Orissa High Court
Sanjay Kumar Agrawal vs State Of Odisha & Others ..... Opposite ... on 4 January, 2024
Bench: B.R. Sarangi, Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P (C) No.42379 of 2023
Sanjay Kumar Agrawal ..... Petitioner
Mr. S.K. Acharya, Advocate
Vs.
State of Odisha & others ..... Opposite Parties
Mr. P.P. Mohanty, AGA
CORAM:
ACTING CHIEF JUSTICE DR. B.R. SARANGI
MR. JUSTICE MURAHARI SRI RAMAN
ORDER
04.01.2024
Order No. This matter is taken up by hybrid mode.
01.
2. Heard Mr. S.K. Acharya, learned Counsel for the Petitioner
and Mr. P.P. Mohanty, learned Addl. Government Advocate for
State-Opposite Parties.
3. The Petitioner has filed this Writ Petition seeking to quash
the letter dated 24.11.2022 under Annexure-3 issued by the
Opposite Party No.3 in not granting price escalation to the
petitioner and to issue direction to the Opposite party no.4 to
provide price escalation to the petitioner for the work "Retrofitting
to Rural Piped Water Supply Scheme to village Khiprimal &
Hirapur under Sinapali Block under Nuapada District".
4. Mr. S.K. Acharya, learned Counsel appearing for the
Petitioner contended that the impugned letter under Annexure-3
cannot sustain in the eye of law, in view of the fact that no
opportunity of hearing was given to the Petitioner. Had
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 v. State of Odisha and others, AIR
2022 ORISSA 37. Thereby, gross illegality and irregularity has
been committed by the Authority in passing the Order impugned,
which is liable to be set aside.
5. 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.
6. Having heard learned Counsel for the Parties and after
going through the records, this Court finds that under Annexure-3
dated 24.11.2022 Opposite Party No.3 passed order without
levying penalty and without extending the benefit of price
escalation or compensation benefit for the extended period.
7. 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 '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.
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 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 Sub-
Divisional Officer, Balasore, F4 Engineering Sub-
Division, Bhadrak have certified the value in rupees of
quarter-wise work, which states as follows:
Serial Running Bill Date of Related quarter Value of work
No. measurement by in rupees
opposite party
1 1st 18.2.2000 1st quarter of Rs.35,74,433
2 2nd 12.5.2000 2nd quarter of Rs.46,89,274
3 3rd and 4th 23.6.2000 & 3rd quarter of Rs.18,15,326
11.8.2000 2000
4 5th and 6th 1.3.2001 1st quarter of Rs.15,00,596
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 Order impugned, 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 letter impugned dated
24.11.2022 in Annexure-3 cannot sustain in the eye of law and the
same is liable to be quashed and is hereby quashed. The matter is
remitted back to Opposite Party No.3 to reconsider the same 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
Laxmikant
(M.S. RAMAN)
JUDGE
Signed by: LAXMIKANT MOHAPATRA
Designation: SENIOR STENOGRAPHER
Reason: Authentication
Location: HIGH COURT OF ORISSA, CUTTACK
Date: 04-Jan-2024 16:11:59
