Orissa High Court
Suresh Khatei vs State Of Odisha & Others on 19 October, 2023
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.34076 of 2023
Suresh Khatei ..... Petitioner
Ms. Kananbala Roy Choudhury,
Advocate
Vs.
State of Odisha & Others ..... Opposite Parties
Mr. P.P. Mohanty, AGA
CORAM:
ACTING CHIEF JUSTICE DR. B.R. SARANGI
MR. JUSTICE M.S.RAMAN
ORDER
19.10.2023
Order No. This matter is taken up through hybrid mode.
01.
2. Heard Ms. Kananbala Roy Choudhury, learned counsel for
the petitioner and Mr. P.P. Mohanty, learned Addl. Government
Advocate appearing for the State-opposite parties.
3. Learned counsel for the petitioner contended that this matter
is covered by the order dated 17.08.2022 passed by this Court in
W.P.(C) No. 20632 of 2022. Copy of the said order having been
served on learned State Counsel in Court today, he acknowledged
the same. Therefore, on the agreement of the parties, this order is
being passed.
4. The petitioner has filed this writ petition seeking to consider
Annexure-4 while order imposing penalty 0.50% of the agreement
value has been quashed vide order dated 31.07.2023 at Annexure-
3 and not approving the price escalation amount for the extended
period and hence to issue direction to the opposite parties to
release the price escalation amount in terms of agreement and in
terms of the judgment of this court in Raghunath Sahu v. State of
Odisha, AIR 2022 Orissa 37 for the work <Construction of bridge
over local Nallah on Retang Railway Station to Panchupalli
village road for the year 2015-16 under Biju Sety Yojana
Agreement No.2373 P1 of 2015-16.=
5. Learned counsel appearing for the petitioner contended that
when imposition of penalty has been quashed vide Annexure-3,
rejection of claim of the petitioner by the authority cannot sustain
in the eye of law, in view of the fact that no opportunity of hearing
was given to the petitioner. Had the opportunity been given, the
petitioner would have brought to the notice of the authority with
regard to the judgment rendered by this Court in Raghunath Sahu
(supra).
6. Mr. P.P. Mohanty, learned Addl. Government Advocate
appearing for the State-Opposite Parties contended that since this
question has already been decided by this Court in Raghunath
Sahu (supra), while considering the case of the Petitioner, the
Authority could have considered the same and passed appropriate
order in accordance with law. As the said benefit has not been
given to the Petitioner, the Order so passed by the Authority
cannot have any justification.
7. Having heard learned counsel for the parties and after going
through the records, it appears that similar matter had come up for
consideration before this court in Raghunath Sahu (supra) and
this Court in paragraphs-20, 21, 22 and 25 held as follows:
<20. Therefore, taking into consideration the meaning
attached to the word 8escalation9, 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 8undertaking9 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.
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 claim of
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 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
SubDivisional Officer, Balasore, F4 Engineering
SubDivision, Bhadrak have certified the value in rupees of
quarter-wise work, which states as follows:
Serial Running Date of Related Value of
No. Bill measurement Quarter work in
by opposite rupees
party
1 1st 18.2.2000 1st Rs.35,74,433
quarter
of 2000
2 2nd 12.5.2000 2nd Rs.46,89,274
quarter
of 2000
3 3rd & 4th 23.6.2000 & 3rd Rs.18,15,326
11.8.2000 quarter
of 2000
4 5th & 6Th 11.8.2001 1st Rs.15,00,596
quarter
of 2001
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/-.
xxx xxx xxx
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.=
8. In view of the aforesaid principles, this Court is of the
considered view that Opposite Party No.3 has lost sight of the fact
that this question has already been decided by this Court. More so,
while passing the penalty Order, no opportunity of being heard
was given to the Petitioner. Had opportunity been given to the
Petitioner, he would have brought to the notice of the Authority
with regard to the judgment of this Court in Raghunath Sahu
(supra).
9. In the above view of the matter, the matter is remitted back
to Opposite Party No.2 to consider the Annexure-4 in the light of
the judgment of this Court in Raghunath Sahu (supra) and pass
appropriate order by affording opportunity of hearing to the
Petitioner in accordance with law, as expeditiously as possible
preferably within a period of two months.
10. With the above observation and direction, the Writ Petition
is disposed of.
Issue urgent certified copy as per Rules.
(DR. B.R. SARANGI)
ACTING CHIEF JUSTICE
Aswini
(M.S. RAMAN)
JUDGE
Signature Not Verified
Digitally Signed
Signed by: ASWINI KUMAR SETHY
Designation: PA(SECRETARY-IN-CHARGE)
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 19-Oct-2023 16:27:44
