Andhra Pradesh High Court - Amravati
Narra Constructions Pvt.Ltd., vs The Government Of Ap on 15 November, 2022
HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION Nos.42236 of 2017 and 39288 of 2018
WRIT PETITION No.42236 of 2017
Between:
Narra Constructions Pvt Ltd., Rep. by its
Managing Director Narra Srinivas, S/o
N.V.Subba Rao, Hindu, aged 48 years, Occ:
Contractor, R/o Flat No.202, Kanthi Sikhara
Apartment, Panjagutta, Hyderabad.
... Petitioner.
Versus
State of Andhra Pradesh, Rep. by its Prl.
Secretary (R&B), Secretariat, Velagapudi,
Amaravathi and three others.
... Respondents.
Counsel for the petitioner : Sri P.Veerraju
Counsel for respondents : GP for Roads & Buildings
WRIT PETITION No.39288 of 2018
Between:
Narra Constructions Pvt Ltd., Rep. by its
Managing Director Narra Srinivas, S/o
N.V.Subba Rao, Hindu, aged 48 years, Occ:
Contractor, R/o Flat No.202, Kanthi Sikhara
Apartment, Panjagutta, Hyderabad.
... Petitioner.
Versus
2
State of Andhra Pradesh, Rep. by its Prl.
Secretary (R&B), Secretariat, Velagapudi,
Amaravathi and three others.
... Respondents.
Counsel for the petitioner : Sri P.Veerraju
Counsel for respondents : GP for Roads & Buildings
COMMON ORDER
These writ petitions were filed by the petitioner Private Limited Company represented by its Managing Director. Since the reliefs claimed in both the writ petitions are inter- linked, they are dealt with jointly and disposed of by a common order.
WRIT PETITION No.42236 of 2017
2. This writ petition is filed seeking Writ of Mandamus declaring the action of 4th respondent in terminating the contract under Clause 62.3 of GCC and not following the procedure contemplated under Clause 63 of GCC as illegal, arbitrary and against the terms of agreement and consequently direct the respondents to release the petitioner's amount due under contract bearing CR.No.91/2013-04 dated 14.02.2014.
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3. (a) In the affidavit filed in support of the writ petition, it was contended interalia that the Government of Andhra Pradesh called for tenders on 10.12.2013 through e- procurement for construction of multi-storied building after demolishing the sub-court building at Vijayawada; that bid was submitted on behalf of petitioner on 31.01.2014 and the petitioner's company stood as lowest; that estimated value is Rs.43,26,72,948/- and petitioner quoted the bid amount at Rs.39,31,26,640.55/-, 9.14% less than estimated value; that 3rd respondent-Superintendent Engineer, R&B sent communication to the petitioner to sign the agreement, accordingly, agreement bearing No.CR.No.91/2013-14 was signed by 3rd respondent and authorized representative of petitioner; that site was handed over to petitioner on 14.02.2014, however designs and drawings were not made ready.
(b) Stipulated time for completion of contract is 36 months from the date of agreement; that entire site was not handed over; that designs and drawings were not supplied till 20.06.2015; that 3rd respondent concluded supplemental agreement after supply of designs and drawings and hence, 4 the petitioner could not show work progress in initial period, in fact letters were addressed to 3rd respondent on 23.05.2015, 29.08.2016, 30.11.2016, 18.01.2017, 07.02.2017 and 27.02.2017 explaining the reasons for slow progress of work.
(c) On 10.02.2016 letter was addressed to 3rd respondent to arrange funds for making payment; that another letter dated 01.02.2017 was addressed stating that site is located adjacent to the Hon'ble Chief Minister's Officer and hence, the police did not allow to ply vehicles; that police also did not allow to do contract work during day time in view of Pushkarams; that structural designs and drawings were handed over on 20.06.2017 and there is variation of work by more than 200%.
(d) Stipulated time for completion of contract was expired by 14.02.2017; that in letter dated 28.02.2017, a request was made to extend the time upto 31.08.2018 without liquidated damages and also submitted a revised programme; that 2nd respondent by letter dated 16.03.2017 extended the currency of contract upto 30.06.2018 by 5 imposing liquidated damage of Rs.11 lakhs; that as per Clause 54 of GCC, the department has to impose liquidated damages only, when there is no possibility of extending currency of contract.
(e) 4th Respondent sent letter No.Court Complex @ VJA /A3/2013 dated 26.07.2017 terminating the contract as per Clause 62.3 of GCC and requested to take immediate action as per Clause 62.4 of GCC; that though the order is dated 26.07.2017, it was communicated to petitioner on 30.07.2017; that even after expiry of four months, neither 3 rd respondent nor 4th respondent issued any certificate for the value of work done by petitioner as per Clause 63.1 of GCC.
(f) 3rd Respondent issued paper publication inviting tenders from the eligible contractors for the left over work, since the contract was terminated, petitioner is entitled to get the amount due to him from the department as per Clause 63.1; that nearly 4.5 crores was held up with the department, apart from bank guarantees and deposits submitted by the petitioner at the time of tenders and hence filed the writ petition.
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(g) Along with writ petition, I.A was filed for grant of stay of all further proceedings of 3rd respondent's notice inviting tenders vide NIT.No.25/TO/2017-18 dated 05.02.2017, however no interim stay was granted by this Court.
4. (a) 4th Respondent filed counter affidavit and contended interalia that the Government issued G.O.Rt.No.92 Law (LA&J) Home-Courts.A1 department dated 06.05.2013 and accorded administrative sanction for construction of multi- storied building complex after demolishing the old sub court building at Vijayawada for Rs.5800.00 lakhs; that tender notification was issued and the petitioner was successful bidder; that agreement was concluded vide C.R.No.91/2013- 14 dated 14.02.2014; that site was handed over to petitioner on 14.02.2014 and the work has to be completed within 36 months i.e. by 13.02.2017; that petitioner commenced the work and the progress of the work was very slow; that the authorities issued letter on 28.10.2015 to speed up the work and, in turn, letter was addressed on behalf of petitioner promising to accelerate the rate of progress, however, petitioner has not taken up the work properly. 7
(b) Time and again, respondent authorities requested the petitioner to speed up the work; that the authorities proposed to impose liquidated damages vide letter No.1209/Court Complex @Vja/AEE2/2013-2014 dated 18.08.2016, 21.10.2016 and 18.11.2016; that notices were also issued to the petitioner under clause 60-C of APDSS dated 06.05.2016, 20.08.2016 and 29.11.2016; that in spite of letters and notices, petitioner has not chosen to complete part of Grade slab and Stilt floor slab; that extension of time was recommended duly imposing liquidated damages of Rs.11.00 lakhs for slow progress of work; that the Engineer- in-Chief (R&B) Buildings has granted extension of time upto 30.06.2018 vide Memo No.DEE2/AE6/ CTS&Res Qtrs/25646/2010 dated 16.03.2017.
(c) As there is complete change of time as per the agreement and as per the approved designs, supplemental agreement to be concluded for making payment to the agency; that deviation statement upto stilt floor level has been prepared and approved by the competent authority and bills were paid; that 2nd deviation statement for all floors was submitted along with financial implication and it is to be 8 approved; that the Executive Engineer (R&B) issued notice to the petitioner under 60(A) of APDSS dated 23.06.2017.
(d) After reviewing the work, the Registrar (Administration) vide Roc.No.1333/2012-DII (BLDGS) dated 18.07.2017 directed to terminate the contract forthwith and to assess the total quantum of work and quality of work done and value of work done so far by JNTU, Kakinada and further, JNTU has to give a detailed estimate of the work to be completed for fixing new agency; that accordingly, the Executive Engineer (R&B) terminated the contract vide letter No.Court Complex@VJA/A3/ 2013-2014 dated 26.07.2017 as per Clauses 62.3 and 62.4 of the conditions of contract of agreement; that the Chief Engineer (R&B) was requested to ratify the action taken by the Executive Engineer; that the JNTU, Kakinada was entrusted with the work of assessment and the value of work done by the agency and the balance of work to be done; that JNTU, Kakinada submitted report on the value of work done by the agency as Rs.11,08,28,199/- after deducting TP @ 9.14% less on the balance of work to be done for Rs.68.50 crores and the same was submitted to the Chief Engineer (R&B) Buildings vide T.O. Lr.No.1209/Court 9 Complex@Vja/AE2/2013-14 dated 29.9.2017 and 31.10.2017; that the Chief Engineer (R&B) Buildings vide Memo No.DEE3/AE6/CTS&ResQtrs/25646/2010 dated 28.07.2017 instructed to call for tenders and accordingly, the tenders were called vide Nit.No.25/TO/2017-18 dated 15.12.2017 of the Superintending Engineer (R&B) Circle, Vijayawada.
(e) Balance work was entrusted to M/s Sri Satya Sai Constructions, Visakhapatnam vide C.R. Agreement No.36/2018-19 dated 17.05.2018 at 13.59% less over the estimate contract value of Rs.43.96 crores within the agreement period of 15 months; that site was handed over to the agency on 17.05.2018; that agency grounded the work and the work is in progress; that 4th respondent followed Clauses 62.3 and 63 of GCC and thereafter terminated the contract following the procedure; that petitioner requested release of amount due under contract bearing C.R.No.91/2013-14 dated 14.02.2014; that the petitioner had an alternative remedy for recovery of amount and the writ petition is filed with false allegations and thus, prayed to dismiss the writ petition.
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5. (a) Reply affidavit was filed on behalf of petitioner on 07.09.2021. In reply affidavit, it was contended that without waiting, after grant of extension, respondents illegally and unlawfully terminated the contract; that new agency accepted the contract for the remaining work of building at 13.59% less over the estimated value and as such no loss was caused to the Government either by termination of contract or re- entrustment of remaining work, thus, deductions from the amount payable to the petitioner under the guise of compliance of clause 63.1 etc. would not arise; that in fact, the petitioner is entitled to interest at 18% and deduction of Rs.88,59,649/- is illegal and unlawful and even as per the letter of 3rd respondent, the net amount due as on 26.07.2017 is Rs.2,15,66,370/-, however, 3rd respondent by letter dated 10.05.2018 alleged that an amount of Rs.1,67,06,467/- was due as on 26.07.2017, after deducting statutory dues.
(b) 3rd Respondent-Superintending Engineer, R&B in Lr.No.1269/Court Complex@VJA/AEE2/2017 dated 10.05.2018 addressed to the Chief Engineer, R&B, admitted that amount payable to the petitioner after deducting 11 recoveries is Rs.1,67,06,467/-; that the said amount is not inclusive of withheld amount of 7.5%, which the Government will hold as security deposit; when the contract is terminated, the said amount is also liable to be paid and if the said amount is included, the total amount payable would be Rs.2,15,66,370/- and thus, the respondents are liable to pay Rs.2,15,66,370/- with subsequent interest at 18% from the date of termination till realization; that as per clause 63.2, for belated payments interest @12% is payable.
6. Additional affidavit was filed on 23.08.2022 on behalf of petitioner. It was contended interalia that at the time of termination of contract, under Clause 62.3, the amount due to the petitioner is Rs.2,21,12,698/- (Rs.1,67,06,467/- + Rs.74,34,631/- i.e. 7.5% withheld amount) after deducting Rs.20,28,400/-, however, the dues wrongly calculated and the respondents have shown an amount of Rs.2,15,66,370/- is only due to petitioner, instead of Rs.2,21,12,698/-; that petitioner is also entitled for pendente lite and post lite interest; that respondents have not acted fairly and reasonably even though the petitioner discharged part of the contract most honestly and loyally and vacated the premises 12 as directed by the respondents despite pendency of the writ petition; that delay in completing the construction of building was occurred since the Court canteen building and the site at front portion thereof was not handed over to the petitioner's company, even by the date of termination of contract; that drawing and structural designs were not supplied 16 months after commencement of contract and eventually, prayed to allow the writ petition.
WRIT PETITION No.39288 of 2018
7. This writ petition is filed seeking Writ of Mandamus declaring the inaction of 3rd respondent in not issuing correct certificate for work done by the petitioner as illegal and arbitrary.
8. (a) In the affidavit, it was contended interalia that after closure of contract, the department has recorded measurements, checked, verified the recorded measurements; that W.P.No.19733 of 2018 was filed on behalf of petitioner to direct the respondents to issue work done certificate and the same was disposed of directing the respondent authorities to supply certificate and accordingly, the 4th respondent sent 13 certificate through letter No.DEE2/AEE7/CTS/Res/25546/ 2010 dated 24.07.2018; the said certificate indicates that the department is entitled to recover an amount of Rs.88,59,649/- from the petitioner; that in the said certificate, 4th respondent deducted an amount of Rs.3,04,26,019/- towards tender premium under clause 63.1 of GCC.
(b) 4th Respondent having terminated the contract by invoking clause 62.3 of GCC, has proposed recovery under clause 63.1 of GCC. Clause 63.1 deals with termination of contract for fundamental breach, whereas clause 62.3 deals with termination of contract for convenience and thus, clause 63.1 has no relevancy to the facts of the case and hence, the certificate issued by 4th respondent is not valid; that legal notice dated 24.03.2018 was issued to 3rd respondent, however, the authorities did not choose to reply to the notice. Hence, the writ petition was filed.
9. (a) 4th Respondent filed counter affidavit denying the averments in the writ petition and contended interalia that pursuant to issuance of drawings, petitioner started 14 construction work and the building can be constructed without constructing portico, which can be constructed at a later stage; that columns are not connected to the main building work and it was brought to the notice of petitioner several times; that the contract agency has given the revised milestone programme on 06.05.2016, however the petitioner failed to stick on to the revised milestone programme; that the petitioner is proceeding with slow progress of work and the same was brought to the notice of agency by letters dated 18.11.2016 and 29.11.2016.
(b) Pursuant to the disposal of W.P.No.19733 of 2018, whereby this Court directed the Engineer-in-Chief to issue certificate as envisaged under clause 63 of terms and conditions of contract between the parties, recoveries due to be made by the petitioner agency as per clause 63.1 comes to Rs.3,04,26,019/-; that the petitioner has to pay Rs.88,59,649/- to the department; that the completion certificate was issued as per clause 63 of the agreement and prayed the Court to dismiss the writ petition. 15
10. Reply affidavit filed on behalf of the petitioner and contended that the respondents having assessed the value of work done by the petitioner at Rs.2,15,66,370/- could not pay the amount immediately within 28 days after termination of contract; that an amount of Rs.7,68,467/- was deducted in 7th and Part Bill dated 20.03.2017; that respondents are not entitled to charge Rs.2,83,97,620/- against the total value amount after termination of contract, since the remaining work was given to another contractor at an amount less than 13.59%.
11. With the consent of the both the parties the writ petitions were disposed of.
12. Both these writ petitions were filed in connection with termination of contract entered by petitioner with respondent authorities vide agreement No.C.R.No.91/2013-14 dated 14.02.2014 and as such, they are disposed of by a common order. In fact, learned counsel for the petitioner and respondent also agreed since the issue involved in the writ petitions is more or less one and the same and they are interconnected.
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13. Undisputed facts going by the pleadings are that an agreement was entered into by the Superintendent Engineer (R&B), R&B Circle, Vijayawada and the petitioner M/s Narra Constructions Private Limited, Hyderabad represented by its Managing Director for construction of multi-storied court building complex after demolishing the old sub-court building at Vijayawada. Estimate contract value is Rs.43,26,72,948/- and the petitioner became lowest tenderer for Rs.39,31,26,640.55, which is 9.14% less than estimate value. Period for completion of work is 36 months.
14. According to the petitioner, though the site was handed over on the date of agreement, however, the designs and drawings were not supplied till 20.06.2015. Respondents by filing counter affidavit denied allegations and would contend that as per M.Book recordings, GSB work is completed in the month of May, 2015 and thus, the authorities denied the allegations of the petitioner regarding non-supply of drawings and designs.
15. A perusal of material papers filed along with the counter affidavit would indicate that letters were issued to 17 the petitioner about slow progress of work and in fact, in some of the letters it was also indicated that action will be initiated as per Clause 60 (C) of APDSS and as per agreement conditions. In letter dated 29.11.2016 issued by the Executive Engineer (R&B) to the petitioner, it was directed to accelerate and show considerable progress of work as per the programme, otherwise the department will not hesitate to take penal action as per Clause 60 (C) of APDSS.
16. The said letter is extracted hereunder for better appreciation.
GOVERNMENT OF ANDHRA PRADESH
ROADS AND BUILDINGS DEPARTMENT
** ** **
From To
Sri M.Satyanarayana Rao, B.Tech, MBA, M/s Narra Construcitons Pvt Ltd
Executive Engineer, FAC, Flat No.202,
(R&B) Division, Kranthi Sikhara Apartments,
Vijayawada. Panjagutta, Hyderabad.
Lr.No.A3/CR.Agt No.91/2013-14/VJA2015, dt. -11-2016. Gentleman, Sub: (R&B) Division, Vijayawada - Construction of multistoried court building complex after demolishing the old Sub-Court building at Vijayawada - Est Rs.58.00 crores - Slow progress of work - remarks called for - Regarding.
Ref: 1) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015, dt.06-10-2015.
2) Review meeting on 01.05.2016 by the Hon'ble District Judge, Krishna, Machilipatnam.
3) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015, dt.05-05-2016.
4) Your letter No.NCPL/MCBC-VJY/2016 dt.06.05.2016.
5) This office Lr.No.A3/CR.Agt No.91/2013-14/VJA/2015, 18 dt.20-08-2016.
6) District Level Monitoring Committee meeting held on 10.09.2016 by Hon'ble District Judge, Machilipatnam.
***** During District Level Monitoring Committee meeting held on 05.05.2016, headed by the Hon'ble District Judge, Krishna, Machilipatnam, you have given revised programme of work on 06.05.2016 for speedy progress of the above work. But you have not adhered to the milestone. Owing to slow progress of the work, you have been reminded vide ref 5th cited to speed up the progress of the work. But the work is not put on track and you have defeated the assurance given by you.
Again the District Level Monitoring Committee meeting held on 10.09.2016, headed by the Hon'ble District Judge, Krishna, Machilipatnam. During the meeting you have promised in the presence of the Hon'ble District Judge, Krishna, Metropolitan Sessions Judge, Vijayawada and other judicial officers that tremendous progress would be shown then onwards as Krishna Pushkarams were already completed and there are no hurdles for transportation of materials. During the meeting all the Judicial officers and R&B officers have been impressed by your words and agreed for you consent given and instructed to speed up the work. After promise made by you on 10.09.2016, you have completed only a meagre amount of work till today.
By this time, you would have been completed Part-B, Slab 1 as per the programme of work given by you on 06.05.2016. It shows that your progress of work is behind the stipulated target. You have neither stick on to the revised programme nor stick on to the promise made by you during the District Level Monitoring Committee meeting held on 10.09.2016. Since this project is very prestigious project and it is need to accommodate all the 23 courts and judicial officers, offices, the motive of the project is defeated due to your slow progress and invites very much criticism from the Government and Judicial Officers. The image and decorum of the department has become shameful in the public as well as in the judicial department due to your slow progress of work only. Hence, you are directed to accelerate and show considerable progress of work as per the programme given by you within a week. Otherwise the department will not hesitate to take penal action as per clause 60 (C) of APDSS.
Yours faithfully, Sd/- M.Satyanarayana Rao Executive Engineer, FAC, (R&B) Division, Vijayawada 19
17. To the above letter, reply was sent on behalf of the petitioner. This is one of the letters among other communications in between the officials and writ petitioner.
18. The Executive Engineer (R&B), Vijayawada addressed letter to the petitioner on 23.06.2017 and requested to speed up the progress of work. By issuing said letter, the petitioner was directed to show cause as to why action shall not be initiated against the petitioner under Clause 60 (a) to APDSS by determining the contract. Eventually, basing on the representation made on behalf of the petitioner seeking extension of time upto 31.08.2017, time was extended till 30.06.2018 by imposing liquidated damages of Rs.11 lakhs. As the matter stood thus, by letter No.Court Complex @ VJA /A3/2013 dated 26.07.2017, the Executive Engineer terminated the contract as per Clause 62.3 conditions of contract and requested the petitioner to vacate the site as per Clause 62.4 of agreement conditions.
19. Learned counsel for the petitioner contended that since contract was terminated under clause 62.3, deductions made by the authorities does not arise.
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20. Clauses 62 and 63 of General Clause and Conditions are extracted hereunder:
62. Termination:
62.1. The department may terminate the Contract, if the contractor causes a fundamental breach of the Contract.
62.2 Fundamental breaches of Contract include, but shall not be limited to the following:
a) The Contractor stops work for 28 days when no stoppage of work is shown in the current program and the stoppage has not been authorized by the Engineer-in-Charge.
b) The Contractor is made bankrupt or goes into liquidation other than for a reconstruction or amalgamation.
c) The Engineer-in-Charge gives Notice that failure to correct a particular Defect is a fundamental breach of Contract and the Contractor fails to correct it within a reasonable period of time determined by the Engineer-in-Charge; and
d) The Contractor does not maintain a security which is required and
e) The Contractor has delayed the completion of works by the number of days for which the maximum amount of liquidated damages can be paid as defined.
f) If the contractor, in the judgment of the Department has engaged in corrupt or fraudulent practices in competing for or in the executing the contract.
g) The contractor has contravened Sub-Clause 5 of Conditions of Contract and sublet the work.
h) The contractors does not adhere to the agreed construction program (Clause 24.1, 24.2, 24.3, 24.4 of Conditions of contract) and also fails to take satisfactory remedial action as per the agreements reached in the managerial meeting (Clause-31) for a period of 15 days.21
i) The Contractor fails to carry out the instructions of Engineer-in-charge within a reasonable time determined by the Engineer-in-charge.
For the purpose of this paragraph: "corrupt practices" means the offering, giving, receiving or soliciting of anything of value to influence the action of a public official in the procurement process or in contract execution. "Fraudulent practice" means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Government and includes collusive practice among Tenderers (prior or after Tender submission) designed to establish Tender prices at artificial non-competitive levels and to deprive the Government of the benefits of free and open competition. 62.3 Notwithstanding the above, the Department may terminate the contract for convenience. (emphasis is mine) 62.4. If the Contract is terminated, the Contractor shall stop the work immediately, make the site safe and secured leave the site as soon as reasonably possible.
63. Payment upon Termination:
63.1. If the Contract is terminated because of a fundamental breach of Contract by the Contractor, the Engineer-in-Charge shall issue a certificate for the value of the work done less advance payments received upon the date of the issue of the certificate, less other recoveries due in terms of the Contract, less taxes due to be deducted at source as per law applicable and less the percentage to apply to the work not completed.
Additional liquidated Damages shall not apply. If the total amount due to the Department exceeds any payment due to the Contractor the difference shall be a debt payable to the department.
63.2. In case of default for payment within 28 days from the date of issue of notice to the above effect, the contractor shall be liable to pay interest at 12% per annum for the period of delay.
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21. Learned counsel for the petitioner would submit that the contract was terminated for convenience of the department and not due to breach of contract. Thus, the authorities shall not make deductions as per Clause 63.1. However, learned Government Pleader for Roads and Buildings would submit that once the contract is terminated, the department is entitled to recover the dues in terms of Contract, less taxes due to be deducted at source as per law applicable law and less the percentage to apply to the work not completed etc. If the total amount due to the Department exceeds any payment due to the Contractor the difference shall be a debt payable to the department. In case of default for payment within 28 days from the date of issue of notice to the above effect, the contractor shall be liable to pay interest at 12% per annum for the period of delay.
22. Learned counsel for the petitioner would submit that as per the letter addressed by 3rd respondent to the Chief Engineer vide Lr.No.1269/Court Complex@VJA/AEE2/2017 dated 10.05.2018, total value of work done by the petitioner is Rs.11,32,39,290/- including the price adjustment as per G.O.Ms.No.94. The net amount payable after deducting the 23 recoveries due in terms of contract is Rs.1,67,06,467/-. Though the said letter contained statement of detailed calculation as per G.O.Ms.No.94, the said calculation was not filed along with the said letter. In fact, letter was addressed by Superintending Engineer to the Chief Engineer.
23. Along with the counter affidavit in W.P.No.39288 of 2018, report of JNTU, Kakinada was filed which would indicate that the total value of work done is Rs.11,32,60,158/-. Certificate, issued pursuant to the directions of this Court in W.P.No.42236 of 2017, would indicate that after deducting amounts under various Heads, an amount of Rs.88,59,649/- is to be recovered from the agency. In the said statement, the amount to be recovered under various Heads is shown as Rs.3,04,26,019/- and the balance to be paid to the petitioner as per the statement is Rs.2,15,66,370/-.
24. Learned counsel for the petitioner would submit that the writ petition under Article 226 of the Constitution of India is maintainable and placed reliance in the judgment of the Apex Court in ABL International Ltd. and another Vs. 24 Export Credit Guarantee Corporation of India Ltd. and others1. Learned Government Pleader would contend that the calculation filed by the Government is not under challenge in the writ petition. The prayer sought for in the two writ petitions (1) to declare the action of respondents in terminating the contract as illegal and arbitrary and consequential relief of payment of amount (2) to direct the respondents to issue correct certificate for the work done. According to the learned Government Pleader, the petitioner did not specify amount and the petitioner developed the case, after filing of counter by the Government, by filing reply and additional affidavit. In view of disputed questions of fact involved, writ petitions under Article 226 of the Constitution of India are not maintainable. In view of the disputed questions of facts, necessary evidence is to be lead by the parties before Civil Court.
25. Learned counsel for the petitioner, on the other hand, would submit that there are no disputed questions of fact involved in the writ petition. The material placed before this Court would prima facie indicate that the contract was 1 (2004) 3 SCC 553 25 terminated by invoking Clause 62.3 for convenience and not on the ground of breach of contract. Thus, the deductions made by the respondents invoking clause 63 does not arise. Thus, he would submit that there are no serious disputed questions of facts involved in the writ petitions and hence, the writ petitions are maintainable under Article 226 of the Constitution of India. In support of his contention, he relied on judgment of the Apex Court in A.V.Venkateswaran, Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani and Anr.2 and ABL International (supra). Learned counsel for petitioner would submit that petitioner is also entitled for interest and in that connection, he relied on the judgment of the Apex Court in Bhagawati Oxygen Ltd. Vs. Hindustan Copper Ltd.3
26. In A.V.Venkateswaran's case, the Apex Court held as follows:
"9. We see considerable force in the argument of the learned Solicitor-General. We must, however, point out that the rule that the party who applies for the issue of a high prerogative writ should, before he approaches the Court, have exhausted other remedies open to him under the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but 2 AIR 1961 SC 1506 3 AIR 2005SC 2071 26 is rather a rule which Courts have laid down for the exercise of their discretion. The law on this matter has been enunciated in several decisions of this Court but it is sufficient to refer to two cases : In Union of India Vs. T.R.Varma, 1958 SCR 499 at pp.503-504: ((S) AIR 1957 SC 882at p.884). Venkatarama Ayyar, J., speaking for the Court said:
"It is well-settled that when an alternative and equally efficacious remedy is open to a litigant, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ. It is true that the existence of another remedy does not affect the jurisdiction of the Court to issue a writ; but, as observed by this Court in Rashid Ahmed Vs. Municipal Board, Kairana, AIR 1950 SC 163, 'the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs'. Vide also K.S.Rashid and Son Vs. The Income-tax Investigation Commission, AIR 1954 SC. And where such remedy exists, it will be a sound exercise of discretion to refuse to interfere in a petition under Art.226 , unless there are good grounds therefore."
There is no difference between the above and the formulation by Das, C.J., in The State of Uttar Pradesh Vs. Mohammad Nooh [1958] 1 SCR595 , where he observed:
"............ It must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory 27 remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies."
After referring to a few cases in which the existence of an alternative remedy had been held not to bar the issue of a prerogative writ, the learned Chief Justice added:
"It has also been held that a litigant who has lost his right of appeal or has failed to perfect an appeal by no fault of his own may in a proper case obtain a review by certiorari."
In the result this Court held that the existence of other legal remedies was not per se a bar to the issue of a writ of certiorari and that the Court was not bound to relegate the petitioner to the other legal remedies available to him.
10. The passages in the judgments of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor-General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy."
27. In Whirlpool Corporation, Vs. Registrar of Trade Marks, Mumbai and others4, the Apex Court held as follows:
"20. Much water has since flown beneath the bridge, but there has been no corrosive effect on these decisions which though old, continue to hold the field with the 4 AIR 1999 SC 22 28 result that law as to the jurisdiction of the High Court in entertaining a Writ Petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the Writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation.
21. That being so, the High Court was not justified in dismissing the Writ Petition at the initial stage without examining the contention that the show cause notice issued to the appellant was wholly without jurisdiction and that the Registrar, in the circumstances of the case, was not justified in acting as the "TRIBUNAL"."
28. In ABL International (supra), the Apex Court considered the maintainability of writ petition for enforcement of contractual obligation of State and its instrumentality. The Apex Court came to the conclusion that if the State or its instrumentality acts in arbitrary manner in the matter of contract, it being contrary to the constitutional guarantees under Article 14 of the Constitution of India, the person aggrieved can invoke extraordinary jurisdiction under Article 226 of the Constitution of India. The Apex Court further held that the writ petition involving consequential relief of monetary claim is also maintainable. The Apex Court held at Paragraphs 27 and 28 thus:
"27. From the above discussion of ours, following legal principles emerge as to the maintainability of a writ petition:-29
(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.
(b) Merely because some disputed questions of facts arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary claim is also maintainable.
28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power [See: Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors. MANU/SC/0664/1998MANU/SC/0664/1998: AIR 1999 SC 22 . And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the court thinks it necessary to exercise the said jurisdiction."
29. There is no dispute regarding the proposition of law enunciated by the Apex Court. In fact, the ratio laid down by Apex Court binds this Court in view of Art 141 of the Constitution of India. However, whether the writ petitioner in the case on hand is entitled to Rs.2,21,12,698/- with interest, as claimed, in the additional affidavit requires any 30 evidence to let in or is admitted amount. If it is admitted amount, without any dispute, in view of the expression of Apex Court writ petition under Art 226 of the Constitution of India is maintainable.
30. As narrated supra, contract was terminated by invoking clause 62.3. Though the writ petition was filed challenging the termination of contract, however, no interim order was granted by this Court. The petitioner vacated the premises and the work was entrusted to another agency and in fact the work was completed.
31. According to the writ petitioner, JNTU, Kakinada assessed the work done by the petitioner and valued at Rs.11,32,60,157.85. Petitioner was paid Rs.9,16,93,788/- and the balance payable is Rs.2,15,66,370/-. It is pertinent to mention here that the estimate of JNTC is not final. After the estimate, authorities issues communication to the writ petitioner that the total amount due by petitioner after deductions comes to Rs.3,04,26,019/-. Thus, according to respondents, petitioner is still liable to pay Rs.88,59,649/-. In fact challenging the same, writ petitioner filed the second 31 writ petition seeking a direction to the authorities to furnish correct certificate.
32. Some of excerpts in the affidavits, reply affidavits are here with extracted, according to this court, are disputed questions of facts need evidence to be let in competent Civil Court.
a) In the affidavit filed in W.P.No.42236 of 2017, it was contended that drawings and designs were not supplied by the department till 20.06.2015.
b) According to the petitioner, letters explaining the slow progress of work were addressed on 23.05.2015, 29.08.2016, 30.11.2016, 18.01.2017, 07.02.2017 and 27.02.2017.
c) The site is located adjacent to the Chief Minister's Office and the police did not allow the vehicles to ply and the police also did not allow to do concrete works during day, in view of Pushkarams.
32
d) In Paragraph-9 of the affidavit, it was contended that nearly 4.5 crores are held up with the department, apart from the bank guarantees and deposits.
e) In the additional affidavit filed by the petitioner, it was contended that at the time of termination of contract, the amount due to petitioner is Rs.2,21,12,698/-.
f) It was further contended that due to wrong calculation, respondents have shown in impugned notice an amount of Rs.2,15,66,370/- only.
g) Petitioner also contended that the claim of respondents for Rs.88,59,649/- is grossly illegal and unlawful and even if it is accepted, it would be wagering contract which is prohibited under Section 30 of the Contract Act.
33. In the facts and circumstances of the case, unless evidence is let in regarding the delay in completion of work; termination of contract; deductions to be made by the authorities and other communication before Civil Court, these being serious disputed questions of law, writ petition under Article 226 of the Constitution of India is not 33 maintainable. In State of Bihar Vs. Jain Plastic and Chemicals Ltd.5, the Hon'ble Apex Court observed that serious disputed questions or rival claims of the parties with regard to the breach of contract are to be investigated and determined on the basis of evidence which may be led by parties in a properly instituted civil suit rather than by a Court issuing prerogative writs.
34. This Court is conscious that merely because one of the parties to the litigation raises a dispute with regard to the facts of the case, the Court entertaining such writ petition under Article 226 of the Constitution of India is not always bound to relegate the parties to a suit. As per the expressions of Hon'ble Apex Court writ petition is not a bar. However, in case of serious disputed questions of facts, it is always desirable to the parties to approach the civil Court. The main prayer in the W.P.No.42236 of 2017 is to declare the action of the 4th respondent in terminating the contract under Clause 62.3 of GCC and not following the procedure under Clause 63 of GCC as illegal and arbitrary. Unless, this 5 (2002) 1 SCC 216 34 Court comes to conclusion about the main prayer, granting of consequential relief does not arise.
35. As pointed out supra, in the first place, petitioner itself is not clear as to the amount payable to it by respondent authorities. A perusal of affidavit, reply affidavit and additional affidavit make the things more than discernable that on every point both the petitioner and respondent are disputing. Apart from that by filing counter respondent authorities are asserting that the petitioner is liable to be pay the amount after statutory deductions. In view of the serious disputed questions of facts, in the considered opinion of this Court, the prerogative writ under Article 226 of the Constitution of India will not be issued in favour of petitioner. Thus, W.P.No.42236 of 2017 is not maintainable and is liable to be dismissed.
36. Accordingly, W.P.No.42236 of 2017 is dismissed. No costs.
37. Since W.P.No.39288 of 2018 is filed to declare the inaction of 3rd respondent in not issuing correct certificate for work done by the petitioner as illegal and arbitrary, in view of 35 discussion made supra, it is evident that pursuant to order in W.P.No.19733 of 2018, 4th respondent sent certificate vide letter No.DEE2/AEE7/CTS/Res/25546/2010 dated 24.07.2018. In fact, the relief sought for in the writ petition is to direct the respondents to issue correct certificate for the work done by the petitioner. However, in view of serious disputed questions of fact, as observed supra, no relief can be granted by this Court in exercise of jurisdiction under Article 226 of the Constitution of India and hence, the writ petition is liable to be dismissed.
38. Accordingly, W.P.No.39288 of 2018 is dismissed. No costs.
After pronouncement of the order, learned counsel for the petitioner sought permission to approach Civil Court by invoking Section 14 of the Limitation Act.
It is open to the petitioner to invoke Section 14 of the Limitation Act and if the petitioner approaches Civil Court by invoking the said Section, the same shall be considered since 36 petitioner was bona fide in prosecuting the matter before this Court.
As a sequel, all the pending miscellaneous applications shall stand closed.
_________________________ SUBBA REDDY SATTI, J 15th November, 2022 PVD