Madras High Court
Tamil Nadu Water Supply And vs P.Kandasamy on 2 February, 2016
Author: C.S.Karnan
Bench: C.S.Karnan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 02.02.2016
CORAM
THE HONOURABLE MR.JUSTICE C.S.KARNAN
A.S.(MD)No.44 of 2013
1.Tamil Nadu Water Supply and
Drainage Board Represented by its
Chairman and Managing Director,
Chennai.
2.The Chief Engineer,
Tamil Nadu Water Supply and
Drainage Board,
Tanjavore.
3.The Superintending Engineer,
Tamil Nadu Water Supply and
Drainage Board,
Trichy.
4.The Executive Engineer,
Tamil Nadu Water Supply and
Drainage Board,
Karur. ... Appellants
Vs.
P.Kandasamy ... Respondent
PRAYER: The above Appeal Suit is filed under Section 96 r/w Order 41 Rule 1
and 2 of Civil Procedure Code against the Judgment and Decree dated
27.09.2012 made in O.S.No.55 of 2010, on the file of the Principal District
Court, Tanjavure.
!For Appellants : Mr.Porkodi Karnan Revathi
^For Respondent : Mr.K.Samidurai
:J U D G M E N T
The history of the case are as follows:-
The plaintiff has filed a Suit in O.S.No.55 of 2010 for declaration that the impugned order of the alleged termination issued by letter dated 17.04.2007 is ab-initio void, illegal and nonentity in the eye of law and not enforceable and for recovery of Rs.19,45,932/- together with subsequent interest from the defendants and for costs. The plaintiff has submitted that the plaintiff is a registered contractor under the first defendant Tamil Nadu Water Supply and Drainage Board for the past 30 years. The work is for providing comprehensive water supply scheme to villagers in Thanthoni Union including maintenance work for a period of one year. The tenders were called by the second defendant and the plaintiff has also submitted his tender. The plaintiff being lowest tenderer, his offer was accepted by the first defendant through letter dated 30.06.2006. The work order was issued by the second defendant in CER TNJ 2346/2006 dated 10.07.2006. The approximate value of the work to be done for Rs.4,12,07,847/-. The agreement was entered into between the plaintiff and the second defendant on 20.11.2006. In accordance with the terms, the plaintiff deposited a sum of Rs.8,24,600/- as security. The period fixed for the completion of the work was 12 months from 15th day of the issue of the work order. The programme schedule was provided in the agreement.
2. The plaintiff has further submitted that the work order was issued on 10.07.2006 and the plaintiff duly started the work within 15 days therefrom. During the progress of the work, the field officers were not cooperating with the plaintiff in the matter of the performance of the work and at every stage, the department people had been hampering the progress of the work. The plaintiff brought machineries and the materials for completion of the work within the period of 12 months as stipulated in the agreement. There was no delay in the performance of the work by the plaintiff. But the people of the defendants found fault on the alleged slowness of the work. The delay and the slowness were caused by the department. While the work was in progress, the plaintiff received a notice dated 04.04.2007 and subsequently the notice dated 17.04.2007 terminating the contract. The show cause notice and the termination notice are quite contrary to the facts, equity against law and for no fault on the part of the plaintiff and is a unilateral, autocratic and penal action on the part of the defendants. The termination of the contract is void in law and cannot be enforced legally. The plaintiff is entitled to be compensated for all his loss in the matter of the work and the agreement. However, the plaintiff restricts his claim for the recovery of the security deposit amount of Rs.8,24,600/- and other amount claimed. The forfeiture of security amount is illegal and contrary to the public policy. So far as the quantum of the work done, the plaintiff is entitled for a sum of Rs.4,51,521/-. This amount has been arrived by the defendants itself as the work done can be quantified from the measurement book available with the department. The plaintiff is entitled to receive the amount with interest of 18% per annum from the defendants. Thus, the plaintiff is entitled to Rs.12,76,021/- together with interest and in total Rs.19,45,932/-. The plaintiff also issued notice dated 18.12.2009 and the same was received by the defendants on 21.12.2009. But the amount due to the plaintiff was not settled by the defendants. The plaintiff also filed a writ petition in W.P.No.24484 of 2009 and this Court gave directions for payment of the amounts immediately. But the defendants have not paid the amount. However, the fourth defendant has issued a reply notice dated 05.01.2010 with false and untenable contentions. Hence, the suit.
3. The fourth defendant has filed a counter statement and the same was adopted by the defendants 1 to 3 stating that all the averments and allegations except admitted specifically are denied. The suit is not maintainable. The plaintiff has not completed the other works as per the schedule and to the satisfaction of the defendants' board. The other works of providing comprehensive water supply scheme of villagers in Karur District should have been completed within one year, but the plaintiff took 3-1/2 years to complete the work and he was not able to complete 100% of the works. The site for the suit contract work was taken over by the plaintiff on 21.07.2006. The work order was issued on 10.07.2006. The work should have been completed by 24.07.2007. The defendants issued 12 reminders with a lapse of four months for completion of work, but only one percent of the work was completed at the time of the termination of the contract on 17.04.2007. The plaintiff is solely responsible for the slow progress of the work. The plaintiff submitted revised programme schedule by his letter dated 25.01.2007 and as per the letter, he should have completed 40% of the works. But, he has completed only 1% of the works. As per the rules, the contract was terminated and forfeiture of E.M.D. was done.
4. The fourth defendant has further submitted that the District Collector of Karur addressed a letter to the first defendant and requested to take action to terminate the contract because of the poor progress of the works. The show cause notice was served as per rules and terms contained in the agreement and tender schedule. There was no bias against the plaintiff. The show cause notice was issued giving opportunity to the plaintiff, but there was no response from the plaintiff. Hence, the termination order was issued. The defendants are entitled to take penal action against the contractor as per the conditions and rules in force. The work done by the plaintiff for Rs.4,51,521/- was adjusted for the loss occurred to the department by the plaintiff in completing the above works through other agencies. There is no amount due to be given to the plaintiff by the defendants. The suit notice dated 18.12.2009 was received and a suitable reply notice dated 05.01.2010 was given. In the meanwhile, M/s.Vairamanikandan, who are the financiers of the plaintiff filed a cause in I.P.No.6 of 2007 in the Sub Court at Mettur against the plaintiff and the first defendant and obtained the interim order to withhold the amount due to the plaintiff to a value of Rs.1.67 crores pending disposal of the case. Hence, the amount due to the plaintiff for Rs.1.70 crores has been withheld by the defendants. The plaintiff filed a writ petition and obtained orders relating to the same subject. A reply has been sent to the plaintiff by the first defendant giving reasons for not releasing the amount to him. The case is under trial. The termination order and forfeiture of the security deposit of the plaintiff are correct and not done as stated by the plaintiff. The suit claim is barred by limitation. There is no cause of action. The Civil Court has no jurisdiction. The claim is false, frivolous and vexatious. Hence, he prays for dismissal of the suit with costs under Section 35A of C.P.C.
5. The trial Court framed 3 issues for consideration in the case namely:
(i)Whether the plaintiff is entitled for the declaratory relief sought for?
(ii)Whether the plaintiff is entitled for the recovery of deposited amount and towards bill of already work done with accrued interest as prayed for the two years?
(iii)What other relief, the plaintiff is entitled for?
The second issue is reconstituted as follows:
(ii)Whether the plaintiff is entitled for the recovery of the performance security deposited with the defendants and the claim for the work already done in pursuance of the agreement with interest as prayed for?
6. On the side of the plaintiff, one witness was examined as PW1 and Exhibits A1 to A20 were marked namely Ex.A1-Xerox copy of agreement executed between the plaintiff and the defendant dated 20.11.2006; Ex.A2- Xerox copy of notice served by the fourth defendant to the plaintiff dated 04.04.2007; Ex.A3-Xerox copy of letter by the fourth defendant to the plaintiff dated 17.04.207; Ex.A4-Office copy of notice issued by the plaintiff's counsel to the defendants 1, 2 and 4 dated 18.12.2009; Ex.A5- Xerox copy of reply notice by the fourth defendant to the plaintiff's counsel dated 05.01.2010; Ex.A6-Bill for 50 MM, 63mm, 75mm, 225mm pipes (original) dated 29.03.2007; Ex.A7-Bill for 225mm, 225mm (6 KGF) 63mm pipes (Original) dated 30.03.2007; Ex.A8-Bill for 225 mm pipes (Original) dated 30.03.2007; Ex.A9-Bill for 75mm, 225mm pipes (Original) dated 07.04.2007; Ex.A10-Bill for 225 mm pipes (Original) dated 09.04.2007; Ex.A11-Bill for 225 mm pipes (Original) 13.04.2007; Ex.A12-Bill for 225 mm pipes (Original) 13.04.2007; Ex.A13-Bill for 225 mm pipes (Original) 14.04.2007; Ex.A14-Bill for 225 mm pipes (Original) 16.04.2007; Ex.A15-Bill for 225 mm pipes (Original) 03.05.2007; Ex.A16-Bill for 225 mm pipes (Original) 03.05.2007; Ex.A17-Bill for 225 mm pipes (Original) 04.05.2007; Ex.A18-Xerox copy of Order in WP.No.24484/2009 and MP.1/2009 of the Madras High Court dated 10.12.2009; Ex.A19-Xerox copy of complaint filed in STC 452/2010 on the file of the J.M.No.VI, Madurai, dated 09.09.2009; and Ex.A20-Xerox copy of order in W.P.No.942 of 2011 of Madras High Court dated 28.04.2011. On the side of the defendants, one witness was examined as DW1 Exhibits B1 to B44 were marked namely Ex.B1-True copy of work order No.CC/TWAD/CR/TNJ Lr.No.2316/2006 SDO- II/ dated 10.07.2006; Ex.B2-True copy of site handing over from the defendants to plaintiff dated 21.07.2006; Ex.B3-True copy of Phonogram to the plaintiff dated 17.08.2006; Ex.B4-True copy of letter No.2316/2006 SDO2 to the plaintiff by D2 dated 22.08.2006; Ex.B5-True copy of Telegram from the third defendant to the plaintiff dated 20.09.2006; Ex.B6-True copy of letter No.2316/2006 SDO-II by the second defendant to the plaintiff dated 27.09.2006; Ex.B7-True copy of letter No.410/JDO3/F Thanthoni CCWSS/06 by fourth defendant to the plaintiff dated 04.10.2006; Ex.B8-True copy of letter No.2316/2006 SDO-II by the second defendant to the plaintiff dated 07.10.2006; Ex.B9-True copy of phonogram by the second defendant to the plaintiff dated 25.10.2006; Ex.B10-True copy of phonogram by the third defendant to the plaintiff dated 13.11.2006; Ex.B11-True copy of agreement bid document (one volume) dated 16.05.2006; Ex.B12-True copy of agreement CE/ER/TNJ-11/2006-2007 (Volume 1 to 4) dated 20.11.2006; Ex.B13-True copy of Agreement programme schedule dated 20.11.2006; Ex.B14-True copy of letter No.3011/JDO3/F100 CWSS/2006 from fourth defendant to the plaintiff; Ex.B15- True copy of letter No.1895/JDO3/F100 CWSS/2006 by the fourth defendant to the plaintiff dated 04.12.2006; Ex.B16-True copy of letter No.1895/JDO3/F100 CWSS/2006 by the fourth defendant to the plaintiff dated 14.12.2006; Ex.B17- True copy of letter No.1895/JDO3/F CWSS/2007 by the fourth defendant to the plaintiff dated 05.01.2007; Ex.B18-True copy of letter No.1895/F100 CWSS/JDO3/2006 by the fourth defendant to the plaintiff dated 24.01.2007; Ex.B19-True copy of revised / EO programme scheme by the plaintiff dated 25.01.2007; Ex.B20-True copy of Lr.No.1895/JDO3/F CWSS/2007 by the fourth defendant to the plaintiff dated 05.02.2007; Ex.B21-True copy of letter No.1895/JDO3/F100 CWSS/2006 by the fourth defendant to the plaintiff dated 16.02.2007; Ex.B22-True copy of letter No.1895/JDO3/F100 CWSS/2006 by the fourth defendant to the plaintiff dated 22.02.2007; Ex.B23-True copy of D.O.Lr.No.F.progress/TWAD/KRR of District Collector, Karur dated 28.02.2007; Ex.B24-True copy of letter No.1895/JDO3/F100 CWSS/2006 by the fourth defendant to the plaintiff dated 23.03.2007; Ex.B25-True copy of show cause notice issued by the fourth defendant to the plaintiff dated 04.04.2007; Ex.B26-True copy of termination order given by the fourth defendant to the plaintiff dated 17.04.2007; Ex.B27-True copy of letter No.1468/2007 Thanthoni CWSS J3 of Chief Engineer, Western Region, Coimbatore to the fourth defendant dated 17.04.2007; Ex.B28-True copy of Measurement Book 1203A (pages 1 to 51) dated 25.11.2006 to 28.02.2007, True copy of Measurement Book 1246A (pages 1 to 4) dated 08.03.2007 to 27.03.2007 and True copy of Measurement Book 1247A (pages 1 to 23) dated 01.03.2007 to 13.04.2007; Ex.B29-True copy of Reach-I Authorized Extras and omissions statement by the fourth defendant dated 20.06.2008; Ex.B30-True copy of Reach-II Authorized Extras and omissions statement by the Superintending Engineer, Erode to the fourth defendant dated 19.11.2008; Ex.B31-True copy of Reach-III Authorized Extras and Omissions statement by the fourth defendant to the Assistant Executive Engineer, Karur dated 24.02.2009; Ex.B32-True copy of Reach-IV Authorized Extras and Omissions statement by the Superintending Engineer, Erode dated 29.12.2008; Ex.B33-True copy of Reach-V Authorized Extras and Omissions statement by the Chief Engineer, Coimbatore dated 06.02.2009; Ex.B34-Xerox copy of Reach-VI Authorized Extras and Omissions statement by the Superintending Engineer, Erode dated 04.12.2008; Ex.B35-Xerox copy of letter No.100/A3/2007 by the Executive Engineer, Karur to the plaintiff dated 22.05.2007; Ex.B36-True copy of letter No.BA/FCWSS 378/2009 by the fourth defendant to the first defendant dated 19.11.2009; Ex.B37-Xerox copy of letter No.NHA1/PIUKRR/TWAD/Karur 2006- 2007/2011 by the project director, NGA1, Karur to the fourth defendant dated 13.02.2008; Ex.B38-Xerox copy of permission for laying water pipe line cross the railway track from Divisional Officer, Southern Railway, Palakkad to the fourth defendant dated 01.10.2007; Ex.B39-Xerox copy of letter RC No.9/2008/JDO of Assistant Divisional Engineer, Highways, Aravankurichi to the Assistant Executive Engineer, TWAD board, Karur dated 19.03.2008; Ex.B40- Xerox copy permission for laying water pipe line across the railway track from the Divisional office, Southern Railway, Palakkad to the fourth defendant dated 30.11.2007; Ex.B41-Xerox copy of proceedings of the District Collector, Karur dated 17.05.2008; Ex.B42-Xerox copy of proceedings of the District Collector, Karur dated 03.04.2007; Ex.B43-Xerox copy of proceedings of the District Collector, Karur dated 05.11.2007; Ex.B44-Letter No.F.1468/2007/Thanthoni CWSS/T3/WR/by Chief Engineer TWAD Board, Coimbatore to the plaintiff in original dated 12.04.2007.
7. PW1 had adduced evidence that immediately after receipt of the work order he started the work and gathered all the necessary materials in the work site, but the site officials of the defendants were not cooperated with the plaintiff and there were delays in getting orders to blast rocks by use of explosives from the District Collector and also for necessary orders for land acquisition for construction of overhead tank and the then Executive Engineer by name Mr.Akilan was acting against the plaintiff and in the meanwhile, the notice dated 04.04.2007 to show cause for termination of the contract was given, but without giving one weeks time, immediately the order dated 17.04.2007 terminating the contract was issued by the fourth defendant and both the show cause notice and order of termination are not legal.
8. DW1 had adduced evidence that the plaintiff was advised on several occasions to complete the work within the time limit and only as a last chance, the show cause notice was issued on 04.04.2007 and no reply was given by the plaintiff to the show cause notice and thereafter, the termination of the contract was made legally by the then Executive Engineer and the second defendant also ratified the order of termination. However, he has admitted that he was not the then Executive Engineer who issued the show cause notice as well as the termination order.
9. The trial Court, after recording the oral and documentary evidence decreed the suit by declaring that the termination order dated 17.04.2007 passed by the fourth defendant is not sustainable under law and directed the defendants to pay a sum of Rs.12,76,121/- to the plaintiff and subsequent interest at the rate of 9% per annum from 18.04.2007 till the date of decree and thereafter at the rate of 6% per annum till the date of realisation for the said amount of Rs.12,76,121/- with proportionate cost.
10. Aggrieved by the judgment and decree passed by the trial Court, the defendants have filed the present appeal on the following grounds:
Grounds:
1. The Judgment and Decree of the learned District Judge is contrary to Law, facts of the case, against the weight of evidence and all probabilities of the case and liable to be set aside.
2. The learned District Judge ought to have dismissed the suit with costs.
3. The learned District Judge ought to have seen that admittedly there was a contract between plaintiff and defendants but through out the trial he has not gone through the terms of the contract and he has not discussed about the terms of the contract any where in his judgment.
4. The learned District Judge has failed to see that time is an essence of contract between the plaintiff and the defendants.
5. The learned District Judge has wrongly shifted the burden of proof of the case upon the defendants and has failed to see that the plaintiff has failed to prove his case.
6. The learned District Judge has not considered the oral and documentary evidence placed on the side of the appellants herein / defendants in a proper manner.
7. The learned District Judge has wrongly concluded that the delay in completion of work is due to delay by various Government Departments. The learned Judge has failed to see that it is the duty of the contractor to do all the incidental works of the contract and therefore the defendants can not be blamed for the delay due to the fault of the plaintiff.
8. The learned District Judge has failed to see that even after sufficient time the plaintiff has failed to respond to the show cause notice given by the defendants.
9. The learned District Judge is not correct in saying that the officer who issued termination order was not enquired while the officer who was present has brought the entire documents on record that too when there was no personal enquiry in this case.
10. The learned District Judge has failed to consider the damages caused to the public money due to the delay caused by the plaintiff in finishing the work.
11. The learned District Judge has failed to appreciate the reminders sent by the defendants to the plaintiff in respect of completion of work.
12. The learned Judge has failed to see that the defendants have acted only as per the terms of the contract and the learned District Judge ought not to have allowed the suit when the plaintiff has failed to prove that he has acted as per the terms of the contract.
13. The learned District Judge has failed to consider the legal proposition when time is considered as an essence of a contract.
14. This Court may be pleased to permit the appellant herein to raise additional grounds later and also at the time of arguments.
15. The discussions, observations, findings and conclusions of the learned District Judge are totally erroneous.
11. The learned counsel for the respondent has submitted that the Plaintiff is entitled to 12 months contract period for completing the work. The fourth defendant i.e., the Executive Engineer, RWS Division, Karur was not empowered to issue premature termination of contract on 17.04.2007, the competent and proper authority being second defendant i.e., the CE, TWAD, who had actually signed the agreement when there was a balance period of 3 + months available reckoning from the date of issue of work order i.e., on 10.07.2006 and 6 months from the date of signing of the agreement i.e., on 20.10.2006. The slow progress of work was purely and reasonably attributable to the Defendant?s Department side for the following valid reasons. Normally, extension of time is granted in the execution of major schemes in all the TWAD Board Divisions on valid grounds, affording an opportunity for the contractor to complete the work. Such an essential opportunity was not at all given to the Plaintiff instead the fourth defendant resorted to premature termination of contract in an arbitrary manner and in gross violation of the agreement condition. Thiru.K.Akilan, the fourth then defendant with an ulterior motive to aid a third party namely A.Chellapillai not covered by the agreement unauthorisedly and willfully withheld bill payments amounting to huge sum of Rs.1.25 Crores pertaining to other work of ?CWSS to 378 Habitations in Karur District? executed by the Plaintiff without any Court directions and higher officers orders, thereby virtually making it impossible for the Plaintiff to show progress on this work ?by way of rotation of money?.
Sl.No. Date Bill prepared and Withheld Bill Nos.
Amount (Rs.) As per the Honourable High Court's directions the payments subsequently released to the plaintiff on
1. 30.08.2006 L.S.5 & 20th Part 30,22,591.00 30.11.2011
2. 30.11.2006 L.S.21 & Part Bill 41,89,574.00 30.11.2011
3. 29.03.2007 L.S.22 & Part Bill 52,98,517.00 30.11.2011 Total 1,25,10,672.00 (Say Rs.1,25 Crores)
12. He has further submitted that the gross failure on the part of the fourth Defendant to get the following materials supplied by the Plaintiff and made available at the site of work duly entered in the M-Book in time and then get tested for quality assurance to enable the plaintiff commence the work and show the required progress of work within the agreement period.
1. Higher and Lower size of PVC pipes
2. Cement
3. Steel
4. Sand
5. Broken stones etc. The show cause notice issued by the second defendant i.e., Chief Engineer, TWAD, Coimbatore on 4.4.2007 allowing a week?s time was not actually served on the Plaintiff at his given residential address namely Sanarpatti, Mettur Dam. But, actually the show cause notice was despatched from second defendant?s Office from Coimbatore only on 16.4.2007. But, without the knowledge and approval of the second defendant, the fourth defendant i.e., the Executive Engineer, RWS Division, Karur suo motu had issued the premature termination orders on 17.4.2007 arbitrarily which is not sustainable as per law by any reckoning because of the involvement of the incompetency on the part of the second defendant.
13. He has further submitted that to cover up the illegal acts of the fourth defendant i.e., Executive Engineer, RWS Division, Karur, the ratification orders issued by the second defendant i.e., Chief Engineer, TWAD, Coimbatore on 17.04.2007 itself undoubtedly goes to show that there had been tampering with of dates as well as anti dating, blissfully forgetting the fact that the second defendant i.e., Chief Engineer?s Head Quarters was at Coimbatore while the fourth defendant i.e., Executive Engineer?s Head Quarters was at Karur. Instead of ratifying the fourth defendant?s i.e., Executive Engineer?s premature termination orders dated 17.04.2007, the second defendant i.e., Chief Engineer could have very well issued the premature termination orders himself on 17.04.2007 itself, but the second defendant i.e., Chief Engineer could not act upon so, for the reason that everything was done with ante-dates to cover up the irregularities already committed by the fourth defendant i.e., Executive Engineer, RWS Division, Karur. This premature termination was chosen to be ratified by the Chief Engineer i.e., on 17.04.2007 without proper application of mind and without observing the tender rules in force. Details showing the total value of work done including Tender Premium and other office expenses left out by the Plaintiff as worked out by the second defendant.
Sl.No. Particulars Value of balance left out item of works by the Plaintiff as per the original agreement Revised Estimate Amount as per the current year schedule of rates (Rs.)
1. Reach-1 92,99,876.00
2. Reach-2 87,47,724.00
3. Reach-3 82,08,700.00
4. Reach-4 86,37,253.00
5. Reach-5 59,09,381.00
6. Reach-6 66,16,488.00 Sub Total 4,28,97,996.00 4,74,19,422.00
7. Office Expenses, Advertisement and other miscellaneous expenditure 8,99,027.00 Grand Total 4,28,97,996.00 4,83,18,449.00
14. The following amounts are not to be recovered from the Plaintiff towards extra financial commitment executed by the four new agencies Sl.No. Particulars Authorised Omissions as per the original and new agreement
(a) Additional Quantities executed not contemplated in the original agreement left out by the contractor
(b) Supplemental item of works executed not contemplated in the original agreement left out by the contractor
(c)
1. Reach-1 6,67,519.46 80,228.43 1,53,830.85
2. Reach-2 9,47,584.91 1,22,496.88 1,39,167.00
3. Reach-3 4,17,206.56 77,647.59 29,299.60
4. Reach-4 3,93,313.19 2,99,191.61
---
5. Reach-5 4,75,970.80 5,82,751.22 1,54,455.51
6. Reach-6 6,76,781.86 3,00,537.89 69,483.00 Total 35,78,376.78 14,62,853.62 5,46,235.96 Say 35,78,377 14,62,854.00 5,46,236.00
(a) + (b) + (c) Rs.55,87,467.00 Total Amount to be deducted from the total value of work done of Rs.4,83,18,449/-
Rs.4,83,18,449.00 - Rs.55,87,467.00 = Rs.4,27,30,982.00 Therefore Profit = Rs.4,28,97,996.00 -
Rs.4,27,30,982.00 = 1,67,014.00 Note: On the whole the Defendants stood benefit financially by Rs.1,67,014/- as mentioned above as profit.
15. He has further submitted that without any valid reasons and justification, the fourth defendant even before arriving at the exact extra financial commitment amount deducted arbitrarily a sum of Rs.75,60,963/- including office expenses towards carrying out the balance items of works by the four new agencies for completing the work was arbitrarily withheld from the payments due for other works namely CWSS to 378 Habitations in Karur District in L.S.23 & Part Bill on 19.3.2008 without the knowledge of the Plaintiff. Therefore, the sum of Rs.4,51,521/- of this termination bill amount was illegally withheld. This requires to be released alongwith the interest thereon. Without actually arriving at the justified figure towards extra financial commitment for this termination work, actually it had resulted only in savings as mentioned above. The following sums were indiscriminately and thoughtlessly deducted from the bill payments of P.Kandasamy, the Plaintiff.
1. Extra financial commitment amounts recovered in L.S.23 & Part Bill without actually arriving at the extra financial commitment in the final analysis Rs.54,45,440.00
2. L.S. 1st & Part Bill of termination work of CWSS to 100 Habitations withheld Rs.4,51,521.00
16. On considering the facts and circumstances of the case and arguments advanced by the learned counsels on either side, this Court is of the view that the objective and the main purpose in having ordered the premature termination of contract citing the reason of slow progress of work was not at all actually achieved subsequently as revealed from the following facts. There is no denying the fact that the original contract for this work was awarded to a single contractor i.e., P.Kandasamy, the Plaintiff for a contract value of Rs. 4.13 Crores whereas the balance items of works left over by the original contractor P.Kandasamy, the Plaintiff at the time of premature termination of contract was chosen to be split up into six reaches and awarded to four new agencies. As a rule and in all fairness and fair play to the case, the Defendants ought to have got completed the balance items of work by the four new agencies by 20.10.2007 itself i.e., within the agreement period in order to justify the premature termination of contract of Plaintiff, citing the reason of slow progress of work. But, in actuality the balance items of work were got completed with a perceivable long delay of 1 year 6 months (i.e., on 31.10.2008), thereby defeating the very objective of premature termination of contract (i.e., on the ground of slow progress of work). There is no denying the fact that had the Plaintiff been allowed to continue to execute the works, the work would have been certainly got completed within the agreement period itself i.e., by 20.10.2007. There are already well defined rules that even before calling for tenders, in order to ensure that the proposed site of work is completely free from any litigations and other encumbrances so that the successful contractor can commence the works without any hurdles whatsoever after award of the work. Contrary to adhering to the above essential requirements on the part of the fourth defendant, the work sites for the following works awarded to the Plaintiff were actually not at all in the immediate possession of the fourth defendant for being handed over to the Plaintiff to enable the Plaintiff to commence the work soon after the issue of the work order. This was also one of the main contributory factors causing undue delay in execution of the work.
1. Site for Construction of overhead tanks
2. Site for Construction of pump rooms
3. Not getting the necessary permission from the PWD, Collectorate, Highways Department, Southern Railways, TNEB etc.,
17. The meriting point in this case is that, the fourth defendant was able to obtain the permission from other departments as noted below on the dates as noted against each, that too, only after termination of the contract of the Plaintiff i.e., on 17.04.2007.
1. Southern Railways 30.11.2007
2. Highways authorities 13.02.2008
3. Acquisition of land for construction of OHTs by the District Collector 17.05.2008
4. Rock blasting permission issued by the District Collector 05.11.2007
5. PWD Until termination of contract not issued
18. Consequent on premature termination of contract of the Plaintiff, virtually there had been no extra financial commitment and loss to the TWAD Board as worked out below. In the final analysis, it could very well be clearly seen that there had been no extra financial commitment in getting the balance items of works carried out by the Defendants through four new agencies and there had been virtually no loss to the Board by carrying out the balance items of works consequent on termination of contract. Therefore, the entire deduction of Rs. 4,51,521/- towards first and final bill of this work was quite illegal and uncalled for and they were chosen to be made without proper application of mind. Therefore, the amounts are to be released immediately alongwith the interest thereon. Hence, this Court is to dismisses the appeal petition preferred by the Defendants and direct the Defendants to make immediate payments as already decreed by the District Court, Tanjore.
19. In the result, the above appeal suit is dismissed. There is no order as to costs.
To The Principal District Court, Thanjavur..