Afr vs State Of Odisha & Others
2022 Latest Caselaw 381 Ori

                       ORISSA HIGH COURT: CUTTACK

                         W.P(C) NO. 24589 of 2014

          In the matter of an application under Articles 226 and
          227 of the Constitution of India.
                                ---------------

AFR Raghunath Sahu ..... Petitioner

-Versus-

          State of Odisha & others        .....        Opp. Parties

              For Petitioner    :    M/s. (Mrs.) Pami Rath,
                                     J. Mohanty & J.P. Behera,
                                     Advocates

              For Opp. Parties :     Mr. T. Pattnaik,
                                     Addl. Standing Counsel


          P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI

THE HONOURABLE MR. JUSTICE S.K. PANIGRAHI

Date of Hearing: 10.01.2022:: Date of Judgment: 19.01.2022

DR. B.R. SARANGI, J. The petitioner, who is a registered

contractor in 'A' class category of the State P.W.D.

Department, has filed this writ petition seeking to

quash the letter dated 03.12.2013 under Annexure-17

issued by the Joint Secretary to Government of Odisha, // 2 //

Fisheries & ARD Department in compliance of the

order dated 19.02.2008 passed by this Court in W.P.(C)

No.15922 of 2007, stating that no further escalation is

considerable at Government level for payment against

the work "Construction of Landing Quay and allied

structures at Talasari Fish Landing Centre in Balasore

District", because of existing situation and the

conditions in the work supported with the undertaking

dated 15.10.2002 after payment of legitimate claims for

Rs.11,85,207/- through Bank Draft No.792415 dated

26.11.2010 by the Executive Engineer, Fishery

Engineering Division, Bhubaneswar as per Fisheries

and ARD Department Sanction Order No.11834/FARD

dated 04.11.2010, and further to direct the opposite

parties to disburse the differential escalation amount of

Rs.4,20,940/- with interest @ Rs.18% per annum from

the date the escalation bill was submitted, i.e.,

27.08.2002.

2. The factual matrix of the case, in brief, is

that the petitioner, being the lowest tenderer in respect

of the work "Construction of Landing Quay and allied // 3 //

structures at Talasari Fish Landing Centre in Balasore

District", was selected in the tender process floated by

opposite party no.4. The work was entrusted to him by

execution of an agreement i.e. Divisional Agreement

No.22F2 of 1999-2000. As per stipulation made in

the agreement, the date of commencement and the

date of completion of the work were 01.12.1999 and

30.05.2001 respectively. Although bids were opened

on 06.04.1998, but there was delay on the part of the

opposite parties in finalization of the tender and

according approval due to pendency of some litigation.

Due to delay in acceptance of the tender, the rate

quoted by the petitioner became unworkable. The

agreement is nothing but verbatim copy of the tender

conditions and thus the original date of

commencement and completion reflected in the tender

papers have also been copied even though the

agreement actually was executed on 25.03.2000 and

the work actually commenced on 01.12.1999 and the

work was completed on 31.03.2003 during extended

period delay being not attributable to the petitioner.

// 4 //

2.1. As per contractual provision, i.e. Clause-

32(a)(b)(c) is strictly for payment of price escalation

during execution of the work in case of

increase/decrease in average wholesale price index (all

commodities) for material inputs and Consumer Price

Index for industrial workers towards labour inputs of

the work and price of POL (diesel oil being the

representative item for price adjustment) pursuant to

the prescribed formulae provided that the work is

carried out within the stipulated time or extension

thereof for the reasons that are not attributable to the

petitioner.

2.2. In view of the above provisions of contract

and in pursuance of the other conditions of the

contract, the petitioner is entitled to escalation cost. In

spite of difficult site condition and unavoidable

situations, the petitioner executed the work and

completed the same during the period extended validly

by the opposite party-Department. The cause of delay

in completion of the work is solely attributable to the

opposite parties and after considering the hindrances // 5 //

caused to the work, the opposite parties have not only

granted extension of time, but also paid running

account bills during extended period. Opposite party

no.3 effected payment through running account bill,

but neglected miserably in his contractual obligation to

pay the differential cost of escalation charges as per

Clause-32 of the agreement in spite of escalation bill of

Rs.16,06,147/- submitted on 27.08.2002.

2.3. The petitioner approached the authority time

and again by submitting representations/letters

addressed to the opposite parties for releasing price

escalation bill amount, as mentioned above, but the

same were not attended to. On account of unusual

delay caused in making payment of the escalation bill

amount, the petitioner was forced to approach this

Court by filing W.P.(C) No.15922 of 2007 seeking

direction for release of undisputed escalation amount

of Rs.16,06,147/- together with interest @ 18% per

annum from 27.08.2002 i.e. the date of submission of

the escalation bill and cost. This Court, vide order

dated 19.02.2008, disposed of the said writ petition // 6 //

with a direction that in case, the petitioner submits a

representation to the opposite parties with regard to

payment of escalation amount, the same shall be

considered and disposed of by giving a reasoned order

within two months from the date of production of such

representation. In compliance thereof, the petitioner

submitted his representation to opposite party no.3

with copies of the order to opposite parties no.1 and 2

on 18.03.2008. Subsequently, he sent reminders to the

said opposite parties on 10.09.2008. Though opposite

parties no.2 & 3 in their letters dated 13.08.2008 and

05.08.2008 respectively admitted the claim of the

petitioner for payment of escalation amount after due

check up to the bills presented by him, there was

inordinate delay caused by opposite party no.1 in

according approval. However, after a good deal of

correspondence and clarification, opposite party no.1

communicated to the petitioner that an amount of

Rs.11,85,207/- (which is less than the bill presented)

towards escalation charges for payment was sanctioned

in his favour vide letter dated 12.11.2010, without // 7 //

disclosing the reasons for not sanctioning the entire

escalation bill amount of Rs.16,06,147/-. As the

petitioner was undergoing much financial hardship due

to substantial amount remaining blocked in the hands

of the department and as situation then warranted to

make payment to his creditors and to be saved from

payment of unnecessary interest, the petitioner

accepted the sanctioned amount of Rs.11,85,207/- on

protest on 24.11.2010 vide acknowledgement on the

reverse of running account bill-C prepared by opposite

party no.3 for Rs.16,06,147/-, but limited it to

Rs.11,85,207 in view of Government sanctioned order.

As a consequence thereof, the petitioner is deprived of

getting payment of balance amount of Rs.4,20,940/-

towards his price escalation cost under the agreement,

which is due to one sided and illegal course of action

by the opposite parties dishonouring the agreemental

provision made in Clause-32 (a)(b)(c). Hence this

application.

3. Mrs. Pami Rath, learned counsel for the

petitioner emphatically urged before this Court that the // 8 //

opposite parties are liable to pay the admitted

escalation dues as per Clause-32 (a)(b)(c) of the

agreement and the letter dated 05.08.2008 issued by

opposite party no.3, it has been clearly held that price

escalation to the petitioner is payable as per the

formula fixed by the Works Department. Non-payment

of a part thereof amounting to Rs.4,20,940/-, the

opposite parties have violated the agreemental

provision of Clause-32 (a)(b)(c). It is further contended

that in order to receive the balance price escalation

amount, the petitioner again made representation and

finally he served a notice under Section 80 CPC for

taking steps towards clearance of his blockage balance

payment of Rs.4,20,940 under original agreement

period. It is further contended that though opposite

parties no.2 and 3 found that the dues of the petitioner

are genuine, pursuant to letter dated 22.08.2012

issued by opposite party no.4-Director of Fisheries,

Cuttack under Annexure-18, and the letter

23.05.2012, issued by opposite party no.3-Executive

Engineer, Fishery Engineering Division, Bhubaneswar // 9 //

and as evident from the fact, opposite party no.3 paid a

part of the escalation amount, but opposite party no.1

in a most whimsical and unjustified manner illegally

refused to pay the entire escalation charges by virtue of

the undertaking of the petitioner dated 15.10.2002. It

is further contended that vide letter dated 03.12.2013,

opposite party no.1 rejected the claim of the petitioner

for disbursement of the rest of the amount claimed in

the bill dated 27.08.2002 assigning the reason for non-

release of the left over amount that the petitioner had

submitted a no claim certificate when extension of time

was granted, while the departmental instruction dated

28.06.1996 states that such certificate cannot be made

a ground to reject the claim for escalation cost.

Thereby, the action taken by the authority is arbitrary,

unreasonable and contrary to the provisions of law and

as a consequence thereof, the petitioner is entitled to

get Rs.4,20,940/-, which was deducted from the

escalation cost along with interest @ 18% per annum.

To substantiate her contentions, she has relied upon

the judgment of the apex Court in ABL International // 10 //

Ltd. V. Export Credit Guarantee Corporation of

India Ltd., (2004) 3 SCC 553.

4. Per contra, Mr. T. Pattnaik, learned

Additional Standing Counsel for the State contended

that the date of commencement and stipulated date of

completion were 01.12.1999 and 30.05.2001

respectively, i.e. 18 months from the date of

commencement. The work was not completed by the

petitioner within the stipulated period of 18 months,

therefore, the petitioner applied extension of time up to

31.03.2003 and submitted an undertaking that he will

not claim any compensation on any account from the

Department for delay in completion of the work and

considering the same, opposite party no.1 granted

extension of time till 31.03.2003 vide letter no.3888

dated 10.03.2005. Thereby, escalation bill raised by the

petitioner amounting to Rs.16,06,147/- was submitted

to opposite party no.1, i.e. Government in Fisheries

and A.R.D. Department for approval and concurrence

of Finance Department for due approval and payment.

Opposite party no.1 after examining the claim of the // 11 //

petitioner by way of short audit after due concurrence

of Financial Advisor (FA)-cum-Joint Secretary of the

Department and in consultation with Finance

Department, accorded approval/sanction to an amount

of Rs.11,85,207/- for payment to the petitioner vide

letter dated 22.11.2010. Accordingly, the payment of

Rs.11,85,207/- was made on 26.11.2010 vide bank

draft. Thereby, the petitioner is not entitled to get the

balance amount of Rs.4,20,940/-, as claimed in the

writ petition. Therefore, he contended that the writ

petition is liable to be dismissed as it does not warrant

interference of this Court.

5. This Court heard Mrs. Pami Rath, learned

counsel for the petitioner and Mr. T. Pattnaik, learned

Additional Standing Counsel for the State opposite

parties by video conferencing mode. Pleadings have

been exchanged between the parties and with the

consent of learned counsel for the parties, the writ

petition is being disposed of finally at the stage of

admission.

// 12 //

6. At the outset, this Court made a query with

regard to maintainability of the writ petition in a

contractual matter, more particularly for payment of

the dues as claimed in the writ petition. In this regard,

learned counsel for the petitioner relied upon

paragraph-27 of ABL International Ltd. (supra),

wherein it is stated as follows:

"27.From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:

(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.

(b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.

(c) A writ petition involving a consequential relief of monetary claim is also maintainable."

7. In view of paragraph-27(c), as quoted above,

it has been clarified that the writ petition involving a

consequential relief of monetary claim is also

maintainable. But, while entertaining an objection with

regard to the maintainability of a writ petition under

Article 226 of the Constitution of India, it should be

borne in mind the fact that power to issue prerogative

writs under Article 226 of the Constitution is plenary in // 13 //

nature and is not limited by any other provisions of the

Constitution. The High Court, having regard to the

facts of the case, has a discretion to entertain or not to

entertain a writ petition. The Court has imposed upon

itself certain restrictions in the exercise of this power.

8. The plenary right of the High Court to issue

a prerogative writ will not normally be exercised by the

Court to the exclusion of other available remedies

unless such action of the State or its instrumentality is

arbitrary and unreasonable so as to violate the

constitution mandate of Article 14 or for other valid

and legitimate reasons, for which the Court thinks it

necessary to exercise the said jurisdiction.

9. Taking into account the above principle, now

in the fact of the present case it is to find out whether

the petitioner is entitled to get the relief or not as

sought in the writ petition filed by him. Furthermore,

there is no dispute that the opposite parties are the

"State" under Article 12 of the Constitution of India.

Therefore, on the factual matrix delineated above, // 14 //

whether the opposite parties are liable to pay the

petitioner's blockage balance amount of escalation cost

of Rs.4,20,940/- as per the original agreement.

10. Escalation cost is payable, in view of Clause-

32 (a)(b)(c) of the agreement, which reads as follows:

Clause 32-(a) "if during the progress of the work the price of any material incorporated in the work (not being materials supplied from the Engineer-in-charge's store in accordance with Clause .......... there of) increases or decreases as a result of increase or decrease in the average wholesale Price Index (all commodities), and the Contractor there upon necessarily and properly pays in respect of that material (incorporated in the work) such/increased or decreased price, then he shall be entitled to reimbursement or liable to refund, quarterly, as the case may be, such an amount, as shall be equivalent to the plus or minus difference of 70% in between the Average Wholesale price Index (all commodities) which is operative for the quarter under consideration and that operated for the quarter in which the tender was opened, as per the formula indicated below, provided that the work has been carried out within the stipulated time or extension thereof as are not attributable to him.

Formula to calculate the increase or decrease in the price materials:-

Vm- 0.75x Pm X R(i-i0) 100 10

Vm- Increase or decrease in the cost of work during the quarter under consideration due to changes in the rates for material.

R- The value of work done in rupees during the quarter under consideration.

// 15 //

i0- The average wholesale Price Index (all commodities) for the quarter in which the tender was opened (as published in R.B.I. Bulletin).

i- The average wholesale Price Index (all commodities) for the quarter under consideration.

Pm- Percentage of material Component (Specified in Schedule of analysis) of the item.

(b) Similarly, if during the progress of work, the wage of labour increase or decrease as a result of increase or decrease in the Average Consumer's Price Index for industrial workers (wholesale Price), and the Contractor thereupon necessarily and properly pays in respect of labour engaged on execution of the work such increased or decreased wages, then he shall be entitled to reimbursement or liable to refund, quarterly as the case may be, such an amount as shall be equivalent to the plus or minus difference in between the Average Consumer's Price Industrial workers (wholesale price) which is operating for the quarter under consideration and that operated for the quarter in which the tender was opened as per the formula indicated below provided that the work has been carried out within the stipulated time or extensions thereof as are not attributable to him.

Formula to calculate the increase or decrease in the cost of labour :-

VI- 0.75 x PI x R (i- i0)
         100         10

VI-    Increase or decrease in the cost of work during

the quarter under consideration due to changes in the rates of labour .

R- The value of work done in rupees during the quarter under consideration.

i0- The average Consumer's Price Index for industrial workers (wholesale price) for the quarter in which the tender was opened (as published in R.B.I Bulletin).

// 16 //

i- The average Consumer's Price Index for industrial workers (wholesale price) for the quarter under consideration.

P1- Percentage of labour Component (Specified in schedule and analysis) of the item.

(c) Similarly if during the progress of work, the price of Petrol, Oil and lubricants (Diesel oil being the representative item for price adjustment) increases or decreases as a result of the price fixed therefor by the Government of India and the Contractor thereupon necessarily and properly pays such increased or decreased price towards Petrol, Oil and Lubricants used on execution of the work, then he shall be entitled to re-imbursement or liable to refund quarterly, as the case may be such an amount, as shall be equivalent to the plus or minus difference in between the price of P.O.L. which is operating for the quarter under consideration and that operated for the quarter in which the tender was opened as per the formula indicated below."

11. As has been already stated, the work was

entrusted to the petitioner by execution of an

agreement i.e. Divisional Agreement No.22F2 of 1999-

2000 by opening bids on 06.04.1998 and as per the

terms of the agreement, the date of commencement

and the date of completion of work were 01.12.1999

and 30.05.2001 respectively. But, the agreement was

executed on 25.03.2000 and the work was actually

commenced on 01.12.1999 and it was completed on

31.03.2003 during the extended period, delay being not

attributable to the petitioner. Therefore, the petitioner // 17 //

submitted escalation bill of Rs.16,06,147/- on

27.08.2002 as per Clause-32 of the agreement.

Opposite parties no.2 and 3, vide letters dated

13.08.2008 and 05.08.2008 respectively, admitted the

claim of the petitioner for payment of escalation cost.

As against claim of Rs.16,06,147/-, opposite party no.1

vide letter dated 22.11.2010, in compliance of the

order dated 19.02.2008 passed by this Court in W.P.(C)

No.15922 of 2007, approved an amount of

Rs.11,85,207/- in order to make payment of the said

amount in favour of the petitioner towards escalation

charges as admissible for the work "Construction of

Landing Quay and allied structures at Talasari Fish

Landing Centre in Balasore District" and the petitioner

received such payment on protest as has been

indicated in the running account bill 'C' which reads as

follows:

"Received the payment Rs.11,25,947/- with protest to my claim Amount Rs.16,06,147/- against my escalation bill."

12.         The      petitioner       made        grievance      on

13.01.2011     for    payment        of    balance      amount   of
                              // 18 //

Rs.4,20,940/-, but the said amount was not paid on

the plea of "no claim certificate" dated 15.10.2002

submitted by the petitioner. The no claim certificate,

which was given by the petitioner, reads as follows:

"Certified that I will not claim any compensation on any account from the department for the delay incompletion of the work construction of Construction of Landing Quay and allied structure of Talsari Fish Landing Centre in Balasore Dist under Agreement No: 22F2/1999-2000."

On perusal of the same, it appears that no claim

certificate was in respect of only 'compensation', but

not with regard to 'escalation cost' as embodied in the

agreement itself.

13. In State of Gujarat v. Shantilal Mangal

Das, AIR 1969 SC 634, the apex Court held that

"compensation" means anything given to make things

equivalent, a thing given to or to make amends for loss,

recompense, remuneration or pay. It need not therefore

necessarily be in terms of money.

Similar view has also been taken by the apex

Court in KSRTC v. Mahadeva Shetty, (2003) 7 SCC

197 and Sandvik Asia Ltd. v. CIT, (2006) 2 SCC 508.

// 19 //

14. In Entertainment Network (India) Ltd. v.

Super Cassette Industries Ltd., (2008) 13 SCC 30,

the apex Court held that a 'compensation' maybe held

to be payable on a periodical basis, as part from the

compensation, other terms and conditions can also be

imposed.

15. In Jeejeebhoy v. Asst. Collector, Thana,

AIR 1965 SC 1069, the apex Court held that the

expression 'compensation' means 'just equivalent of

what the owner has been deprived of'.

16. In Kiranbala Dandapat v. Secy. Grid

Corporation of Orissa Ltd., AIR 1998 Ori. 159, this

Court has also considered 'compensation' as follows:

"Compensation means anything given to make things equivalent, a thing given or to make amends for loss, recompense, remuneration or pay; it need not, therefore, necessarily be in terms of money, because law may specify principles on which and manner in which compensation is to be determined as given. Compensation is an act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damified may receive equal value for his loss or be made whole in respect of his injury; something given or obtained as equivalent given for property taken or for an injury done to another, a recompense in value; a recompense given for a thing received recompense for whole injury suffered, remuneration or satisfaction for injury or // 20 //

damage or every description. The expression 'compensation' is not ordinarily used as an equivalent to 'damage' although compensation may often have to be measured by the same rule as damages in an action for a breach."

17. Therefore, the no claim certificate so given

by the petitioner can be construed that he will not

claim any 'compensation'. But, fact remains the

petitioner claims escalation cost as per provisions of

Clause-32 (a) (b) (c) of the agreement.

18. In Food Corporation of India v. A.M.

Ahmed & Co., (2006) 13 SCC 779, the apex Court held

that 'escalation' is normal and routine incident arising

out of gap of time in this inflammatory age in

performing any contract of any type.

19. In Suryamani Nayak v. Orissa State

Housing Board, AIR 2005 Ori. 26, this Court held that

the expression 'escalation' used in an agreement

ordinarily means an agreement allowing for adjustment

up and down according to change in circumstances as

in cost of material in work contract or in cost of living

in wage agreement. It would not bring within its sweep // 21 //

higher rate of wage which a contractor is otherwise

liable to pay.

20. Therefore, taking into consideration the

meaning attached to the word 'escalation', as per terms

and conditions of the agreement, the petitioner is

entitled to get escalation cost but not the

compensation, for which the blockage of the escalation

benefit has been made. Needless to say, an

'undertaking' is nothing but a standard form, which

every contractor has to sign and submit to the effect

that he shall not claim for compensation for delay in

work and extend the period of work. This is submitted

whenever extension of time is granted for completion of

work or else extension will not be granted. This

document is signed, without adjudicating the merits of

the claim of the petitioner, and is done under duress or

else the contract would be liable to be terminated with

penalty, even though the petitioner may not be

responsible for delay in execution of work.

                                   // 22 //




21.          The     Government           of    Odisha      in      Works

Department,         vide   letter    dated      28.06.1996          under

Annexure-12, introduced the provision of escalation

clause in P.W.D. Contract form for payment of

escalation charges to the contractor during the

extended period, relying upon the extract of the

proceedings of the Codes Revision Committee Meeting

held on 25.11.1995 at 11.30 A.M. in the Office

Chamber of Engineer-in-Chief-cum-Secretary to

Government, Works Department in Item -1, which is

extracted hereunder:-

"Item -1: Payment of escalation charges to Contractors.

Xxx xxx xxx

(ii) While granting extension of time to the Contractors "no claim certificate" is obtained from them in the prescribed form of the Department. The significance of such certificate is that the Contractor surrenders his claim for "compensation on any account". But it is seen in many cases that contractors are putting up their claims for escalation in spite of no claim certificate given by them earlier. It is to be decided if such claim of the contractors are consistent with the non claim certificate. At this point, Secretary, Works Department observed that compensation and escalation are not one and the same. The object of payment of compensation is to make good the loss suffered by the contractor on account of negligence, default or fraud committed by the other party and does not cover escalation. Hence "no claim certificate" will not be a bar to te claim of // 23 //

escalation. The members endorsed the above views of the Engineer-in-Chief-cum-Secretary.

Xxx xxx xxx"

In view of the above mentioned provision, even though

the petitioner executed "no claim certificate", but that

will not be a bar for him to claim escalation cost.

22. In the present case, the bill dated

27.08.2002 was raised towards escalation cost to the

tune of Rs.16,06,147/-, but the authority considered

the same, after the order was passed by this Court on

19.02.2008 in W.P.(C) No.15922 of 2007, and

sanctioned a sum of Rs.11,85,207/- towards escalation

cost, by deducting Rs.4,20,940/- without any rhyme or

reason, for which the said amount of Rs.11,85,207/-

was received by the petitioner with protest. Thereby,

the opposite parties have agreed that the petitioner is

entitled to escalation cost during extended period of

work and as such, extension of work was not due to

fault of the petitioner. As a matter of fact, the

escalation cost was granted in part to the petitioner,

relying upon no claim undertaking submitted by the

petitioner, which is absolutely a myth. The opposite // 24 //

parties, having accepted the entitlement of escalation

cost by the petitioner as per Clause-32 of the

agreement, have taken into consideration the "value of

work done in rupees during the quarter under

consideration". The said value of the work in rupees of

the relevant quarter has already been decided and

sanctioned by opposite party no.1 vide sanction order

dated 18.08.2003. As per certificate dated 18.08.2003,

the Junior Engineer F4 Engineering, Sub-Division,

Bhadrak and Sub-Divisional Officer, Balasore, F4

Engineering Sub-Division, Bhadrak have certified the

value in rupees of quarter-wise work, which states as

follows:

Serial No.   Running       Date     of Related      Value     of
             Bill          measurement quarter      work      in
                           by opposite              rupees
                           party

1            1st           18.2.2000    1st quarter Rs.35,74,433
                                        of 2000

2            2nd           12.5.2000    2nd quarter Rs.46,89,274
                                        of 2000

3            3rd and 4th   23.6.2000 & 3rd quarter Rs.18,15,326
                           11.8.2000   of 2000

4            5th and 6th   1.3.2001     1st quarter Rs.15,00,596
                                        of 2001
                             // 25 //

The bill dated 27.08.2002 also reflects the same value

even though it has been submitted earlier. As it

appears, instead of taking note of own certified

document dated 18.08.2003, the opposite parties,

while dealing with the escalation bill of the petitioner

dated 22.11.2010, have reduced the value of the work

arbitrarily, so far it relates to the value of 1st quarter of

2000. Instead of reflecting the value as Rs.35,74,433/-,

it has been reflected as Rs.1,21,600/-, which has

resulted in arriving at a different amount as escalation

cost and that is how instead of Rs.16,06,147/- the

escalation cost has been calculated as Rs.11,85,207/-.

23. The reflection of work value for the first

quarter of 2000 as Rs.1,21,600/-, instead of

Rs.35,74,433/-, is erroneous and contrary to its own

recording in certificate dated 18.08.2003. This is also

fortified from the entries made by the opposite parties

in the measurement book, which has been placed on

record as Annexure-15, wherein for 1st quarter of 2000

the amount of Rs.35,74,433/- has been specifically

mentioned at page 137. Though in respect of other // 26 //

quarters the amount has been mentioned correctly,

and the same has been reasonably placed, but

erroneously calculated for payment of escalation cost

as Rs.11,85,207/- in place of Rs.16,06,147/-. As per

the measurement book and certificate dated

18.03.2002, the total value of work upon which

escalation is to be calculated has come to

Rs.1,15,79,625/-, i.e. the said amount is also the

amount payable to the petitioner. The said amount has

also been paid in the form of final bill, which has been

paid much prior to the payment of escalation amount.

Thereby, there is no dispute with regard to the value of

work reflected in the measurement book or in the

certificate dated 18.03.2002. But, due to erroneous

intimation of amount for the 1st quarter of 2000

running account bill in the letter dated 22.11.2010 in

Annexure-14 amounting to Rs.1,21,600/- in place of

Rs.35,74,433/-, the escalation cost reduced from

Rs.16,06,147/- to Rs.11,85,207/-. Therefore, due to

wrong recording of value of work, the blockage amount // 27 //

of Rs.4,20,940/- towards escalation cost is payable to

the petitioner.

24. Even in paragraph-23 of the writ petition,

the petitioner has pleaded as follows:-

"23. That the said amount reflected for the 1st quarter of 2000 as Rs.1,21,600/- instead of Rs.35,74,433/- is not only contrary to its own recording in certificate dated 18.08.2003 but also to the entries made by the opposite party in measurement book. The amount reflected in certificate dt. 18.08.2003 is also supported by the entries in the measurement book which again is a document authored by the opposite party. It is clearly reflected in measurement book that the amount for 1st quarter of 2000 is not Rs.1,21,600/- but Rs.35,74, 433/-."

But, there is no specific denial to such pleading. Rather

in paragraph-11 of the counter affidavit, it is stated as

follows:-

"11. That in reply to the averments made in Paragraphs-21 to 28 of the writ application, it is humbly submitted that the after examining the claim of the petitioner, the O.P. No.1, by conducting short audit and in consultation with the Finance Department has sanctioned the legitimate amount in favour of the petitioner and accordingly the same has been paid to the petitioner. No further claim of the petitioner is pending with the Opp. Parties. Considering the aforesaid facts, the Hon'ble Court may graciously be pleased to dismiss the writ being devoid of any merit."

Since the pleadings made in paragraph-23 of the writ

petition have not been disputed by the opposite parties // 28 //

and the claim has been denied only on the basis of no

claim certificate, the petitioner is entitled to get the

benefit of blockage amount of Rs.4,20,940/- towards

escalation cost as per the bill submitted on

27.08.2002.

25. Considering the facts and law, as discussed

above, this Court is of the considered view that the

opposite parties are liable to pay the blockage amount

of Rs.4,20,940/- towards escalation cost as per the bill

submitted on 27.08.2002 along with interest @ 12%

per annum w.e.f. 22.08.2012 till the actual payment is

made. As such, the payment shall be made within a

period of three months from the date of

communication/production of the judgment, failing

which it will carry further interest @ 18% per annum

w.e.f. from 22.08.2012 till the actual payment is made.

26. In the result, the writ petition is allowed.

However, there shall be no order as to cost.

As the restrictions due to resurgence of

COVID-19 situation are continuing, learned counsel for // 29 //

the parties may utilize a print out of the order available

in the High Court's website, at par with certified copy,

subject to attestation by the concerned advocate, in the

manner prescribed, vide Court's Notice No.4587 dated

25th March, 2020, as modified by Court's notice no.

4798 dated 15th April, 2021, and Court's Office Order

circulated vide Memo Nos.514 and 515 dated 7th

January, 2022.

.....................................

                                       DR. B.R. SARANGI,
                                             JUDGE

S.K.PANIGRAHI,J.           I agree.

..................................... S.K. PANIGRAHI, JUDGE

Orissa High Court, Cuttack The 19th January, 2022, Alok