Telangana High Court

M/S. V. K. A. Constructions vs State Of Telangana on 8 July, 2024

  THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE

                             AND

 THE HON'BLE SHRI JUSTICE ANIL KUMAR JUKANTI


               WRIT APPEAL No.808 of 2024


JUDGMENT:

(Per the Hon'ble the Chief Justice Alok Aradhe)

Mr. K.R.Kaushal Karan, party-in-person representing

the appellant-M/s. V.K.A. Constructions.

Mr. I.V.Siddhivardhana, learned Special Government

Pleader for the respondents.

2. This intra court appeal emanates from an order

dated 02.01.2024 passed by learned Single Judge in

W.P.No.10777 of 2019, by which writ petition preferred by

the appellant has been disposed of.

3. Facts giving rise to filing of this appeal briefly

stated are that the appellant claims to be the firm

registered as a Special Class Contractor with Government

of Telangana and is engaged in executing road works on

contract basis with various Departments of the State

Government including the respondents. The Engineer-in-

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Chief (R&B), National Highways, floated a tender on

30.12.2016 for the work of "Widening & Strengthening of

Nadergul to Sagar PWD Road (via) Adibatla, Kongarakalan,

Mangalpally from KM 0/0 to 17/5 (Working Reach from

KM 0/0 to 9/0) in Ranga Reddy District". The appellant

participated in the aforesaid tender and was declared as

successful bidder. A letter of acceptance dated 15.02.2017

was issued to it by the Superintending Engineer (R&B),

National Highways. According to the appellant, it

proceeded with the work which was awarded to it after

obtaining working drawings. However, it is the case of the

appellant that it was forced to do the work which was

beyond the specified working reach without any written

approval. It is the case of the appellant that 90% of the

project work is complete. However, even payment of

admitted bills has not been made to it.

4. The appellant therefore approached the

Superintending Engineer (R&B), National Highways on

28.11.2018 seeking release of payments due to it. The

appellant thereafter by communication dated 28.12.2018, ::3::

delivered to the appellant on 11.01.2019, was asked to

resume the work notwithstanding the fact that the work

awarded to it was not in existence. The appellant

thereupon on 18.01.2019 invoked clause 23.1 of the

conditions of contract and requested the Executive

Engineer (R&B), National Highways to treat the contract as

closed. It is the case of the appellant that under the

coercion exercised by the respondents, the appellant

sought extension of time upto 30.06.2019 to execute the

balance work. It is the case of the appellant that the time

for completion of the remaining work was extended upto

30.06.2019 without any liquidated damages. Thereafter,

the contract awarded to the appellant is terminated on

04.05.2019.

5. The appellant thereupon filed a writ petition

before the learned Single Judge namely W.P.No.10777 of

2019, in which a writ of mandamus was sought seeking the

quashment of termination notice dated 04.05.2019 as well

as subsequent ratification dated 21.05.2019. The

appellant sought a direction to the respondents to make ::4::

payment of the admitted amount of bill to the tune of

Rs.62,30,212.00.

6. Learned Single Judge by an order dated

02.01.2024 disposed of the writ petition namely

W.P.No.10777 of 2019 with the direction to the

respondents to make payment of the admitted amount of

the bill. However, it was held that the issue pertaining to

termination of contract requires adjudication of disputed

questions of fact which may not be adjudicated in a

summary proceeding under Article 226 of the Constitution

of India. The appellant therefore relegated to avail of the

alternative remedy provided to it under the law. In the

aforesaid factual background, this intra court appeal has

been filed.

7. Party-in-person submitted that he has not

abandoned the work and the Superintending Engineer

(R&B), National Highways, has not ratified the order of

termination dated 04.05.2019. It is further submitted that

the order of termination of the contract dated 04.05.2019

is arbitrary and is violative of fundamental right of the ::5::

appellant to carry on business. It is further submitted that

though appellant was ready and willing to perform the

remaining part of the contract, yet the appellant was not

allowed to do so and was forced to apply for extension of

time after the period of contract has expired. It is therefore

submitted that order of termination of contract dated

04.05.2019 be set aside and the appellant be permitted to

carry out the balance work. In support of his submission,

party-in-person has relied on decision of Supreme Court in

ABL International Ltd. v. Export Credit Guarantee

Corporation of India Ltd. 1.

8. We have considered the submission made by

party-in-person and have perused the order dated

02.01.2024 in W.P.No.10777 of 2019.

9. Learned Single Judge in paragraph 24 of the

order dated 02.01.2024 in W.P.No.10777 of 2019 has

recorded as follows:

"24. In the above conspectus of facts, the following disputed questions arise for consideration:

1 (2004) 3 SCC 553 ::6::

a) Whether there was any default on the part of the respondent authorities in handing over drawings/design to the petitioner and whether petitioner was pressurized to go ahead without the said drawings;

b) Whether the bills of the petitioner were withheld from time to time;

c) Whether the petitioner was pressurized to apply for extension of time and additional work was done by the petitioner on oral instructions of the authorities;

d) Whether the respondents No.6 and 7 stopped the work of the petitioner citing public criticism and for any other reason;

e) Whether the petitioner rightly invoked clause 23 of the conditions of the contract vide letter dated 18.01.2019 for closure of contract and to settle the account to the extent of the work done;

f) Whether the petitioner sought extension of time under pressure from the respondent authorities by not releasing the bill payments;

g) Whether rider "without positive price variation"

insisted upon by the respondent No.4 vide letter dated 18.03.2019 for extension of time granted by the respondent No.2 up to 30.06.2019 is valid;

h) Whether the termination notice dated 04.05.2019 is antedated and the action of the respondents No.4 and 5 is malafide;

i) Whether there is deficiency in the work done by the petitioner;

j) Whether the petitioner defaulted in completing the work within the period of contract and extended period by way of extension of time;

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k) Whether there was loss caused to the respondent-department due to alleged abandoning of the work by the petitioner."

10. Undoubtedly, it is true that if a State or its

instrumentality acts in an arbitrary, unfair and irrational

manner even in contractual plea, this Court in exercise of

powers under Article 226 of the Constitution of India can

entertain the petition and can interdict such an arbitrary

action. However, it is equally well settled legal proposition

that High Court in exercise of powers under Article 226 of

the Constitution of India does not adjudicate the disputed

questions of fact (See Shubhas Jain v. Rajeshwari

Shivam 2). Similar view was taken in Radha Krishan

Industries v. State of Himachal Pradesh 3 and it has been

held that if in case disputed questions of fact arise for

determination in a writ petition, the High Court may

decline to exercise the writ jurisdiction.

11. In the instant case, whether the rescission of

the contract is arbitrary or is irrational or the power to

rescind the contract has been exercised in consonance with

2 2021 SCC OnLine SC 562 3 (2021) 6 SCC 771 ::8::

the terms and conditions of the contract depends upon

adjudication of disputed questions of fact which cannot be

gone into in a summary proceeding under Article 226 of

the Constitution of India. Therefore, the learned Single

Judge has rightly declined to exercise the extraordinary

jurisdiction under Article 226 of the Constitution of India

and has relegated the appellant to avail of the alternative

remedy available to it in law.