A. Lohirajan v. The Divisional Engineer (Highways) Tiruvallur Division & Another
2008-11-06
R.BANUMATHI
body2008
DigiLaw.ai
Judgment :- Petitioner seeks a writ of certiorarified mandamus, to quash the order of the 1st Respondent issuing Show Cause Notice in Proce.No.1/2005/A6 dated 30.07.2007 and consequently direct the Respondents herein to foreclose the contract under Section 109-04 of Preliminary Specifications on Roads and Bridges and refund the amounts deposited by the Petitioner along with interest. 2. Brief facts which led to the filing of the writ petition are as follows: (i) The Petitioner is a Class I registered contractor of the Highways Department. An agreement was entered on 20.02.2006 between the Petitioner and the 2nd Respondent for the work of widening to four lanes and strengthening of Singaperumal Koil – Sriperumbudur – Thiruvellore – Red Hills Road – measuring 8 kms at a cost of Rs.11.76 crores. (ii) The Petitioner challenges the legality of the Show Cause Notice dated 30.07.2007, calling upon the Petitioner as to why EMD sum of Rs.6,17,500/- and another Rs.23,07,800/- of FSD in the form of Bank guarantee should not be forfeited. The Petitioner has averred that the agreement contemplated completion of work within a period of 12 months from the day of handing over of the site. However it is the case of the Petitioner that the site is not free till today and that there exist avenue trees, electric posts, telegraphic posts, encroachments, telephone cable, Panchayat house service, water connection to houses on both sides etc., on the site that have not been removed by obtaining proper permission from various Government Authorities. This was the duty on the part of the Respondents that they failed to perform. The allegation is that it is hardly possible to perform the contract in the light of the fact that so many utilities and structures have to be removed. (iii) 1st Respondent in these circumstances, wanted to determine that the contract ought to be forfeited thus depriving the Petitioner of the amounts already stated. Further case of Petitioner is that the right course of action for the Departments under clause 109-04 of PS to SSRB is to foreclose the contract when the Department is not in a position to hand over the site as contemplated.
Further case of Petitioner is that the right course of action for the Departments under clause 109-04 of PS to SSRB is to foreclose the contract when the Department is not in a position to hand over the site as contemplated. Aggrieved by the said Show Cause Notice for forfeiting the amounts paid by him, the Petitioner seeks for a certiorarified mandamus for quashing the order in question and a direction to the effect that the contract may be foreclosed in accordance with the law applicable. 3. The Respondents have filed counter stating that it is their case that none of the allegations made in this writ petition are true. The work order for the Petitioner was issued by the Superintending Engineer (H) Chennai Circle vide letter No.60/2005D2/dated 07.02.2006. According to the Respondents that the Petitioner had not started work even as on 31.07.2006 and emphatically deny the allegation that the site was never handed over to the Petitioner. The Respondents go on to make a case that the impediments alleged to have existed had been removed in due course of time. 4. According to the Respondents, the Department was forced to take action for non completion of work through issuance of show cause notice. The factual contradiction by the Respondents of the Petitioners case ends with the respondents stating affirmatively that the site was handed over to the Petitioner as early as on 27.02.2006. The Respondents have averred that the impugned order is only a show cause notice and that it is not final. Further, the Petitioner is at liberty to approach the Respondents to put forth his case. 5. Drawing attention to various communications, learned counsel for the Petitioner Mr. S. Srinivasan, has contended that work was to commence from the date of handing over of the site and the site was not all handed over free from encroachments and other obstacles. The learned counsel further contended that inspite of repeated correspondence the Department have not chosen to remove the trees, etc., It was further urged that because clear site was not handed over to the Petitioner, the Petitioner could not complete the work and therefore the Show Cause Notice issued is unreasonable and arbitrary. It was also argued that extension of time would show that there were genuine difficulties in completing the work. 6. Countering the arguments, the learned Additional Government Pleader Mr.
It was also argued that extension of time would show that there were genuine difficulties in completing the work. 6. Countering the arguments, the learned Additional Government Pleader Mr. N. Senthil kumar, contended that inspite of hand over of site and removal of obstacle and also extension of time the Petitioner has not completed the work. The learned Addl.Govt.Pleader would further submit that as against the percentage of work to be done, the work progressed in Snail pace and in such circumstance the Department was justified in issuing Show Cause Notice to forfeit EMD and the Bank guarantee and the same cannot be challenged. 7. As per Clause 4 of the contract time shall be considered as essence of the agreement. The contractor has to commence the work as soon as the site is handed over to him and the Petitioner has agreed to complete the work within a period of one year from the date of such handing over of the site and he has to show progress as defined in the tabular statement annexed to the agreement. 8. Learned counsel for the Petitioner has drawn courts attention to number of communications from the 1st Respondent viz Letters dated 111. 2006, 211. 2006, 30.11.2006, proceedings dated 112. 2006 and 112. 2006, letters dated 112. 2006, 212. 2006, 22.01.2007, 06.02.2007, 14.02.2007, 29.03.2007, 26.04.2007 letter to the 1st Respondent by the Petitioner dated 07.05.2007, letters dated 16.05.2007, 31.05.2007 and 29.06.2007. In all the above letters Petitioner was informed that he has not completed the work as per the terms of contract and that the work was delayed. For delay in completion of work in proceedings viz Letter No.Ve.Mu.No.1/2005-06/A6 dated 211. 2006, proceedings in Ve.Ka.No.1/05-06/A6 dated 112. 2006, letter No.Ve.Ka.No.1/05/2006/A6 dated 212. 2006, letter No.Ve.Ka.No.2005/2006/A6 dated 22.01.2007, letter No.1/2005-06/A6 dated 14.02.2007, letter No.va.Ka.No.1/2005-2006/A6 dated 29.03.2007, letter No.1/2005-2006/A6 dated 26.04.2007, letter No.1/2005-06/A6 dated 31.05.2007, Letter No.1/2005-06/A6 dated 29.06.2007, the Petitioner was imposed fine amounts of Rs.10,000/-, R.5,000/-, Rs.2,000/-Rs.5,000/-, Rs.2,000/-, Rs.2,000/- Rs.5000/-, Rs.2000/-, Rs.5,000/- respectively. 9. According to Petitioner, the site has not been handed over to him free from encroachments. It is further case of the Petitioner that the stretch of road which was handed over was not free for the Petitioner to commence the work.
9. According to Petitioner, the site has not been handed over to him free from encroachments. It is further case of the Petitioner that the stretch of road which was handed over was not free for the Petitioner to commence the work. Learned counsel for the Petitioner forcibly contended that the site is not free even till today as the site runs through Tiruvellore town and there exists number of trees, electric posts, telegraphic posts, encroachments, telephone cable, bus shelters, huge transformers to be removed. The learned counsel for the Petitioner has drawn courts attention to Petitioners letter dated 06.07.2007, whereby the Petitioner has annexed the list of trees, electric posts and obstructions to be removed. 10. Per contra, the stand of the Respondents is that obstructions had been almost removed and the stretch was free for the Petitioner to commence his work. In the counter filed by the Respondents in Para No(6) it is stated that in the stretch km.46/0-51/8 all the trees had been removed in the month of March 2007, and the removal of the remaining tress is in process. It is further stated that shifting of power lines, the Electricity Board was paid an amount of Rs.25,90,000/-on 19.09.2006. The Electricity Board shifted power lines and there is no hindrance of Telephone lines or Water Board lines. Stand of Respondents is that they had taken genuine steps to remove the obstructions and almost part of the stretch is free for the Petitioner to commence his work. 11. By the impugned show cause notice dated 30.07.2007, the Department called upon the Petitioner to show cause for the delay and calling upon the Petitioner to complete the work by 31.08.2007, failing which the EMD and the Bank guarantee would be forfeited. The impugned Show Cause Notice is reproduced hereunder: ",t;ntiyapd; xg;ge;j kjpg;g[j;bjhif U:/176. 36.926?d; ,Jtiu bra;Js;s ntiyapy; xU gl;oay; Tl tH;fg;gltpy;iy/ nkw;brhd;d ntiyf;fhd xg;ge;j kjpg;gPl;od;go jh;fs; 100 rjtPj ntiy bra;JKoj;jpUf;f ntz;Lk;/ ntiy jhkjj;jpw;fhf ghhh;itapy; fhQqk; ,t;tYtyf jhf;fPJfs; K:ykhf mwpt [iua[k;. mguhjKk; tpjpf;fg;gl;lJ/ ,Ug;gpDk; ntiyia Jhpjkhft[k;. KGikahft[k; bra;J Kof;f jh;fs; ve;jtpj eltof;ifa[k; vLf;ftpy;iy/ ,J kpft[k; tUe;jj;jf;fjhFk;/ ntiy jhkjj;jpw;F U:/5000-? mguhjk; tpjpf;fg;gLfpwJ/ ntiyia KGikahf Kof;f 31/8/2007 tiu fhy ePl;og;g[ tH;fg;gLfpwJ/ ,e;j jhf;fPJ fpilj;j 7 ehl;fSf;Fs; ntiyapy; nghjpa Kd;ndw;wk; fhz;gpf;f jtwpdhy;. v!;/v!;/Mh;/gp.tpjp 109? 05 kw;Wk; 07d;go nkw;brhd;d ntiyf;fhd j;fsJ xg;ge;jj;ij KGikahf uj;Jbra;J itg;g[j;bjhif gwpKjy; bra;ag;gLtJld; ,t;ntiyia gpwpbjhU xg;ge;jf;fhuh; K:yk; br;aJ mjdhy; Vw;gLk; brytpdj;ij j;fsplkpUe;J tN:ypf;fg;gLk;/" 12.
KGikahft[k; bra;J Kof;f jh;fs; ve;jtpj eltof;ifa[k; vLf;ftpy;iy/ ,J kpft[k; tUe;jj;jf;fjhFk;/ ntiy jhkjj;jpw;F U:/5000-? mguhjk; tpjpf;fg;gLfpwJ/ ntiyia KGikahf Kof;f 31/8/2007 tiu fhy ePl;og;g[ tH;fg;gLfpwJ/ ,e;j jhf;fPJ fpilj;j 7 ehl;fSf;Fs; ntiyapy; nghjpa Kd;ndw;wk; fhz;gpf;f jtwpdhy;. v!;/v!;/Mh;/gp.tpjp 109? 05 kw;Wk; 07d;go nkw;brhd;d ntiyf;fhd j;fsJ xg;ge;jj;ij KGikahf uj;Jbra;J itg;g[j;bjhif gwpKjy; bra;ag;gLtJld; ,t;ntiyia gpwpbjhU xg;ge;jf;fhuh; K:yk; br;aJ mjdhy; Vw;gLk; brytpdj;ij j;fsplkpUe;J tN:ypf;fg;gLk;/" 12. The question falling for consideration is whether the Department was not justified in issuing Show Cause Notice and whether the Show Cause Notice is vitiated by arbitrariness. 13. Stand of the Respondents is that the site was handed over to the Petitioner for commencement of work as early as on 27.02.2006, and the Department in fulfillment of its duties and performance of its part of the agreement had corresponded with all the concerned Agencies/Departments for removal of hurdles to enable the Petitioner to complete the work within the stipulated period. As seen from the averments in the counter affidavit, the Department has also paid the amount of Rs.25,90,000/-to the Electricity Board for shifting of power lines. 14. Number of communications were sent to the Petitioner calling upon him to expedite the work and complete within the time frame. For delay in the work fine was also imposed, in these circumstances the Respondents issued Show Cause Notice for determination of the contract. As per Clause 109.07 of Standard Specifications on Roads & Bridges Rules, in the exercise of power contained in PS 109.05, the Engineer shall determine the contract for any of the reasons set forth in paragraphs (a) to (f). The stand of the Department is that exercise of power for determination of contract empowers the Department to forfeit the EMD and Bank guarantee and also recover the difference in the cost of project work under reference from the Petitioner. 15. The impugned notice dated 30.07.2007 is only Show Cause Notice it is for the Petitioner to put forth his claim / contention before the 1st Respondent. When the parties are governed by terms and conditions of the contract, exercising jurisdiction under Article 226 of the Constitution of India, it is not for the court to issue writ of mandamus to foreclose the contract. 16.
When the parties are governed by terms and conditions of the contract, exercising jurisdiction under Article 226 of the Constitution of India, it is not for the court to issue writ of mandamus to foreclose the contract. 16. That apart, questions whether the site handed over was free from encroachments or not; whether there was delay on the part of the Petitioner; whether there was contravention of the terms of the contract, are all questions which cannot be gone into in exercising jurisdiction under Article 226 of the Constitution of India. As per Clause 109.10 (c) of the Standard Specifications on Roads and Bridges Rules, any dispute or differences which may arise between the parties shall be referred to arbitration. As per the terms of the agreement resolving the differences set forth in the arbitration clause of Preliminary Specifications to Standard Specifications on Roads and Bridges Rules, is the Superintending Engineer (Highways) Chennai Circle. All questions of fact / dispute arising between the parties will have to be determined only by invoking the arbitration clause in the Articles of Agreement. 17. When efficacious alternative remedy is available by way of arbitration, the writ petition is not maintainable. In a catena of decisions, it has been held that writ petition under Article 226 of the Constitution should not be entertained when the statutory remedy is available under the Act, unless exceptional circumstances are made out. In 2005 (8) SCC 264 , U.P. State Spinning Co. Ltd Vs R.S. Pandey and another Honble Supreme Court has held:- ".... 11. Except for a period when Article 226 was amended by the Constitution (Forty-Second Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction or discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy.
At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided, the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. 18. In issuing writ of certiorarified mandamus High Court can issue direction to authorities by mandamus to act in accordance with law and rules and not in violation of statutory provisions. Having regard to the delay in execution of work first respondent was convinced to exercise power under clause 109.07 in issuing show cause notice to determine the contract. When the Respondents have proceeded to act in accordance with the Preliminary Specifications to Standard Specifications on Roads and Bridges Rules, court cannot issue writ of mandamus to foreclose the contract and refund the earnest money deposit. 19. Learned Additional Government Pleader would submit that because of incompletion of work by the Petitioner widening of the road got delayed. It was further submitted that fresh tender was called for and the tender was also accepted for completion of the work and the work has been allocated to another tenderer. The learned Additional Government Pleader also submitted that as per terms of the agreement the Petitioner is to make out the loss / damages to the Government. Since work has been allocated to another tenderer the only course available to the Petitioner is to invoke the arbitration clause as per terms of the agreement if he is aggrieved. 20. In the result the writ petition is dismissed. Petitioner is at liberty to invoke the arbitration clause in the Articles of Agreement for resolving the dispute. Connected Miscellaneous Petitions are also closed.