Research › Search › Judgment

Patna High Court · body

2010 DIGILAW 2614 (PAT)

Tantia Construction Company Ltd. , Through Its Vice-president contracts Anjan Sarma Son Of Professor P. C. Sarma v. Union Of India Through The Chairman, Railway Board, Rail Bhavan, New Delhi

2010-12-10

NAVANITI PRASAD SINGH

body2010
JUDGEMENT 1. Petitioner, in this writ application, is a firm of contractor with longstanding relationship with the Railway. For construction of the new broad gauge line between Ara and Sasaram, petitioner had entered into an agreement for supply, transporting and stacking of 42000 cubic meters of stone ballast from Karwandia quarry. The period for completion of work was twice extended and ultimately cancelled by the Railway and a re-tender has been issued for the balance work at the risk and cost of the petitioner. This action is the first grievance of the petitioner. 2. The second is that even if the contract had been cancelled, for the work done of about 6000 cubic meters of stone ballast supply, petitioner was required to be paid. Petitioner has only been paid for 3160 cubic meter of stone ballast but not for the balance. Thus is the second grievance. 3. Railway upon response to the notice have filed a counter affidavit to which a rejoinder has been filed. 4. Heard the parties and with their consent this writ petition is being disposed of at this stage itself. 5. As noted above, primarily the nature of the contract was for transporting, supply and stacking of stone ballasts at work site designated. Petitioner asserts and it is not in dispute that stone ballast could not be supplied at work site. On site it requires a prior earth work to do be done. It is not disputed that earth work, which had to be done was to be done by another Company under another contract independent of the petitioner. It is again not in dispute that for different reasons, the earth work was not duly completed in time. Once, earth work was not completed in time, there were difficulties for the petitioner to complete its part of the contract. 6. The contract was awarded to the petitioner on 19.1.2006 and had to be completed by 18.5.2007. On 24.7.2007, the petitioner wrote to the Railway (Annexure 4) that by then they had supplied about 4000 cubic meters of ballast but as the embankment was not ready to receive further, they were handicapped in the matter. It was pointed out that due to time lapse and raising cost, the petitioner was agreeable to do the work on part of the site available but requested to close the contract to save the petitioner from losses. It was pointed out that due to time lapse and raising cost, the petitioner was agreeable to do the work on part of the site available but requested to close the contract to save the petitioner from losses. This is apparently so because a contractor quotes rates for certain work for a certain period and if the period extends the project work by the contractor would become uneconomic. It appears, railway immediately realized the situation and considered the matter. The concerned engineer then informed the petitioner by their letter dated 17.8.2007 (Annexure-5) that it had been sanctioned to extend the time for completion of the contract from 18.5.07 to 31.10.2007. A reference to the said letter, as contained in Annexure-5 to the writ petition, would show that it was not a simplicitor extension but it was an extension with reference to clause 17(A)(ii) & (iii) of the General Condition of the Contract, 2001 of the railways. It is not in dispute that both those clauses exclusively relate to delay or fault on the part of the railway causing delay in execution of the contract. Thus, this letter is a clear admission on the part of the railway that the delay in completion of the contract was solely attributable to the railway and not to the petitioner. Though time for completion of contract was increased, no price revision was ordered. Again the petitioner could not make substantial progress and a notice dated 22.10.2007, being seven days notice, was issued by the railway, as contained in Annexure-6, which was responded by the petitioner vide its communication dated 26th October, 2007 (Annexure-7) wherein petitioner again pointed out that they were prevented from completing the contract. Discussions followed and then again by letter dated 30.12.2007 (Annexure-9) the railway granted a further extension up to 20.1.2008 and again it was exclusively with reference to clause 17(A)(ii) & (iii) of the General Condition of Contract, 2001, which, as stated above, related exclusively to delay on part of the railway itself. Thus, again railway admitted that it was because of some fault on their part, the work could not be done by the petitioner. It would thus be seen that on both occasions, petitioner requested closure of the contract still the railway extended it without price revision forcing the petitioner to carry on the work even much beyond the period of contract. It would thus be seen that on both occasions, petitioner requested closure of the contract still the railway extended it without price revision forcing the petitioner to carry on the work even much beyond the period of contract. Admittedly and undisputedly, railway admitted its own fault for the delay on both occasions. Now, when the petitioner failed to complete the work within the extended time, the contract has been rescinded and re-tendered at the risk and cost of the petitioner. 7. Petitioner thus challenges that railway all along having admitted that it had caused the delay, then cancelling the contract and re-tendering it at the risk and cost of the petitioner was not permissible and such action was grossly arbitrary. Railway had a right to cancel and had a right to re-tender but the cost escalation could not be passed on to the petitioner. 8. Having considered the matter, in my view, the facts are not at all in dispute. It is also not disputed that the delay was acknowledged by the railway itself as delay on their part for what ever reasons. Petitioner as per railway itself cannot be blamed. Now, the petitioner was being forced to complete the work at higher cost and even now the sites are not fully available. This on the face of it is arbitrary. On basis of these undisputed facts, there is no escape from holding that the action in re-tender at the risk and cost of the petitioner is arbitrary. If any one, it was the railway to be blamed for its own delay and that cannot be transferred to the petitioner. Thus, I hold that the risk and cost clause in the second tender issued for the balance work cannot be justified either in fact or in law. 9. Mr. Y.V. Giri, learned Senior Counsel rightly relied on a judgment of this Court delivered under similar circumstances in the case of Navshardul Construction Pvt. Ltd. V/s. Union of India & Ors. since reported in 2007(4) BBCJ 571 in which the case law in this regard has been discussed in detail. It deals with Railway Contract as well. 10. Now, we come to the second part with regard to payment for work done. Petitioner has annexed the payment voucher as Annexure-14. since reported in 2007(4) BBCJ 571 in which the case law in this regard has been discussed in detail. It deals with Railway Contract as well. 10. Now, we come to the second part with regard to payment for work done. Petitioner has annexed the payment voucher as Annexure-14. This voucher is prepared by the railway which clearly admits that the petitioner had supplied 3160 cubic meter of ballast, for which payment was to be made. This voucher is dated 22.2.2007. As noted above, work was done and extension was given thereafter. Railway submits in their counter affidavit that to the extent work done, payments have been made but also admits that beyond the payment as per Annexure-14 of the writ petition, no further payment is done. 11. With reference to the re-tender notice, it is pointed out by the petitioner that the stone ballast requirement as per re-tender is 6000 cubic meter less than original tender. Petitioners claim has been that during the period he had executed the contract, he had supplied about 6000 cubic meter of stone ballast of which payment had been received in respect of 3160 cubic meter. The balance remains due. 12. In view of the facts, as noted above, and no further explanation coming from railway as to why the quantity it re-tender stood reduced by 6000 cubic meter, I have no option but to accept what is submitted on behalf of the petitioner that in fact 6000 cubic meter ballast was duly supplied by them and payment was due of the balance after taking into account payment in respect of 3160 cubic meter of stone ballast. Thus, to the extent above, the claim of the petitioner is acceptable on the undisputed facts aforesaid. The effect of the writ petition, being allowed, would be that the contract of the petitioner, in question, would be deemed to be closed without risk and cost consideration and payment would be required to be made for the balance work as noted above. 13. With the above observation and direction, this writ petition stands disposed of.