M/S. Sai Shakthi Constructions vs The Government Of A.P.
2022 Latest Caselaw 1545 Tel

      THE HON'BLE SRI JUSTICE A. ABHISHEK REDDY

                  WRIT PETITION No.35335 of 2012
ORDER:

Aggrieved by the action of respondent No.1 in rejecting to adopt

the price escalation vide Government Memo No.6351, dated

18.05.2012, the present Writ Petition is filed.

Heard the learned counsel for the petitioner and the learned

Government Pleader for Irrigation & Command Area Development for

respondents.

The case of the petitioner, in brief, is that the petitioner has

been entrusted with the work of SRSP-stage-1 formation of double

lane road from existing single lane road from NH-7 to Cross Regulator

of Kakatiya Canal and from approach road to Rest house in SRSP,

Pochampad, Nizamabad, under an agreement vide agt.No.12/GVC-

I/2009-10, dated 22.10.2009. Accordingly, the petitioner has

executed and completed the work by March, 2012 and final bill was

paid in September, 2012. It is the grievance of the petitioner that

even though the Government has issued orders adopting price

adjustment for steel and cement, POL, Bitumen and other materials

for all ongoing civil works of all Departments, the petitioner has not

been extended the said benefit. Aggrieved by the same, the present

Writ Petition is filed.

                                   2                                      AAR, J
                                                           W.P. No.35335 of 2012

Learned counsel for the petitioner has stated that the rejection

of the application of the petitioner for price escalation solely on the

ground that the orders issued by the then Government of Andhra

Pradesh have not been adopted and that there is no clause in the

agreement entered between the parties for granting the benefit of

price escalation, which is arbitrary, illegal, bad and contrary to the

Government Orders and the well established principles of law laid

down by the Hon'ble Supreme Court. Learned counsel for the

petitioner has vehemently argued that the petitioner has entered into

an agreement for execution of work of SRSP-stage-1 formation of

double lane road from existing single lane road from NH-7 to Cross

Regulator of Kakatiya Canal and from approach road to Rest house in

SRSP, Pochampad, Nizamabad, vide agreement dated 22.10.2009 and

the said works were completed in September, 2012. Learned counsel

has further stated that even though the petitioner has made several

representations, both oral as well as written, for price adjustment

before the conclusion of the contract, the official respondents did not

consider the said representations and kept the matter pending.

Learned counsel has also drawn to the attention of the Court to the

letter written by the Superintending Engineer, Sirramsagar Project,

Nizamabad, to the Administrator-cum-Chief Engineer, Sriramsagar

Project, Hyderabad, recommending the case of the petitioner on the

basis of the G.O. Ms. No.94 dated 16.04.2008 issued by the 3 AAR, J W.P. No.35335 of 2012

Government. Thereafter the Administrator-cum-Chief Engineer,

Sriramsagar Project, Hyderabad, vide letter dated 02.03.2012 has

written to the Secretary to Government (A.D), I&CAD (P.W. Maj. VIII)

Dept., Hyderabad, recommending for the price escalation as

contemplated under the GOs referred above. But, vide Memo

No.6351/M&MI(The-II)/A2/2012-2 dated 18.05.2012, the Special

Chief Secretary to Government (Irrigation) has not agreed for price

adjustment solely on the ground that the said price adjustment

clause was neither uploaded in the tender schedule nor included in

the agreement. Learned counsel has contended that once the

Government has issued the GO for granting the benefit of price

escalation for all the ongoing works, the contention of the official

respondents that the said G.O. is not applicable to the petitioner as

there is no clause in the agreement to that effect, is totally against the

very purpose and purport for which the said GO was issued.

Irrespective of the fact whether the clause for price adjustment is

uploaded in the tender schedule or included in the agreement entered

between the parties or not, as the Government has issued the GO for

the benefit of the contractors, the said benefit cannot be denied to the

petitioner. Learned counsel has relied on the judgments reported in

State of Orissa vs. Birat Chandra Dagara1 and Food Corporation

1 AIR 1997 ORISSA 142 4 AAR, J W.P. No.35335 of 2012

of India vs. A.M. Ahmed & Co2 to contend that irrespective of the

fact whether the said clause is there in the agreement or not, the

officials are bound to pay price adjustment inconsonance with the

GOs issued by the Government and they simply cannot reject the

application solely on the ground that the agreement did not provide

for grant in the price adjustment.

Per contra, the learned Government Pleader has vehemently

opposed the very maintainability of the Writ Petition and has stated

that initially the petitioner has submitted the bills without there

being any price adjustment as he was fully aware of that he was not

entitled for any price adjustment as per the terms and conditions of

the agreement entered between the parties. Learned Government

Pleader has further stated that the petitioner during the execution of

the contract at no point of time raised any dispute with regard to the

price adjustment and only at the end of the contract, that too after

receipt of payment of all the bills, he started making representations

seeking the benefit of price adjustment given under the GO Ms. No.94

dated 16.04.2008. Therefore, he prayed this Court to dismiss the

present writ petition.

Perused the record.

A perusal of the record shows that as per the agreement

entered between the parties, admittedly there is no clause for price

2 2006 (4) Arb. LR 155 (SC) 5 AAR, J W.P. No.35335 of 2012

adjustment. The works began on 22.10.2009 and the same were

supposed to be completed within one year. Thereafter, the time was

extended twice and the works were completed by September, 2012.

The petitioner has made representation on 15.02.2012 seeking price

adjustment and based on the same, a communication was sent from

the Superintending Engineer to the Administrator-cum-Chief

Engineer, Sriramsagar Project, Hyderabad, for extending the benefit

of the GOs and giving the price adjustment to the petitioner even

though there is no clause as such in the agreement. But vide Memo

dated 18.05.2012 issued by the Special Chief Secretary to

Government (Irrigation) the request of the petitioner for price

adjustment was rejected on the ground that there is no price

adjustment clause in the agreement entered between the parties and

the petitioner was also fully aware of the same.

Along with counter affidavit, the learned Government Pleader

has filed certain documents including the relevant page of the

Measurement Book wherein the petitioner has made the following

endorsement:

"Release and discharge certificate

1) I do hereby release and discharge of all the claims whatsoever effect to this work.

2) I hereby accept all the measurements full and final/settlement of work.

(Contractor)"

                                               6                                              AAR, J
                                                                               W.P. No.35335 of 2012

Even though the learned counsel for the petitioner has relied on

the judgments in Birat Chandra Dagara (referred supra) and A.M.

Ahmed & Co (referred supra), wherein it was held that

de hors any clause in the agreement between the parties, the

petitioner would still be entitled to for any price escalation/price

adjustment. There is absolutely no quarrel with regard to the above

proposition of law laid down by this Court, but as seen from the

record, the petitioner himself has given an endorsement in the

Measurement Book, extracted above, stating that he has no further

claim whatsoever and that he received all the claims to the full and

final settlement. In view of the same, the said judgments relied by

the learned counsel for the petitioner are of no help and are not

applicable to the facts of the present case.

In Nathani Steels Ltd. vs. Associated Construction3 the

Apex Court following the decision given in the case of P.K. Ramaiah

vs. Chairman & M.D. National Thermal Power Corporation4 has

held that once dispute is amicably settled between the parties finally,

the arbitration clause cannot be invoked by a party to resolve the

same on any ground. The Apex Court further held as under:

"Even otherwise, we feel that once the parties have arrived at a settlement in respect of any dispute or difference arising under a contract and that dispute or difference is amicably settled by way of a final settlement by and between the parties, unless that settlement is

3 1995 Supp (3) SCC 324 4 1994 Supp (3) SCC 126 7 AAR, J W.P. No.35335 of 2012

set aside in proper proceedings, it cannot lie in the mouth of one of the parties to the settlement to spurn it on the ground that it was a mistake and proceed to invoke the arbitration clause. If this is permitted, the sanctify of contract, the settlement also being a contract, would be wholly lost and it would be open to one party to take the benefit under the settlement and then to question the same on the ground of mistake without having the settlement set aside. In the circumstances, we think that in the instant case, since the dispute or difference was finally settled and payments were made as per settlement. It was not open to the respondent unilaterally to threat the settlement as non est and proceed to invoke the arbitration clause."

Having regard to the law laid down by the Hon'ble Supreme

Court in Nathani Steels Ltd. (referred supra) and more particularly

the endorsement made by the petitioner himself in the Measurement

Book that he had no further claim and received the bill amounts in

full satisfaction of all the claims, this Court does not find any merit in

the present writ petition warranting any interference of this Court

and granting the relief sought by the petitioner.

Accordingly, the Writ Petition is dismissed.

Miscellaneous petitions pending in this writ petition, if any,

shall stand closed. There shall be no order as to costs.

_________________________ A.ABHISHEK REDDY, J Date : 28.03.2022 sur