Punjab-Haryana High Court
Skylark Industries vs State Of Punjab And Others on 31 May, 2022
Author: Raj Mohan Singh
Bench: Raj Mohan Singh
CWP No.6702 of 2019(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No.6702 of 2019(O&M)
Reserved on 13.05.2022
Date of Decision-31.05.2022
Skylark Industries ... Petitioner
Versus
State of Punjab and others ... Respondents
CORAM:-HON'BLE MR. JUSTICE RAJ MOHAN SINGH
Present: Mr. Kanwaljit Singh, Sr. Advocate with
Mr. Ajay Pal Sandhu, Advocate
for the petitioner.
Mr. C.L. Pawar, Sr. DAG, Punjab
Mr. Amit Singh Sethi, Advocate
for respondent No.2.
***
RAJ MOHAN SINGH, J.
[1]. Petitioner is a proprietorship firm and has filed this writ petition for the issuance of an appropriate writ, especially in the nature of certiorari quashing the impugned order dated 24.12.2018 passed by respondent No.2 with a further direction to the respondents to release the due and admitted amount of payment along with interest and damages. [2]. A contract for operation and maintenance of 75 numbers construction of pump houses, D-tank, fencing of pump house area with barbed wire including supply, supplying and lowering of pump set, supplying and installation of control 1 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 2 panel and other accessories and commissioning of tubewells and supplying and laying of underground unlasticised PVC pipe lines complete in all respects in different blocks of Hoshiarpur and SAS Nagar Districts under 280 numbers tubewells NABARD scheme and their operation and maintenance for 7 years was allocated to the petitioner-firm vide agreement dated 04.12.2015. Similar contract for operation and maintenance of 37 numbers construction of pump house etc in Ropar, SBS Nagar, Gurdaspur and Pathankot Districts under 280 numbers tubewells NABARD scheme and their operation and maintenance for 7 years was allocated to the petitioner-firm vide agreement dated 21.12.2015. In this way, total work of operation and maintenance of 112 numbers tubewells along with components complete in all respects for 7 years was allocated to the petitioner-firm.
[3]. Clauses 8, 13, 15 to 24 and 31 to 36 of the agreements are reproduced hereasunder:-
"8. The payment for operation and maintenance would be released quarterly to the contractor after the operationalization of the tube well and starting of Abppashi (Irrigation) in the chak of the tube well and also issue of certificate by the concerned Divisional Engineer.
13. After completion of period of contract the scheme will be taken back in good running condition.
2 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 3
15. The Second Party/Contractor will appoint his own employees for operation and maintenance of these schemes for rendering satisfactory services. Required manpower as and when needed shall also be deployed by the contractor.
16. Expert personnel and skilled/semi-skilled/unskilled workmen with adequate qualification and experience having appropriate level of acumen is required for the job. Such personnel/workmen/employees are to be inducted by the contractor to carry out the job with entire satisfaction of corporation.
17. The contractor will be at liberty to appoint any number of employees for operation and maintenance of this scheme.
18. The contractor will ensure that for all that time, at least one person remains available at tube well site. The staff employed shall be got approved from the Engineer- in-Charge.
19. The contractor shall furnish information about the names and addresses of all the employees employed by him to the concerned Executive Engineer, on 1st of every month and immediately whenever there is change in his employees due to resignation, removal etc.
20. The contractor should ensure payment either equal or more than the Minimum Wages as notified from time to time for doing similar services as notified State or Centre Govt. In other words, minimum wages as per Minimum Wages Act, 1948 as revised to the skilled/unskilled workers should strictly be adhered to.
3 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 4
21. All other acts/rules/regulations, by-laws, orders, notifications etc. present or future applicable to the contractors from time to time for performing the aforesaid services shall also be applicable.
22. The contractor or his supervisor should visit the site at least once in a week or as and when required by the department for which no extra payment will be made as they should be readily available to the department.
23. Any act of indiscipline/misconduct/theft/pilferage on the part of any employee engaged by the contractor resulting in any loss to the department in kind or cash will be viewed seriously and the department will have the right to levy damages or fine and/or even terminate the contract forthwith.
24. It shall be binding on the contractor to ensure that the persons employed by him are clearly given to understand in writing that they will have no right or claim for absorption in department at any time on any grounds. They will not be in any manner servants of the department. Any liability, arising on this account shall be directly that of the contractor.
31. The contractor will provide the department a contact mobile number which will be available for 24 hours for attending any emergency work for the contracted installations.
32. The contractor shall furnish information about the names and addresses of all the employees employed by him to the concerned Executive Engineer, on 1st of every month and immediately whenever there is change in his employees due to resignation, removal etc. 4 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 5
33. The contractor will maintain a record of daily attendance of workers at each installation separately.
34. Log books at each installation will be kept as per the format of the corporation and as instructed by Engineer- in-Charge.
35. The contractor shall maintain record on log book showing machinery repair record, repair of pipe line etc. as per operation & maintenance manual of the department.
36. The contractor shall maintain a complaint register on every tubewell scheme, so that a record of complaint is available to the department."
[4]. Petitioner has pleaded that payments till 31.12.2016 were received by the petitioner from the respondents, however, payments w.e.f. 01.01.2017 till 30.06.2018 were not paid by the respondents despite submissions of bills by the petitioner. The work was duly entered in the measurement book after due verification and approval of the concerned engineering incharge of the respondents. Respondent No.2 has even written to respondent No.1 on 29.05.2018 for making arrangements of Rs.1558.04 lacs under the non-plan budget for the year 2018-19 for operation of tubewells, repair, maintenance, contingency and other expenses.
[5]. According to the learned Senior Counsel for the petitioner, the aforesaid letter was issued in the context of 5 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 6 releasing of requisite funds so as to enable respondent No.2 to make payment of outstanding amount to the contractors including the petitioner. Petitioner had to give up the work on account of non-payment of bills on 16.01.2019. Petitioner has been making the representations to the respondents to release the due and admitted payments. Since payments were not released despite performance certificate issued by the department and villagers, therefore, the petitioner had to approach the High Court by way of filing CWP No.21957 of 2018 with a prayer of issuance of direction to the respondents to release the due and admitted payments, which had gone upto about 6 crores along with interest and which had been duly verified by respondent No.2. The aforesaid writ petition was disposed of vide order dated 26.10.2018 by directing the respondents to decide the representations within a period of six weeks. It was also directed that if any amount is found due, the same would be released to the petitioner. [6]. Since no payment was released and unnecessary hurdles were created by the respondents, therefore, the petitioner had to give a notice under Section 67 of the Indian Contract Act and thereafter, handed over the charge on 16.01.2019 after submitting final bills upto 15.01.2019. A certificate was issued by the Divisional Engineer of having satisfactorily performed the works upto 14.12.2017. Gram 6 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 7 Panchayat, Gobindpura including shareholders, sarpanches and namberdars has also appreciated the work of the petitioner.
[7]. Respondent No.2 wrote letter dated 26.12.2018 to the Chief Secretary, Punjab Government, Irrigation Department on the subject regarding provisions of Rs.538.60 lacs in non-budget plans for repair of tubewells, operation and maintenance. It was submitted that the corporation is running approximately 1680 tubewells, out of which 111 tubewells were operated, repaired and maintained through outsourcing agency and remaining tubewells were being run by their own employees of corporation. For payment of dues of outsourcing agency i.e. petitioner, the High Court has passed the order dated 26.10.2018 in CWP No.21957 of 2018. Respondent No.2 further informed that keeping in view the order passed by the High Court, a speaking order was passed on 24.12.2018, according to which, payment of Rs.78.60 lacs for the period of 01.01.2017 to 30.06.2018 has to be made to the petitioner. Apart from this, Rs.100 lacs more payment for the period 01.07.2018 to 31.03.2019 has to be made to the outsourcing agency. Respondent No.2 has informed that Rs.360 lacs is required for the operation and maintenance of tubewells being run by the corporation on its own level for the year 2018-19 including previous liabilities. Accordingly, 7 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 8 corporation required Rs.538.60 lacs in total for the annual budget for the year 2018-19. It has also been shown that due to non-payment of dues to the petitioner, notice dated 21.12.2018 was issued by the petitioner for stoppage of operation and maintenance of tubewells from 15.01.2019. With this background, a request was made for provision of increasing the amount to the tune of Rs.538.60 lacs so that compliance of the order passed by the High Court can be made.
[8]. By referring to the aforesaid letter, learned Senior Counsel vehemently submitted that dues of the petitioner were duly acknowledged. According to the speaking order dated 24.12.2018, an amount of Rs.78.60 lacs was found due for the period 01.01.2017 to 30.06.2018 and Rs.100 lacs was calculated for the period 01.07.2018 to 31.03.2019. In the impugned speaking order, it has been mentioned that for the purpose of operation of tubewells, a provision was made in the technical estimate for deployment of two operators and one chowikdar for each tubewell as per approval rates of Labour Department, Government of Punjab plus escalation @ 7% per year for 7 years. The provision was also made in technical estimate for payment of EPF @ 13.61% and ESI @ 4.75%. A contractor profit of 10% was also added on salary, EPF and ESI. The intention of the employer was very clear 8 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 9 that for the purpose of operation, it wanted to deploy two operators and one chowkidar for each tubewell. The position was also brought to the notice of Board of Directors of the Corporation in the Agenda Item No.23.2 of its meeting held on 25.02.2014 and Agenda Item No.30.07 of its 30th meeting held on 10.11.2015. In case of 75 tubewells (agreement dated 04.12.2015), the total tender amount was Rs.38,53,22,592.81 against departmental cost of Rs.37,77,77,927.30. Similarly, in case of 37 tubewells (agreement dated 21.12.2015), the total tender amount was Rs.19,66,59,122/- against departmental cost of Rs.18,04,45,568/-. Specific provisions were made in the agreements in respect of deployment of staff for operation of tubewells. The respondent-corporation has noticed in the impugned order that the petitioner had deployed only 1 operator/staff per tubewell and there was no clarity in the agreement regarding deployment of 2 tubewell operators and 1 chowkidar for each tubewell for operation of tubewells and it was only mentioned in Clause 18 that the contractor will insure that for all the time, at least one person remains available at tubewell site. According to the respondent- corporation, if Clause 18 is read in conjunction with other provisions of agreements and labour laws, it would show that deployment of 3 employees for each tubewell was required to be made by the petitioner for compliance of provisions of Clause 18 of the agreement.
9 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 10 [9]. With this background, the respondent-corporation ultimately came to the conclusion that the petitioner is not entitled for full payment of operational charges at the approval rate in view of non-deployment of requisite staff. Respondent- corporation has worked out entitlement of the petitioner as per staff employed i.e. 1 operator instead of requisite 3 persons for efficient operation and other requirements as pointed out in the impugned order.
[10]. In para Nos.17 and 18 of the impugned order, the respondent-corporation has worked out the payment payable to the petitioner for operation and maintenance of tubewells for the period 01.01.2017 to 30.06.2018 in the following manner:-
17.
Sr. Name of SE Amount Amount Total amount No. payable for payable for payable operation maintenance
1. SE, Hoshiarpur, 96,29,609.00 10,98,895.00 1,07,28,504.00 Tubewell Circle, Hoshiarpur (61 T/well) 2 SE, Chandigarh 81,68,758.00 8,43,930.00 90,12,688.00 Tubewell Circle, Chandigarh (50 T/well) 10 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 11
18.
Sr. Name of SE Amount recoverable
No.
1. SE, Hoshiarpur, Tubewell Cirlce, 33,73,248.00
Hoshiarpur (61 T/well)
2. SE, Chandigarh Tubewell Circle, 85,08,413.00
Chandigarh (50 T/well)
[11]. In para No.18, it has been noticed that
Superintending Engineers of both the places i.e. Hoshiarpur Tubewell Circle and Chandigarh Tubewell Circle have reported that the payment made to the petitioner for operation of tubewells upto 31.12.2016 was excessive and was based on deployment of 3 tubewell operators, whereas contractor/petitioner had deployed only 1 tubewell operator, therefore, an amount of Rs.33,73,248.00 in respect of Hoshiarpur Tubewell Circle and Rs.85,08,413.00 in respect of Chandigarh Tubewell Circle is liable to be recovered being successfully paid. In this way, total payable amount for operation and maintenance of tubewells for the period 01.01.2017 to 30.06.2018 worked out to be Rs.10728504- 3373248+9012688-8508413=Rs.78,59,531/-(Rupees Seventy Eight Lacs, Fifty Nine Thousands, Five Hundred Thirty One only). Ultimately, the corporation in view of lack of clarity in the agreement regarding the requirements of deployment of staff for operation of tubewell thought it appropriate to give opportunity to the petitioner to give a fresh representation in 11 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 12 case, its actual expenses are more on staff for operation of tubewells along with proof of expenses on staff deployed as per lists already furnished by the contractor including expenses of salary, EPF and ESI. It has also been observed that in case, its expenses are proved to be more than the payment as shown in para Nos.17 and 18 of the impugned order, the extra payment can be allowed as per expenses towards operational staff by adding 10% contractor profit subject to maximum provided in the agreement. However, no claim towards interest shall be considered. [12]. Perusal of the impugned order would show that the amount has been curtailed due to deployment of one tubewell operator instead of staff of 3. Respondent-corporation has given an opportunity to the petitioner to file fresh representation.
[13]. After passing of the aforesaid speaking order, another speaking order was passed on 16.10.2019 in favour of the petitioner for payment of further sum of Rs.95.10 lacs for the period 01.07.2018 to 15.01.2019. In this way, total amount payable to the petitioner was assessed to the tune of Rs.1,73,69,000/- (78.59+95.10=173.69) i.e. Rupees One Crore, Seventy Three Lacs, Sixty Nine Thousand only. [14]. Respondent-corporation has also pleaded that an amount of Rs.1,73,69,000/- has already been paid to the 12 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 13 petitioner after due clarity and pre-audit of the bills during pendency of the present writ petition. Vigilance inquiry has also been initiated, which is statedly pending. [15]. According to the rejoinder to the replication filed by respondent No.2 on 10.03.2022, different reports Annexures R-2/1 to R-2/8 have been attached, showing the deductions made by the respondent-corporation on account of non- provision of adequate staff. Reference has been made to different clauses of the agreements to justify the deductions. [16]. In the interim report dated 11.01.2021 submitted by Four-Members-Committee, following recommendations have been made on technical aspects to look into by the competent authority on the representations given by the petitioner on 26.10.2020 and 03.11.2020:-
"1) Two speaking orders has already passed by MD PWRMDC letter no.2003/337-A dated 24-12-2018 and letter no.868 dated 16.10.2019. Above orders were challenged in the Hon'ble Pb. and Haryana High Court in CWP 6702 of 2019 which was listed for hearing on 7/1/2019 and next date of hearing is 6/4/2021.
2) PWRMDC has already made full and final payment Rs.1,73,69,000 vide voucher No.CHD D00911200001013 dated 9/1/2020.
3) Skylark industries has breached the contract and left the job of maintenance on 15/1/2019.
13 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 14 Keeping in view the above mentioned technical and legal aspect, the committee is of view that:
a) The contract has been closed/breached of 15/1/2019 by Skylark, now performance securities may be released after approval from competent authorities.
b) There was a significant delay in the payment on the part PWRMDC to procedural delay at various offices/levels to the Skylark as there was a provision to release payment quarterly in the contract bid document.
c) Hoshiyarpur circle made payment for 6 days in a week and CTC circle made 7 days payment in running and maintenance period. To bring the parity in the circles, it needs to be look into as it is a fact as per record.
d) Since two MD PWRMDC has given their speaking orders, PWRMDC letter no.2003/337-A dated 24-12-
2018 and letter no. 868 dated 16.10.2019, now, junior officers in the committee can not comment on the speaking orders passed by respective managing directors.
e) Last, the matter is sub-judice in the Hon'ble Court and listed for hearing on 6/4/21 in Honourable High Court. The committee can not do further probing in the case without any further court orders.
In this case, legal option may be sought and decision may be taken by appropriate authority at higher level regarding above mentioned points. Interim report is submitted for approval and further orders, please.
Sd/-11.1.2021 Sd/-11.1.2021
Convene-Cum-Divisional Engineer Chairman-Cum-Superintending
Operation & Maintenance Division Engineer Chandigarh Tubewell
PWRMDC Hoshiarpur Circle, PWRMDC Mohali.
14 of 18
::: Downloaded on - 02-06-2022 04:40:36 :::
CWP No.6702 of 2019(O&M) 15
Sd/- Sd/-
Superintending Engineer (Member) Financial Advisor (Member)
Hoshiarpur Tubewell Circle, PWRMDC, Mohali
PWRMDC, Hoshiarpur
Enst. No. 50-55/25G Dated: 11.01.2021"
In view of pendency of the present writ petition, it has been shown by the Committee that the Committee cannot do further probing.
[17]. Perusal of the report would show that there is a serious dispute with regard to clarity arising out of different clauses of the agreements.
[18]. Learned Senior Counsel for the petitioner pleaded that one person was deputed during 24 hours as per requirement of agreements and there was no complaint whatsoever received from any quarter. In view of no complaint or objection at any point of time by the respondents, the work cannot be held to be not satisfactorily performed by the petitioner, thereby attracting deductions in computation of the amount. Learned Senior Counsel further submitted that the data forming subject matter of para Nos.17 and 18 of the impugned order dated 24.12.2018 is conspicuously silent about the manner in which the figure has been arrived at. [19]. On the other hand, learned counsel for respondent No.2 empathetically stressed that due to lack of clarity in the agreements regarding requirements of deployment of staff for operation of tubewells, a further opportunity has been given to 15 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 16 the petitioner to establish its claim by way of fresh representation in respect of actual expenses incurred by it for the operation of tubewells along with proof of expenses on the total staff deployed as per lists submitted by the petitioner towards salary, EPF and ESI.
[20]. In view of nature of controversy involved, I deem it appropriate to negate the objection regarding maintainability of the present writ petition on the strength of ratio laid down in M/s Hindustan Sugar Mills Vs. State of Rajasthan and others, 1981 AIR (SC) 1681, Sanjeev Kumar Dwivedi Vs. State of Bihar and others, 2006(7) RCR (Civil) 765, ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others, 2004(3) SCC 553, CWP No.9744 of 2001 titled Vijay Kumar and another Vs. Punjab Financial Corporation and another decided on 17.01.2002, M/s Janta Land Promoters Limited Vs. State of Punjab and others, 2010(20) RCR (Civil) 198, Civil Appeal No.6382 of 2012 titled M/s Real Estate Agencies Vs. Govt. of Goa and others decided on 10.09.2012 and Civil Appeal Nos.3956-3957 of 2017 titled Vice Chairman & Managing Director, City and Industrial Development Corporation of Maharashtra Ltd. and another Vs. Shishir Realty Private Limited and others decided on 29.11.2021.
16 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 17 [21]. Evidently, an amount of Rs.1,73,69,000/- has been paid to the petitioner on 09.01.2020. In view of liberty given to the petitioner to establish the factum of total expenses incurred by it towards deployment of working staff for operation of tubewells, this Court also finds that the parties may also establish on record as to whether any complaint/objection was ever raised in respect of inadequacy of deployment of staff by the petitioner towards operation of tubewells at any point of time. Since the clauses of agreements are somehow not clear, therefore, the provision made in the technical estimate for deployment of 2 operators and 1 chowikdar for each tubewell has to be revisited by respondent No.2 by giving adequate opportunity of hearing to the petitioner.
[22]. Since an amount of Rs.1,73,69,000/- has already been paid by the petitioner, therefore, it would be just and appropriate to dispose of the present writ petition with a direction to respondent No.2 to revisit the issue in entirety after giving due opportunity of hearing to the petitioner to establish actual expenses incurred by it towards operation of tubewells. Petitioner would be at liberty to adduce any such material to prove that the amount incurred by it was in excess of amount paid to the petitioner after making deductions. Since right of filing fresh representation has already been 17 of 18 ::: Downloaded on - 02-06-2022 04:40:36 ::: CWP No.6702 of 2019(O&M) 18 given to the petitioner in the impugned order dated 24.12.2018, therefore, I deem it appropriate to once again reiterate the aforesaid aspect, thereby giving fresh opportunity to the petitioner to establish its claim by filing fresh detailed representation before respondent No.2. On receipt of such representation, respondent No.2 shall proceed to consider the controversy in accordance with law, preferably within a period of two months from the date of receipt of certified copy of this order.
[23]. Disposed of.
(RAJ MOHAN SINGH)
JUDGE
31.05.2022
Prince
Whether reasoned/speaking Yes/No
Whether reportable Yes/No
18 of 18
::: Downloaded on - 02-06-2022 04:40:36 :::