Karnataka High Court
Prabhakar H J vs State Of Karnataka on 20 March, 2017
Author: A.S.Bopanna
Bench: A S Bopanna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF MARCH 2017
BEFORE
THE HON'BLE MR. JUSTICE A S BOPANNA
W.P.Nos.11091-11092/2016 (GM-TEN)
C/W
W.P.No.42646/2016 (GM-TEN)
W.P.Nos.11091-11092/2016
BETWEEN:
PRABHAKAR H J
PROPRIETOR,
AGED ABOUT 51 YEARS,
SRI ANNAPOORNESHWARI CONSTRUCTIONS,
MAIN ROAD, KALASA,
MUDIGERE TALUK,
CHIKKAMAGALURU 577124.
... PETITIONER
(BY SRI. RAGHUPATHY T N, ADV.)
AND:
1. STATE OF KARNATAKA
REP. BY ITS PRINCIPAL SECRETARY
PANCHAYAT RAJ
ENGINEERING DEPARTMENT,
RURAL DEVELOPMENT AND PANCHAYT RAJ,
3RD FLOOR, 3RD GATE,
M.S. BUILDING, AMBEDKAR VEEDHI,
BENGALURU 560001.
2. SUPERINTENDING ENGINEER
PANCHAYAT RAJ ENGINEERING CIRCLE,
CORPORATION COMPLEX,
LALBAGH,
MANGALURU 575 001.
3. EXECUTIVE ENGINEER
PANCHAYAT RAJ ENGINEERING DIVISION,
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KADUR MANGALUR ROAD,
JYOTHINAGARA
CHIKKAMAGALURU 577102.
4. ZILLA PANCHAYAT
CHIKKAMAGALURU DISTRICT,
KADUR MANGALURU ROAD,
JYOTHINAGARA
CHIKKAMAGALURU 577102
REP. BY ITS CHIEF EXECUTIVE OFFICER,
5. ASSISTANT EXECUTIVE ENGINEER
PANCHAYAT RAJ ENGINEERING SUB-DIVISION
B.H. ROAD,
TARIKERE-577228,
CHIKKAMAGALURU DISTRICT.
6. EXECUTIVE ENGINEER
RURAL DRINKING WATER AND
SANITATION DIVISION
KADUR MANGALUR ROAD,
JYOTHINAGARA
CHIKKAMAGALURU-577102.
7. SUPERINTENDING ENGINEER
RURAL DRINKING WATER AND
SANITATION CIRCLE,
KUVEMPUNAGARA,
MYSURU 570023.
8. CANARA BANK
KALASA BRANCH,
KALASA,MUDIGERE TALUK,
CHIKKAMAGALURU 577124,
REP. BY ITS MANAGER.
9. CORPORATION BANK
THIRTHAHALLI BRANCH,
THIRTHAHALLI TALUK,
SHIVAMOGGA DISTRICT 57432
REP. BY ITS MANAGER.
... RESPONDENTS
(BY SRI. A.G. SHIVANNA, AAG A/W
SMT. PRATHIMA HONNAPURA, HCGP. FOR R1 TO 2
SRI. ASHOK N NAYAK, ADV. FOR R3-7
SRI. V B RAVISHANKAR, ADV. FOR R9
R8 IS SERVED)
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THESE PETITIONS ARE FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO
DECLARE THAT THE ORDER DATED 23.12.2015 RESCINDING
THE TENDER AGREEMENT ISSUED BY R-7 AT ANNEX-AA IS
ILLEGAL AND QUASH THE SAME; DECLARE THAT THE LETTER
/ ORDER DATED 03.02.2016 ISSUED BY R-6 IN FAVOUR OF R-8
AND 9 AT ANNEX-CC IS ILLEGAL AND QUASH THE SAME AND
ETC.
W.P.No.42646/2016
BETWEEN:
PRABHAKAR H J
PROPRIETOR,
AGED ABOUT 51 YEARS,
SRI ANNAPOORNESHWARI CONSTRUCTIONS,
MAIN ROAD, KALASA,
MUDIGERE TALUK,
CHIKKAMAGALURU 577124.
... PETITIONER
(BY SRI. RAGHUPATHY T N, ADV.)
AND:
1. STATE OF KARNATAKA
REP. BY ITS PRINCIPAL SECRETARY
PANCHAYAT RAJ
ENGINEERING DEPARTMENT,
RURAL DEVELOPMENT AND PANCHAYT RAJ,
3RD FLOOR, 3RD GATE,
M.S. BUILDING, AMBEDKAR VEEDHI,
BENGALURU 560001.
2. THE CHIEF ENGINEER
KARNATAKA RURAL WATER SUPPLY
& SANITARY DEPARTMENT
I FLOOR, E BLOCK, KHB COLONY
KAVERI BHAVAN, K.G.ROAD
BENGALURU-560 001
3. THE EXECUTIVE ENGINEER
KARNATAKA RURAL WATER SUPPLY
& SANITARY DIVISION
KADUR ROAD,
CHIKKAMAGALURU 577102.
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4. SUPERINTENDENT ENGINEER
KARNATAKA RURAL WATER SUPPLY
& SANITARY DIVISION
NO.1161, GANGE ROAD
C & D BLOCK
KUVEMPUNAGAR
MYSURU-570023
5. EXECUTIVE ENGINEER
PANCHAYAT RAJ
ENGINEERING DIVISION,
ZILLA PANCHAYAT
KADUR MANGALUR ROAD,
JYOTHINAGARA
CHIKKAMAGALURU 577102.
6. ZILLA PANCHAYAT
CHIKKAMAGALURU DISTRICT,
KADUR MANGALURU ROAD,
JYOTHINAGARA
CHIKKAMAGALURU 577102
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER,
7. ASSISTANT EXECUTIVE ENGINEER
PANCHAYAT RAJ ENGINEERING
SUB-DIVISION, B.H. ROAD,
TARIKERE-577228,
CHIKKAMAGALURU DISTRICT.
... RESPONDENTS
(BY SRI. A.G. SHIVANNA, AAG A/W
SMT. PRATHIMA HONNAPURA, HCGP. FOR R1 TO 2
SRI. ASHOK N NAYAK, ADV. FOR R3, 5 TO 7)
THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF
THE CONSTITUTION OF INDIA, WITH A PRAYER TO DECLARE
THAT THE TENDER NOTIFICATION DATED 10.06.2016 IN SHORT
TERM TENDER NO.01/2016-17 ISSUED BY THE R3 IS
PRODUCED HEREWITH AT ANNEX-K IS ILLEGAL AND QUASH
THE SAME AND ETC.
THESE WRIT PETITIONS HAVING BEEN RESERVED FOR
ORDERS ON 09.03.2017, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING :
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ORDER
The petitioner is the same in both these petitions. In W.P.Nos.11091-92/2016 the petitioner is assailing the order dated 23.12.2015 impugned at Annexure-AA to the petition. In that light, the petitioner is seeking that the letter dated 03.02.2016 at Annexure-CC invoking the bank guarantee be quashed. Further the respondents are sought to be restrained from forfeiting the EMD and security deposits relating to the contract.
2. In W.P.No.42646/2016, the petitioner is seeking that the tender notification dated 10.06.2016 at Annexure-K be declared as illegal and the same be quashed. A direction is also sought to respondent Nos.2 and 3 to take a decision on the representation dated 14.05.2016 at Annexure-F to the petition.
3. The above writ petitions are consequential on one another. The petitioner who is a Class I PWD Contractor operating in the name and style Sri Annapoorneshwari Constructions had participated in the tender process for carrying out the water supplies 6 to Karkucchi and ten other villages. The issue presently relates to the completion of the scheme for Belenahalli and 20 other villages of Tarikere Taluk, Chickmagalur District. The work order dated 18.06.2010 was issued in favour of the petitioner. The tender amount is Rs.5,99,47,138.68. An agreement dated 20.09.2010 was entered into between the parties agreeing to the terms and conditions which included the completion period of nine months. Since according to the respondents the work was not completed within the time frame, a show cause notice dated 31.12.2011 was issued. The petitioner however through his reply referred to the impediments in performing the work within the time frame as according to the petitioner the land for implementing the project was not available as the pipeline was to pass cutting across the National Highway, Railway line and also with regard to the forest area.
4. Thereafter certain correspondences were exchanged between the parties and the concerned authorities and the petitioner contends that the South 7 Western Railway had ultimately accorded the permission on 16.07.2013. The petitioner claims to have taken up the work immediately thereafter. The petitioner accordingly through the reply dated 29.09.2014 informed the respondents that the work to the extent of Rs.5,13,68,323/- was completed before 14.02.2013 and the work had been stopped on the issue relating to the permission from the National Highway authorities. Hence, a representation dated 28.10.2014 was submitted by the petitioner seeking extension of time to complete the work. The work was thereafter permitted to be completed on or before 15.12.2014. However, according to the respondents the work had not been completed but according to the petitioner despite all impediments the petitioner had completed the work to the extent of 80%. The respondents on finding that the progress is unsatisfactory have cancelled the agreement through their order dated 23.12.2015 and action was taken to invoke the bank guarantee. It is in that circumstance W.P.No.11091- 92/2016 was filed.
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5. In the said writ petitions though the invoking of the bank guarantee had been stayed, the termination of the agreement as such had not been stayed. In that circumstance, the respondents in order to secure the completion of the work and implement the project have re-tendered the work through the notification dated 10.06.2016. The petitioner claiming to be aggrieved by the same, as his interest would be affected if the work entrusted to him is re-tendered and since his representation dated 14.05.2016 was pending consideration has filed the petition in W.P.No.42646/2016 calling in question the tender notification and seeking consideration of the representation. In that circumstance, the issue being the same in these petitions, they are considered together and disposed of by this common order.
6. The respondents No.3 to 7 have filed their objection statement. The claim of the petitioner that he has completed the work entrusted to him earlier as also the subject work is disputed. In respect of Kalasa project the proceedings in W.P.No.4245/2013 is referred 9 and the undertaking given that it would be completed within six months excluding monsoon is referred and it is stated that the petitioner has not started the work nor completed the project. The volume of the work both on the percentage and the amount as claimed by the petitioner as having been completed is seriously disputed. It is stated that the actual work done by the petitioner is 2920 mts which amounts to Rs.1,06,01,192/- but the petitioner has drawn the excess amount up to Rs.530 lakhs showing the false measurement without carrying out the actual work. It is contended that the railway authorities had given the permission on 16.07.2015 and though the pipeline work below the railway track was completed in May 2014, the work had been stopped up to 23.09.2015. In that view the cancellation of tender was issued on 23.12.2015. The reason as assigned relating to the delay in view of the widening of National Highway is also not sustainable as that part of the work had already been executed. The petitioner has not completed the work despite several undertakings given by him to complete 10 it. Since the water supply scheme was not implemented, the State Government has appointed an enquiry committee and in respect of Belenahalli Multi- Village Water Supply Scheme, there is a specific finding of excess amount being drawn. It is contended that the project in question is an important project for providing drinking water to various villages under the Zilla Panchayat and the same has not been completed even as on today though it was entrusted to the petitioner in the year 2010. The action taken is therefore sought to be justified and it is contended that the fresh tenders issued on 10.06.2016 is also in accordance with law.
7. Heard Sri T.N.Raghupathy, learned counsel for the petitioner, Sri A.G.Shivanna, learned Addl. Advocate General and Sri Ashok N.Nayak, learned counsel for the respondents. Perused the petition papers.
8. As noticed from the rival contentions the first issue relates to the cancellation of the work order issued in favour of the petitioner pursuant to a tender 11 notification on the ground that the work had not been completed within the time frame that was provided under the contract. The second issue relates to the fresh tender notification issued in respect of the work which has not been completed by the petitioner pursuant to the work order that had been issued earlier and as such is a consequential action.
9. The fact that further work is necessary to be undertaken so as to complete the drinking water project cannot be in dispute for the reason that the petitioner himself has addressed the communication referred to above seeking extension of time and even in this proceeding the contention urged is that only about 20% of the work is yet to be completed and the same would be completed if the time is extended and that too the petitioner will do so at the same rate as had been agreed earlier without claiming escalation. The fact that a fresh tender notification has been issued by the respondent will also establish the fact that further work is necessary to be completed and the earlier contract has remained incomplete. The learned counsel for the 12 petitioner has however referred to Clause 26 of the agreement which provides for extension of the intended completion date and also to clauses 36 and 38 wherein it provides for submission of bills for payment towards the value of the work completed. In that light, it is contend that the quantum of amount paid by the respondents thus far towards the bills submitted by the petitioner would demonstrate that the work up to 80% has been completed and the payment made is to that extent. Clause 38 of the agreement relates to compensation events and would refer to unforeseen circumstances etc.
10. In that background, it is contended that the delay was due to the clearance that was required from the forest department, the railway authorities as also the delay due to the widening of the National Highway which are aspects that should have been taken into consideration by the respondents for extending the time for completion instead of arbitrarily terminating the agreement. The decision in the case of Collector (District Magistrate), Allahabad and another vs. 13 Rajaram Jaiswal (1985)3 SCC 1) is relied wherein it is held that where power is conferred to achieve a purpose, that power must be exercised reasonably and in good faith to effectuate the purpose and the same should be for legitimate reasons and not for extraneous or irrelevant consideration. The learned counsel for the petitioner has also relied on the decision in the case of State of Punjab and Another vs. Gurdial Singh and Others [(1980)2 SCC 471] wherein the colorable exercise of power is despised and it is held that the action is bad where the true object is to reach an end different from the one for which the power is entrusted and in that context, it is contended by the learned counsel that the power exercised to terminate the contract is malafide, instead if the power is exercised to extend the time the work would be completed by the petitioner and the object would be achieved.
11. The learned counsel for the respondents would also refer to the terms of the contract to point out the power of termination is available under Clause 49 of the agreement and it is contended that despite several 14 notices and communications, the petitioner has failed to correct the breach within a reasonable period of time and as such the respondents were left with no other alternative but to terminate the contract. In such circumstance, the contractor is required to immediately vacate the site. The learned counsel in addition to pointing out to the several notices issued extending the time has also referred to the order dated 22.02.2016 passed by a Hon'ble Division Bench in W.P.No.4245/2013 when a public interest petition was filed seeking direction to the respondents herein including the petitioner herein who was arrayed as respondent therein. In the said petition, the petitioner had sought for a direction to speed up the Kalasa Drinking Water Project which is a part of the work assigned to the petitioner and on taking note of the similar contention put forth relating to the clearance from the forest department, the petition was disposed of on recording the undertaking on behalf of the petitioner herein to complete the second phase of the work within nine months, excluding the monsoon. Despite the same 15 the petitioner has failed to complete the project is the contention of the learned counsel for the respondents.
12. The learned counsel for the respondent has also relied on the decision in the case of State of Kerala and Others vs. M.K.Jose [(2015)9 SCC 433] wherein it is held as hereunder:
"12. As the factual narration would reveal, the respondent has been invoking the jurisdiction of the High Court under Article 226 of the Constitution on various occasions challenging every action which pertain to extension of time, denial of revised estimate by the State Government and many other facets of that nature and the High Court, we must say, has been generously passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor and to consider his representation in accordance with law. This kind of orders in a contractual matter, in our considered view, is ill-conceived. They not only convert the controversy to a disturbing labyrinth, but encourage frivolous litigation. The competent authority might have mentioned that more than 50% work remained to be done but that should not have prompted the Appellate Bench hearing the intra- court appeal to appoint a Commission of two Advocates and granting them liberty to take 16 assistance of a competent Engineer. As the report would show, the Commission of two Advocates have taken assistance of a retired Assistant Executive Engineer and submitted the report. Though, learned counsel for the State had not objected to the same, yet we really fail to fathom how a writ jurisdiction can be extended to cause a roving enquiry through a Commission and rely on the facts collected without granting opportunity to the State to file objections to the same and in the ultimate eventuate, cancel the order of termination of contract. What precisely was the quantum of work done and whether there had been a breach by the owner or the contractor, are required to be gone into by the appropriate legal forum.
13. A writ court should ordinarily not entertain a writ petition, if there is a breach of contract involving disputed questions of fact. The present case clearly indicates that the factual disputes are involved."
13. In the light of the rival contentions, there can be no serious dispute to the fact about that the work entrusted to the petitioner and the manner in which it is to be performed as also the rights and obligations between the parties are being regulated by a contract. The position that the work as entrusted has 17 not yet been completed is not in dispute. The petitioner contends that 80% of the work has been completed and if time is extended the remaining work would be completed within the extended period. The extent of work as claimed to have been completed by the petitioner is seriously disputed by the respondents as it is contended that only 2920 mtrs is completed and the reasons as put forth by the petitioner to contend with regard to the impediments that has caused the delay in completion of the work is also seriously disputed. Further, it is seen that this Court while disposing of a public interest petition had taken note of the undertaking and allowed completion. Whether that portion of the work has been completed or not is immaterial when admittedly the entire project as such has not been completed.
14. In the above circumstances, though the learned counsel for the petitioner has relied on the decisions referred supra relating to the manner in which the power is to be exercised to achieve the end object, the power to be exercised in the instant case cannot be 18 construed in the nature of doing so in an administrative action. On the other hand, the parties are governed by the terms of contract which regulates all aspects of the matter. With regard to the matter relating to the contract there are serious disputes between the parties. The power to be exercised is in terms of the contract and at this juncture this Court in any event in a writ petition cannot come to a conclusion whether the invocation of any of the terms of the contract so as to terminate the contract is justified or not nor can this Court exercise the power to direct a party to act in a particular manner, contrary to the terms agreed between the parties which may result in the alteration of the terms agreed to between the parties and will amount to re-writing the contract which is not permissible in law. The terms of the contract itself provides for the remedies if any party has committed breach thereof. In fact that is the position which has been succinctly laid down by the Hon'ble Supreme Court in the case of M.K.Jose (supra) indicating that 19 interference in a writ petition is not called for when factual disputes are involved.
15. In that circumstance, when the contract is terminated for non-completion of the work entrusted, the issue of tender notification to secure completion of the remaining work will be the natural course which accordingly has been undertaken by the respondents. The petitioner therefore cannot expect any relief in a writ petition of the present nature but will have to avail the remedies as provided under the contract even if the petitioner were to allege breach being committed by the respondents or if any other relief is desired.
In that view of the matter, both the petitions are dismissed leaving it open to the petitioner to avail any other remedy in accordance with law. No costs.
Sd/-
JUDGE akc/bms