Madhya Pradesh High Court
M/S Vishnu Prakash R. Punglia Limited ... vs Smart City Development Limited on 14 September, 2022
Author: Vivek Rusia
Bench: Vivek Rusia, Amar Nath Kesharwani
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE AMAR NATH (KESHARWANI)
ON THE 14th OF SEPTEMBER, 2022
WRIT PETITION No. 20882 of 2022
BETWEEN:-
M/S VISHNU PRAKASH R. PUNGLIA LIMITED THROUGH ITS
AUTHORIZED SIGNATORY SHRI MAHESHBHAI M.
KUMBHANI S/O SHRI MAGANBHAI, AGED ABOUT 47 YEARS,
HEAD OFFICE AT H-1, FIRST FLOOR SHIVALIK COMPLEX
NEAR GOL BUILDING, SARDARPURA, JODHPUR AND
REGISTERED OFFICE AT FLAT NO. 605, VI FLOOR, B WING,
KINGSTON CLASSIC CHINCHOLI, BANDRA ROAD, MALAD
MUMBAI (MAHARASHTRA). R/O D-304, GARDEN RESIDENCY,
3, GALA GYMKHANA ROAD, SOUTH BHOPAL, AHMEDABAD
(GUJARAT)
.....PETITIONER
(SHRI PIYUSH MATHUR, LEARNED SENIOR ADVOCATE WITH
SHRI ARIHANT KUMAR NAHAR, LEARNED COUNSEL FOR THE
PETITIONER.)
AND
SMART CITY DEVELOPMENT LIMITED CHIEF EXECUTIVE
1. OFFICER NEHRU PARK CAMPUS, INDORE (MADHYA
PRADESH)
EXECUTIVE DIRECTOR INDORE SMART CITY
2. DEVELOPMENT LIMITED NEHRU PARK CAMPUS INDORE
(MADHYA PRADESH)
ADDITIONAL SUPERINTENDING ENGINEER [CIVIL] INDORE
3. SMART CITY DEVELOPMENT LIMITED NEHRU PARK
CAMPUS INDORE (MADHYA PRADESH)
EXECUTIVE ENGINEER INDORE SMART CITY
4. DEVELOPMENT LIMITED NEHRU PARK CAMPUS INDORE
(MADHYA PRADESH)
5. DRA CONSULTANTS LIMITED HAVING ITS HEAD OFFICE AT
58 INGOLE NAGAR OPPOSITE AIRPORT ROAD BEHIND
HOTEL PRIDE WARDHA ROAD NAGPUR AND HAVING ITS
PROJECT OFFICE AT288, AHINSA APARTMENT, GOYAL
NAGAR NEAR BANGALI SQUARE INDORE (MADHYA
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PRADESH)
.....RESPONDENTS
(SHRI MANOJ MUNSHI, LEARNED COUNSEL FOR THE
RESPONDENT/MUNICIPAL CORPORATION.)
This petition coming on for hearing on this day, the court
passed the following:-
ORDER
The petitioner has filed the present writ petition being aggrieved by termination letter dated 08.09.2022 whereby due to lack of planning, default in execution and failure in the development of adequate resources to perform the obligation as per the contract given by the respondent.
The contract awarded to the petitioner has been terminated with immediate effect and as a result of termination the Bank Guarantee of Rs.7,48,79,910/-, and Security Deposit of Rs.3,70,81,793/- and hold amount Rs.83,94,335/- has been forfeited and the petitioner firm and sub-contracting agencies Ms. Teerath Gopicon Pvt. Ltd. has been debarred from for coming tenders of ISCDL and Indore Municipal Corporation for a period of five years.
2. On 07.04.2018 the petitioner participated in the NIT No.02/ISCDL/18-19 for the work of "Improvement of Water Supply and Sewerage Systems in ABD are of Indore Smart City including Operations and Maintainance for the period of 10 years" A Letter of Acceptance (hereinafter referred as LOA) was issued on 22.06.2018 followed by Work Order dated 25.07.2018. According to the petitioner, the respondents have failed to fulfil their reciprocal obligations even after four years from the date of issuance of LOA such as removal of the encroachment and handing over a clear site to work. However, respondent no.1 has
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granted an extension of two years to complete the work till 27.05.2023 despite that notice of termination was sent to the petitioner company on 16.05.2022 followed by final notice dated 16.07.2022. The petitioner submitted a reply to the said final notice and now by the impugned order dated 08.09.2022 the contract has been terminated with forfeiture of Bank Guarantee, Security Deposit etc.
3. Shri Piyush Mathur learned senior counsel for the petitioner submitted that when the respondents have failed to remove the encroachment to provide a clear site to start the work. On this very ground, the petitioner has requested for termination of a contract. After receipt of notice of termination given by the petitioner, Superintending Engineer vide letter dated 08.09.2022 has made allegations of corrupt practice and fraudulent practice against the petitioner and threatened to register an FIR and on the same day the Chief Executive Officer of the respondent issued impugned termination letter. Vide impugned order not only the amount of bank guarantee has been directed to be forfeited, the petitioner has been blacklisted for a period of five years. It is highly illegal and arbitrary on the part of the respondents to Act in such a harsh manner contrary to the terms and conditions of the contract.
4. Shri Mathur learned senior counsel has referred the Clause no.50.3 of the agreement which gives the right to the contractor to seek termination of the contract if the contractor is unable to carry out any of its obligations under the contract for any reason attributable to the employer like failure to provide possession or access to the site or other areas. Hence, prayed that the respondents are restrained to encash the bank guarantee until the petitioner avails of the remedy under the law.
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5. Per contra Shri Munshi, learned counsel appearing for the respondent/Municipal corporation on advance notice submitted that Clause No.53 of the agreement provides the dispute resolution system under which the contractor has a remedy to raise a dispute before the competent authority as defined in the contract data and this clause further provides the remedy of appeal against the order of competent authority to the appellate authority and further remedy to appeal before the M.P. Madhyastham Adhikaran . In support of his contention, Shri Munshi has placed reliance on an order passed by this Court in the case of Gannon Dunkerley & Co. Ltd. Vs. Indore Smart City Development Ltd. in WP No.2448/2018 there in which relying on a similar dispute resolution clause in the contract Division Bench of this court has dismissed the writ petition as well as denied the Interim Relief.
6. Shri Mathur learned senior counsel appearing for the petitioner has further placed reliance on the case of Alok Kumar Choubey Vs. State of M.P. and others reported in 2021 (1) MPLJ 348 in which the division bench of this High Court has laid down seven well recognize exceptions to the alternate remedy for entertaining a writ petition under Article 226 or 227 of the Constitution of India. Shri Mathur argued that where there has been a violation of principles of natural justice or where the State or its intermediary in a contractual matter act against the public good/ interest, unjust and unfairly, unreasonable and arbitrarily the writ court can entertain a writ petition under Article 226 or 227 of the Constitution of India rather than requiring the petitioner to avail the alternate remedy. However, the division bench has further clarified that the alternate remedy will always depend on the situation of the given case upon the petitioner
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making a strong case. It has also been held if it is shown that the facts of the case are not disputed and the Government and its instrumentality have to be found acting unjustly, and unfairly even regarding contractual matters the high court will be justified in entertaining writ petition despite the availability of the alternate remedy. In the present case, the disputed question of facts are involved. The petitioner as well as the respondents both are making allegations against each other in respect of the non- completion of the terms and conditions of contract within the stipulated time. The dispute resolution system provides a complete remedy to the contractor to raise this grievance before the competent authority, or appellate authority as well as before the M.P. Madhyastham Adhikaran. Hence, the writ petition is not liable to be entertained for want of alternate and efficacious remedy.
7. At this stage, Shri Mathur learned senior counsel submits that the bank guarantee is valid up to 29.07.2023 therefore till the petitioner exhaust the alternate remedies by a raising dispute before the competent authority the Municipal Corporation be restrained to invoke the bank guarantee. In support of his contention, he has placed reliance on the recent order passed by the Division Bench this court in the case of M/s. Tahal Consulting Engineering Pvt. Ltd. Vs. M.P. Urban Development Company Ltd. and others. Writ Petition No.13033/2022 dated 30.08.2022 in which this court has granted adequate protection in respect of encashment of BG to the petitioner therein considering the fact that the appellate authority has no power to grant the interim relief accordingly , restrained the respondent to invoke the bank guarantee till the disposal of the appeal pending before the competent authority.
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8. Shri Munshi learned counsel for the Municipal Corporation has produced the letter dated 09.09.2022 whereby C.E.O. had already requested Bank of Baroda Jodhpur, Rajasthan to encash the bank guarantee of Rs.7,48,79,910/-
9. Admittedly, under the dispute resolution system, the competent authority as well as the appellate authority has no jurisdiction to pass an interim order. If the petitioner submits the dispute within 45 days before the competent authority respondents No. 1 to 4 shall not encash the bank guarantee in question (if already not encashed to date) till the order is passed by the competent authority within 45 days as the bank guarantee is valid up to 29.07.2023. With the aforesaid, the writ petition is disposed of.
Certified within 3 days as per Rule.
(VIVEK RUSIA) (AMAR NATH (KESHARWANI))
JUDGE JUDGE
Ajit/-
AJIT
Digitally signed by AJIT KAMALASANAN
DN: c=IN, o=HIGH COURT OF MADHYA PRADESH
BENCH INDORE, ou=HIGH COURT OF MADHYA
PRADESH BENCH INDORE, postalCode=452001, st=Madhya Pradesh, KAMALAS 2.5.4.20=156c9cedca1b74d671db9f220a5e3ed6c ba241effad892107d95ef0a1afc55b4, pseudonym=CFDFD9C36711CA738F527A5D61A 1EE901C09EF29, ANAN serialNumber=7F0BEE2D78BD57DA058F324744 1C87E7E0817FB61F5E2ABCAEE63CAAA7B3B9FF, cn=AJIT KAMALASANAN Date: 2022.09.15 16:51:48 +05'30'