

submitted that he was constrained to stop the

work on the basis of the said letter as well WP(C).No.27862 OF 2020(G)

as the oral direction of the respondent.

While so, the petitioner was issued with

Ext.P4 show cause notice on 30.10.2020

proposing termination of the contract

invoking Clause 3(a)(b) of General Conditions

of Contract for Central PWD works 2014. It is

stated that though petitioner submitted

Ext.P5 explanation on 10.11.2020 explaining

the entire circumstances, the respondent

issued Ext.P8 order on 8.12.2020, terminating

the contract and forfeiting the performance

guarantee as well as the earnest money

deposit. Petitioner was directed to report

before the respondent for joint measurement.

It is stated that contract is terminated

without appreciating the fact that the work

had to be stopped at the request of the

Principal; without taking note of the WP(C).No.27862 OF 2020(G)

scarcity of labourers after the Covid-19

outbreak and without considering any of the

factual circumstances pointed out in his

explanation. It is stated that he had

already requested for extension of time up to

30.01.2021 and not to take any penal action

against him.

3. According to the petitioner, he

would be able to complete the work, in case

he is given three months' time as he has made

all arrangements for the same. The learned

counsel for the petitioner submitted that a

re-tender at this stage would only be

contrary to public interest as it would

involve more expenditure to the Government as

the rate of work would be different.

4. The learned central Government

Counsel has filed a statement on behalf of WP(C).No.27862 OF 2020(G)

the respondent refuting the contentions

raised by the petitioner. It is stated that

pursuant to Ext.P1 letter of acceptance, an

agreement was entered into between the

petitioner and the Executive Engineer,

wherein it was stipulated that the period of

completion of the work would be 210 days,

specifying the date of commencement of the

work as 31.07.2018 and due date of completion

as 25.2.2019. It is therefore stated that

the outbreak of Covid-19 pandemic which

occurred after an year could not have been

the reason for delay in completion of work.

It is stated that the respondent had been

asking the petitioner to accelerate the

progress of work with due diligence issuing

Annexure R1(b) to R1(p) letters issued

between 25.01.2019 and 27.11.2019 and WP(C).No.27862 OF 2020(G)

thereafter, informing him the violation of

contractual conditions and obligations from

his part with warning that the department

would be forced to take action under Clause 3

of the contract on failure to maintain

desired progress of the work. It is stated

that during inspections several defects in

the work and lapses in safety were found. He

was given several chances to improve the

quality of work, speed etc. to abide by the

programme of work, in each of the notices

issued to him, where the lapses were

explained. On expiry of the time schedule on

25.02.2019, extension was granted upto

31.08.2019 without prejudice to the right of

Government to recover liquidated damages; the

Chief Engineer had also examined the case and

it was found that petitioner was responsible WP(C).No.27862 OF 2020(G)

for the delay. It is stated that despite the

direction of the Chief Engineer in Annexure

R1(e) letter dated 08.08.2019, while giving

another opportunity to petitioner, even after

finding the petitioner solely responsible for

the delay, petitioner did not submit the

application for rescheduling of milestone for

completion of work on war footing, in a

proper format, even after reminding him the

same in Annexure R1(i) letter of the

respondent or in Annexure R1(j) letter of the

Superintending Engineer. In the absence of

any proper application for ROM or for

extension of time and taking note of the slow

pace in the work the Chief Engineer issued

Annexure R1(k) show cause notice on

27.11.2019 under Clause 2 of the agreement

proposing action against the petitioner for WP(C).No.27862 OF 2020(G)

imposing compensation for the prolonged delay

and the casual approach of the petitioner,

stating that there was no likelihood of

completion of work within 07.02.2020, as per

the work schedule submitted by petitioner. It

is stated that the respondent had issued

another show cause notice Annexure R1(l)

dated 03.05.2020 to petitioner for action

under Clause 3 and after considering the

explanation of the petitioner and taking note

of the outbreak of Covid-19 and the lockdown

measures the respondent had, in Ext.R1(m)

letter dated 04.06.2020, recommended

extension of time till 30.09.2020. But even

thereafter petitioner did not take any pro-

active steps. Therefore Ext.P4 show cause

notice was issued for proceeding under clause

3. It is stated that Annexure R1(n)and R1(o) WP(C).No.27862 OF 2020(G)

letters would show that the explanation of

petitioner was considered. While terminating

the contract the reasons for the same are

also stated in Ext.P6, which are sufficient

for termination. It is stated that the

Principal as well as the Chairman of the

managing Committee had expressed serious

concern over the delay in completion of the

work in their letters Annexure R1(p) dated

27.11.2019, Annexure R1(r)letter dated

25.02.2020. It is stated that the Principal

had as per Annexure R1(s) letter dated

06.10.2020 requested to hand over the

building immediately, pointing out the

inconvenience caused to them. It is stated

that petitioner himself assumed that

extension was given till 31.01.2021, even in

the absence of any such orders. He used to WP(C).No.27862 OF 2020(G)

raise false allegations against the

department. It is also pointed out the

petitioner has already been found responsible

for the delay in completion of construction

of other two hostels also in

Thiruvananthapuram.

           5.       The        petitioner       filed       a     reply

   affidavit        stating         that        though              the

   respondent       never        extended       the     period       of

contract fixed as on 25.02.2019, the request

of petitioner for extension till 30.01.2021

was never objected. It is stated that he has

satisfactorily completed several works like

those covered by Exts.P6 and P7 produced

along with the reply affidavit, under the

respondent and that he had been carrying out

the present work also with due diligence.

According to him, the delay occurred because WP(C).No.27862 OF 2020(G)

of the inaction of the respondent in

furnishing the drawings, non-finalisation of

location lay out, etc. It is stated that the

revised structural drawings for foundation

details of the building were made available

only on 08.11.2018; plinth level and

foundation details were finalised only on

12.11.2018; architectural drawings were

issued only on 16.04.2019, that too after a

series of correspondence in Exts.P9 to P12

letters sent to the respondent between

03.09.2018 and 23.02.2019, in which he had

explained the hindrances occurred in the

execution of work. It is stated that the

drawings of the part plan basement level and

ground level of toilet block was issued only

on 17.08.2019, as evident from Ext.P8 letter

of the respondent, whereas the actual WP(C).No.27862 OF 2020(G)

completion of the work stipulated was

25.01.2019. It is also his case that his

application for extension of period of

contract was accepted by the respondent

without any reservation. It is stated that

the work which was stopped at the instance of

the Principal of the School could be

restarted only with the minimized structural

resources in the absence of sufficient number

of labourers. Pointing out Ext.P13 payment

agreement as well as 7th RA bill approved in

Ext.P15 by the respondent on 30.10.2020 and

5.12.2020 respectively and the payment

effected as per Ext.P16 memorandum on

21.12.2020, the petitioner claims that the

respondent had impliedly granted extension

based on his request in Ext P14 letter dated

07.09.2020. According to him payment could WP(C).No.27862 OF 2020(G)

not have been made to him in the absence of

extension of time for completion of work or

after termination of contract. It is stated

that the work, which he had to stop in July

2020 at the instance of Principal, could be

restarted only after permission was granted

on 26.08.2020. The work could be restarted by

15.09.2020, after arranging sufficient

labourers, and materials. According to

petitioner, he had explained the reasons for

the delay, in the explanation he had

submitted and had assured to complete the

work by 30.01.2021. After the respondent

allowed the petitioner to continue with the

work, the termination of contract by Ext.P6

order is mala fide. It is stated that the

work awarded to him at 2016 schedule of rates

would have to be re-arranged only at WP(C).No.27862 OF 2020(G)

escalated rate of 2018 which would incur more

expenditure to Government. It is the case of

the petitioner that he has not violated any

of the conditions of contract and it would be

in furtherance of public interest to permit

him to complete the work.

6. I heard Sri.Sachithanada Pai the

learned Counsel for the petitioner and the

learned CGC appearing for the respondent.

The learned counsel for the petitioner

submits that petitioner requires only three

more months' time to complete work. The

learned Central Government Counsel on

instructions submitted that the respondent as

well as the Department has lost confidence in

the petitioner. The learned Central

Government Counsel also points out that when

the respondents have arrived at the decision WP(C).No.27862 OF 2020(G)

to terminate the contract only after taking

note of all the circumstances, the progress

of work etc. this Court may not interfere

with the same. It is also argued that nothing

prevents the respondent from making payment

for the work that have been already carried

out and such payment cannot imply grant of

extension of time for completion of work.

7. When the petitioner submits that

he has completed major part of the work, it

is disputed by the respondent. Similarly the

reason for the delay caused in completion,

according to petitioner, is on the

respondent; whereas it is solely on

petitioner, according to the respondent.

Petitioner claims that there was implied

extension of time for completion which is

stoutly opposed by respondent.

WP(C).No.27862 OF 2020(G)

8. Admittedly there is no order

granting extension of time to the petitioner

for the period up to 30.01.2021. Petitioner

claims only implied extension.

9. It is seen that the contract is

terminated in accordance with the provisions

contained in the agreement executed between

the parties as well as the provisions

contained in the General Conditions of

Contract. There is serious dispute as to the

reason for the delay apart from the plea of

loss of confidence on the petitioner. In such

circumstances, this Court will not be

justified in interfering with the issue.

Though the petitioner pointed out that he

would complete the work within a period of

three months or that there would be

additional expenditure on account of WP(C).No.27862 OF 2020(G)

enhancement of rate in the event of a re-

tender, when the respondents submit that they

have lost confidence in a party, this Court

cannot compel the respondents to permit the

petitioner to work. It is seen that a number

of notices were being issued to petitioner to

accelerate the progress of work, though

petitioner asserts that delay was caused at

the instance of respondent. The termination

is seen effected after a lot of

correspondence between the parties and it is

stated that the said termination is in

accordance with clause 3 of the agreement.

Therefore it is only appropriate for the

petitioner to co-operate with the respondent

to complete the joint measurement.

10. The scope of judicial review in

contractual matters is very limited. In the WP(C).No.27862 OF 2020(G)

judgment in State of Kerala v. M.K. Jose:

(2015) 9 SCC 433 the Apex Court held that

Court should ordinarily not entertain a writ

petition, if there is a breach of contract

when factual disputes are involved. The Apex

Court was considering an appeal against the

judgment of this court which permitted the

contractor to proceed with the work after

setting aside the termination of contract

based on the report filed by the Advocate

Commissioner, regarding the quantum of work

executed. In the judgment in ABL

International Ltd. v. Export Credit Guarantee

Corpn. of India Ltd.: (2004)3SCC 553, the

Apex Court, held that though judicial review

in contractual matters is not totally

excluded, the plenary right of the High

Court to issue a prerogative writ will not WP(C).No.27862 OF 2020(G)

normally be exercised by the Court unless the

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. In Noble

Resources Ltd. v. State of Orissa:

(2006)10SCC 236 it was held that the question

whether power to exercise judicial review

should be exercised, should be decided in the

factual circumstances of each case. While

considering the challenge against award of

contract the Apex Court, in Tata Cellular:

Union of India: (2004)6 SCC 651, held that

the role of the court in matters involving

contracts is only to review the manner in

which the decision is taken and the Court WP(C).No.27862 OF 2020(G)

which does not have expertise in matters

covered by the tender would not venture to

correct the administrative decision and there

should be a fair play in the joints for an

administrative body and that the

administrative decision must not only be

tested by the application of principle of

reasonableness while it should also be free

from arbitrariness not affected by bias or

actuated by mala fides.

             Therefore,       I    am      of    the        view    that

   interference      with    the     Ext.P6          order     is    not

   warranted       under      Article            226         of      the

   constitution      of     India.        The        writ    petition

accordingly dismissed. In order to enable the

respondents to re-tender the work, the

petitioner shall co-operate with the

respondents for the joint measurement without WP(C).No.27862 OF 2020(G)

any delay. Admitted payment if any due to the

petitioner shall also be made after the same.

It is made clear that the dismissal of

the writ petition will not stand in the way

of the petitioner invoking the remedies

available to him in accordance with law.

Sd/-

P.V.ASHA JUDGE akv WP(C).No.27862 OF 2020(G)

APPENDIX PETITIONER'S/S EXHIBITS:

EXHIBIT P1 COPY OF THE ACCEPTANCE OF TENDER ISSUED BY THE RESPONDENT.

EXHIBIT P2 EXPLANATION DATED 04.06.2020 OF THE PETITIONER.

EXHIBIT P3 LETTER DATED 29.07.2020 OF THE PRINCIPAL, NAVODAYA VIDYALAYA.

EXHIBIT P4 SHOW CAUSE DATED 30.10.2020 OF THE RESPONDENT.

EXHIBIT P5 EXPLANATION DATED 10.11.2020 OF THE PETITIONER.

EXHIBIT P6 LETTER OF TERMINATION OF CONTRACT OF THE RESPONDENT DATED 08.12.2020.

EXHIBITS ALONG WITH REPLY AFFIDAVIT:

EXHIBIT P6 COPY OF THE COMPLETION CERTIFICATE ISSUED BY THE RESPONDENT DATED 02.07.2016.

EXHIBIT P7 COPY OF THE COMPLETION CERTIFICATE ISSUED BY THE RESPONDENT DATED 06/02/2020.

EXHIBIT P8 COPY OF THE LETTER DATED 17/08/2020 OF THE RESPONDENT.

EXHIBIT P9 COPY OF THE LETTER DATED 03/09/2018 OF THE PETITIONER.

EXHIBIT P10 COPY OF THE LETTER DATED 30/10/2018 OF THE PETITIONER.

EXHIBIT P11 COPY OF THE LETTER DATED 09/11/2018 OF THE PETITIONER.

EXHIBIT P12 COPY OF THE LETTER DATED 23/02/2019 OF THE PETITIONER.

EXHIBIT P13 COPY OF MEMORANDUM OF PAYMENT ON AGREEMENT DATED 30/10/2020.

WP(C).No.27862 OF 2020(G)

EXHIBIT P14 COPY OF THE LETTER DATED 07/09/2020 OF THE PETITIONER.

EXHIBIT P15 COPY OF ABSTRACT BOOK OF RUNNING ACCOUNT DATED 05/12/2020.

EXHIBIT P16 COPY OF MEMORANDUM OF PAYMENT ON AGREEMENT DATED 21/12/2020.

RESPONDENT'S/S EXHIBITS:

ANNEXURE R1(A) COPY OF LETTER FROM THE ASSISTANT ENGINEER DATED 26/08/2020.

ANNEXURE R1(B) COPY OF LETTER FROM THE RESPONDENT DATED 25/01/2019.

ANNEXURE R1(C) COPY OF LETTER FROM THE RESPONDENT DATED 18/07/2019.

ANNEXURE R1(D) COPY OF LETTER FROM THE RESPONDENT DATED 03/08/2019.

ANNEXURE R1(E) COPY OF LETTER FROM THE CHIEF ENGINEER DATED 08/08/2019.

ANNEXURE R1(F) COPY OF LETTER FROM THE PETITIONER DATED 19/08/2019.

ANNEXURE R1(G) COPY OF PROGRAM CHART SUBMITTED BY THE PETITIONER DATED 19/08/2019.

ANNEXURE R1(H) COPY OF LETTER FROM THE CHIEF ENGINEER DATED 22/08/2019.

ANNEXURE R1(I) COPY OF LETTER FROM THE RESPONDENT DATED 27/08/2019.

ANNEXURE R1(J) COPY OF THE LETTER FROM THE SUPERINTENDING ENGINEER DATED 27/09/2019.

ANNEXURE R1(K) COPY OF LETTER FROM THE CHIEF ENGINEER DATED 27/11/2019.

WP(C).No.27862 OF 2020(G)

ANNEXURE R1(L) COPY OF LETTER FROM THE RESPONDENT DATED 13/05/2020.

ANNEXURE R1(M) COPY OF LETTER FROM THE RESPONDENT DATED 10/06/2020.

ANNEXURE R1(N) COPY OF LETTER FROM THE RESPONDENT DATED 19/11/2020.

ANNEXURE R1(O) COPY OF LETTER FROM THE CHIEF ENGINEER DATED 01/12/2020.

ANNEXURE R1(P) COPY OF LETTER FROM THE PRINCIPAL, JNV DATED 27/11/2019.

ANNEXURE R1(Q) COPY OF THE LETTER FROM THE RESPONDENT DATED 06/12/2019.

ANNEXURE R1(R) COPY OF LETTER FROM THE ASSISTANT COLLECTOR, THIRUVANANTHAPURAM DATED 25/02/2020.

ANNEXURE R1(S) COPY OF LETTER FROM THE PRINCIPAL, JNV, VITHURA DATED 06/10/2020.

ANNEXURE R1(T) COPY OF LETTER FROM THE RESPONDENT DATED 20/02/2020.

ANNEXURE R1(U) COPY OF LETTER FROM THE ASSISTANT ENGINEER DATED 03/09/2019.

ANNEXURE R1(V) COPY OF LETTER FROM THE RESPONDENT DATED 05/09/2019.

//TRUE COPY// PA TO JUDGE