Sri Ashes Deb vs The State Of Tripura And Ors
2021 Latest Caselaw 981 Tri

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                        HIGH COURT OF TRIPURA
                                   AGARTALA

                                 WP(C) No.608/2020
Sri Ashes Deb.
                                                      ............ Petitioner(s).
                                       - Vs. -
The State of Tripura and Ors.
                                                     ............ Respondent(s).

                                 WP(C) No.609/2020
Sri Ashes Deb.
                                                      ............ Petitioner(s).
                                       - Vs. -
The State of Tripura and Ors.
                                                     ............ Respondent(s).

                                 WP(C) No.611/2020
Sri Ashes Deb.
                                                      ............ Petitioner(s).
                                       - Vs. -
The State of Tripura and Ors.
                                                     ............ Respondent(s).
             For Petitioner(s) : Mr. Somik Deb, Sr. Advocate,
                                 Ms. Riya Chakraborty, Advocate,
                                 Ms. S Chisim, Advocate.
             For Respondent(s) : Mr. S S Dey, Advocate General,
                                 Mr. K De, Additional Govt. Advocate,
                                 Ms. A Chakraborty, Advocate.

          HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
           HON'BLE JUSTICE MR. S G CHATTOPADHYAY
                                  _O_R_D_E_ R_

28/9/2021
(Akil Kureshi, CJ).


             These three petitions arise in similar facts involved similar

questions of law and are between the same parties. The petitioner, an
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individual, has prayed for the direction to the Government to release his

unpaid bills for execution of works carried out by him for and on behalf of

the Government. The main opposition of the Government is that whatever be

the petitioner's rightful claim for completion of these works, in relation to

other two contracts namely, agreements No.(1)/2015-16 and 25/2013-14,

there have been substantial overpayments to the petitioner which the

Government has to recover and which the Government has the authority to

set off against the petitioner's present claims.


[2]       Facts

may be noted at some length :

In WP(C) No.608/2020, the petitioner was awarded a contract for

maintenance of bailey bridges and certain roads in the Chawmanu Sub-

Division during the year 2016-2017. According to the petitioner, upon

completion of the work, the department had to make a payment of

Rs.7,50,382/-. When the petitioner raised the demand before the department,

on 24th February 2020, the department conveyed to the petitioner that certain

formalities are not fulfilled and until the same is done, the payment cannot

be released. The petitioner at one stage also tried to seek appointment of an

arbitrator by filing an arbitration petition before this Court, however, the

Court was of the opinion that the petitioner had not completed the

formalities under the agreement before an arbitrator could be appointed. Be

that as it may, the petitioner continued his efforts to persuade the department Page - 3 of 9

to release the bills. On 5th June 2020, the department reiterated its stand that

until the petitioner completes the formalities, the payment cannot be made.

On 21st July 2020, the petitioner conveyed to the department that he would

visit the concerned officer on 23rd July 2020 for completing all the

formalities. On 5th August 2020, petitioner again wrote to the Executive

Engineer and pointed out that he had visited him, on 23rd July 2020 and

completed all the formalities despite which the payment has not yet been

made. On 17th July 2020, the Executive Engineer conveyed to the petitioner

as under :

"Dear Sir,

Please refer to the above, the aforesaid letters have been issued in favour of you for deposition of cost difference for an amount of Rs.71,22,966.77 & refund of excess payment for an amount of Rs.2,02,46,249.00 against the agreement No.25/CE/EE/LTV/ PWD/M/2013-14 and refund of excess payment for an amount of Rs.10,90,898.00 against the agreement No.01/CE/SE-V/EE/LTV/ PWD/2015-16, but till today, you have not yet taken any action in this regards.

Therefore, your all dues under this division have been suspended and restricted until deposition of the cost difference and refund of excess payment."

Under this communication thus, the department for the first time

raised the issue of its intention to set off the petitioner's claim arising out of

his contract against department's counter-claims in relation to the past

contracts. At that stage, the petitioner approached the Court.

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[3] In the other two petitions, facts are substantially similar of course

except for the amounts involved. In WP(C) 609/2020, the petitioner's claim

is for a sum of Rs.60,46,447/- and in WP(C) 611/2020, the petitioner's claim

is Rs.60,98,880/-. In these cases also, the department has cited its claims

arising out of agreements No.01/2015-16 and 25/2013-14 to deny the

petitioner's claims.

[4] In response to the notice issued, department has appeared and filed

replies. Grounds taken in their replies are, (i) that there was delay in

execution of the work which would involve a penalty and (ii) that in relation

to the agreements No.01/2015-16 and 25/2013-14, the department has made

substantial overpayments to the petitioner which when adjusted against the

petitioner's present bills, nothing remains payable.

[5] The petitioner has filed rejoinder and additional affidavit in which

it is pointed out that with respect to agreements No.01/2015-16 and 25/2013-

14, the department had never taken the stand of alleged overpayment to the

petitioner till the petitioner raised his bills and when unpaid, sought

appointment of an arbitrator. Once the arbitrator was appointed, the

department in reply to the petitioner's claims before the arbitrator had set off

such counter-claims.

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[6] In background of such facts, learned senior counsel for the

petitioner Mr. Somik Deb vehemently submitted that the department cannot

be allowed to deny the petitioner's claims in the present context on the

ground that in relation to certain other contracts the Government has raised

the ground of overpayments. He submitted that such counter-claims were

raised only after the petitioner resorted to arbitration. The Government's

claims are yet to be examined by the arbitrator. Even before the arbitrator

passes his award the department cannot treat its claim as ascertained claim.

[7] On the other hand, learned Advocate General opposed the

petitions contending that (i) writ petition is not an appropriate remedy for

deciding such disputed questions, (ii) the agreement contains an arbitration

clause and the petitioner may raise an arbitration dispute if aggrieved and

(iii) the petitioner had delayed execution of the work and had also not

completed the formalities despite reminders from the department. On the

ground of equity also, therefore, the petition must be rejected.

[8] Learned Advocate General drew our attention to Clause 39.3.2 of

the agreement which according to him, enables the department to adjust the

overpayments of the earlier contracts against the contractor's present bills.

He submitted that the department has raised two counter-claims against the

petitioner for the past contracts where there were overpayments made.

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[9] In rejoinder, learned senior counsel Mr. Deb made two

clarifications. He firstly stated that the petitioner does not want

quantification of his claims in the present contracts by this Court. Let such

quantification be done by the department. He further stated that without

prejudice to his legal contentions, the petitioner is prepared to offer an

unconditional Bank guarantee while withdrawing the amounts in relation to

the present contracts which may be ascertained by the department.

[10] In view of the statements made by the counsel for the petitioner, we

may examine the facts on record. As noted, the petitioner has completed the

execution of three different contracts and in relation to which the petitioner

has outstanding claims. The petitioner's quantification is not admitted by the

department. However, the department also does not dispute that some

amounts are yet to be paid to the petitioner in relation to these three

contracts. The main ground raised by the department for releasing such

payments even when ascertained is that in relation to the previous

agreements No.01/2015-16 and 25/2013-14, the department has made huge

overpayments to the contractor. In facts of the present case, by taking

appropriate steps for safeguarding the interest of the Government revenue,

the admitted payments to the petitioner in relation to these three contracts

must be made. In other words, the department would not be allowed to

withhold such payments on the ground that it has outstanding counter-claims Page - 7 of 9

against the petitioner in relation to other contracts. This is so for the

following reasons.

[11] Clause 39.3.2 of the agreement reads as under :

"39.3.2. In case of overpayments or wrong payment if any made to the contractor due to wrong interpretation of the provisions of the contract, Contract conditions etc., such unauthorised payment will be deducted in the subsequent bills or final bill for the work or from the bills under any other contracts with the Government or at any time there after from the deposits available with the Government."

As per this clause, it would be open for the department to deduct

from the running bill or the final bill of the contractor for the work, any

overpayments and also from the payments arising out of any other contract

with the Government. We are informed that identical clause was present in

agreements No.01/2015-16 and 25/2013-14 also. In that view of the matter,

for the time being, without concluding this issue, we are prepared to proceed

on the basis that the Government has a right to adjust the payment arising

out of these contracts the Government's claims in relation to past

agreements. However, such claims have to have some ascertainment and

cannot be unilateral assertion of one of the parties to the agreement.

Recognizing any such right into the Government would amount to giving

power of attachment of judgment to a party to the agreement. We have noted

that the claims which the Government now raises against the petitioner in

relation to the past contracts, were for the first time raised by way of Page - 8 of 9

counter-claim in an arbitration proceedings instituted by the petitioner.

Whatever be the outcome of such arbitral proceedings and the acceptance or

rejection of the Government's claims against the petitioner, at this stage, the

Government must release the petitioner's payments arising out of the present

contracts. Perhaps, it was open for the Government to approach the arbitrator

in the pending proceedings and seek interim protection in terms of Section

16 of Arbitration and Conciliation Act, 1996 where the arbitrator enjoys

wide powers. Particularly when the petitioner is prepared to receive such

payments by giving unconditional Bank Guarantee, the Government's

anxiety of not being able to recover the money ultimately found due and

payable by the arbitrator, is taken care of.

[12] The ground of disputed question or availability of the alternate

remedy would not survive. In view of such narrow compass, the issues have

been dealt with in view of the petitioner's concessions. The relevant

concessions we have recorded are that the petitioner does not require

quantification of the claims in these cases at the hands of the Court but

leaves it for the Government to do and the petitioner is prepared to withdraw

the sums so ascertained by the Government by offering unconditional Bank

guarantee.

[13] Under the circumstances, these petitions are disposed of with the

following directions :

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(i) The department shall verify the petitioner's claims of unpaid amounts, arising out of the present agreements and quantify the sums which according to the department are outstanding. This exercise shall be completed within 3(three) months.

(ii) Upon completion of the above exercise, the department shall indicate the sums payable to the petitioner under these agreements. Upon such communication, the amount will be paid over to the petitioner on the petitioner furnishing unconditional Bank guarantee for the whole amount. Such Bank guarantee shall be encashed if in the arbitral proceedings ultimately the department is held entitled to receive such sum or any part thereof.

(iii) The petitioner shall keep such Bank guarantee alive till the arbitral proceedings are completed and for a period of 3(three) months after the arbitrator passes his award.

(iv) With respect to the quantification of the petitioner's claims to be made by the department as provided in Clause (i) above, if the petitioner has any dispute, it will be open for the petitioner to raise the same in accordance with law.

Pending application(s), if any, also stands disposed of.

    ( S G CHATTOPADHYAY, J )                      ( AKIL KURESHI, CJ )




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