Andhra Pradesh High Court - Amravati
M/S.Sai Avantika,Nellore vs Govt.Of Ap,Prl.Scy,Icad,Hyd, 3 on 12 August, 2025
APHC010652552013
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3333]
(Special Original Jurisdiction)
TUESDAY,THE TWELFTH DAY OF AUGUST
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SMT JUSTICE V.SUJATHA
WRIT PETITION NO: 8156/2013
Between:
1. M/S.SAI AVANTIKA,NELLORE, - SAI VENKATA (JV)
ENGINEERING CONTRACTORS HAVING ITS OFFICE AT 3-
547, LAKSHMIPURAM, NELLORE, REPRESENTED BY ITS
MANAGING PARTNER MR. A. SRIRAMULU.
...PETITIONER
AND
1. GOVT OF AP PRL SCY ICAD HYD 3, REPRESENTED BY
ITS PRINCIPAL SECRETARY TO GOVERNMENT, I& CAD
DEPARTMENT, SECRETARIAT BUILDINGS, HYDERABAD,
2. THE CHIEF ENGINEER, AVR HNSS PROJECT, HLC
COMPOUND, ANANTAPUR, ANANTAPUR DISTRICT,
3. THE SUPERINTENDING ENGINEER, AVR HNSS CIRCLE
NO.1, B CAMP, KURNOOL, KURNOOL DISTRICT,
4. THE EXECUTIVE ENGINEER, AVR HNSS DIVISION NO.2,
OPPOSITE YMCARS ROAD, KURNOOL, KURNOOL
DISTRICT.
...RESPONDENT(S):
2
VS,J
WP_8156_2013
Petition under Article 226 of the Constitution of India praying
that in the circumstances stated in the affidavit filed therewith, the
High Court may be pleased toto issue an appropriate writ or a
direction and more particularly one in the nature of a writ of
mandamus, declaring the proceedings issued by the Superintending
Engineer, AVR HNSS, Circle No.1, B Camp, Kurnool, the 3rd
respondent herein in proceedings no. SE/AVR HNSS-
I/KNL/TS/8AEE2/package 25 (works)737, dated 25-08-2011 and the
consequential impugned letter bearing no.EE/HNSS/2KNL/P25/123,
dated 15-02-2012/15-03-2013 issued by the Executive Engineer,
AVR HNSS, Division No.2, Kurnool, the 4th respondent herein
seeking to recover a sum of Rs. 2,82,50,000/- is arbitrary and illegal
and set aside the same and consequently direct the respondents to
release all the payments due to the petitioner and further direct the
respondents to release a sum of Rs. 14 crore as recommended by
the technical committee in respect of package no.25
IA NO: 1 OF 2013(WPMP 10216 OF 2013
Petition under Section 151 CPC praying that in the
circumstances stated in the affidavit filed in support of the petition,
the High Court may be pleased to grant interim suspension of the
letter bearing No. EE/HNSS/2KNL/ P25/123, dt:
15.02.2012/15.03.2013 issued by the Executive Engineer, AVR
JHNSS, Division No.2, Kurnool, the 4th respondent, pending
disposal of the writ petition
Counsel for the Petitioner:
1. G RAMESH BABU
Counsel for the Respondent(S):
1. GP FOR IRRIGATION & COMM AREA DEV
The Court made the following:
3
VS,J
WP_8156_2013
ORDER:
The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-
".... to issue an appropriate writ or a direction and more particularly one in the nature of a writ of mandamus, declaring the proceedings issued by the Superintending Engineer, AVR HNSS, Circle No.1, B Camp, Kurnool, the 3rd respondent herein in proceedings No.SE/AVR HNSS-I/KNL/TS/ 8AEE2/package 25 (works)737, dated 25.08.2011 and the consequential impugned letter bearing No. EE/HNSS/2KNL/P25/123 dated 15.02.2012/ 15.03.2013 issued by the Executive Engineer, AVR HNSS Division No.2, Kurnool, the 4th respondent herein seeking to recover a sum of Rs.2,82,50,000/- is arbitrary and illegal and set aside the same and consequently direct the respondents to release all the payments due to the petitioner and further direct the respondents to release a sum of Rs.14 crore as recommended by the technical committee in respect of package No. 25....."
2) The case of the petitioner is that in pursuance of the tenders called for by respondent No.3 for AVR HNSS Project package No.25 for investigation, preparation, hydraulic particulars, designs, drawings and excavation of HNSS main canal from KM 42.000 to KM 64.000, including CM & CD works and distribution system. The petitioner participated in the said tender and stood as a highest 4 VS,J WP_8156_2013 bidder for the same. Thereafter, the petitioner entered into an agreement No.SEH8EPC/2004-06, dated 26.02.2005 for package No.25, the estimated cost of the said works is Rs.56.50 crores and as per the said agreement, the petitioner was supposed to complete the work within 24 months from the date of the agreement i.e. before 25.02.2007. After awarding the contract and signing of the agreement, the petitioner herein mobilized sufficient men and material for executing the work. However, to start work one of the essential requirements was acquisition of land for excavation of canal. As the land owners were not paid any compensation amount after acquisition of the land, they have prevented the petitioner from proceeding with the excavation work. Further, respondent No.3 has also not taken any steps to handover the required land for excavation after doing needful to the land owners. Considering the said reasons, respondents, vide memo No.18021/Maj.Irri.VI/2010 dated 23.07.2010, have extended the time for completion of the work, up to 30.06.2011.
3) It is the further case of the petitioner that he has completed 85.13% of the work, which is worth Rs.48.10 crores, by the end of August, 2010 and the value of balance work is Rs.8.40 crores only. However, on 01.03.2011, respondent No.3 issued tenders for execution of remaining 15% of the work, which was not completed by the petitioner and entered into an agreement with the third party on 13.05.2011 without issuing any notice to the petitioner.
4) The grievance of the petitioner is that the said action of the respondents calling for tenders for the balance 15% work, even without issuing notice to the petitioner and before completion of time 5 VS,J WP_8156_2013 granted to the petitioner up to 30.06.2011 vide Memo No.18021/Maj.Irri.VI/2010 dated 23.07.2010, is illegal. Further, respondent No.3 informed the petitioner vide letter No.SE/AVR HNSS-I/KNL/TS/8AEE2/ package 25 (works) 737, dated 25.08.2011 that Superintending Engineer, AVR HNSS Circle No.1, Kurnool has notified to the EPC agency for deletion of critical part of work by invoking clause P.S.60 (C) to APDSS. Further, some part of main canal work was awarded to the other agency on tender basis for completion of the work as a whole as per the Government instructions and also instructed the respondent No.3 to recover 5% of finished contract amount from the original agency of package No.25 i.e. the petitioner herein as per clause P.S.60 (C) of APDSS. Accordingly, the petitioner was directed to remit an amount of Rs.2,82,50,000/- in the shape of Demand Draft drawn in favour of pay and Accounts Officer, Kurnool towards recovery to be effected as per Clause P.S.60 (C) of APDSS. The grievance of the petitioner is that though he has completed more than 85% of the works, penalty of 5% on finished contract amount, instead of deducting the same on balance work, is illegal and arbitrary. Hence, the writ petition.
5) When the matter came up for admission on 21.03.2013, this Court passed the following interim order:
"There shall be interim direction not to enforce the impugned demand subject to the condition that the Bank guarantee furnished by the petitioner shall be kept alive."6
VS,J WP_8156_2013
6) Respondent No.3 filed counter while admitting the facts stated by the petitioner contended that the petitioner almost stopped the work after 16.08.2010 and did not resume the work citing the inordinate delay in making payment. Since the petitioner is awarded the work based on their financial merits, the hardship expressed by it in repayment of Bank loans, wages and salaries to workers and employers and also the suppliers of materials, is a lame cause put forth by it, for slow progress of work. It is further contended that after prolonged correspondence, respondent issued notice to the petitioner in the month of November, 2010 vide letter No.SE/AVRHNSS1/KNL/TS/AEE2/P25 (W), 981M dated 23.11.2010 to complete the works within the extended time i.e. before 30.06.2011. Further, respondent No.3 vide letter dated 13.01.2011 notified that the progress of work is far behind the schedule and action will be initiated as per agreement conditions for termination of work under clause 60 of APSS, if the work is not completed as per the schedule, but the petitioner could not resume the work for the reasons best known to it. For completion of the balance work as on 30.09.2009, for a value Rs.9.487 crores, Government has accorded 4th EOT to the EPC agency upto 30.06.2011, but the petitioner could complete only Rs.1.089 crores value of work as on 28.02.2011 i.e. in a period of 1 year 6 months. It is further contended that in spite of several reminders, the petitioner has not shown any progress. On the other hand, the petitioner represented that they encountered problems during execution of work and put forth claims for under water excavation, controlled blasting etc. Though the claims are not sustainable under EPC contract system, the respondents submitted them to the Government reporting actual conditions existing in the 7 VS,J WP_8156_2013 work, for taking a decision. The Government referred the issue to the High Power Committee, Technical Committee and State Level Standing Committee, who also opined that the claims are not sustainable, except under water excavation for Rs.9.93 Crores.
7) It is further contended that the Hon'ble Chief Minister during the review meeting held on 18.01.2011, instructed for taking action under Clause PS 60 (C) by deleting critical part of the above works from the existing agency and entrust them to a new agency, with current SSR in a competitive and transparent manner. Accordingly, an estimate was prepared with the SSR 2010-11 for the deleted portion of the work, which was estimated at Rs.41,01,40,000/- and respondent No.3 has taken action by inviting tenders in the month of March, 2011 and finalized them in May, 2011 after issuing notices to the petitioner in the months of 23.11.2010 and 13.01.2011. Further, respondent No.3 entrusted the work to a new agency with tender premium (-) 0.4739% less over IBM value, by following departmental procedure in a transparent manner, and later agreement was concluded by Superintending Engineer vide agreement No.3SE/HNSS-1/KNL/2011-12 dated 13.05.2011. It is further contended that vide letter No.SE/AVRHNSS- 1/KNL/TS/AEE2/PK.25 (works) 737M dated 25.08.2011 Superintending Engineer informed the petitioner about deletion of work referring to earlier letter dated 13.01.2011. The components of deleted portion of works from the agency and the value of work as certified by the Executive Engineer was also mentioned in the said letter. Further, respondent No.4 in his letter No.EE/HNSS2/KNL/DB/P25/123 dated 15.02.2013 directed the 8 VS,J WP_8156_2013 petitioner to remit an amount of Rs.2,82,50,000/- which is 5% of the contract value, which is legal and valid, and as such requested to dismiss the writ petition.
8) Learned counsel for the petitioner would contend that the petitioner has completed about 85.13% of work, which is worth Rs.48.10 crores, by the end of August, 2010 and the value of the balance work is only Rs.8.40 crores, but the respondents imposed penalty of 5% on finished contract value, which is illegal and arbitrary. Learned counsel for the petitioner furnished copy of the Memos No.11138/Proj.III/A1/2014 and No.10681/Proj.III/A1/2014 dated 01.07.2015 with regard to package Nos.14 and 31, which pertains to similar work undertaken by the petitioner, wherein the respondents imposed 5% Penalty on the balance work as per clause 60 C of APDSS for non completion of work. In view of the above, learned counsel for the petitioner requested this Court to direct the concerned to take similar view in the present case also.
9) Learned Assistant Government Pleader for Irrigation and Command Area Development admitted that the respondents imposed 5% penalty on the balance work in respect of Contract Package Nos.14 and 31 vide proceedings dated 01.07.2015.
10) Admittedly, in the present case, the petitioner entered into an agreement vide agreement No.SEH8EPC/2004-06 dated 26.02.2005 for package No.25, and the same has to be completed within 24 months from the date of the agreement i.e. before 25.02.2007 and thereafter the petitioner has completed work to a tune of Rs.48.10 crores, which would constitute 85.13%, but 9 VS,J WP_8156_2013 however, as the land owners were not paid any compensation amount after acquisition of the land, they have prevented the petitioner from proceeding with the excavation work. Further, respondent No.3 has also not taken any steps to handover the required land for excavation after doing needful to the land owners. Considering the said reasons, respondents, vide memo No.18021/Maj.Irri.VI/2010 dated 23.07.2010, have extended the time for completion of the work, up to 30.06.2011. Even before completion of said period, respondent No.3 issued a tender notice No.2/SE/2010-2011 dated 01.03.2011 for balance work of package No.25 on the ground of slow progress of work. Later, even without issuing any prior notice to the petitioner, respondents issued impugned proceedings dated 15.02.2012 deducting 5% finished contract value for non completion of work of package No.25 as per clause P.S.60 (C) of APDSS. However, as per Memos No.11138/Proj.III/A1/2014 and No.10681/Proj.III/A1/2014 dated 01.07.2015 with regard to package Nos.14 and 31, which pertains to similar work undertaken by the petitioner, the respondents imposed 5% Penalty on the balance work as per clause 60 C of APDSS for non completion of work instead of imposing 5% penalty on finished contract value. Taking different view by the respondents for package No.25 undertaken by the petitioner is discriminatory and arbitrary. Therefore, the impugned order imposing 5% penalty on finished contract value is liable to be set aside.
11) Accordingly, the writ petition is allowed setting the impugned proceedings No.SE/AVR HNSS-I/KNL/TS/ 8AEE2/package 25 (works)737, dated 25.08.2011 issued by respondent No.3 and the 10 VS,J WP_8156_2013 consequential impugned letter bearing No. EE/HNSS/2KNL/P25/123 dated 15.02.2012/ 15.03.2013 issued by respondent No.4 and the matter is remanded back to respondent No.3 for passing appropriate orders under similar lines as in Memo No.11138/Proj.III/A1/2014 pertaining to package No.14 and Memo No.10681/Proj.III/A1/2014 dated 01.07.2015 pertaining to package No.31. No costs.
12) Miscellaneous petitions pending, if any, in this Writ Petition shall stand closed in consequence.
________________________ JUSTICE V.SUJATHA 12.08.2025 Ksp