Calcutta High Court
Consulting Engineering Services ... vs Government Of West Bengal on 22 November, 2013
Author: I.P.Mukerji
Bench: I. P. Mukerji
ORDER SHEET
T No.291 of 2013
TA No.116 of 2013
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
CONSULTING ENGINEERING SERVICES (INDIA) PVT. LTD.
Versus
GOVERNMENT OF WEST BENGAL, IRRIGATION & WATERWAYS DIRECTORATE
BEFORE:
The Hon'ble JUSTICE I. P. MUKERJI
Date : 22nd November, 2013.
Appearance:
Mr. Surajit Nath Mitra, Sr. Advocate Mr. Arindam Mukherjee, Advocate Mr. D.K.Jain, Advocate for the plaintiff/petitioner Mr. Ashoke Kumar Banerjee, Sr. Advocate & Govt. Pleader Mr. Sakya Sen, Advocate for the State of West Bengal The Court: After the storm 'Aila', the West Bengal government undertook the task of embankment remodelling, restructuring, strengthening and so on, in the Sunderbans, North and South 24 Parganas. Initially it proposed to do so along a stretch of 834 KMs. The project would cost Rs.5,800 crores. It was divided into stages. Work was also divided amongst contractors in "packages".
After August, 2010, the government thought it feasible, to restrict the work to 122 KMs only at a cost of Rs.685 crores. It was divided into "seven packages".
The plaintiff, it was said, was appointed the consultant and supervisor over the entire work. According to Mr. Mitra, learned Senior Advocate, appearing for the plaintiff, the government had entered into a contract with his client, separate from those with the seven contractors who were entrusted with the work of executing the work relating to those seven packages. 2
This was of course denied by Mr. Ashoke Kumar Banerjee, learned Government Pleader.
The plaintiff was advanced a sum of Rs.7.5 crores as mobilisation advance by the government. This was secured by way of a counter guarantee by the plaintiff, by a bank guarantee given by the Central Bank of India to the government.
The work could not be proceeded with by the seven contractors, primarily for the reason that the government could not make the land available to them. At least this is what prima facie appears from the records which are annexed to the petition. The status report of the work between April 2010 and June 2012 would show insignificant progress. The status report for the subsequent period upto 30th June, 2013, would also show the same, for the above reason.
The records, prima facie, show that the plaintiff had no fault in the work not commencing nor in the discontinuation of the work.
This is because they were Supervisors. Hence, prima facie the submission of Mr. Mitra, that the performance of his client did not arise, unless the contractors proceeded with the work, appears to be correct. It was submitted on behalf of the plaintiff that they had expended more than Rs.8.5 crores towards performance of their part of the contract.
It was submitted by Mr. Mitra that the contract expired by efflux of time, i.e., on 31st March, 2013. Thereafter, it was extended by the State till 31st July, 2013.
At no point of time did the State attempt to terminate the contract against the plaintiff or any other contracting parties.
There was not even a notice to show cause against these persons as to why the contract should not be terminated, which is usually done in government contracts, during the time period of the contract.
On the other hand, it was contended by the learned Government Pleader that the bank guarantee was an unconditional one and that this Court under the law had no power to stop its invocation.3
As I have said before, the government has not even issued a show-cause notice to the plaintiff nor to any other contractors, threatening to terminate the contract.
The government has not even taken any step for measurement or ascertainment of the work done by the plaintiff.
Prima facie, I accept the submission made on behalf of the plaintiff that a significant sum of money was expended by them for performing their obligations under the contract.
It is true that the plaintiff had taken Rs.7.5 crores from the government in 2010 as mobilization advance. But they have also secured the said amount with the Government by furnishing a bank guarantee.
Furthermore, by their letter dated 26th July, 2013, the government represented to the plaintiff that they take steps for extension of the bank guarantee. Not a single fault was attributed to the plaintiff. In fact, the government sought time to complete the measurement work and to check the contractors' bills and so on.
Thereafter, invoking the bank guarantee by their letter dated 14th November, 2013, is an act which the Court cannot appreciate, at least at this stage. The government cannot act contrary to the representations made by them expressly or impliedly not to invoke the bank guarantee. I find such assurance in their letter dated 26th July, 2013.
Moreover, the above facts suggest that there is some special equity in favour of the plaintiff and that the bank guarantee should not be invoked, at this stage.
This is conditional upon the plaintiff keeping the bank guarantee renewed. It was submitted by Mr. Mitra, that the bank guarantee was expiring on 30th November, 2013.
The plaintiff should suitably renew the bank guarantee and inform the Advocate-on-Record for the State of West Bengal accordingly. They should continue to renew the bank guarantee upon information to the said Advocate-on- Record at least ten days before its expiry. In default, the State would have the 4 liberty to encash the same. As far as the present bank guarantee is concerned, it should be renewed immediately by the plaintiff and notice of such renewal should be given to the Advocate-on-Record for the State by 27th November, 2013 failing which the State will be at liberty to encash the same. Subject to fulfilment of the above conditions, order in terms of prayer (b) and (c) of the Notice of Motion till disposal of this application or until further orders of a legal forum.
Affidavit-in-opposition be filed by 9th December, 2013. List this application on 24th December, 2013 under the heading "Adjourned Motion". Affidavit in Reply may be filed in the meantime.
All parties including the Central Bank of India concerned to act on a signed photocopy of this order upon the usual undertakings.
(I.P.MUKERJI, J.) G/dg2/sg2