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2012 DIGILAW 74 (ORI)

Utkal High ways Engineers and Contractors v. General Manager, Lingaraj Area, Mahanadi Coalfields Limited

2012-02-09

B.N.MAHAPATRA, V.GOPALA GOWDA

body2012
JUDGMENT V. GOPALA GOWDA, C.J. - Since the above noted three writ petitions involve similar questions of fact and law, they were taken up together for analogous hearing and are being disposed of by this common judgment. 2. The prayer in all these writ petitions is to quash the e- Tender Notice dated 14.10.2011 (in W.P.(c) Nos.27848 & 28958 of 2011) and Notice dated 30.09.2011 (in W.P.(C) No.28827 of 2011) for transfer of coal from respective railway sidings floated by the opp.parties for an estimated cost of work mentioned in the tender notices urging various legal contentions. 3. Though the elaborate facts and grounds are urged in these petitions, one set of facts and grounds are stated for the purpose of considering the rival legal contentions urged on behalf of the parties. 4. The undisputed fact is that the petitioner in W.P.(C) No.27848 of 2011 is a loader for mechanical transfer of coal into NTPC Wagons at Lingaraj Spur Siding No.1 and 2 at Lingaraj OC Project, Lingaraj Area for a total quantity of 450 lakh tons and therefore it has challenged the new tender notice issued under Annexure-1 on the ground that the same amounts to virtually termination of the petitioners existing contract and they have further prayed for issuance of a direction to the opposite parties for extension of time of the contract on the ground that the delay in execution of the agreed contract work is attributable to the departmental failure. Therefore, the case of the petitioners falls under Clause 5.8(a) of the general terms & conditions which provides for submitting petition for extension of time and in the present cases the same have been rejected in all the cases, which have not been challenged. Reliance is placed upon Clause 5.8(a) read with Clause 6.4 of the general terms and conditions which deals with extension of time for completion of contracted quantity. It is also further submitted that hindrance registers maintained by both the M.C.L. Company and the Contractor/petitioners at the site reveal that the delay in execution of work as per contract is not attributable to the petitioners. In respect of all these contentions, the petitioners produced the documents which are the hindrance registers. It is also further submitted that hindrance registers maintained by both the M.C.L. Company and the Contractor/petitioners at the site reveal that the delay in execution of work as per contract is not attributable to the petitioners. In respect of all these contentions, the petitioners produced the documents which are the hindrance registers. It is submitted that before non-fulfilment of the quantity as agreed to in the contract tender notice, inviting and floating new tender amounts to virtually termination of contract, which is unreasonable and not permissible in law in view of the Clause 5.8(a) read with Clause 6.4 of the general terms and conditions of the contract. It is contended by Mr. Ashok, Parija, Mr. S.K. Padhi, learned Senior Advocates and Mr. Kanungo, learned counsel appearing on behalf of the petitioners that departmental failure of not furnishing the rakes for executing the agreed contractual work is not attributable to the petitioners as it is a departmental failure. Therefore, it is contended that the petitioners have made out a case for considering their representations for extension of the contract period of fulfil the quantity agreed upon in the contract work to be executed which has not been done on account of the department failure. It is further submitted by Mr. Kanungo in Writ Petition No.27848 of 2011 that in the present impugned tender notice, the tender was submitted quoting lesser price than the existing contract and as such the same has been terminated being lesser and therefore he states that the same should not be put against the petitioner as it was a distress bidding. The petitioner-company in the said case had mobilised its machinery and work force keeping the contracts quantity in mind as it had to go for such distress bidding at lower rates to protect the interest of the petitioner-Company and its workmen, who have already been deployed, keeping the original contracted quantity in mind. The petitioner-company in the said case had mobilised its machinery and work force keeping the contracts quantity in mind as it had to go for such distress bidding at lower rates to protect the interest of the petitioner-Company and its workmen, who have already been deployed, keeping the original contracted quantity in mind. The question required to be examined by this Court is as to whether the petitioners are entitled to get extension of time for execution of the agreed contract from the opposite party at the existing rate as provided for under clause 5.8(a) of the general terms and conditions of the contract or should they be allowed extension of time of the contracted quantity at the existing rate or the rate finalised in the next tender whichever is lower as provided for in 5.8 (b) of the aforesaid terms and conditions. 5. It is, therefore, contended by the learned Senior Advocate for the petitioners that rejection of the representations of the respective Companies in not examining Clause 5.8(a) by the opp.party-Company is arbitrary and unreasonable. Since the opp.party-Company is an authority as defined under Article 12 of the Constitution, Chapter-III of the Constitution particularly the action of the Company shall be tested with Article 14 of the Constitution of India. Therefore, the writ petitions filed by the petitioners seeking for the relief as aforesaid are maintainable. 6. Detailed statement of counter is filed by the opposite parties in all these writ petitions denying various averments made and grounds urged in the petitions raising preliminary objection that the writ petitions are not maintainable as the contract entered into between the petitioners and opp.parties are not statutory contract. Therefore, the remedy is only available in the Civil Court under the Specific Relief Act seeking for specific performances or claiming damages for breach of the contract between the parties. 7. In support of the submissions that writ petitions are not maintainable, the learned counsel on behalf of the opposite parties has placed reliance upon the judgments of the Apex Court reported in AIR 1981 (3) SCC 238 paragraph 9, AIR 2008 SCC 2160 paragraph 15. The learned Senior Advocate on behalf of the petitioners contend that the opp.party-Company is an authority as desired under Article 12 of the Constitution of India, therefore Part-III of the Constitution Articles 14, 19(1)(g) and 21 of the Constitution would be attracted to the fact situations. The learned Senior Advocate on behalf of the petitioners contend that the opp.party-Company is an authority as desired under Article 12 of the Constitution of India, therefore Part-III of the Constitution Articles 14, 19(1)(g) and 21 of the Constitution would be attracted to the fact situations. Therefore, this aspect of the matter has been expressly dealt with by the Hon'ble Supreme Court in the case of Mahabir Auto Stores & others v. Indian Oil Corporation and others reported in AIR 1990 SC 1031 in which case constitutional Bench decisions in the cases of E.P. Royappa v. State of Tamil Nadu and another reported in AIR 1974 SC 555 & Maneka Gandhi v. Union of India, AIR 1978 SC 597 are referred to and held that the action of the authority comes within the purview of Article 12 & therefore its action is amenable to writ jurisdiction of this Court. Therefore, they contend that the preliminary objection of the opposite party that the writ petitions are not maintainable is wholly tenable in law, hence requested this Court for rejection of the same. 8. Mr. Kanungo, learned counsel for the petitioner (in W.P.(C) No.27848 of 2011) has placed reliance upon the reported decision of the Supreme Court in the case of Union of India and others v. Tantia Construction Pvt. Ltd. reported in 2011 (4) SCALE-745 wherein at paragraph 27, it is held by the Hon'ble Supreme Court that constitutional power vested in High Court and Supreme Court cannot be fettered by any alternative remedy available to the authorities and injustice whenever and where ever takes place has to be struck down as an anathema to the rule of law and the provisions of the Constitution. Therefore, it is contended by learned counsel on behalf of the petitioners that the stand taken by the opposite party is not tenable in law and as such they prayed this Court for grant of relief as prayed for in these petitions. 9. Mr. S. Mohanty, learned Senior Advocate has seriously contended that it is not a departmental failure, it is not the duty of the Company to arrange rakes for the purpose of executing the work by the petitioners. Since the petitioners need to comply with the contractual terms and conditions, therefore, there was no alternative for the Company but to invite new tender for the purpose of executing the work. Since the petitioners need to comply with the contractual terms and conditions, therefore, there was no alternative for the Company but to invite new tender for the purpose of executing the work. Therefore, the e- Tender Notice issued can neither be termed as illegal or un-justified as it is the failure on the part of the petitioners in not fulfilling the terms and conditions of the contract. Further he places reliance upon Clause 5.8(b) and contends that it is not a case of 5.8(a) as there is failure on the part of the petitioners. If they want extension of time for completion of the work that would be only on such terms and conditions, as provided in clause 5.8(b). Therefore he submits that in W.P.(C) No.27848 of 2011 the tender offered by the petitioner is the lowest tender than the rates, which are agreed under the present contract. If the petitioners' cases are allowed, then they will be allowed to supply and transport the goods on the higher rates, then the public interest will suffer and further it is contended that it is not the duty of the opp. parties to arrange rakes by the Railways to execute the agreed contractual work by the petitioners. Hence, it cannot be contended that it is the departmental failure and therefore, the work could not be completed within the stipulated time. Therefore, the petitioners are not entitled for extension of the contractual period to complete the agreed work under the contract. 10. With reference to the above rival contentions of the parties, the points that would arise for consideration are as follows :– (i) Whether the writ petitions are maintainable or not? (ii) Whether the petitioners are justified in placing reliance upon Clause 5.8(a) seeking for extension of time? (iii) Whether petitioners are justified in praying for quashing Annexure-1 i.e. e-Tender Notice? (iv) What order? 11. The first point is required to be answered in favour of the petitioners for the following reasons. It is an undisputed fact that the opp.party Company is the authority as defined under Article 12 of the Constitution of India as it is controlled by the Union of India. Therefore, it is amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India. No doubt, the contract entered into between the parties is not a statutory contract. Therefore, it is amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India. No doubt, the contract entered into between the parties is not a statutory contract. Nonetheless, the same is entered with the opposite party which is an authority in terms of Article 12 of the Constitution. Therefore, the parties are governed by the terms and conditions of the agreement. In these cases, clause 5.8(a) read with clause 6.4 of the terms and conditions is to be taken into consideration for the purpose of examining the case that whether the petitioners are required to approach the Civil Court seeking for appropriate relief under the, Specific Relief Act for breach of terms and conditions of the agreed contract. Learned Senior Counsel for the petitioners have placed reliance upon the decision of the Supreme Court in the case of Mahabir Auto Stores (supra), wherein the Supreme Court had examined the case with reference to termination of dealership which is the contract between the parties, but it has held that Article 14 of Constitution is attracted for after referring to the cases of E.P. Royappa v. State of Tamil Nadu and another, reported in AIR 1974 SC 555 and Maneka Gandhi v. Union of India (supra) wherein it is held by the Apex Court that the actions of the authority are amenable to writ jurisdiction and this Court can examine whether the action of it is arbitrary and unreasonable. In the case at hand, the delay in not executing the agreed contractual work is not attributable to the petitioners. It is evident from the documents produced by them and it is also not the case of the opp. parties that the delay is for the fault of the petitioners contending that the reasons assigned for not completing the contractual work and not providing the rakes by the Railway Department is not the duty of the MCL for the same. But the fact remains that the petitioners are not at fault in not executing the work because the rakes are not supplied by the Railways. It is the duty of the petitioners to get the rakes allotted from the Railway Department. Reading of Clause 6.4(e) of the term and conditions indicated that for execution of the contractual work by the petitioners as agreed in the contract, the supply of the rakes by the Railways is very important. It is the duty of the petitioners to get the rakes allotted from the Railway Department. Reading of Clause 6.4(e) of the term and conditions indicated that for execution of the contractual work by the petitioners as agreed in the contract, the supply of the rakes by the Railways is very important. As could be seen from the documents produced by the petitioners, the delay is not attributable to the petitioners at all. Therefore, clause 5.8(a) is attracted. Hence, we have to hold that the writ petitions are maintainable. 12. When the first point is answered in favour of the petitioners, the second and third points are also to be answered together in favour of the petitioners for the following reasons. It is an undisputed fact that the delay is not attributable to the petitioners as could be seen from the documents produced and averments made by the petitioners in the petitions. The contention urged by the learned Senior Counsel for opp. parties is that it is the duty of the Company to arrange rakes from the Railways. It is further contended that as the petitioners have not fulfilled their contractual obligation, therefore, no alternative !s left to the opp. parties than to notify the tender to say that the remaining is to be awarded in favour of the eligible bidders is not tenable in law. This contention cannot be accepted by this Court in view of Clause 5.8(a) of the terms and conditions of the agreement. The departmental failure is the reliance placed upon by the petitioners for not making arrangement for supply of the rakes by the Railway Department to execute the contractual work. In the contract, nowhere it is mentioned that the petitioners shall arrange for allotment of rakes from the Railways for executing the contract work. Therefore, we have to hold that it is the duty of the Company to see that the rakes are allotted from the Railways to execute the work under the contract by the petitioners. Under Clause 5.8(a) read with Clause 6.4, representations have been given by the petitioners seeking for extension of time, but the same have been rejected. Therefore, there is no doubt that they have not challenged the order of rejection. Under Clause 5.8(a) read with Clause 6.4, representations have been given by the petitioners seeking for extension of time, but the same have been rejected. Therefore, there is no doubt that they have not challenged the order of rejection. The question we are required to answer is point No.2 i.e. whether non-consideration of representation and issuance of e-tender are not justified at all for the reason that representation given should have been considered and passed order before issuance of e-tender notice. Fact remains that without considering the representations of the petitioners and inviting tenders published in e-tender notice, which are impugned in these writ petitions, amount to termination of contract of the petitioners. Therefore, the consideration of representations of the petitioners for extension of time should have been made in the context of the departmental failure. Such failure is the main reason for extension of existing contract in favour of the petitioners. The, reliance placed on Clause 5.8(b) by the learned Senior Counsel on behalf of the Company is not attracted to the facts of the case at hand. For the reasons indicated above, the delay is not attributable to the petitioners. Therefore, Clause 5.8(a) read with clause 6.4 should have been considered extensively by the opp. parties, but that has not been done. Therefore, the decision taken by the opp.parties to publish the e-tender notices inviting bids is bad in law. Rejection of the representations without examining the relevant clause under 5.8(a) read with clause 6.4 particularly the entries made in the Hindrance Register, would clearly go to show that the delay is not attributable to the petitioners at all, but such delay for non-fulfilment of the work agreed in the contract by the petitioners is on account of not making available of rakes by the Railway Department. Therefore, Clause 5.8(a) read with Clause 6.4 is attracted to the fact situation of the present case. Since, we are of the view that inviting fresh tender is in contravention of the Clause 5.8(a) of the terms and conditions, when the petitioners' applications for extension of time were very much pending before them, therefore, the notice inviting fresh tenders amounts to termination of contract as it is arbitrary and unreasonable as the representations seeking for extension of time have not been properly considered by the Company. Therefore, the action of opp.parties in inviting fresh tender amounts to termination of contract which should not be allowed to sustain as it violates the fundamental rights of the petitioners guaranteed under Articles 14, 19(1)(g) & 21 of the Constitution of India and therefore the impugned notices are liable to be quashed. 13. For the reasons stated above, we answer both the points in favour of the petitioners. Accordingly, the writ petitions are allowed quashing the e-tender notice and other notice dated 30.9.2011 impugned in W.P.(C) No.28827 of 2011, but without cost. Petitions allowed.