Jammu & Kashmir High Court
Srm Contractors Pvt. Ltd. Through vs Union Territory Of J&K And Others on 21 August, 2020
Author: Rajesh Bindal
Bench: Rajesh Bindal
Serial No. 389
HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
WP (C) No. 983/2020 (O & M)
c/w
WP (C) No. 984/2020 (O & M)
WP (C) No. 985/2020 (O & M)
WP (C) No. 986/2020 (O & M)
(Through Video Conferencing)
Reserved on: 10.08.2020
Pronounced on: 21.08.2020
SRM Contractors Pvt. Ltd. through
Rajesh Kumar Jammu ....Petitioner(s)
Through:- Mr. Rahul Pant, Advocate
(Through Video Call)
v/s
Union Territory of J&K and others ....Respondent(s)
Through:- Mr. Ravinder Gupta, AAG
(Through Video Call)
Coram: HON'BLE MR. JUSTICE RAJESH BINDAL, JUDGE
JUDGMENT
1. This order will dispose of four petitions bearing WP(C) Nos. 983 to 986/2020.
2. The petitioner in all the petitions has prayed for a direction to the respondents to release balance payment on account of the work executed by him.
2 WP (C) No. 983/2020
3. Learned counsel for the petitioner submitted that the work was allotted to him after inviting tenders. The same was executed to the satisfaction of the authorities. Part payment was made. However, balance payment after completion of work has not been made. He further submitted that when initially affidavit was filed by the Department, the stand taken was that on account of shortage of funds, the payment could not be released. However, subsequently stand sought to be taken is that the work executed by the petitioner was not sanctioned. The aforesaid plea has been taken only to defeat the rightful claim of the petitioner. If there was any defect in the procedure to be adopted by the authority, the petitioner cannot be made to suffer. It is for the Department to resolve those issues. At that stage, no one had raised any objection that the work being executed by the petitioner was not approved. In this period of COVID-19, huge payment of the petitioner having been blocked, he is not able to pay salaries to his staff. He further referred to the documents annexed by the respondents with the supplementary affidavit, which shows that funds were released on account of the work executed by the petitioner. When part payment was earlier released, how can the respondents be permitted to take a plea that the work was not authorized. The NIT was issued in the name of the Governor. All the communications were being endorsed to the Secretary of the Department concerned. Hence, it cannot be denied that high-ups in the Department were not having knowledge about the project being executed on allotment of the same to the petitioner. Their silence means deemed permission. The stand sought to be taken now is totally inequitable once the work has been executed. It was even inaugurated by the then Minister. 3 WP (C) No. 983/2020
4. On the other hand, learned counsel for the respondents submitted that it is a case in which the matter has come on surface that fraud had been played by the some of the officers in the Department in connivance with the contractors. Number of works were allotted without there being any sanction by the competent authority. Many of them were allotted without even inviting tenders. In the case in hand as well, if the NIT placed on record by the petitioner is perused, in the column of position of funds it is mentioned as „demanded‟. For execution of any project funds are sanctioned in advance. Once the financial sanction is not there, how a project can be executed. The petitioner had also taken calculated risk in execution of work with non-availability of funds with the Department. Regarding part payment to the petitioner is concerned, he submitted that there may be some manipulation in the Department where funds allocated for other projects may have been diverted. He further submitted that as against availability of funds to the tune of ₹1,841.41 crores from the years 2015-16 till 2018-19, the works to the extent of ₹2,264.34 crores, were executed. Many were without any sanction. As substantial discrepancies were noticed, the Finance Department vide order dated 11.05.2019, constituted a fact finding Committee to look into the irregularity in awarding and implementation of contracts from the years 2010-18. A report thereof has been received which inter-alia states that number of works were executed without administrative approval or which were beyond estimated cost and without concurrence the scope of work was changed. In many cases, the works were allotted without inviting tenders. The quality was also compromised. After receipt of the aforesaid report by the Committee, the Government has referred the whole case to the Anti-Corruption Bureau for investigation. To streamline the 4 WP (C) No. 983/2020 working in the Department and to plug the loopholes, a Committee has been constituted vide order dated 09.06.2020 to standardize the bidding documents and other details for sanction and execution of the works. The Finance Department has further issued a Circular on 08.07.2020 providing for procedure for issuance of tenders and for review of the tendering procedures by the administrative Secretaries concerned. As the amount, which is subject matter of dispute pertains to a tender for which there was no approval by the competent authority, payment cannot be made at this stage, unless the matter is enquired into. The Department is not admitting the liability as there was no sanction as such for execution of the project.
5. Heard learned counsel for the parties and perused the paper book.
6. In a bunch of four petitions, the petitioner has prayed for a direction to the respondents for release of payment on account of work executed by him. His argument is that the work was allotted after tenders were invited. It has been completed to the satisfaction of the authorities and part payment was also made but still final payment is not being made despite even verification by the concerned authorities. The fact that some part payment has been made to the petitioner is not in dispute.
7. As the case set up by the petitioner in the writ petition was that the amount which was admitted to be due to him, had not been paid though he had executed the work to the satisfaction of the authorities, notice in the petitions was issued and objections were filed by the Executive Engineer, (R&B) Division-III, Jammu. As in the objections filed, the stand taken was not definite, vide order dated 25.06.2020, the Principal Secretary, PW(R&B) 5 WP (C) No. 983/2020 Department was directed to attend the Court hearing on 26.06.2020. On the next date of hearing, Shalinder Kumar Principal Secretary, PW(R&B) Department attended the Court hearing through Video Calling. He sought time to file a detailed affidavit explaining the conditions under which certain works were allotted without authorization and even the payments were drawn from the treasury. He further submitted that the matter has been referred to the Anti-Corruption Bureau.
8. Subsequently, affidavit was filed on 13.06.2020 by Rajnish Kumar, Additional Secretary to Government, PW(R&B) Department, wherein it is stated that after the devastating floods in J&K in the years 2014, when substantial damage was caused to the roads and bridges macadamization plan was prepared in the year 2015-16. It provided for higher specifications for the works to be executed and defect liability period for three years was also introduced. Information was provided in the form of following table in paragraph-4 of the aforesaid affidavit giving details of availability of funds, work done and the pending claims from the years 2015-16 to 2018-19:
S.No. Year Availability Work Expenditure Pending work of funds done done claim
1. 2015-16 330.00 337.71 270.00 67.61
2. 2016-17 500.00 511.29 467.52 43.77
3. 2017-18 711.41 1021.47 692.15 329.32
4. 2018-19 300.00 393.87 300.00 93.87 Total 1,841.41 2,264.34 1,729.67 534.57 (A) 6 WP (C) No. 983/2020
9. A perusal of the aforesaid chart shows that execution of the work was more than the availability of funds. How without the funds being available the work was executed is really a mystery. The amount due for the work done was found to be ₹534.57 crores during the year 2019-20. ₹350 crores were allocated in the year. Out of which ₹262.87 crores were earmarked for clearing the pending dues. However, when the matter was examined in detail by the Finance Department, it was found that there was lot of discrepancies in execution of works. Vide Government order dated 11.05.2019, a fact finding committee was constituted to look into the irregularities in awarding the contracts for the years 2010-18. The committee submitted its report. The findings, as have been reproduced in paragraph 5 of the aforesaid affidavit, are extracted below:
i) "Many works have been executed without accord of the Administrative Approval. A brief check of the information provided by the field/Executing agencies regarding macadamization works executed from 2010-2018 in Jammu as well as Kashmir reveal that proposal for Accord of Administrative Approval is shown as submitted to the competent authorities but copy of the same are not available in the records. This clearly shows that works in all probability have been executed without accord of Administrative Approval.
ii) Works have been executed beyond the estimated costs without due concurrence i.e. the scope of work has been changed. In some cases, it is observed that works have been executed without inviting tenders which means that some works have been executed in violation of codal procedures.
iii) Even where work of macadamization/Black topping work has been done, it has been carried out 7 WP (C) No. 983/2020 unscientifically without camber and proper drain due to which the condition of road is likely to become unsatisfactory in a relatively shorter period of time due to moisture accelerated distress.
iv) There is lack of focus on proper maintenance of the road, thus reducing the durability of works already carried out.
v) A brief examination of the information available reveals that many works have been executed without availability of funds resulting in creation of huge liabilities.
vi) During site visits, the quality assurance system was enquired about. Chief Engineer, R&B Kashmir informed that necessary quality parameters have been taken care of such as bitumen, aggregates, viscosity, flash point etc.
vii) The thickness of macadamization can be checked even today through potholes. In most cases seen during site visits depth of surface coat varied between 25m to 50mm. However, this needs further assessment.
viii) The macadamization/surfacing is normally to be carried out after due preparation of layers of sub-
grade. It has been observed that this aspect has mostly been ignored, resulting in faster deterioration in patches.
ix) Where Administrative Approval (AA) has been
accorded, and tender documents confirmed
availability of funds, as against demanded, and works have been carried out within the tendered cost, but liabilities have still not been paid, such claims can be met first after due fulfilment of formalities.
x) Where AA has been accorded and funds availability has been indicated, but extra work has been carried 8 WP (C) No. 983/2020 out, work done claims can be met after procedural formalities have been completed up to 50% on certification of concerned Chief Engineers provided such extra works do not exceed 50%any other reasonable limit of original cost/length.
xi) Where AA has not been accorded, but funds
availability have been indicated as
available/demanded in tender, AA can be accorded post facto after due verification and claims entertained up to 50% at this stage pending further verification.
xii) Where AA has not been accorded, nor tender has been issued, such claims need to be referred to Vigilance for enquiry against officials/officers associated with such works and further view may be taken only after receipt of enquiry report."
10. Based on the aforesaid recommendations, the Government has referred the whole case to the Anti-Corruption Bureau for investigation. It is further provided in the affidavit that proper action under rules will be taken against all those officers/officials who are found to be indulged in omission and commission by the Anti-Corruption Bureau. In paragraph-7 of the aforesaid affidavit it is stated that even in the tender notice annexed by the petitioner, it is mentioned that the NIT was issued without availability of funds. As the petitioner had participated in the tendering process and was found to be a successful bidder, having full knowledge of non-availability of funds, he cannot be permitted to raise the issue at this stage. There seems to be some nexus. Issuance of tender notice without availability of funds and absence of approval of the Government amounts to financial indiscipline and irregularity. It is further provided that to streamline the working for 9 WP (C) No. 983/2020 allotment of tenders for execution of various works and to plug loopholes in the system, a Committee was constituted vide order dated 09.06.2020 with the following terms of reference:
"a) Standardization of bidding documents.
b) Standardization of contract documents for Bridges,
Roads and Up-gradation.
c) Quality control check system.
d) Present SOR and items rates between next year
and adoption of new SOR standardization.
e) Measures to strength the Design, Inspection and
Quality Control Department (DIQC).
f) Safety/work done certificate to be issued by the
concerned Authority.
g) Strength of the office of the Development
Commissioner (Works).
h) Submission of the bills to the treasury and
production of documents.
i) Measures to ensure the time bound release of funds
from the HOD to the DDO level.
j) Release of CDR/Bank Guarantee."
11. Further instructions have been issued on 08.07.2020 by the Finance Department streamlining the process for issuance of tenders in terms of General Financial Rules (GFR) and also that the controlling officers shall ensure that no tenders are invited unless administrative and technical approvals are sought in advance and the funds are available in the budget. The administrative secretaries to review the status of tendering process periodically. It has been directed that in future no tender shall be issued indicating the funds position as „demanded‟. Finding involvement of some of the treasury officers in the Finance Department, twelve of them were 10 WP (C) No. 983/2020 transferred, who had cleared the bills of various works without there being any administrative approval or technical sanction. No funds are being released for all these projects as the matter is under investigation with Anti- Corruption Bureau.
12. The bunch of these petitions have been filed in this Court simply to enforce a money claim for which normally civil suit is the remedy. However, High Court in its writ jurisdiction interferes where no disputed facts are involved and the action of the State is found to be unreasonable and arbitrary. But the facts in the case in hand are altogether different as it is a case in which the amount is sought to be disputed by the respondents taking the plea that the work which was executed by the petitioner was not even approved by the competent authority and there were no funds earmarked for that purpose. This fact is even evident from the tender document itself, where in the Column of position of funds, it is mentioned as „demanded‟. As from the facts stated in the supplementary affidavit, it is evident that projects worth hundreds of crores of rupees were executed without sanction, this Court in its writ jurisdiction does not deem it appropriate to direct payment of the amount to the petitioner as the amount, which is claimed to be due by the petitioner and said to be verified by the department, is in dispute.
13. Initially affidavit was filed by Rajesh Bhagat, Executive Engineer, (R&B), Division-III, Jammu. Even the NIT has been issued by the Executive Engineer. Hence, initially the stand taken was that because of non- availability of funds, the amount could not be released to the petitioner. For taking that stand, apparently the Executive Engineer had not even taken the Government into confidence. It was only when the Secretary of the 11 WP (C) No. 983/2020 Department was summoned that the truth was revealed. This can be on account of apparent connivance also. Had the case been decided on the basis of stand taken by the Executive Engineer, this Court could have directed for release of payment, which may not be due to the petitioner as in terms of the stand now taken, it is found that the tender was issued without any approval/sanction by the competent authority and the amount sought to be disputed by the State.
14. Sometime in these types of cases the petitioners merely make a request for a direction to the respondents to consider their claim and take a decision thereon and in the garb of that order, the petitioners therein may be able to get the payments released, taking the same to be direction of this court. Authorities should be careful in such types of cases also and should apprise the court immediately by moving appropriate application in cases the payment is not due on any account instead of paying the same, taking that as direction of the Court.
15. The plea raised by the petitioner that copies of the communications and even the NIT issued by the Executive Engineer were sent to the Commissioner/Secretary and other senior officers, hence it should be treated as deemed approval, is merely to be noticed and rejected. Mere endorsement of a copy of the tender by an officer of the Department to the Secretary concerned, cannot be treated as deemed approval. He had only sent the same for information. Administrative or financial approval for any project has to be taken in advance before the issuance of tender. Further it cannot be presumed that all communications which are merely endorsed to the Secretary are to be perused by him meticulously. There may be hundreds 12 WP (C) No. 983/2020 of tenders issued by the different offices/departments in the Government and regularly copies thereof must have been endorsed.
16. Further the contention that the tender has been issued on behalf of the Governor of the J&K, hence, it shall be deemed as having been issued properly. There is no merit even in this argument raises. Suffice to add that mere mentioning of these words, will not come to the rescue of the petitioner to raise an argument that there was approval by the competent authority for issuance of tender. It is merely using a standard format so that the action being taken by the concerned officers, which may or may not be with the approval of the competent authority, looks as properly done.
17. For the reasons mentioned above, I do not find any reason to interfere in the present petitions seeking payment of money as facts are disputed by the respondents.
18. The writ petition is, accordingly, dismissed. However, the same will not debar the petitioner to avail of his other appropriate remedy for claiming the relief prayed for.
19. Before parting with the order, with reference to the affidavit dated 13.07.2020 filed by Additional Secretary to Government, PW(R&B) Department that the matter has been referred to the Anti-Corruption Bureau more than a year back, it may be added that status of the investigation is not forthcoming. The investigation in such cases is not to move at snail‟s speed. It has to be brought to its logical conclusion as early as possible. It is the question of proper utilization of tax payers‟ money. There are two public 13 WP (C) No. 983/2020 interest litigations bearing PIL No. 09/2012 and WP(C) PIL No. 14/2020 pending in this court. These pertain to the cases, which were registered under the Prevention of Corruption Act. In some cases challans were not filed in court either because sanction was not granted for prosecution or otherwise investigation has not been completed decades. The same are listed on 26.08.2020. Up-to-date status of the matter being investigated by the Anti- Corruption Bureau in the case will be placed before the Court in the aforesaid petitions.
20. A perusal of the paper books in the some of the cases shows that the documents which are filed in the shape of affidavit/supplementary affidavit/objections are without any date as to when those were signed. Even the name and designation of the officer concerned is also not mentioned on the same.
21. The Registry is directed to ensure that on all the documents which are filed in court the date as well as the designation of the officer concerned, who signs the pleadings, is properly mentioned.
22. Copy of this order be sent to the Director, Anti-Corruption Bureau, J&K, Jammu for information and compliance.
(RAJESH BINDAL) JUDGE Jammu 21.08.2020 Paramjeet Whether the order is speaking : Yes/No. Whether the order is reportable : Yes/No. PARAMJEET SINGH 2020.08.21 14:36 I am approving this document