Rajasthan High Court - Jodhpur
M/S. Ummed Construction Company vs State Of Rajasthan on 11 September, 2023
Author: Nupur Bhati
Bench: Nupur Bhati
[2023:RJ-JD:28056]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 1842/2020
M/s. Ummed Construction Company, Through Its Proprietor
Ummed Bishnoi S/o Shri Teja Ram Ji Bishnoi, Aged About 32
Years, Having Registered Office At C-333, Saraswati Nagar, Basni
1St Phase, Jodhpur.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary,
Government Of Rajasthan Public Health And Engineering
Department, Jaipur.
2. Chief Engineer (Project), Public Health And Engineering
Department, Jodhpur.
3. Superintending Engineer, Public Health And Engineering
Department, Sirohi Circle, Sirohi.
4. Executive Engineer, Public Health And Engineering
Department, Sirohi Circle, Sirohi.
----Respondents
For Petitioner(s) : Mr. Sajjan Singh Rathore
For Respondent(s) : Mr. Pankaj Sharma, AAG with
Mr. Rishi Soni
HON'BLE DR. JUSTICE NUPUR BHATI
JUDGMENT
Judgment Reserved on <><><> 04/09/2023 Date of Pronouncement <><><> 11/09/2023
1. The instant writ petition has been filed by the petitioner-M/s. Ummed Construction Company, through its Proprietor Ummed Bishnoi, under Article 226 of the Constitution of India with the following prayers:-
"A. By an appropriate writ, order, or directions, the order dated 07.01.2020 (Annex.9), recovery notice dated (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (2 of 16) [CW-1842/2020] 28.01.2020 (Annex.11) and any notice, order or communication already passed or passed during pendency of the writ petition in pursuance to the order dated 07.01.2020 (Annex.9) may kindly be quashed and set aside.
B. By an appropriate writ, order or directions, any NIT if already issued or issued during the pendency of the writ petition in pursuance to the Order dated 07.01.2020 (Annex.9) for getting the remaining work done at the risk and cost of the petitioner company may kindly be quashed and set aside.
C. By an appropriate writ, order or directions, the respondents may kindly be directed to execute the agreement/contract in pursuance to the work order dated 15.12.2018 (Annex.2) and also to make available the lay out plans for the awarded work.
D. By an appropriate writ, order or directions, the respondents may kindly be restrained from taking any action against the petitioner company for stopping the work, awarded in pursuance to the order dated 15.12.2018 (Annex.2)."
2. With the consent of learned counsel representing the parties, the matter is heard finally and is being decided today itself.
3. Brief facts of the case are that the petitioner, a proprietor firm, applied in the NIT No.2018-2019/128 for the work of 'Providing Laying Jointing and Commissioning of various sizes HDPE Pipeline, other allied works under UWSS Sirohi against Old and Polluted Pipe Line.' The petitioner-company being the lowest bidder, was issued the work order dated 15.12.2018 with a condition that the petitioner-company should execute the formal (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (3 of 16) [CW-1842/2020] agreement with a non-judicial stamp of Rs.12,180/- on receipt of this letter and further that the date of commencement of the work will be the date of issuance of the order i.e. 15.12.2018 and the date of completion was the date after two months from the date of commencement, meaning thereby that the petitioner-company was required to complete the said work within a period of two months.
4. In the work order, it was also mentioned that the work is to be started within ten days of the passing of the order or else, it will be get done from the other party at the risk and cost of the petitioner-company. The petitioner-company immediately contacted the office of the respondent-Executive Engineer for execution of formal agreement, but due to unavoidable circumstances and the occupation of the office in some other work, formal agreement was not executed.
5. The petitioner-company started working in pursuance of the work order dated 15.12.2018. The formal agreement was not executed even after about one and a half month and therefore, the petitioner-company stopped the work and requested the respondent to execute the formal agreement.
6. The respondents issued communication dated 07.02.2019 and 14.02.2019 (Annexure-3) to the petitioner-company to complete the work. The petitioner approached the respondents and requested them to execute the formal agreement in order to start the work but no action whatsoever was taken in this regard. (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (4 of 16) [CW-1842/2020] The petitioner-company made a communication dated 12.04.2019 (Annexure-4) to the respondents that the rates which are being reserved are not proper and therefore, the work order may be cancelled. The petitioner-company again started the work upon the assurance of the respondents that soon, the agreement would be executed but when the agreement was not executed, the petitioner-company again stopped the work on 14.06.2019.
7. The petitioner-company was issued several notices dated 16.09.2019, 19.09.2019, 14.10.2019 and 22.10.2019 (Annexure-
5), mentioning in it that the petitioner-company should start the work and if the work is not started, then, the action as per clause 2 and 3 of the agreement/contract would be initiated. The petitioner-company, again approached the respondents and requested them to execute the formal agreement, but, despite such request, the respondents issued final notice dated 29.11.2019 (Annexure-6), calling upon the petitioner to submit reply in reference to the proposed action as per clause 2 and 3 of the contract, or else, ex-parte proceedings would be initiated against the petitioner-company.
8. The petitioner-company submitted the reply dated 12.12.2019 to the notice dated 29.11.2019, stating therein that the petitioner-company was ready to perform the work and the same was stopped as the formal agreement was not executed between the parties. The respondents made a communication dated 03.01.2020 amongst themselves while informing that the petitioner-company has done the work of about Rs.1,03,653/- till (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (5 of 16) [CW-1842/2020] 14.06.2019 and thereafter, the work was stopped and despite several notices, the petitioner-company did not start the work again and thus, the respondents proposed to take action against the petitioner-company.
9. The respondent No.3-Superintending Engineer, passed an order dated 07.01.2020 (Annexure-9) against the petitioner- company and imposed penalty of Rs.4,76,764.61/- i.e. 10% of remaining work of Rs.47,67,646.10/- and also directed to get the remaining work done at the risk and cost of the petitioner- company after issuing fresh NIT. The petitioner-company submitted a representation dated 16.01.2020 (Annexure-10), but the respondent No.4-Executive Engineer, vide recovery notice dated 28.01.2020 (Annexure-11), directed the petitioner-company to deposit the penalty amount in light of the order dated 07.01.2020, within 7 days and thus, the petitioner-company being aggrieved of the impugned orders viz. 07.01.2020 (Annexure9) and 28.01.2020 (Annexure-11), preferred the present writ petition.
10. Learned counsel Mr. Sajjan Singh Rathore, appearing for the petitioner, made following submissions that:-
(a) The action taken against the petitioner-company, is based on the clauses and conditions of the agreement which was not executed on a proper paged stamp duty and thus, in the absence of any agreement having signatures of both the parties, the action of the respondents is not sustainable.(Downloaded on 12/11/2023 at 05:42:02 AM)
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(b) The petitioner-company on various occasions made a request to the respondents to execute the formal agreement, but the respondents did not pay any heed to it and despite the same not being executed, the petitioner-company started the work on two occasions but as the formal agreement was not executed, the petitioner-company had no choice but to stop the work on 14.06.2019.
(c) The respondents in the notices dated 16.09.2019, 19.09.2019, 14.10.2019 and 22.10.2019, have not pointed out anywhere that the agreement has not been executed, despite that, the petitioner-company had been requested for execution of the formal agreement time and again whereas, in all the notices, the respondents have simply stated that the work has been stopped by the petitioner-company but the particular reason for stopping the work has not been mentioned.
(d) In accordance with clause 25.1 of the Tender Document (Annexure-1), it is mandatory that the successful bidder shall sign the contract agreement within ten days of the department notice, but the respondents have failed to sign the contract agreement with the petitioner-company.
(e) Under clause 25.1, only following documents can be considered as a contract agreement i.e. agreement placed as Annexure-3 in the tender document, letter of award and the bid documents with all addendum contained in it. But in the present case, as the agreement has not been signed between the parties, therefore, the respondents could not have initiated proceedings (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (7 of 16) [CW-1842/2020] against the petitioner-company under clause 2 and 3 of the contract agreement.
(f) The clause 26.3 of the tender document, stipulates that it was mandatory upon the respondents to execute the agreement with the petitioner-company and it was a prerequisite condition and without fulfilling the prerequisite condition, the respondents could not have initiated the proceedings against the petitioner- company by imposing penalty and getting the remaining work done at the risk and cost of the petitioner-company by third party.
(g) Learned counsel for the petitioner submitted that as per Article 299 of the Constitution of India, the respondents were under an obligation to execute the agreement on behalf of Hon'ble the Governor of Rajasthan, but the respondents have failed to do so.
11. Learned counsel for the petitioner placed reliance upon the judgment rendered by Hon'ble Apex Court in the case of State of Punjab Vs. Om Prakash Baldev Krishan reported in 1988 64 CCC 817, decided on 23.08.1988. Relevant portion of the said judgment is reproduced hereinbelow:-
"This Court reiterated that under that section a contract entered into by the Governor of a Province must satisfy three conditions, namely, (i) it must be expressed to be made by the Governor; (ii) it must be executed; and (iii) the execution should be by such persons and in such manner as the Governor might direct or authorise. These three conditions are required to be fulfilled. This position was reiterated by this Court again in Seth Bikhraj Jaipuria v. Union of India, (1962) 2 Scr 880: (air 1962 Se 113). This Court explained that three conditions as mentioned in State of Bihar v. Karam Chand Thapar (air 1962 Sc 110) (supra) (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (8 of 16) [CW-1842/2020] had to be fulfilled, and further reiterated that the object of enacting these provisions was that the State should not be saddled with liability for unauthorised contracts and, hence, it was provided that the contracts must show on their faces that these were made by the Governor-General and executed on his behalf in the manner prescribed by the person authorised. It is based on public policy. No question of waiver arises in such a situation. If once that position is reached, and that position is well-settled by the authorities over a long lapse of time, no question of examining the purpose of this requirement arises. In Union of India v. A.1. Rallia Ram (1964) 3 Ser 164 (air 1963 Sc 1685), this Court again reiterated that the agreement under arbitration with the Government must be in accordance with section 175(3) of the Government of India Act, 1935. These principles were again reiterated by this Court in Timber Kashmir Pvt. Ltd. v. Conservator of Forests, Jammu, (1977) 1 Scr 937: (air 1977 Sc 151). There, the Court was concerned with section 122(1) of the Jammu & Kashmir Constitution which corresponded to Article 299(1) of the Constitution of India. In that case all the three applications filed by the respondent State for a reference to an arbitrator under section 20 of the Jammu & Kashmir Arbitrator Act, were dismissed by a single Judge of the Jammu & Kashmir High Court on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly executed in accordance with the provisions of section 122(1) of the Jammu & Kashmir Constitution which corresponded to those of Article 299(1) of the Constitution of India. But the Division Bench allowed the appeals holding that if contracts were signed by the Conservator of Forests in compliance with an order of the Government, the provisions of section 122(1) of the Jammu & Kashmir Constitution could not be said to have been infringed. This Court held that the contract could not be executed without the sanction. Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Government, as it could, and, if some acts of the Government could fasten some obligations upon the Government, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee. But, once there had been a valid execution of lease by duly authorised officers, the documents would be the best evidence of sanction. In that case, the contracts were executed on behalf of the Government of Jammu and Kashmir. The only question with which the Court was concerned in that case was whether the contracts executed by duly authorised officials had been proved or not. It was held that it was so proved."(Downloaded on 12/11/2023 at 05:42:02 AM)
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12. Learned counsel for the petitioner, thus, urged, that the writ petition deserves to be dismissed and the impugned orders dated 07.01.2020 (Annex.9) and 28.01.2020 (Annex.11) may be quashed and set aside.
13. Per contra, Mr. Pankaj Sharma, learned AAG assisted by Mr. Rishi Soni, Advocate, vehemently opposed the submissions advanced by the petitioner's counsel and made following submissions that:-
(a) The petitioner-company raised the issue of alleged non-
execution of the agreement only after issuance of final notice dated 19.11.2019 and prior to that, the petitioner-company never came to the respondents for execution of the formal agreement so much so, that the petitioner-company at the midst of the work, asked for cancellation of the work order while raising objection regarding the reserved rates by way of submitting an application placed on record as Annexure-4 dated 12.04.2019.
(b) The said stand of the petitioner-company reveals the intention and the fact that the petitioner-company was having the complete knowledge and understanding that the letter of acceptance and other documents, form a binding contract between petitioner-company and the person authorized and there was no valid reason that the petitioner-company stopped the work and thus, to escape the consequential liabilities for non-completion of the work, the petitioner-company has admitted to take undue benefits while concocting false and cooked up story. (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (10 of 16) [CW-1842/2020]
(c) The writ petition is liable to be dismissed as it has been specifically stated in the writ petition that the formal agreement has not been executed in regard to the work in question, which is in itself false and no such ground exists in the matter as terms of the tender document as well as the letter of acceptance are clear and the two documents together constituted a binding contract agreement to which, a number has also been allotted in favour of the petitioner-company as 117/2018-19 and thus, there was no requirement of a formal agreement to be executed between the petitioner-company and the respondents.
(d) The objection raised by the petitioner-company before issuance of final notice dated 29.11.2019, is only in respect to the rates and thee is no whisper regarding the non-execution of formal agreement between the parties and the petitioner-company has also not placed on record any document whatsoever to substantiate that the petitioner-company took the necessary steps for execution of the formal agreement.
(e) The letter of acceptance (Annexure-2) also mentions the duration of the period during which, the said work ought to have been completed by the petitioner-company which is :-
"(a) Stipulated Dt. of commencement date of issue of this order.
(b) Stipulated Dt. of completion 02 (Two) Month after stipulated Dt. Of Commencement.
The work is to be started immediately, so in case of work is not started with in 10 days from date of issue of this order then it will allotted to other party on your risk and cost." (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (11 of 16) [CW-1842/2020] The petitioner-company though, started the work in time but failed to complete the same within the stipulated time period of two months and the letter dated 07.09.2019 issued by the Office of Assistant Engineer, PHED, Sub-Division, Sirohi, reflected that upon such non-completion of the said work by the petitioner- company, it was causing grave inconvenience to the public at large.
(f) The petitioner-company was served upon various notices/letters, but the petitioner-company never replied to the said notices/letters and never raised any objection that upon non- execution of the formal agreement between the parties, the petitioner-company had stopped the said work. The petitioner- company chose to remain silent even after issuing various number of notices (Annexure-5) and the impugned orders dated 07.01.2020 (Annexure-9) and 28.01.2020 (Annexure-11), were passed after affording the petitioner-company a reasonable opportunity of hearing and despite the fact that the period of completion of the work order was over, the petitioner-company was given several opportunities to complete the work order, but the petitioner-company did not complete the same.
Learned AAG, thus, urged, that the writ petition deserves to be dismissed with costs.
14. Heard learned counsel representing the parties as well as perused the material available on record.
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15. This Court finds that the petitioner-company was duly issued the letter of acceptance (Annexure-2) dated 15.12.2018 wherein, it was categorically stipulated that the said work was to be started immediately within ten days from the date of issue of the order dated 15.12.2018 or else, it will be allotted to other party at the risk and cost of the petitioner-company. Also, in the said order dated 15.12.2018, it was categorically mentioned that the said work has to be completed within the stipulated time period of two months. Undoubtedly, the petitioner started the said work well within time. Though, the formal agreement on non-judicial stamp paper of Rs.12,180/- was not executed between the petitioner- company and the respondents but the petitioner company utterly failed to complete the allotted work within the stipulated time period.
16. It has been vehemently submitted by the learned counsel for the petitioner that the petitioner-company time and again, requested the respondents to execute the formal agreement so much so, that the petitioner-company also personally approached the respondents requesting them for the execution of the formal agreement, but no heed was paid by the respondents. It has also been contended that the petitioner-company stopped the work and again started the work upon the verbal assurance of the respondents that soon the agreement would be executed but the work was again stopped on 14.06.2019 upon non-execution of the agreement. The petitioner-company in order to substantiate the steps taken by it, has not placed on record any document in order (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (13 of 16) [CW-1842/2020] to show that repeatedly, it requested the respondents to execute the agreement and no action was taken by them and therefore, the petitioner-company was left with no option but to stop the work.
17. It is also seen that the respondents issued several notices to the petitioner-company which have been placed on record as Annexure-5 whereby, the petitioner-company was repeatedly cautioned to complete the work and in the notice dated 16.09.2019, it has also been mentioned that vide letter dated 03.06.2019, issued by the Assistant Engineer, PHED, Sirohi, the petitioner-company was directed to get the measurements of the work done by him, but neither the petitioner-company was present nor its representative for getting the measurement of the said work done.
It is an admitted fact that despite several notices being served upon the petitioner-company for completing the work within a period of 15 days from the issuance of such notices, the petitioner-company neither completed the work, nor showed its inability to complete the work on the ground of non-execution of the agreement, nor bothered to respond to the notice dated 16.09.2019, showing its or its representative's inability to get the measurements of the work done by it. It is also important to note that despite stipulated period of two months being over, the respondents gave several opportunities to the petitioner-oompany by way of repeated notices (Annexure-5) to complete the work but the petitioner-company did not avail the said opportunities and left (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (14 of 16) [CW-1842/2020] the work incomplete. The petitioner-company was served upon the final notice dated 29.11.2019 (Annexure-6), by the respondents for submitting its explanation in regard to violation of the condition No.2 and 3 of the contract and it was for the first time that the petitioner-company responded to the said final notice by filing reply dated 12.12.2019 (Annexure-7) stating therein that the petitioner had stopped the said work as there was no agreement entered between the petitioner and the respondents. Thereafter, the respondent No.4-the Executive Engineer vide communication dated 03.01.2020 (Anenxure-8) directed the respondent No.3-the Superintending Engineer to take appropriate action against the petitioner-company upon non-completion of the said work, a copy of which was duly sent to the petitioner- company as the same has not been denied.
18. The petitioner-company did not respond to the said communication dated 03.01.2020 (Annexure-8), as nothing has been placed on record, even though, the petitioner received a copy of the said communication. This fact also cannot also be ignored that the petitioner himself had written a letter to the respondents dated 12.04.2019 (Annexure-4), requesting the respondents to cancel the work order on the ground that the reserved rates were improper. The said communication is reproduced hereinbelow:-
"दिनां क : 12.04.19 श्रीमान अधिशाषी अभियन्ता जन स्वा० अभि० विभाग सिरोही (Downloaded on 12/11/2023 at 05:42:02 AM) [2023:RJ-JD:28056] (15 of 16) [CW-1842/2020] विषय :- आपके द्वारा दिया गया कार्य आदे श सं . 4821/2013-1 15.12.2018 के बारे में उपरोक्त निवे दन है कि मेरी फर्म सं . UWES Sirohi against old and Polluted Pipe Lines का कार्य डाला था। जो की इस टे ण्डर से दरें गलत रक्षित हो गई थी जो की दरें कार्य करने से उचित दर नही ं है । अतः कार्य आदे श को निरस्त करवाने के आदे श करावे।
सही /-"
The said communication reflects that the petitioner was not inclined to complete the work order allotted to it, as the petitioner-company found the reserved rates to be improper and thus, requested the respondents to cancel the said work order and later on, while realizing the consequences of not discharging the liability of completing the work order within the stipulated period of two months, the petitioner took altogether a different stand that the said work was not completed on account of the non- execution of the agreement between the petitioner-company.
19. The respondents while issuing several notices to the petitioner-company placed on record as Annexure-5, granted the petitioner various opportunities to complete the said work despite the fact that the period of two months had elapsed way back in the month of 'February, 2019', but the petitioner-company neither respondent any of the notices, nor completed the said work. This fact also cannot be ignored that the respondents had also brought to the notice of the petitioner-company that upon non-completion of the said work, the people residing therein, were facing grave hardship, as a regular water supply could be made available, but the petitioner-company did not bother and chose not to complete the allotted work.
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20. In view of the above discussion, I do not find any merit in the instant writ petition, and the same is, thus, dismissed. Stay application as well as all other pending applications, if any, also stand dismissed.
(DR. NUPUR BHATI),J Devesh Thanvi/-
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