Andhra HC (Pre-Telangana)
Bhagyanagar Contractors Welfare ... vs The Managing Director M.W.S. & Sewerage ... on 21 April, 2003
Equivalent citations: 2003(4)ALD489
ORDER V.V.S. Rao, J.
1. The Bhagyanagar Contractors' Welfare Association is the petitioner in this writ petition. The petitioner association is espousing the cause of the contractors who undertake works for Hyderabad Metro Water Board and Sewerage Board ('Water board' for brevity). It seeks a writ of Mandamus declaring the action of the respondents including the Managing Director of the Board and various General Managers in Hyderabad in charging and collecting a percentage of the bills submitted by the Contractors towards Rock Recovery. They allege that such recovery is not governed by the terms of contract or the Rules in the A.P. Detailed Standard Specifications. They contend that the action of the respondents 1 to 11 is arbitrary and violative of Article 14 of the Constitution of India.
2. The affidavit accompanying the writ petition is sworn to by the President of the association. In paragraph 3 of the affidavit the grievance is explained thus:
The process of excavating the soil and the rock is done by benching and chiseling and the excavating waste either rock or sand as the case maybe shall become the property of the Government as envisaged in the agreement of the members. In certain circumstances the excavated waste, with prior approval of the respondents- departments is being used by members themselves. However, in most cases, the specifications itself, indicates that when benching mud chiseling is done, that kind of rock is not useable. However while bills are submitted after executing the so called works the respondents are charging a percentage of the bill towards rock recovery which is neither governed by the agreement of the individual members nor in the provisions of the A.P. Detailed Standard Specifications & General Principles of engineering Contracts.
3. The learned counsel for the petitioner Sri CCS Sastri submits that the Water Board is a public authority constituted under the Hyderabad Metropolitan Water Supply & Sewerage Board 1989 and therefore in relation to contractual matters, it cannot act arbitrarily. Secondly he would contend that being public authority, it is bound to pay the amount to the contractors who have carried the works strictly in accordance with the binding covenants of the contract entered into between the contractors and the Water Board and that there cannot be any arbitrary recovery under any head. Thirdly, he would contend that the Water Board is also engaging big contractors for big projects in relation to which no such recovery like rock recovery is being made. Therefore, the action of the respondents is discriminatory and violative of Article 14 of the Constitution of India.
4. At the time of preliminary hearing, the learned standing counsel for Water Board took time for getting instructions. Today, when the matter is called, the learned standing counsel placed before me a proforma of K2 agreement bond. Condition No. 4 of the Conditions annexed to the contract reads as under.
5. Stones blasted or removed from the foundations will have to be used by the contractor on the work if ordered by the Department recovery for which will be made at Rs. (Rupees ) per cubic meter for the solid qty. i.e. for quantity obtained after deducting 40% from the stock measurements."
6. Be it noted that proforma of K2 agreement bond produced by the learned counsel for the petitioner also contains a similar clause. A plain reading of the same would be sufficient to reject the contention of the learned counsel for the petitioner that the agreement does not provide for such recovery.
7. The learned counsel for the petitioner also placed before me a proforma of LS agreement bond executed by the Water Board with other contractors in relation to other works categorized as lump sum works. The learned standing counsel does not deny that there is no such clause or covenant in the LS agreement bond for rock recovery from the bills submitted by the contractors.
8. The writ petition especially involves the question of interpretation of the contract. No doubt, it is a contract entered into between the public authority like the Water Board and a private citizen. By reason of one of the parties being public authority, the contractual nature of the contract is not lost. Therefore, both the parties to the contract are bound by the terms of the contract.
9. In Radhakrishna Agarwal v. State of Bihar, AIR 1977 SC 1496 the Supreme Court observed;
But, after the State or its agents have entered into the field of ordinary contract the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Art.14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart form contract.
10. In Assistant Excise Commissioner v. Issac Peter, the Supreme Court held;
In case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts.
11. If there is any breach of the terms or dispute as to the interpretation of a covenant of the contract, appropriate remedy is not by way of a writ petition. It is only by way of a common law remedy for breach of a contract or interpretation of a clause. However, if there is arbitration clause, in the agreement, either party can avail the remedy of arbitration/conciliation.
12. Insofar as the submission that for big projects and lumpsum contracts rock recovery is not being made is concerned, the same has no merit. There is an intelligible differentia between a contract for a big project and for the small works undertaken by the members of the petitioner association. Therefore, the question of Article 14 of the Constitution of India does not come up for consideration.
13. Lastly, I am of the considered view that Bhagyanagar Contractors Welfare Association is not entitled to maintain the writ petition. No aggrieved contractor who has suffered rock recovery from his bills is before this Court. No doubt an association like the petitioner may have general programme of protecting the interest of the members. When it comes to recovery, may be rock recovery, from the bills submitted by an individual contractor, the aggrieved person is the individual contractor and not the association. For instance, if there is any dispute regarding payment of a bill by the Water Board to the Contractor, the association cannot seek a reference to arbitration nor can it file a suit on behalf of the contractor. The writ petition, for the above reasons fails and it is accordingly dismissed. No costs.