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Madhya Pradesh High Court · body

2002 DIGILAW 958 (MP)

UMA SHANKAR SARASWAT v. STATE OF M. P.

2002-10-11

RAJENDRA MENON

body2002
ORDER Rajendra Menon, J. The petitioner by the present petition has challenged the order dated 15-7-1999 Annexure P-22 by which invoking the provisions of Clause 43 of the Agreement, the State has rescinded from the agreement and further directed for execution of the remaining work by another Contractor and recovery of the expenses incurred from the petitioner. The respondents issued a notice inviting tender for the purpose of executing the work of painting and rubber sealing for radial gates of Mohani Pick up Weir Dam Narwar. The petitioner submitted his tender for the same and which was accepted. Annexure P-2 is the tender and the terms and conditions for execution of the work are contained in the said document. Initially, the time of completing the work was upto 16-5-1998. Conditions for execution of the work are contained in Annexure A to the said document wherein detailed specification for painting replacement of rubber seals have been provided. Various conditions have been stipulated in the said detailed specification. Amongst others it was stipulated in the conditions that:- (i) The analysis and technical specifications in respect of paints properties in paint composition and performance, requirement of the paints shall be submitted by the Contractor for examination and approval. For item Sl. 2 and 3 of 'G' Schedule, specific I.S. Code and brand should be mentioned. (ii) The painting (primer and finish coats) shall be done by brush or by contentional airless spray as recommended by the manufacturer of the paints-materials. The spray application is performed so as to achieve the uniform finish of the paintain to all the surface of gates including the interior of the structure. For the cleaning of brush/spray equipment only recommended solvents/thinner are to be used to maintain the quality of coating. (iii) A by warning of the paint shall be performed by means of hot water bath, paint shall not be applied when the temperature of metal or of surrounding at is below 45 degree C. (iv) Surface shall not be coated in bad weather such as rain, moist, for sterms or high humidity (more than 80%). Apart from the aforesaid various other conditions have been stipulated. According to the petitioner, the aforesaid conditions reproduced were some of the main conditions which are relevant in the present case. Apart from the aforesaid various other conditions have been stipulated. According to the petitioner, the aforesaid conditions reproduced were some of the main conditions which are relevant in the present case. After the tender was accepted the agreement was entered into and work order was issued to the petitioner vide Annexure P-5 dated 27-5-1997. On 29-5-1997 vide Annexure P-6 the petitioner contends that he had submitted certain samples and literatures and other material for approval of the same they were submitted on 29-5-1997 and 5-6-1997 vide Annexure P-6 and P-7 respectively. Thereafter, on 14-5-1997 vide Annexure P-8 request was made for approval of the paints so that work can be taken up. It is the case of the petitioner that vide Annexure P-9 dated 16-7-1997 the Executive Engineer had directed the S.D.O. to take certain actions in the matter, literature and other papers were also enclosed. Test report of the material were also submitted. Similarly, letters were issued vide Annexure P-10 on 20-9-1997 Annexure P-12 the letter issued by the Department indicating that the letter dated 2-7-1997 Annexure P-10 has not been received in the Office of the S.D.O. Upto 4-11-1997 when no approval was received the petitioner submitted Annexure P-13 reminder seeking approval so that work could commence. The Department wrote to the petitioner vide Annexure P-14 on 19-11-1997 asking for making various queries, these were promptly reply by the petitioner, thereafter, vide Annexure P-16 dated 3-4-1993 approval of paint material for upstream side was only granted. This, according to the petitioner was only partial approval as approval for downstream side was not received, because of the delay committed by the Department in not granting approval, work could not progress as per requirement. The petitioner prayed for extension of time vide letter dated 12-5-1998 Annexure P-18. Thereafter vide Annexure P-19 dated 20-5-1998 prayer was made for releasing payment which remained unpaid since March 1998. Vide Annexure P-20 dated 27-5-1998 notice was issued to the petitioner proposing to take action under Clause 4.3.3 of the Agreement. The petitioner submitted reply vide Annexure P-21 but without considering the same, by the impugned order Annexure P-22 dated 15-7-1998, the agreement has been rescinded and the action taken. It is the case of the petitioner that extension was granted to the petitioner upto 31-10-1998 and that before the said date, the impugned order has been passed rescinded the Agreement. The petitioner submitted reply vide Annexure P-21 but without considering the same, by the impugned order Annexure P-22 dated 15-7-1998, the agreement has been rescinded and the action taken. It is the case of the petitioner that extension was granted to the petitioner upto 31-10-1998 and that before the said date, the impugned order has been passed rescinded the Agreement. Shri A.M. Naik, learned Sr. Counsel took me through various documents available on record to emphasise the fact that the petitioner was willing to perform his part of the Contract but for want of approval and delay in making payment, the work could not be completed. It was put-forth by him that 57% of the work has been completed, it is argued by Shri Naik that without approval of the samples, work could not be completed. Not only approval was not granted but when comments were asked for from the S.D.O. who is competent person in the matter vide Annexure P-14 dated 11-9-1998, the S.D.O. emphasised and observed that the petitioner is not at fault. Referring to the aforesaid document Annexure P-24 it is submitted by Shri Naik that the contention of the petitioner have been accepted and from the aforesaid documents it is clear that the petitioner has not committed any default, he is not responsible for delay in execution of the work and the breach of contract, if any, is on the part of the respondent State and not on the petitioner. That being so, it is submitted by him that arbitrarily, in an unreasonable manner, the impugned order has been passed. According to the learned counsel for the petitioner, the Executive Engineer concerned has acted mala fidely in the matter, he did not accord approval in time, failed to make payment of the work executed and without considering the facts and circumstances of the case and without taking note of the fact that extension was granted on 30-10-1998 rescinded the Contract on 15-7-1998, this according to the petitioner is arbitrary, illegal and unsustainable. Referring to the various judgments, it is submitted by learned Sr. Counsel that the action in the present case is clearly vitiated and therefore the petitioner is entitled to the relief claimed by him. Relying on the following Judgments:- Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, , Prestress India Corporation Vs. Referring to the various judgments, it is submitted by learned Sr. Counsel that the action in the present case is clearly vitiated and therefore the petitioner is entitled to the relief claimed by him. Relying on the following Judgments:- Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, , Prestress India Corporation Vs. U.P. State Electricity Board and Others, , Harminder Singh Arora Vs. Union of India (UOI) and Others, and State of Karnataka vs. Shree Rameshwara Rice Mills, Thirthahalli, AIR 1987 SC 1359 , it is contended on behalf of the petitioner that the State has to act in a just, fair and reasonable manner and if it is found that even in matters pertains to Contract the State has acted arbitrarily, unreasonably and in total violation and disregard to the provisions of the Contract, this court can interfere in the matter. It is also submitted by Shri Naik that there is no disputed question of fact as the factual aspect of the matter is admitted on the basis of records and therefore the petition under Articles 226/227 is maintainable and the relief claimed for by the petitioner can be granted. Respondents have filed a detailed return. A preliminary objection has been raised in the return and it has been indicated that as per the provisions of Clause 4.3.29.1 of the Agreement, whenever any dispute arises in connection with the execution of the Contract, a claim has to be raised before the Superintendent Engineer and thereafter in case the matter is not settled, a provision for arbitration is available in the Contract. Referring to the provisions of the Agreement, it is contended that in the present case the dispute has to be adjudicated by the M.P. State Arbitration Tribunal in accordance with the provisions of M.P. Madhyastham Adhikaran Adhiniyam 1982 and therefore the petition is not maintainable. That apart, it has been averred that for adjudication of the dispute in question and for granting relief to the petitioner, this Court has to adjudicate the factual aspect of the matter and as disputed facts are involved, writ petition is not the appropriate remedy. Referring to the various judgments it is argued by Shri J.D. Suryavanshi, learned counsel appearing for the respondent State that the petitioner has to resort to the remedy of getting the dispute settled by the Arbitration Tribunal. Referring to the various judgments it is argued by Shri J.D. Suryavanshi, learned counsel appearing for the respondent State that the petitioner has to resort to the remedy of getting the dispute settled by the Arbitration Tribunal. He has placed reliance on State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., ; Visakhapatnam Port Trust and Another Vs. M/s. Ram Bahadur Thakur Pvt. Ltd., etc., Visakhapatnam Port Trust and Another vs. Ram Bahadur Thakur Pvt. Ltd. and Others, 2001(8) ST 334, State of Bihar and Others vs. Jain Plastics and Chemicals Ltd. Referring to section 20 of the M.P. Madhyastham Adhikaran Adhiniyam 1982, it is submitted by him that the petition is not maintainable. It is his case that this is a dispute within the meaning of section 2(d) of the M.P. Madhyastham Adhikaran Adhiniyam 1982 and the petitioner have a remedy of arbitration and therefore the petition is not maintainable, Shri A.M. Naik, Sr. Counsel vehemently contended that this is not a dispute within the meaning of section 2(d) as the amount in question is not ascertained amount and if the amount is not ascertained, it is not a dispute within the meaning of the aforesaid Clause. That apart, it is submitted by him that there is no dispute with regard to the factual aspect of the matter. It is the S.D.O. who is the competent person to deal with the matter and in his report Annexure P-24, the S.D.O. has indicated that the Contractor has not committed any fault, approval has not been granted till the date of issuance of Annexure P-24 and that being so, the matter can be decided in this Court in a petition under Article 226/227 of the Constitution on the basis of the documents and other material which are available on record. It is further submitted by him that the appeal submitted to the Appellate Authority in accordance with the terms and conditions of the Agreement vide Annexure P-27 dated 22-2-1998 has been rejected by a non speaking order on 9-3-1999 vide Annexure P-28. It is submitted that the Appellate Authority has not considered the averments made in the appeal and without application of mind and without due consideration of the grounds raised in the appeal, the order Annexure P-28 has been passed rejecting the appeal. I have heard learned counsel for the parties and have also perused the record. It is submitted that the Appellate Authority has not considered the averments made in the appeal and without application of mind and without due consideration of the grounds raised in the appeal, the order Annexure P-28 has been passed rejecting the appeal. I have heard learned counsel for the parties and have also perused the record. The basic question which requires determination in the present case is as to whether this Court can adjudicate the dispute between the parties in the light of the specific provisions as contained in Clause 4.3.29.1 of the Agreement in question. A perusal of the aforesaid Clause indicates that in connection with any dispute with regard to the specification, design, drawing instructions and all questions in respect of the Agreement including the quality, workmanship, the material used and other question, all claims, rights and matters arising out of the Contract shall be decided by the Superintendent Engineer and if any party is aggrieved by the decision of the Superintendent Engineer, he may refer the matter for arbitration. Thereafter the matter has to be adjudicated by the Arbitrator in the arbitration proceedings. From the aforesaid, it is clear that the agreement in question contemplates settlement of dispute through arbitration, that being so, it is a case where a remedy of arbitration is provided in the agreement. It is not the case of the petitioner that any statutory rule or regulation have been violated. The contention of the petitioner is that he has not violated any of the terms and conditions of the Agreement, they are not at fault for non compliance of the work, it is the Department which delayed grant of approval and in fact approval was not granted till the impugned order was passed on 15-7-1998. According to the petitioner, there is no dispute require enquiry or investigation, on the contrary the records itself demonstrates that the petitioner has not committed any breach and therefore the action of the respondents being arbitrary and illegal, relief can be granted on the basis of the material on record. However, the respondents have contended that the petitioner is responsible for the delay. It is their case that the petitioner refused to commence the work and on the excuse of non grant of approval or because of low temperature or commencement of rains he has delayed the work. However, the respondents have contended that the petitioner is responsible for the delay. It is their case that the petitioner refused to commence the work and on the excuse of non grant of approval or because of low temperature or commencement of rains he has delayed the work. In the return it has been averred that the temperature was not so low nor had rain started. It is also submitted that the petitioner did not submitted literature, no literature was received in the Division and therefore there is no question of granting approval on the literature. In this regard specific averments have been made in para 5.f and 5.g of the return. That apart, a perusal of the return indicates - that the respondents have denied each and every fact and it is their case that the petitioner has not executed the work in accordance with the Contract. Various averments have been made in para 5.(K), 5.(L) and even the fact of submitting the literature in the division has been denied. It has been averred that the petitioner had failed to discharge his duties in submitting the literature and had committed delay. It has been averred that according to the Agreement, the petitioner had to complete 25 gate paints but he had only completed 5 number of gate paints as per technical specification and accordingly payment of five gate paints was given to the petitioner. Similarly, the return goes to indicate that respondents have disputed the claim made by the petitioner. It is also contended that the petitioner is not entitled to the amount of Rs. 61,60,000/-. From the aforesaid, it is clear that there is serious dispute between the parties. The petitioner may be right in contending that he is not responsible for the delay or that approval was not granted to him in time but the fact remains that in the light of the averments made in the return, the matter has to be adjudicated and a finding has to be recorded with regard to the issues which arises between the parties in the light of the pleadings made by them. This, therefore, is a disputed question of fact. This, therefore, is a disputed question of fact. The contention of the petitioner that the action of the respondents are arbitrary and therefore the dispute can be adjudicated in the petition as a proposition of law can be accepted in the light of the observations made in the case of Ramana Dayaram Shetty (supra) and some other cases relied upon by the petitioner but the fact remains that in the facts and circumstances of the present case will those principles apply. The cases referred to by the learned counsel for the petitioner pertains to grant of tender and decision and arbitrariness in the decision of granting decision. They are not cases pertaining to dispute with regard to execution of the agreement between the parties or in connection with disputes arising out of execution of work in pursuance of an agreement. Once an agreement has been entered into and there is dispute with regard to execution of the same, the Division Bench of this court in the case of Smita Conductors Private Limited, Bombay and another vs. Madhya Pradesh State Electricity Board, 1984 MPLJ 20 has held that petition under Article 226 is not the appropriate remedy. In this regard, the observation of the Division Bench in para 9 of the judgment is very relevant. In the aforesaid case, it has been held that the petitioner under Article 226 is not the appropriate remedy for adjudicating the disputes which are purely of civil nature. In State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., it has been held that interference in contractual matters is not permissible in a petition under Article 226 of the Constitution. Similarly, the Supreme Court in the case of Kerala State Electricity Board and Another Vs. Kurien E. Kalathil and Others, in para 10 and 11 has observed as under:- 10. We find that there is a merit in the first contention of Mr. Raval. Learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable, to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies. In the case of State of Himachal Pradesh Vs. Raja Mahendra Pal and Others, in para 6 it has been observed as under:- The powers conferred upon the High Court under Article 226 of the Constitution are discretionary in nature which can be invoked for the enforcement of any fundamental right or legal right but not for mere contractual rights arising out of an agreement particularly in view of the existence of an efficacious alternative remedy. The constitutional court should insist upon the party to avail of the same instead of invoking the extraordinary writ jurisdiction of the court. This does not however debar the court from granting the appropriate relief to a citizen under peculiar and special facts notwithstanding the existence of an alternative efficacious remedy. The existence of the special circumstances are required to be noticed before issuance of the direction by the High Court while invoking the jurisdiction under the said article. In the instant case, the High Court did not notice any special circumstance which could be held to have persuaded it to deviate from the settled proposition of law regarding the exercise of the writ jurisdiction under Article 226. Considering the present in the light of the aforesaid enunciation of law, I am of the considered view that present is not a case where the matter can be decided on the basis of documents on record. There are serious disputes between the parties on various issues and as the agreement in question provides for arbitration, petition under Article 226 is not the appropriate remedy in the present case. This is also not a case where any special arrangement exists for deviation from the normal rule. There are serious disputes between the parties on various issues and as the agreement in question provides for arbitration, petition under Article 226 is not the appropriate remedy in the present case. This is also not a case where any special arrangement exists for deviation from the normal rule. The argument of Shri A.M. Naik that present is not a dispute within the meaning of section 2(d) of the M.P. Madhyastham Adhikaran Adhiniyam, 1982 is misconceived and cannot be accepted. Even otherwise, as there is arbitration clause in the agreement and as the dispute between the parties is purely a civil dispute arising out of an agreement for execution of certain work and as the petitioner has not pointed out violation of any fundamental right, statutory legal right, no interference in a petition under Article 226 can be made out. In that view of the matter, I am not inclined to interfere in the matter. Accordingly, the petition is dismissed for the reasons stated hereinabove. Final Result : Dismissed