Research › Search › Judgment

Patna High Court · body

2012 DIGILAW 804 (PAT)

A2Z Infrastructure Ltd. v. State of Bihar

2012-05-18

S.N.HUSSAIN

body2012
ORDER This writ petition has been filed by the petitioner for the following reliefs:- i) Making the payment and admitted due of Rs.7,62,65,817.00 along with 18% interest thereon calculated from the date the amount failed due to the actual date of payment, for conducting the work of daily primary collection of M.S.W. Mechanical Street Sweeping Drain cleaning and transportation of waste as per MSW Rules 2000 in the Nine Wards and Nine Main Roads of Patna Municipal Corporation. ii) For issuance of the writ in the nature of mandamus directing the respondent authorities for expansion of the work of the petitioner from nine wards to other wards and circles of Patna Municipal Corporation, as per the provision of clause 3 (3.2) (c) of the contract agreement which states that the contractor would start with services in New Patna Circle and to proceed in other areas after evaluation by competent authorities and satisfactory performance and at present the contractor is conducting operation only in nine wards of the New Patna Circle from the date of the institution of the contract agreement dated 09.1.2010 and till date no expansion has been made in the wards of other circles (Bankipur circle, Kankarbagh Circle, Patna City Circle) and the Contractor had also not been allotted work as per the terms and provisions of the Contract, as there were 29 wards in New Patna Circle and petitioner had been allotted only 9 wards out of these 29 wards, whereas, as per the provisions of the Contract the petitioner had to be allotted all 29 wards of New Patna Circle. iii) For issuance of writ nature of mandamus directing the respondent authorities for publication of a notification in News Paper for collection of user charges from those areas where the contractor is providing door to door collection service as per the terms of the contract agreement dated 09.1.2010. iv) For issuance of any other relief or reliefs. 2. Petitioner has filed I.A.No.8480 of 2011 seeking addition of a relief of writ of certiorari for quashing memo no.31/C dated 23.07.2011 (Annexure-42) issued by the Municipal Commissioner, Patna Municipal Corporation, to the Principal Secretary, Department of Urban Development and Housing, Government of Bihar along with report of the Commissioner of the Corporation of the same date. 3. 2. Petitioner has filed I.A.No.8480 of 2011 seeking addition of a relief of writ of certiorari for quashing memo no.31/C dated 23.07.2011 (Annexure-42) issued by the Municipal Commissioner, Patna Municipal Corporation, to the Principal Secretary, Department of Urban Development and Housing, Government of Bihar along with report of the Commissioner of the Corporation of the same date. 3. Petitioner is a public company having its registered office at Delhi and claims to have taken up work under Solid Wastes Management Schemes in various cities and is handling project at Indore, Lucknow, Kanpur, Ranchi and several other cities with adequate and developed machineries, equipments and skilled men power and hence when notices for Expression of Interest (EOI) for Solid Wastes Management in Patna Town was published on 02.06.2009 in several newspapers by the Bihar Urban Development Agency ((hereinafter referred to as ‘the BUDA’ for the sake of brevity) under the Department of Urban Development and Housing, Government of Bihar ((hereinafter referred to as ‘the Department’ for the sake of brevity), the petitioner submitted its application and after completing all the formalities and procedures, including pre-proposal meetings, opening of bid, letter of acceptance, bank guarantee by the petitioner etc., petitioner was selected and agreement dated 09.01.2010 was entered into between the petitioner and the Municipal Commissioner, Patna Municipal Corporation ((hereinafter referred to as ‘the Corporation’ for the sake of brevity) and work order was issued to the petitioner. 4. Learned counsel for the petitioner stated that in CWJC No.2911 of 2006, the State of Bihar and the Corporation had filed affidavits specifically stating that the Government has already made over possession of 78 acres of land to the Corporation, whereafter the contract of setting up the Solid Wastes Plant on the said land has been allotted to this petitioner vide letter dated 12.09.2009 issued under the signature of Municipal Commissioner. In the said circumstances, the Division Bench of this Court vide order dated 06.12.2009 passed in the aforesaid case directed the Municipal Commissioner to conclude the agreement expeditiously and ensure progress of the work under his personal supervision. 5. In the said circumstances, the Division Bench of this Court vide order dated 06.12.2009 passed in the aforesaid case directed the Municipal Commissioner to conclude the agreement expeditiously and ensure progress of the work under his personal supervision. 5. Learned counsel for the petitioner averred that in accordance with the aforesaid agreement and work order the petitioner started conducting the operation satisfactorily and submitting its timely reports, whereafter he filed his bills on month to month basis as per the required procedure mentioned in clause 14.3 of the Special Condition of the Contract Agreement. He argued that according to the provisions of Clause 14.4 of the said agreement, the authorities had to pay 75% claim of monthly bills within 10 working days and the remaining 25% of the bill was to be paid after verification on the basis of log report prepared at way bridge and the same was to be paid to the petitioner within a period of 20 days after the payment of 75% claim. 6. Learned counsel for the petitioner also claimed that he submitted the monthly bills from January, 2010 till July, 2011, but in spite of submission of all the required documents, including report etc. and after conducting the operation as per the terms of the contract, the Corporation did not pay the amounts for all those months, nor any efforts were made to even verify the bills. Hence, the petitioner had no option, but to move this Court for the aforesaid reliefs. 7. On the other hand learned counsel for the respondents submitted that this writ petition is for payment of dues and for such matters, a provision of arbitration has been included as clause 25 in the agreement in question stating the procedure for dispute and arbitration as well as decision of the competent authority and appointment of a sole arbitrator. Subsequently, the Corporation amended the contract agreement substituting the clause of sole arbitrator with a clause 25(a) providing an Arbitration Committee, consisting of Mayor of the Corporation, a senior personnel of the petitioner-Company and a neutral 3rd arbitrator. It also provided that if the Mayor/Commissioner is unwilling, then the matter would be referred to BUDA. 8. Subsequently, the Corporation amended the contract agreement substituting the clause of sole arbitrator with a clause 25(a) providing an Arbitration Committee, consisting of Mayor of the Corporation, a senior personnel of the petitioner-Company and a neutral 3rd arbitrator. It also provided that if the Mayor/Commissioner is unwilling, then the matter would be referred to BUDA. 8. He also stated that these clauses of arbitration covered wide range covering the instant matter and hence there is no need of any interference by this Court under the provision of Article 226 of the Constitution of India. In this regard, he relied upon two decisions of Division Benches of this Court in case of Bihar State Housing Board and others Vs. Sahil Kumar Chanda reported in 2007(3) PLJR 486 and in case of Saraswati Kumar Sinha Vs. The State of Bihar & Ors. reported in 2008(1) PLJR 688 in which it had been held that extra-ordinary jurisdiction of the High Court should not be exercised in case of disputed amount of money in contract. 9. Learned counsel for the respondents claimed that the respondents constituted a six-member Committee for scrutiny and verification regarding genuineness and correctness of the bills submitted by the petitioner and the work done against them for its release in which the representative of the petitioner was also included as a member and the said Committee after enquiry submitted a detailed report on which basis a buff-sheet was placed before the Mayor of the Municipal Corporation with a copy to the State Government vide letter dated 23.07.2011 and hence the claim of the petitioner was wholly disputed between the parties and was denied. 10. It was also claimed by learned counsel for the respondents that after the execution of the contract agreement between the parties, petitioner should have abided by the terms of the agreement to execute the work in the interest of the Corporation, which had not been fulfilled and the same was under enquiry by the Vigilance department, Govt. of Bihar and before scrutiny and verifications of the bills of the petitioner, the Vigilance Investigation Bureau had made a preliminary enquiry and instituted a case bearing Vigilance P.S. Case No.054/10 dated 21.07.2010 for offences punishable under Sections 467, 468, 420, 406, 409, 447, 447A, 120B and 201 of the Indian Penal Code read with Section 7, 8, 13(2) and 13(1) ( C ) (D) of Sa. Ni. Ni. Adhiniyam, 1988. 11. Learned counsel for the respondents argued that the Board of Corporation in its meetings dated 30.06.2010, 28.07.2010 and 19.08.2010 also considered the matter and decided that the cleaning arrangement of the petitioner and proposal for payment would remain stayed along with the agreement between the parties. It was also argued that the aforesaid steps were taken by the respondents under the Bihar Municipal Empowered Standing Committee Work Conduct Rules, 2010 and to that effect a letter was also sent by the Corporation to the Special Secretary of the Department on 10.11.2011 as the award of work to petitioner was under enquiry, its work was not found satisfactory and its bills were found to be exaggerated. Hence, learned counsel for the respondents argued that this writ petition is not maintainable and is fit to be dismissed as relief sought therein is only for money and for the purpose of contract for which petitioner may approach the appropriate forum. 12. In this regard, he relied upon three decisions of the Supreme Court as well as two decisions of this Court, namely in case of Improvement Trust, Ropar through its Chairman Vs. S. Tejinder Singh and Ors. reported in (1995) Suppl- 4 SCC 577; in case of Kerala State Electricity Board and another Vs. Kurien E. Kalathil and others reported in (2000) 6 SCC 293 ; in case of Haryana Urban Development Authority and another Vs. Anupama Patnaik reported in (2000) 10 SCC 649 ; and in case of Amarendra Kumar Vs. State of Bihar & Ors. reported in AIR 1993 Patna 112; in case of M/s Trident Tubes Limited Vs. The Government of Bihar & Ors reported in 1995(1) PLJR 321. 13. In case of Improvement Trust, Ropar through its Chairman (supra), the Apex Court has held that no writ petition can lie before a High Court for recovery of professional fees of an advocate. In case of Kerala State Electricity Board and another (supra), the Apex Court has held that contract between the parties is in the realm of private law where it is not a statutory contract and hence whether any amount is due and if so how much and refusal of the person to pay it is justified or not were not the matters which could have been agitated and decided in a writ petition. In case of Haryana Urban Development Authority and another (supra), the Apex Court had held that a simple claim of money involving disputed questions of facts cannot be entertained by a High Court under its writ jurisdiction. In case of Amarendra Kumar (supra), a Division Bench of this Court had held that the contract in question not being statutory in nature, no writ of mandamus for payment of the dues can be issued. In case of M/s Trident Tubes Limited (supra), a Bench of this Court held that in cases where mutual rights and liabilities of the parties are governed by the terms of contract, a writ petition under Article 226 of the Constitution of India is not maintainable. 14. Learned counsel for the respondents have also relied upon two decisions of Division Benches of this Court in case of Bihar State Housing Board and others (supra) and in case of Sarswati Kumar Sinha (supra) by which it was held that since there was an arbitration clause in the agreement and hence as per the contract, they must resolve their dispute through that forum. 15. Recently the Apex Court has given a minute consideration to the aforesaid prepositions in case of Union of India and others Vs. Tantia Construction Private Limited reported in (2011) 5 SCC 697 and held that the question of maintainability of a writ petition on account of arbitration clause included in the agreement between the parties, it is now well established that an alternative remedy is not an absolute bar to the invocation of jurisdiction of the High Court under Article 226 of the Constitution of India and that without exhausting such alternative remedy, a writ petition would be maintainable. In its various decisions, the Apex Court clearly indicated that the constitutional powers vested in the High Court cannot be fettered by any alternative forum available to the parties. Injustice, wherever and whenever it takes place has to be struck down as an anathema to the rule of law and the provisions of the Constitution of India. The same view has been held throughout by the Apex Court which would be apparent from several decisions of the Supreme Court in case of Whirlpool Corporation V. Registrar of Trade Marks reported in (1998) 8 SCC 1 ; in case of Modern Steel Industries Vs. The same view has been held throughout by the Apex Court which would be apparent from several decisions of the Supreme Court in case of Whirlpool Corporation V. Registrar of Trade Marks reported in (1998) 8 SCC 1 ; in case of Modern Steel Industries Vs. State of U.P. reported in (2001) 10 SCC 491 ; in case of Harbanslal Sahnia v. Indian Oil Corporation Ltd. reported in (2003) 2 SCC 107 ; in case of NSSCO v. Champa Properties Ltd. reported in (2009) 14 SCC 491; and in case of Hindustan Petroleum Corporation Ltd. v. Super Highway Services reported in (2010) 3 SCC 321 . 16. The Apex Court has also held in its decision in case of Sm. Gunwant Kaur and others v. Municipal Committee, Bhatinda and others reported in AIR 1970 SC 802 that the High Court is not deprived of its jurisdiction to entertain a petition under Article 226 of the Constitution of India merely because in considering the petitioner’s right the question of fact may fall to be determined as in a petition under Article 226 of the Constitution of India, the High Court has the jurisdiction to try issues both of fact and law. It was further held in that decision that exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petitioner raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and in that regard the High Court was of the view that dispute may not appropriately be tried in a writ petition, the High Court may decline to try such a petition. When the petitioner raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and in that regard the High Court was of the view that dispute may not appropriately be tried in a writ petition, the High Court may decline to try such a petition. It was also held in the said decision that rejection of a petition in a limine will normally be justified, where the High Court is of the view that petition is frivolous or because of the nature of the claim made, dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons, but where it is clear that in proof of the allegations documentary evidences were relied upon and the conflict did not involve any oral evidence, the High Court has the jurisdiction to determine questions of facts even if they are in dispute and would not be justified in dismissing the petition on the ground that it will not determine disputed questions of facts and it should have proceeded to try the petition in stead of relegating the petitioners to a separate litigation. 17. In the instant case, the respective claims of the parties are merely based upon some admitted documents, such as the agreement between the parties dated 09.01.2010, letters and reports sent by the petitioner to the Corporation, resolutions of the Board and the Committee etc. Furthermore, detailed arguments on behalf of both the parties have been heard at length after the decision of a division Bench of this Court dated 07.12.2011 passed in LPA No.1666 of 2011 and when thereafter this case was taken up on 22.02.2012, both the parties themselves insisted that this case be finally heard on merit and decided at this stage itself. The said parties included the respondents also at whose instance this case has been finally heard at length at each and every point raised by them which are not only with respect to money claims, rather they involve larger issues also. 18. The said parties included the respondents also at whose instance this case has been finally heard at length at each and every point raised by them which are not only with respect to money claims, rather they involve larger issues also. 18. The petitioner has produced the details of expenses (Annexure-31) made by the petitioner as per the aforesaid agreement which amounted to a total of Rs.9,35,04,263.58 but against that not a single penny was paid by the Corporation to the petitioner since the date of agreement. The petitioner has also annexed details of fixed assets (Annexure-31/1) created by the petitioner to the tune of Rs.10,83,59,873.53 and has produced the details of receipts (Annexure-31/2) showing payment of taxes by the petitioners to the Government in connection with the works in question. He has also produced a certificate (Annexure-33) of the then Municipal Commissioner dated 09.02.2011 showing satisfactory work and infrastructure of the petitioner and has also given details of other works (Annexure-34) done by it. The said documents, which had been annexed to the writ petition as parts of paragraph 68 to 75, have not been categorically denied by the respondents in their counter affidavit, rather it has been tried to be explained only by stating that six-member Committee had been constituted for scrutiny and verification regarding genuineness and correctness of the said documents submitted by the petitioner and the work done against them for the release of the bills, but they miserably failed to show that the said Committee had ever rejected the said documents of the petitioner. The claim of the respondents is completely falsified by the certificate granted by the earlier Municipal Commissioner dated 09.02.2011 which has been annexed to the writ petition as Annexure-33. 19. The subsequent Municipal Commissioner sent a report dated 23.07.2011 (Annexure-42) to the Principal Secretary of the Department with respect to the reasons for non-payment to the petitioner, whereafter the matter was considered by the Board of the Corporation in its meeting dated 15.09.2011 (Annexure-36) in which it was found that the earlier Municipal Commissioner had given his report in favour of the petitioner, whereas the subsequent Municipal Commissioner has submitted a report against him, but the petitioner had been appointed through the State Government and the Board approved it with certain modifications and gave directions in favour of the petitioner for cleaning Ward nos.01 to 72. In the said meeting several members of the Corporation raised serious allegations with respect to the working of the present Municipal Corporation, thus it was held by the Board in its meeting as per the majority view that 75% of the bills of the petitioners should be paid to it immediately within three days and further to extend the infrastructure of the petitioner to all 72 wards without any delay and to constitute a Committee of some members of the Board to enquire into the report of the Municipal Commissioner. 20. The aforesaid decision was taken by the Board in view of the specific provisions in clause 14.4. of agreement dated 09.01.2010 (Annexure-13) which provided that 75% claim of monthly bill raised would be paid within 10 working days and remaining 25% would be on bill verification on the basis of log report prepared at Weigh Bridge and its payment will be made within 20 days after the payment of 75% claim. It transpires that the respondents authorities completely violated the terms of the agreement including the period provided, the necessary communications, evaluation of the work, responsibility of Corporation to supervise the work, absence of approaching road to the dumping ground, electricity, disposal ground, and Weigh Bridge which were to be provided by the Corporation, due to which the petitioner repeatedly raised objections (Annexures-16, 17, 18, 19, 20, 21, 23, 24, 25 etc.) before the Municipal Commissioner, but due to inaction of the Corporation the petitioner had to suffer huge losses. 21. From the aforesaid admitted facts and documents it is quite apparent that the petitioner had to work in a very adverse circumstances due to inaction of the Municipal Commissioner for reasons best known to him, but in spite of the said fact the petitioner had done extensive works, which have not been categorically denied by the respondents. Hence, the petitioner was legally entitled to 75% claim of monthly bill filed by him after fulfilling all the requirements and which was to be paid to him by the respondents within 10 working days as per the term of the agreement itself in clause 14.4. thereof, but admittedly no such payment had been made, nor any effort has been made by the authorities to supervise and look into the matter which was the duty cast upon them as per the terms of the said agreement. thereof, but admittedly no such payment had been made, nor any effort has been made by the authorities to supervise and look into the matter which was the duty cast upon them as per the terms of the said agreement. This inaction of the Municipal Commissioner and his other illegal activities were raised by the members of the Board in the meeting of the Board dated 15.09.2011 (Annexure-36) and hence in terms of the aforesaid clause 14.4. of the agreement, the Board directed that 75% of the bills of the petitioner should be paid to him within three days, but even after more than six months neither any direction of the Board was complied nor the requirement of the term of the agreement was fulfilled, nor any payment has been made by the authorities to the petitioner till date. 22. The respondents have claimed that the dispute has been referred to the State Government as per the new Rules, but in view of the clear decision of the Board in its meeting dated 15.09.2011 there was no occasion for referring the matter as the Board had already taken a very clear decision in that regard approving payment of 75% of the bills of the petitioner immediately. The said decision of the Board has not ever been challenged by any one, nor the respondents have been able to show that the Board has ever rejected any of the claim of the petitioner. 23. It has to be noted that although the respondents have tried to raise allegations against the petitioner, but there is nothing to show that they ever stopped the petitioner from working or put any bar upon payment of his bills and the petitioner continued working as per the agreement till 19.06.2011, but when even after 18 months no payment as per its bills were made by the authorities as per the terms of the agreement, the petitioner itself stopped its work and wrote a letter to the Corporation which is annexed to the writ petition as Annexure-28 thereof. 24. So far Vigilance Case no.054 of 2010 is concerned, it has been initiated against 16 persons, out of whom 14 accused are the authorities of the Corporation, including its Municipal Commissioner as well as authorities of the State, whereas accused nos.15 and 16 are named as concerned beneficiaries/ companies/firms/ institutions etc. 24. So far Vigilance Case no.054 of 2010 is concerned, it has been initiated against 16 persons, out of whom 14 accused are the authorities of the Corporation, including its Municipal Commissioner as well as authorities of the State, whereas accused nos.15 and 16 are named as concerned beneficiaries/ companies/firms/ institutions etc. with its proprietor and concerned builders/land owners/ developer firm with its proprietor and other concerned Lok Sewak and Gair Lok Sewak. Hence, it is quite apparent that petitioner has not been made accused by name in the said case, nor the vigilance authorities had taken any action against the petitioner for stopping the work. Hence, reliance of the respondents authorities on the said vigilance case is absolutely frivolous and misconceived as in fact the authorities of the Corporation and the State are themselves accused in the vigilance case and they are bound to face the consequences. 25. Considering the entire facts and circumstances of the case as mentioned above, it is quite apparent that the claim of the petitioner is squarely covered by terms of the agreement as well as documents produced by the petitioners with respect to his performance, which have not been categorically denied by the respondents who have failed to produce any document to the contrary. Furthermore, in view of clause of 14.4 of the agreement dated 09.01.2010 as well as specific direction of the Board of the Corporation in its meeting dated 15.09.2011 (Annexure-36), there was no occasion for the respondents to deny the payments to the petitioners to which he was legally entitled. 26. Accordingly, the letter/report of the Municipal Commissioner dated 23.07.2011 (Annexure-42) is hereby quashed and the respondents are directed to pay the entire dues of the petitioner amounting to Rs.7,62,65,817.00 along with interest at the rate of 8% per annum to be calculated from the date the respective amount fell due till the date of actual payment. The said payments must be made to the respondents-authorities expeditiously and in any case within four months from the date of receipt/production of a copy of this order. However, since the petitioner having himself stopped work after 20.06.2011, he is not entitled for any further relief. 27. With the aforesaid observations/directions, this writ petition is allowed.