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Gujarat High Court · body
2011 DIGILAW 732 (GUJ)
H. M. PATEL v. STATE OF GUJARAT
2011-11-10
K.S.JHAVERI, V.M.SAHAI
body2011
JUDGMENT 1. All these petitions involve common questions on law and facts and hence, they are disposed of by this common judgment. 2. The petitioners seek to challenge the communication dated 28.02.2003 of respondent no.1 whereby, the petitioners have been denied the benefits of revised Price Adjustment Formula after June 1994. 3.0 The petitioners are Joint Venture Consortium formed for the purposes of bidding and carrying out work under the Sardar Sarovar Narmada Project of the Government of Gujarat. Respondent no.1-State constituted the Sardar Sarovar Narmada Nigam Limited (for short, “the SSNNL”), a Government of Gujarat Company, for the purpose of constructing a Dam across River Narmada at Village Kevadia, Taluka Nandod, District Bharuch, under the Sardar Sarovar Project. 3.1 In 1990 the SSNNL invited offers for awarding contracts for constructing different portions of the Main Canal, Branch Canals, Main Dam and Hydro-power Plant. The petitioners, along with other Contractors, were selected for the contract work and accordingly, several Memorandum of Understanding (M.o.U.) were signed by and between the SSNNL and the Contractors, including one with the petitioners. 3.2 A similar contract was also entered into by and between the SSNNL and a Contractor, named, M/s. Jai Prakash Associates. So far as the M.o.U., entered with the petitioners is concerned, the work was to be completed within a period of forty eight (48) months. The M.o.U. also contained a Price Adjustment Clause for granting relief against the increase and decrease in cost of materials, wages of labour, operating cost, etc. 4. It is the case of the petitioners that the prices of Oil and related products soared up very sharply the world over, including India, as a result of the Gulf War that took place in the year 1990. It rendered the Price Adjustment Clause totally unrealistic as it did not give adequate relief against the cost escalation caused by the Gulf War. Therefore, the petitioners and other Contractors requested the SSNNL to take necessary steps to relieve the Contractors from the financial burden imposed upon them on account of the unpredictable rise in the cost of labour / materials due to rise in the price of oil and related products.
Therefore, the petitioners and other Contractors requested the SSNNL to take necessary steps to relieve the Contractors from the financial burden imposed upon them on account of the unpredictable rise in the cost of labour / materials due to rise in the price of oil and related products. In order to make proper and effective representation of their common problems relating to cost escalation, the Contractors formed an Association named the “Gujarat Narmada Irrigation Contractor's Association”, through which, representations were made to the SSNNL regarding the issue of price adjustment. 5. Respondent no.1 framed certain guidelines on the issue of price adjustment in pursuance of which various revised M.o.Us. were entered into by and between the Contractors, including the petitioners, and the SSNNL particularly on the issue of price adjustment. 6. The petitioners could not complete the work before the stipulated date, i.e. 28.01.1994. However, the time was extended without levy of any damages. It was only on or around 30.05.1999 that they were able to complete the work. 7. It is the case of the petitioners that incentive was paid uninterruptedly till 30.06.1994 and that for the subsequent period, the SSNNL refused to make payment of incentive to the petitioners and other Contractors. Being aggrieved by the same, all the Contractors jointly made a request to the SSNNL to continue payment of incentive for the work done up to 30.06.1994. However, respondent no.1 decided to make payment of incentive only to the Dam and Hydro-power works Contractors, including one M/s. Jai Prakash Associates, for the work done from 01.07.1994 to 30.06.1996, for which a M.o.U. dated 19.03.1997 was entered into with them. 8. The petitioners called upon the SSNNL to extend the same treatment to them vide its letter dated 24.01.2003. However, the petitioners were informed by the SSNNL, vide communication dated 28.02.2003, that their demand could not be accepted. 9. Being aggrieved by the action of respondents no.1 & 2 of granting compensatory incentive to the Dam and Hydro-power works Contractors for the work done from 30.06.1994 to 30.06.1996 and also of granting revision of rates to M/s. Jai Prakash Associates and denying the same to the Canal Contractors, including the petitioners, the petitioners have preferred the present petitions. 10.0 Mr.
10.0 Mr. AS Vakil learned counsel for the petitioners submitted that all the Contractors employed by the SSNNL and to whom the incentive was initially extended, are similarly situated with the Dam and Hydro-power works Contractors, in the matter of grant of incentive and that there are no intelligible differentia distinguishing the two. But, the Contractors for Dam and Hydro-power works have been granted incentives up to 30.06.1996 and one M/s. Jai Prakash Associates has been given upward revision of rates for the work done thereafter. The said action of the respondents is a camouflage for extending the incentives beyond 30.06.1996 to said M/s. Jai Prakash Associates. The petitioners have suffered huge financial loss on account of the denial of incentives by the SSNNL. Hence, the impugned action of the respondents is arbitrary and discriminatory and also violative of the fundamental rights guaranteed under Article 14 of the Constitution. 10.1 Learned counsel for the petitioners placed reliance upon a decision of the Apex Court in the case of L.I.C. of India and another v. Consumer Education and Research Centre and others, AIR 1995 SC 1811 and more particularly on the following paragraphs; “19. The question, therefore, is whether the appellant is free to incorporate as a part of its business principles, any term of its choice. It is true that the appellant is entitled to accept insurance policy from a person possessed of health with first class life and before acceptance of the policy the insured is required to undergo medical examination as per policy at his expense to satisfy his condition of health. The question is whether the term policy needs to be restricted only to the employees of Govt., quasi-government or reputed commercial firms and whether such condition is just, fair and reasonable or based on reasonable classification consistent with Articles 14 and 21 of the Constitution. The contention of the appellants is that life insurance policy being a contract of insurance becomes a binding contract on appellants' acceptance. Until a contract is entered into, the proposed insured does not acquire any right in insurance policy. The terms of the contract under Table 58 cannot be declared ultra vires before a concluded contract emerged. Contract of insurance operates in the arena of contractual relations.
Until a contract is entered into, the proposed insured does not acquire any right in insurance policy. The terms of the contract under Table 58 cannot be declared ultra vires before a concluded contract emerged. Contract of insurance operates in the arena of contractual relations. Refusal to enter into contract does not infringe any fundamental right or a legal right nor the respondents are entitled to compel the appellants to enter into favourable relations when they did not fulfill the essential terms of the proposal. Therefore, writ petition is not maintainable to enforce such rights in embryo nor they be entitled to declaration in their favour. 20. It is true that life insurance business as defined under S.2(11) of the Insurance Act, 1938, is business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, and any contract which subject to payment of premiums for a term dependent on human life including those enumerated in clause (a) to © thereof. Thereby, the contract of insurance is hedged with bilateral agreement on human life upon payment of premia subject to the convenants contained thereunder. But as stated earlier, is the insurer entitled to impose un-constitutional conditions including that which denied the right of entering into the contract, limiting only to a class of persons under a particular policy? We make it clear at this juncture that the insurer is free to evolve a policy based on business principles and conditions before floating the policy to the general public offering on insurance of the life of the insured but as seen earlier, the insurance being a social security measure, it should be consistent with the constitutional animation and conscience of socioeconomic justice adumbrated in the Constitution as elucidated hereinbefore. 27. In the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or arbitrary in its decision.
Duty to act fairly is part of fair procedure envisaged under Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest. 28. In Kumari Shrilekha Vidyarthi v. State of U.P., (1991) 1 SCC 212 , this Court in paragraph 22 pointed out that the private parties are concerned only with their personal interest but the public authority are expected to act for public good and in public interest. The impact of every action is also on public interest. It imposes public law obligation and impress with that character, the contracts made by the State or its instrumentality. "It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to the adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions". In Food Corporation of India v. M/s Kamdhenu Cattle Feed Industries, (1993)1 SCC 71 at p. 76 in para 8, this Court held that "the mere reasonable or legitimate expectation of a citizen may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process".
Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process". In Sterling Computers Ltd. v. M & N Publications Ltd., (1993)1 SCC 445 at page 464 para 28, it was held that even in commercial contracts where there is a public element, it is necessary that relevant considerations are taken into account and the irrelevant consideration discarded. In Union of India v. M/s Graphic Industries Co., (1994)5 SCC 398 , this Court held that even in contractual matters public authorities have to act fairly; and if they fail to do so approach under Article 226 would always be permissible because that would amount to violation of Article 14 of the Constitution. The ratio in General Assurance Society Ltd. v. Chandumull Jain, 1966(3) SCR 500 , relied on by the appellants that tests laid therein to construe the terms of insurance contracts bears no relevance to determine the constitutional conscience of the appellant in fixing the terms and conditions in Table 58 and of their justness and fairness on the touch stone of public element. The arms of the High Court is not shackled with technical rules or of procedure. The actions of the State, its instrumentality, any public authority or person whose actions bear insignia of public law element or public character are amendable to judicial review and the validity of such an action would be tasted on the anvil of Article 14. While exercising the power under Article 226 the Court would be circumspect to adjudicate the disputes arising out of the contract depending on the facts and circumstances in a given case. The distinction between the public law remedy and private law field cannot be demarcated with precision. Each case has to be examined on its own facts and circumstances to find out the nature of the activity or scope and nature of the controversy. The distinction between public law and private law remedy is now narrowed down. The actions of the appellants bears public character with an imprint of public interest element in their offers with terms and conditions mentioned in the appropriate table inviting the public to enter into contract of life insurance. It is not a pure and simple private law dispute without any insignia of public element.
The actions of the appellants bears public character with an imprint of public interest element in their offers with terms and conditions mentioned in the appropriate table inviting the public to enter into contract of life insurance. It is not a pure and simple private law dispute without any insignia of public element. Therefore, we have no hesitation to hold that the writ petition is maintainable to test the validity of the conditions laid in Table 58 term policy and the party need not be relegated to a civil action. 29. The contention of the appellants is that the offending clause is a valid classification. The salaried group of lives from the government, semi-government or reputed commercial institutions from a class with a view to identify the health conditions, the policy was applied to that class of lives. No mandamus would be issued to declare the classification as unconstitutional when it bears reasonable nexus to the object and there is intelligible differentiabetween the salaried lives and the rest. The High Court, therefore, was wrong in declaring the offending clause as arbitrary violating Article 14. It is true that the appellant is entitled to issue the policy applicable to a particular group or class of lives entitled to avail contract of insurance with the appellant but a class or a group does mean that the classification meets the demand of equality, fairness and justness. The doctrine of classification is only a subsidiary rule evolved by the courts to give practical contend to the doctrine of equality, over-emphasis on the doctrine of classification or anxious or sustained attempt to discover some basis for classification may gradually and imperceptly erode the profound potency of the glorious content of equality enshrined in Article 14 of the Constitution. The over emphasis on classification would inevitably would result in substitution of the doctrine of classification to the doctrine of equality and the Preamble of the Constitution which is an integral part and scheme of the Constitution. Menaka Gandhi ratio extricated it from this moribund and put its elasticity for egalitarian path finder. Lest, the classification would deny equality to the larger segments of the society.
Menaka Gandhi ratio extricated it from this moribund and put its elasticity for egalitarian path finder. Lest, the classification would deny equality to the larger segments of the society. The classification based on employment in government, semi-government and reputed commercial firms has the insidious and inevitable effect of excluding lives in vast rural and urban areas engaged in unorganised or self-employed sectors to have life insurance offending Article 14 of the Constitution and socio-economic justice. It is true that the appellants have to successfully operate the life insurance plan need to forecast mortality among the insured lives within a relatively narrow margin of error and are entitled to scrutinize the medical history of the lives to be covered under the appropriate policy including Table 58. It is seen that the term policy under Table 58 is the cheapest and accessible policy to the people and that the life of the policy is 5 to 7 years and the insurable lives are upto 50 years. Before acceptance of the policy the appellants also have the medical report submitted by the proposed policy holder at his expense. Though leave record of the government employees or those working in semi- government or reputed commercial firms has been introduced at a later stage, it may not by itself be a fool proof of the good health of the concerned proposed policy holders. It would appear that the appellants have adopted a soft and easy course. The class of the employees sought to be covered under policy would, by and large generally be those already insured under whole life policy or endowment policy. Extending the Table 58 policy again to 10% of such a class from total population may not always be more successful apart, extending the benefit to other people who can afford to take the policy and continue to pay the premium would ensure social security. It would percolate not only to the salaried class to whom other policies stood extended but also larger segments not only in urban areas and also in the rural areas would reap the benefit. Though assured employment sources of income may be easily tapable source, policy being volitious it may not be difficult for the people in other private sector, unorganised sector etc, or people in self-employed sector to take policy under Table 58.
Though assured employment sources of income may be easily tapable source, policy being volitious it may not be difficult for the people in other private sector, unorganised sector etc, or people in self-employed sector to take policy under Table 58. Sezhivan Committee itself had recommended and it would be obvious that pursuant thereto Table 58 also was introduced into the market to benefit those lives in rural areas or in the unorganised sectors. Confining the policy under Table 58 to already covered salaried sections would, therefore, be unreasonable and arbitrary and would deprive large segments in the rural areas or unorganised or self-employed would be unjust and irrational and unfair. 40. It is, therefore, the settled law that if a contract or a clause in a contract is found unreasonable or unfair or irrational one must look to the relative bargaining power of the contracting parties. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service forever. With a view to have the services of the goods, the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract. 45. It is seen that the respondents are not seeking any direction in their favour to call upon the appellants to enter into a contractual relations of term policy in Table 58. Their privilege and legitimate expectation to seek acceptance of policy of life insurance are their freedom. Instead they sought for a declaration that the policy confining to only salaried class from government, semi- government or reputed commercial firms is discriminatory offending Article 14. Denial thereof to larger segments violates their constitutional rights. We are of the considered view that they are right. They are not seeking any mandamus to direct the appellants to enter into contract of life insurance with them. The rest of the conditions age etc are valid and do not call for interference. The offending clause extending the benefit only to the salaried class in Government, semi- Government and reputed firms is unconstitutional.
They are not seeking any mandamus to direct the appellants to enter into contract of life insurance with them. The rest of the conditions age etc are valid and do not call for interference. The offending clause extending the benefit only to the salaried class in Government, semi- Government and reputed firms is unconstitutional. Subject to compliance with other terms and conditions, the appellant is free to enforce Table 58 policy with all eligible lives. The declaration given, therefore, is perfectly valid. The offending part is severable from the rest of the conditions. We have, therefore, no hesitation to hold that in issuing a general life insurance policy of any type, public element is inherent in prescription of terms and conditions therein. The appellants or any person or authority in the field of insurance owe a public duty to evolve their policies subject to such reasonable, just and fair terms and conditions accessible to all the segments of the society for insuring the lives of eligible persons. The eligibility conditions must be conformable to the Preamble, fundamental rights and the directive principles of the Constitution. The term policy under Table 58 is declared to be accessible and beneficial to the large segments of the Indian society. The rates of premium must also be reasonable and accessible. Accordingly, we hold that the declaration given by the High Court is not vitiated by any manifest error of law warranting interference. It may be made clear that with a view to make the policy viable and easily available to the general public, it may be open to the appellants to revise the premium in the light of the law declared in this judgment but it must not be arbitrary, unjust, excessive and oppressive. Both the appeals are accordingly dismissed but in the circumstances parties are directed to bear their own costs.” 11.0 Ms. Sangita Vishen learned AGP appearing on behalf of respondent-State raised a preliminary objection that the dispute in question is of a civil nature, for which the appropriate remedy available to the petitioners is to file a civil suit. She submitted that the original contract signed between the SSNNL and the petitioners provided a remedy of arbitration, which could have been availed by the petitioners.
She submitted that the original contract signed between the SSNNL and the petitioners provided a remedy of arbitration, which could have been availed by the petitioners. Hence, the present petitions under Article 226 of the Constitution deserves to be rejected since it involves disputed questions of facts and requires adjudication by way of leading evidence. 11.1 Learned AGP submitted that the respondent-State approved the proposal made by the SSNNL regarding payment of incentives to the Contractors engaged in the project and also the Price Adjustment formulae, as recommended by the Board of Directors of the SSNNL, subject to certain terms and conditions, vide its communication dated 12.12.1991. 11.2 She submitted that the petitioners were given contract for constructing a Canal under the Project within a stipulated period and on certain terms and conditions. 11.3 She drew attention of the Court to the Government order dated 12.12.1991 and submitted that Incentives were given to the petitioners under the M.o.U. with effect from 01.10.1990 or 18 months after the award of contract, whichever is later and that the same was provided to the petitioners up to 30.06.1994. 11.4 However, the petitioners had not completed the contract work within the stipulated period and thereby, committed breach of the terms and conditions of contract. She submitted that the incentive scheme was initiated for timely completion of the work but, since the petitioners had failed to complete the work within the specified period, they were not given the benefit of incentive. 11.5 Learned AGP further submitted that the contracts with the Dam and Hydro-power work Contractors, as compared to the canal Contractors, were to remain in force even after June 1994 since they were long term contracts. Therefore, the Dam and Hydro-power plant Contractors and said M/s. Jai Prakash Associates were given contracts with extended benefit of incentives of the revised Price Adjustment Formula. Therefore, no discrimination was made against the petitioners while awarding contracts under the Project. Hence, the present petitions deserve to be rejected. 12. Mr. GC Majmudar learned counsel for respondent no.2 adopted the submissions made by learned AGP and submitted that construction of Dam and Hydro-power plant are different as compared to that of a Canal. Therefore, the contracts for these two works are also different and the petitioners cannot equate themselves with said M/s. Jai Prakash Associates, who are Contractors of Dam and Hydro-power plant.
Therefore, the contracts for these two works are also different and the petitioners cannot equate themselves with said M/s. Jai Prakash Associates, who are Contractors of Dam and Hydro-power plant. Hence, the petitions are misconceived and deserves to be rejected. 13. We have heard learned counsel for the parties. We have carefully examined the documents on record, more particularly, the pre-revised and revised contracts entered into between the parties. It is not in dispute that the contract entered into between the petitioners and the SSNNL was for constructing the Narmada Main Canal, Reach Kms 108 to Kms 144.5 (Earth work, Lining, Structures & Service Roads). As per the contract, the work was to be completed within a period of 48 months starting from 29.01.1990, i.e. before 28.01.1994. While the work was in progress, the Contractors agitated for a revision of the Price Adjustment Formula contained in the original contract on the ground that the said Formula did not provide adequate compensation to cover the actual extra costs that is incurred by the Contracts. The SSNNL considered the claim of the Contractors and proposed certain changes in the Price Adjustment Formula. On the basis of the said proposal, the respondent-State on 12.12.1991 granted approval to the proposals regarding payment of Incentives to the Contractors engaged in different works of the Project and also the Price Adjustment Formula, as recommended by the Board of Directors of SSNNL. The said approval was accorded subject to the following; “1. Incentive shall be provided up to June 1994 and shall be restricted to ongoing contracts for dam, power house, main canal and branch canals up to Km 144 of the Main Canal (i.e. Phase-I). However, if the performance of the contractor is not satisfactory or if circumstances indicate that the objective of commencing irrigation in Phase-I by June 1994 cannot be achieved, the scheme for incentives for the works of Phase-I including the incentives for accelerated construction programme of Main Dam work shall be reviewed. 2. The payment of incentive shall be related to a time bound programme. SSNNL should execute a Memorandum of Understanding (MOU) with each contractor and pay the incentive only if the contractor fulfills his obligations. 3. Incentive shall be provided only in cases where the contract value exceeds Rs.1 Crore and is for a duration of 2 years or more. 4.
The payment of incentive shall be related to a time bound programme. SSNNL should execute a Memorandum of Understanding (MOU) with each contractor and pay the incentive only if the contractor fulfills his obligations. 3. Incentive shall be provided only in cases where the contract value exceeds Rs.1 Crore and is for a duration of 2 years or more. 4. The incentive payments would become effective from 01.10.1990 or 18 months after the award of contract, whichever is later. 5. In case of contracts for Unit-I and III, the cost is shareable by the participating State of M.P., Maharashtra, Rajasthan and Gujarat and in case of Unit-II the cost is shareable by Gujarat and Rajasthan. SSNNL should, therefore, persuade the Sardar Sarovar Construction Advisor Committee in case of Unit-I and III and Standing Committee of the Narmada Control Authority in case of Unit-II to approve the changes in the price escalation formula and allocate the share of the cost on this account to the participating States. However, as this could take some time, Government have agreed to release Gujarat's share. 6. The continuation of the incentive beyond June 1994 for the Dam and Power House contract could be considered closer to the time.” 14. However, it appears that the Contractors, including the petitioners, could not complete the work before the stipulated period, i.e. 28.01.1994 and therefore, time was extended up to 30.06.1994. 15. As per the revised Price Adjustment Formula, “Incentive shall be provided only up to June 1994” and that “payment of Incentive shall be related to a time bound programme”. It was made clear that Incentive shall be paid only “if the Contractor fulfills his obligations”. As stated herein above, the petitioners could not complete the work before the stipulated period and also the extended period. The work could be completed only around 30.05.1999. Therefore, the respondents stopped making payment of Incentives to the petitioners after June 1994 on the ground that the petitioners had committed breach of the terms and conditions of the Government order dated 12.12.1991, more particularly, of Clause-2 therein which specifically provided that payment of incentive shall be related to a time bound programme and incentive shall be paid only if the Contractor fulfills his obligation.
We find the action of the respondents of not making payment of incentives to the petitioners after June 1994 to be in consonance with the Government order dated 12.12.1991 since the petitioners had failed to complete the contractual work even though the time limit was extended. 16. The petitioners have alleged discrimination on the ground that a Contractor, named, M/s. Jai Prakash Associates has been paid Incentives even after June 1994 though the said Contractor had also committed breach of Clause-2 of the Government order dated 12.12.1991 by not completing the work within the specified and revised period. Here, it is pertinent to note that Clause-6 of the Government order provides that “the continuation of Incentive beyond June 1994 for the Dam and Power House contract could be considered closer to the time”. The SSNNL continued to pay Incentives to said M/s. Jai Prakash Associates since it was involved in the work relating to construction of Dam and Hydro-power plant. 17. It is well-known that Sardar Sarovar Project has been facing different kinds of problems right from its inception. The Sardar Sarovar Project is a multi-crore project benefiting the population of four States. The petitioners cannot claim equity with M/s. Jai Prakash Associates since the petitioners were awarded contract work of constructing the Main Canal whereas, said M/s. Jai Prakash Associates were awarded the contract work of Dam and Hydro-power plant. It is true that said M/s. Jai Prakash Associates was also unable to complete the work specified under the contract within the stipulated period. However, it was granted benefit of Incentives beyond June 1994 since it was involved in the Dam and Power House works and not in Canal works, as was provided in Clause-6 of the Government order. 18. The terms and conditions mentioned in the Government order have been framed keeping in mind the nature of work involved under different contracts. The work related to a Dam or a Hydro-power plant is very complex, highly technical and different as compared to that of a Canal.
18. The terms and conditions mentioned in the Government order have been framed keeping in mind the nature of work involved under different contracts. The work related to a Dam or a Hydro-power plant is very complex, highly technical and different as compared to that of a Canal. M/s. Jai Prakash Associates was involved in the work of Dam and Hydro-power plant and it was in the interest of the nation as a whole that the respondents continued to extend the benefit of Incentives after June 1994 to said M/s. Jai Prakash Associates so that the work related to Dam and Hydro-power plant does not get derailed on account of any stoppage of Incentives to said M/s. Jai Prakash Associates after June 1994. 19. It was not so that said M/s. Jai Prakash Associates was given the extended benefit of Incentives by the respondents in an arbitrary or discriminatory manner. It was granted the extended benefits under Clause-6 of the Government order dated 12.12.1991, which was also accepted by the petitioners by signing the Memorandum of Understanding with the SSNNL. The petitioners had accepted the terms and conditions of the Government order dated 12.12.1991 in toto. Therefore, it does not lie in the mouth of the petitioners to choose and pick only that part of the order which is favourable to them and to oppose what is against them, after having signed the Memorandum of Understanding containing the revised Price Adjustment Formula. The nature of work executed by the petitioners and said M/s. Jai Prakash Associates are completely different and it can be said that the contract entered into with the petitioners and similarly situated Contractors are short-term contracts and that entered into with said M/s. Jai Prakash Associates is long-term contract. 20. Keeping in mind the larger public interest and on the basis of Clause-6 of the order dated 12.12.1991, the respondents continued to extend the benefit of Incentives to said M/s. Jai Prakash Associates, which, in our opinion, is just, legal and non-discriminatory. Except on the above ground, the petitioners have not been able to show from the record that they have been subjected to any other form of discrimination by the respondents resulting into violation of their right guaranteed under Article 14 of the Constitution of India. 21.
Except on the above ground, the petitioners have not been able to show from the record that they have been subjected to any other form of discrimination by the respondents resulting into violation of their right guaranteed under Article 14 of the Constitution of India. 21. It is not disputed that the petitioners could complete the contractual work only around May 1999, which, they were, otherwise, required to complete before the extended period of 30.06.1994. Evidently, the petitioners are in breach of the relevant terms and conditions of the Government order dated 12.12.1991. The petitioners were not paid Incentives after June 1994. Whereas, said M/s. Jai Prakash Associates continued to receive Incentives till 1996. However, the petitioners did not challenge the action of the respondents of non-payment of Incentives after June 1994 within a reasonable period though they were very much aware that said M/s. Jai Prakash Associates had been receiving Incentives from the respondents continuously. It was at a very belated stage that the petitioners raised their claim for Incentives for the subsequent period. Therefore, the claim of the petitioners is also time-barred. 22. From a plain reading of the M.o.U. regarding Incentives, it is clear that the same was entered into on account of the exigency of Gulf War. Therefore, it was imperative that the work is completed within the prescribed period. However, the petitioners failed to perform their part of the obligation under the M.o.U. and therefore, they were not paid Incentives beyond June 1994. Further, the terms and conditions of the M.o.U. also prevent recourse to Arbitration. Hence, the said remedy will also not be available to the petitioners. 23. So far as the decision relied upon by learned counsel for the petitioners is concerned, the same shall not come to the rescue of the petitioners since no discrimination, as alleged, has been meted out to the petitioners. 24. In view of the above discussion, we find no merits in these petitions. Consequently, the petitions are dismissed. Rule is discharged.[ 2011 DIGILAW 732 (GUJ) · digilaw.ai ]