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2004 DIGILAW 447 (ORI)

SURYAMANI NAYAK v. ORISSA STATE HOUSING BOARD

2004-10-08

A.K.PARICHHA, A.K.PATNAIK

body2004
A. K. PARICHHA. J. ( 1 ) THE petitioner has filed this writ application for a direction to the opposite parties to prepare the final bill relating to construction of HIG duplex house at Jagamara, Bhubaneswar taking into consideration the escalation in the wholesale price index including enhanced rate of minimum wages fixed by the Government and also to clear up his other ancillary pending dues. ( 2 ) THE petitioner, a special class contractor, had been allotted with contract for construction of 50 Nos. of HIG duplex houses at Jagamara, Bhubaneswar and agreement No. 18-F/2 of 1989-90 had been executed. According to the agreement, the work was to commence from 2-2-1990 and was to be completed by 1-2-1991. Since the work could not be completed within the stipulated time and the petitioner could not even achieve a substantial progress in the work, the contract was rescinded by the opposite parties vide letter No. 2011 dated 26-11-1991. Later, on the prayer of the petitioner, discussion was held and the petitioner was allowed to continue the work and to complete the same by 31-5-1992. The petitioner could not complete the work by that scheduled date and prayed for extension of time and the authorities granted such extension with the condition that the petitioner shall not claim any compensation for price escalation. Ultimately, the work of 37 duplex houses was completed on 30th September, 1994 and final bills were prepared. The grievance of the petitioner is that in the said final bill, the differential escalation price of materials and POL as per the escalation clause incorporated in the agreement dated 5-8-1991 and the differential expenditure met by the petitioner on account of payment of wages at the revised rate were not included. His further grievance is that he had executed some works worth of Rs. 9,28,411/-beyond the agreement quantity, but payment of rs. 6,11,683/- was only made leaving a balance of Rs. 3,26,736/ -. According to him, he is entitled to get the different escalation price of materials and POL, differential expenditure met towards payment of wages on the revised rate fixed by the Government of Orissa in Labour Department, the balance amount relating to the works executed beyond the agreement quantity. 6,11,683/- was only made leaving a balance of Rs. 3,26,736/ -. According to him, he is entitled to get the different escalation price of materials and POL, differential expenditure met towards payment of wages on the revised rate fixed by the Government of Orissa in Labour Department, the balance amount relating to the works executed beyond the agreement quantity. He has accordingly prayed in this writ petition to direct the opposite parties to prepare the final bill incorporating the above noted claims and pay these amounts along with the admitted final bill amount of Rs. 3,77,563/-, Rs. 2. 81. 813/- and Rs. 1,75,550/- towards civil work. PH work and electrical works respectively. ( 3 ) OPPOSITE parties 1 to 3 in their counter affidavit have taken a stand that the period of execution of the work under Agreement no. 18-F/2 of 1989-90 was one year from the date of the contract and the agreement does not provide for any escalation they have averred that the petitioner could not even complete a substantial portion of the contract by the stipulated completion date for which the contract was rescinded, but subsequently, on the request of the petitioner and the undertaking given by him that he would not claim any compensation on account of escalation, he was allowed to continue the work and complete the same by 31st May, 1992, but this also the petitioner could not do and again prayed for extension of time giving further undertaking that he would not claim any compensation for the work undertaken during the extended period. According to them in view of the fact that the delay in execution occurred due to the laches on the part of the petitioner and also in view of the undertaking given by him the petitioner is not entitled to any additional amount notwithstanding that the minimum wages of labour have been enhanced by notification of the State Government dated 1-7-1990. It has been further averred by the opp. parties 1 to 3 that the dispute raised by the petitioner essentially relates to claim of money pursuant to an agreement, which cannot be granted in exercise of the extraordinary writ jurisdiction under Article 226 of the Constitution of india. ( 4 ) MR. It has been further averred by the opp. parties 1 to 3 that the dispute raised by the petitioner essentially relates to claim of money pursuant to an agreement, which cannot be granted in exercise of the extraordinary writ jurisdiction under Article 226 of the Constitution of india. ( 4 ) MR. K. Patnaik, learned counsel appearing for the petitioner submitted that the petitioner's contract was subsisting on 1-7-1990 when the minimum wage of unskilled labourers was raised from Rs. 12. 83 to Rs. 25/- per day by virtue of the notification of the State Government in Labour Department and because of such enhancement, minimum wage had to be paid in due discharge of statutory obligation and so the opposite parties cannot now deny to reimburse the differential wage amount. He cited the decision of the Supreme Court in Tarapore and co. v. State of Madhya Pradesh, 1994 (1)Arb. LR 341 and the decision of this Court in Surendranath Kanungo v. State of Ortssa (OJC No. 4744 of 1993) in support of his aforesaid submission. His further contention was that the execution of the work got delayed because of non-co-operation of the opposite parties and not for the fault of the petitioner as will be evident from the recommendation made by the opposite parties 2 and 3 from time to time for extension and when the petitioner was not at fault for the delay in execution of the work, escalation of price in respect of the work executed is payable by the opposite parties. His further contention was also that there being no plausible reason for withholding the admitted final bill amount, the opposite parties are duty bound to release and pay the admitted final bill amount In favour of the petitioner. His next contention was that the writ Court has jurisdiction to entertain the present writ petition and cited the decision of the Supreme Court in ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. , (2004) 3 SCC 553 in support of his submission that even in contractual matters, a writ petition under Article 226 of the constitution is maintainable. ( 5 ) MR. ( 5 ) MR. S. K. Nayak-1, learned counsel appearing for the opposite parties, on the other hand, submitted that the work under the agreement in question was time bound work and when the petitioner could not complete the work within the stipulated time and prayed for extension of time giving undertaking that he will not claim any compensation on account of escalation, he is now debarred from raising claim on account of escalation in wholesale price index of commodities and escalation in the rate of wages. His further argument was that In absence of specific terms in the contract, the petitioner cannot be paid any extra amount on account of escalation in the wholesale price index of commodities or labour. His last submission was that the claims raised by the petitioner being essentially money claim arising out of a contract and based on disputed questions of fact, the same cannot be adjudicated by this Court under the extraor dinary writ jurisdiction. In support of this submission, he cited the decisions of the supreme Court in State of U. P. v. Bridge roof Co. (India) Ltd. , AIR 1996 SC 3515 and state of Bihar v. Jain Plastics and Chemicals Ltd. , AIR 2002 SC 206 . ( 6 ) THE first question that arises for consideration is whether the petitioner's claim on account of increase in the minimum wage pursuant to the notification issued by the state Government with effect from 1-7-1990 can be considered as a claim on account of escalation or compensation, when the petitioner himself had indicated that he will not claim while seeking extension of time for completion of the work. ( 7 ) THE expression 'escalation' used in the agreement ordinarily means, an agreement allowing for adjustment up and down according to change in circumstances as in cost of material in a work contract or in cost of living in a wage agreement. The expression 'escalation' would not bring within its sweep higher rate of wage which a contractor is otherwise liable to pay in view of the notification issued by the State Government under the provisions of Minimum Wages Act, failing which he may have to face criminal prosecution. The expression 'escalation' would not bring within its sweep higher rate of wage which a contractor is otherwise liable to pay in view of the notification issued by the State Government under the provisions of Minimum Wages Act, failing which he may have to face criminal prosecution. No equitable reason is also there to give extended meaning to the expression and bring such enhanced rate of wage within the area of compensation since payment itself made to the workers at higher rate is pursuant to a statutory notification issued under the provisions of the Minimum wages Act and the claim of the contractor on that score is not for his own enrichment. This view finds support from the observations made by the Apex Court in Tarapore and Co. v. State of M. P. , 1994 (1) Arb. LR 341. In that case also there was some dispute as to whether the contractor can be reimbursed extra expenditure made on account of payment of minimum wages to the workers as fixed by the Government of madhya Pradesh. The Court held that payment of wages as per the rate fixed under the Minimum Wages Act is a statutory obligation and although the terms of the contract were silent about payment of minimum wages the contractor was statutorily bound to pay minimum wages fixed by the State government to the workers. Once the contractor paid such revised rate of wages and incurred extra expenditure, the Government or the contractee is bound to reimburse such extra expenditure incurred by the contractor. It was specifically said that in such situation even though no specific clause is available in the contract an agreement for payment of minimum wages and reimbursement of the same can be implied. A Division Bench of this Court also took the same view in the case of Surendranath Kanungo v. State of orissa OJC No. 4744 of 1993. ( 8 ) IN the present case, it is not disputed that the minimum wage of unskilled workers was Rs. 12. 83 when the contract between the petitioner and opposite parly No. I was executed. It is also not disputed that during pendency of that contract, the minimum wage of unskilled workers was raised from rs. 12. 83 to Rs. 25/- per day with effect from 1-7-1990 by virtue of the notification of the State Government in Labour Department. 12. 83 when the contract between the petitioner and opposite parly No. I was executed. It is also not disputed that during pendency of that contract, the minimum wage of unskilled workers was raised from rs. 12. 83 to Rs. 25/- per day with effect from 1-7-1990 by virtue of the notification of the State Government in Labour Department. It is further available from the letter no. 882 dated 10-1-1994 (Annexure-2) issued by the Chief Engineer, opposite party no. 1 that payments to the unskilled labourers were made at the rate of enhanced minimum wage directly by opposite party No. 2, the Project Engineer and such extra payments were adjusted from the bills of the petitioner. If the contractor is made bound under law to pay higher wages to the labourers on account of the notification issued by the State Government, there will be no justification to deny proportionate compensation to the contractor on that score. We are, therefore, of the considered opinion that such extra demand has to be reimbursed by the contractee and endorsement made by the contractor petitioner while seeking extension of time for completion of the work to the effect that he will not claim any compensation on account of escalation and the order of opposite party No. 1 while extending time with stipulations that no compensation on account of escalation would be paid, will not debar the petitioner contractor from claiming higher amount of wages which he has been made liable to pay because of the statutory notification of the state Government enhancing minimum rate of wages. . ( 9 ) REGARDING the claim relating to escalation of price index of the materials and POL etc. the plea of the petitioner is that when the Chairman, OSHB had approved escalation of price in respect of the work executed during the period 1-7-1990 to 31-12-1991, there is no good reason to refuse approval of such price escalation of the material and pol etc. for the period 31-5-1991 to 30-9-1994. The reply of the opposite parties in this regard is that since the dead line for completion of the work had been fixed to 31-5-1992, the escalation of the price in respect of the work executed by the petitioner up to that date was approved by the chairman, OSHB. for the period 31-5-1991 to 30-9-1994. The reply of the opposite parties in this regard is that since the dead line for completion of the work had been fixed to 31-5-1992, the escalation of the price in respect of the work executed by the petitioner up to that date was approved by the chairman, OSHB. But such escalation cannot be approved beyond 31-5-1992 as delay in completion of the work is attributable to the laches/inaction of the petitioner. It is the admitted case of the parties that when the contract was revived after discussion between the petitioner and the Chief Engineer, It was stipulated that the petitioner would complete the work by 31-5-1992 and accordingly, the Chairman, OSHB approved escalation of price in respect of the work executed up to 31-5-1992. Such escalation was refused beyond 31-5-1992 on the plea that delay occurred due to the laches on the part of the petitioner. The petitioner, on the other hand, has averred that due to non-clearance of site, erroneous estimation of the schedule item of work, non-supply of materials and irregular payments, the progress of the work was slowed down and so the allegation that delay occurred due to his laches is not acceptable. ( 10 ) THE letter of the authorities to resume the work clearly stipulated that the work should be completed by 31 -5-1092 and in that letter dated 5-2-1993 the escalation clause was not allowed. In spite of absence of the escalation clause the petitioner is now demanding the escalation price of the materials and POL on the plea that delay in completion of the work was not due to his fault, but due to the fault of the opposite parties and to substantiate this stand, he has placed reliance on Annexure-E, which is the recommendation of the Project Engineer-Ill. The opposite parties, on the other hand, have countered this plea by stating that prompt action was always there from the side of the contractee and the fault was always with the contractor petitioner. In order to find out who was at fault and for whose lapses delay occurred, facts, evidence and circumstances are to be analysed. Ordinarily a writ court in exercise of extraordinary Jurisdiction under Article 226 of the constitution cannot entertain and issue a direction for enforcement of a claim, where the claim is based in disputed questions of fact. In order to find out who was at fault and for whose lapses delay occurred, facts, evidence and circumstances are to be analysed. Ordinarily a writ court in exercise of extraordinary Jurisdiction under Article 226 of the constitution cannot entertain and issue a direction for enforcement of a claim, where the claim is based in disputed questions of fact. In ABL International Ltd. v. Export credit Guarantee Corporation of India Ltd. ( 2004 (3) SCC 553 ) cited by Mr. Patnaik, learned counsel for the petitioner, the Supreme Court held that in appropriate cases, a writ petition as against the State or the instrumentality of the State arising out of contractual obligation is maintainable and merely because some disputed questions of fact arise for consideration, the same cannot be a ground to refuse to entertain a writtion in all cases as a matter of rule. It was further held that writ petition involving consequential relief of monetary claim is also maintainable. However, the principle that the writ petition involving serious disputed questions of fact which requires consideration of evidence which is not on record will not normally be entertained by a Court in exercise of its jurisdiction under Article 226 of the Constitution was not denied. In the instant case, the petitioner claims that due to non-clearance of site, non-supply of materials, non-payment of dues in time and erroneous estimation of schedule items of work, the work under the contract could not be completed in time. The opposite parties have denied these allegations in their counter affidavit. So, serious disputed questions of fact require adjudication and consideration of evidence, which are not record will be necessary. In such a situation, the claim of the petitioner cannot be entertained and direction cannot be issued under extraordinary writ jurisdiction under Article 226 of the Constitution. ( 11 ) SIMILARLY, the claim of the petitioner amounting to Rs. 3,26,736/- towards balance amount of work executed beyond the agreement quantity has also been disputed by the opposite parties in paragraph 13 of the counter affidavit. This also being a serious disputed question of fact, issue of any direction to the opposite parties in this regard is not permissible In exercise of the writ jurisdiction of this Court. 3,26,736/- towards balance amount of work executed beyond the agreement quantity has also been disputed by the opposite parties in paragraph 13 of the counter affidavit. This also being a serious disputed question of fact, issue of any direction to the opposite parties in this regard is not permissible In exercise of the writ jurisdiction of this Court. However, the prayer of the petitioner for a direction for payment of the final bill amount can be entertained as the opposite parties have admitted in paragraph 12 of the counter-affidavit that estimation in respect of the items has been made and final bill is ready for payment. ( 12 ) IN view of our conclusions noted above, we direct the opposite parties to reimburse the excess expenditure incurred by the petitioner on account of payment of enhanced rate of minimum wages to the labourers and also to pay the admitted final bill amount to the petitioner within a period of three months from today. For the rest of the claims no direction can be issued to the opposite parties as they involve serious disputed questions of fact. ( 13 ) THE writ petition is thus allowed in part. No cost. Ordered accordingly.