Madras High Court
M/S. Urc Construction (P) Ltd vs The Chief Engineer on 4 October, 2021
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
W.P.No.9117 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 04.10.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.No. of 9117 of 2015
and
M.P.No.1 of 2015
M/s. URC Construction (P) Ltd.,
having its registered office at:
No.119, Power House Road,
Erode - 638 001. ... Petitioner
Vs
1.The Chief Engineer,(Construction)
Construction Organization,
Southern Railway,
Egmore, Chennai - 600 008.
2.The Administrative Officer,(Construction)
Southern Railway,
Egmore, Chennai - 600 008.
3.The Deputy Chief Engineer,
Gauge conversion II,
Southern Railway,
Tiruchirapalli. ...Respondents
PRAYER : Writ Petition filed Under Article 226 of the Constitution of
India, praying to Certiorarified Mandamus to call for the entire records of
the second respondent in No.W496/MTK/64/IICN(7709) dated 31.12.2014 /
1/8
https://www.mhc.tn.gov.in/judis/
W.P.No.9117 of 2015
06.01.2014 and which culminated in the termination notice issued by the
third respondent in No.W496/MTK/64/IICN(7709) dated 14.03.2015 and
quash the same as illegal, arbitrary and unsustainable and further direct the
respondents to return the earnest money deposit (EMD) of Rs.5,23,060/-
made by the petitioner in FDR No.33977602580 dated 19.07.2014 issued by
the State Bank of India, URC Nagar, Erode - 638 012.
For Petitioner : Mr.V.P.Sengottuvel
For Mr.U.Baranidharan
For Respondents : Mr.P.T.Ramkumar
Standing Counsel
ORDER
The order of the 2nd respondent dated 31.12.2014 and the consequential order of termination notice dated 14.03.2015 are under challenge in the present writ petition.
2.The petitioner company is a pioneer Engineering Contractors/ Infrastructure Developers in South India. A tender notice was issued by the 1st respondent on 13.06.2014 for the proposed Gauge conversion of work between Pattukottai-Karaikudi Section, proposed construction of Station building, platforms, approach road, protective works, passenger amenities, watering arrangements and yard drainage etc., at Periyakkottai Crossing 2/8 https://www.mhc.tn.gov.in/judis/ W.P.No.9117 of 2015 Station. The tender processes were completed and admittedly the petitioner was the successful tenderer. Contract value for various items of works are described as under
Annexure-A - Rs. 2,18,42,634.84.
Annexure-B - Rs. 6,93,28,517.56.
Annexure-C - Rs. 60,41,534.20.
Annexure-D - Rs. 47,54,394.64.
Total - Rs.10,19,67,081.24.
3.The grievances of the writ petitioner is that among the above stated works, Annexure 'B' relating to earth work for formation of bank for rail alignment is the major work with almost 70% of the Contract value.
However, the said Annexure 'B' has been deleted from the scope of the work by the authorities and even during negotiation between the parties, the railway authorities have not considered this aspect.
4.The detailed facts became unnecessary, in view of the fact that the tender process has not been disputed and the petitioner was admittedly, the successful tenderer and during negotiation also the petitioner has clarified that all the works must be granted to him based on the tender notification.
5.In the event of not conforming of the works as per the tender 3/8 https://www.mhc.tn.gov.in/judis/ W.P.No.9117 of 2015 notification, the petitioner in his letter had categorically stated that he would not be in a position to take up the work as the same would cause heavy loss to the petitioner company.
6.The authorities in the proceedings dated 31.12.2014, has stated that they have accepted the works only in respect of Annexures A, C and D and specifically stated that Annexure B has been deleted from the scope of the work. The petitioner company in their letter dated 12.01.2015, categorically stated as follows:
“In spite of our invariable requests during the negotiation meetings, the contract value of work has been reduced about 70% by deleting the entire 'Annexure-B' and just 30% of value is awarded to us. Since we are not interested to carry out the works considering the drastic reduction of contract value, we submit your good self that we hereby not accept the above LOA and request to kindly return the EMD that we have already submitted with tender vide FDR No.33977602580 dt. 19.07.2014 for Rs.5,23,060 of SBI, URC Nagar, Erode at the earliest.”
7.In the impugned termination notice dated 14.03.2015, the respondents have not even considered the objections raised by the petitioner 4/8 https://www.mhc.tn.gov.in/judis/ W.P.No.9117 of 2015 in respect of the deletion of Annexure B work. Contrarily, they have taken an unilateral decision and issued the termination notice. While doing so, the authorities are bound to return the EMD amount to the petitioners. It is not the petitioner who is responsible for violation of the terms and conditions of the contract. In view of the deletion of Annexure B work, the petitioner would not be able to carry on the works as per his project details in the tender process. The reduction of work is done by the authorities unilaterally and without providing any opportunity to the writ petitioner.
8.Even in such cases, where there is a proposal to reduce the work, during the negotiation an opportunity of hearing and considering the grievances of the contractors are mandatory. Thus, the respondents have violated the principles of natural justice, depriving the petitioner / contractor from carrying out the contract work as per the tender terms and conditions.
9.This being the factum, the case on hand is a very clear case where the authorities have committed certain infirmities in dealing with the petitioner / contractor, more specifically, by deleting a part of the work, 5/8 https://www.mhc.tn.gov.in/judis/ W.P.No.9117 of 2015 without the consent and without affording an opportunity to the petitioner.
10.Thus, the petitioner is entitled for the relief sought for. Accordingly, the respondents are directed to return the full EMD amount of Rs.5,23,060/- along with simple interest at the rate of 6% per annum, from the date of deposit, till the date of realisation of the amount. The respondents are directed to settle the said amount in favour of the writ petitioner within a period of eight weeks from the date of receipt of a copy of this order.
11.With this direction, the writ petition stands allowed. No Costs. Consequently, the connected Miscellaneous Petition is closed.
04.10.2021 Index : Yes/No Internet : Yes/No Speaking Order/Non-Speaking Order ars/mka To 6/8 https://www.mhc.tn.gov.in/judis/ W.P.No.9117 of 2015
1.The Chief Engineer,(Construction) Construction Organization, Southern Railway, Egmore, Chennai - 600 008.
2.The Administrative Officer,(Construction) Southern Railway, Egmore, Chennai - 600 008.
3.The Deputy Chief Engineer, Gauge conversion II, Southern Railway, Tiruchirapalli.
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