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2013 DIGILAW 1303 (PAT)

State of Bihar v. Singh Construction represented by Ashok Kumar Singh

2013-11-18

DINESH KUMAR SINGH, NAVIN SINHA

body2013
NAVIN SINHA, J.:–The Respondent was allotted work for ‘Protection of Araria– Bahadurganj-Thakurganj Road in the year 1999- 2000 in two parts. Non-payment after completion of works led to the institution of CWJC No. 3742 of 2000 seeking directions for payment of contractual dues amounting to Rs.65,85,364/-. The respondents inter alia objected that a writ petition was not maintainable for payment of contractual dues. On 24.4.2003, noticing that the matter was pending examination by the Cabinet Vigilance [Technical Examination Cell] Department, the Learned Single Judge opined that no positive direction could be given to make payment. After report was received and if the dues were found admitted payment should be made expeditiously. 2. The Cabinet Vigilance report dated 28.11.2003 opined that there were deficiencies in the manner in which the works were allotted and for which the officers named in the report were answerable. The work plan for construction of spurs was technically flawed. Estimate for the works had not been approved and allotment had not been received before inviting tenders. Procedures prescribed in Rule 130 ‘A’ and ‘B’ of the PWD Code had been violated in the award of works by the Superintending Engineer. Consequently the Secretary, Road Construction Department, by reasoned order dated 16.3.2004 held that the works were done without departmental approval or allotment. Provisions of the PWD Code had been violated in award of works. Government procedures for notice inviting tenders were not followed. The work plan was technically flawed. The execution of works and measurements were raising questions regarding genuineness of the bills. In the circumstances he declined to approve payment. 3. The respondent then instituted CWJC No.6525 of 2004. The Learned Single Judge held that the Cabinet Vigilance report did not dispute allotment of works, completion and quality of works. The appellants had not informed the Court about the action, if any, taken against the officers named in the Cabinet Vigilance report. Approving reliance by the respondent on 2004 [4] PLJR 371 [Binay Kumar Singh Vs. State of Bihar] and 2000 [2] PLJR 164 [M/s. S. S. L steel Ltd. Vs. Union of India] it was held that the respondent could not be answerable for procedural deficiencies on part of the authorities in awarding the works or execution as required by them. Directions were given for payment within 3 months failing which interest was to be paid at the rate of 9% till actual payment. Union of India] it was held that the respondent could not be answerable for procedural deficiencies on part of the authorities in awarding the works or execution as required by them. Directions were given for payment within 3 months failing which interest was to be paid at the rate of 9% till actual payment. Aggrieved, the appellants have preferred the present appeal. 4. Learned counsel for the appellants contended that the Secretary had rejected the claim by a reasoned order. The execution of the works in question was in dispute. The bills were doubtful. Procedures for award of works had not been followed. The work order itself was technically flawed. Serious and complex disputed facts were involved. Jurisdiction could not have been exercised under Article 226 of the Constitution for payment of a money claim arising out of a contract as it could not be said that they were admitted dues. The report of the Cabinet vigilance has not been properly appreciated and discussed. Part of the four spurs had been launched with no boulder pitching or inadequate boulder pitching. Twelve spurs were to be constructed under the work order. The measurement book dated 2.7.1999 records eleven spurs. Seven of them were old existing spurs. Only four new spurs had been constructed. The measurement of spur no.1 in measurement book no. 533 dated 2.7.1999 is shown as 7‘6’. In measurement book no.534 dated 19.7.1999 the same spur has been shown as approximately 10 feet. The measurement book was therefore not prepared at the site but sitting in the office. The entries in the measurement book were fictitious. Two measurement books i.e.533 and 534 had been prepared by the same Junior engineer of the same date for the same works entries which were contradictory. If the entire procedure for preparation of technical plan, tender and allotment of works was flawed, there were technical deficiencies, forgery committed in the measurement book, the Learned Single Judge committed gross error in holding that in absence of material regarding action taken against the officers mentioned in the Cabinet vigilance report withholding of payment was unjustified. The two were separate issues. It was wrongly held that Cabinet vigilance had not disputed successful completion of works by the respondent and that no technical deficiency had been found with the quality of the work. The two were separate issues. It was wrongly held that Cabinet vigilance had not disputed successful completion of works by the respondent and that no technical deficiency had been found with the quality of the work. The Learned Single Judge in the circumstances arrived at an erroneous conclusion that there had been mere procedural infirmities on part of the authorities, the liability committee had approved payment and the respondent was not answerable for official lapses. The opinion of the Liability committee, a body with no statutory status could not override the opinion of the Cabinet vigilance Department. 5. During the pendency of the appeal Vigilance P S case number 50 of 2010 giving rise to Special case no. 18 of 2010 was instituted on basis of the order of the Secretary dated 16.3.2004. By judgment and order dated 26.2.2013, the Special Judge, Vigilance-II, Patna, has held the 7 accused government officers mentioned in the Cabinet vigilance report guilty under sections 420, 468, 471 477-A, 120-B of the Indian Penal Code read with section 13 [2] Prevention of Corruption act, 1988. The subsequent events also fully justified non-payment of the claim in the writ jurisdiction. Reliance was placed on 1992 [2] PLJR 229 [Binod Kumar Srivastava Vs. State of Bihar] (DB), [2002] 1 SCC 216 [State of Bihar Vs. Jain Plastics & Chemicals], [2006] 7 SCC 511 [Union of India Vs. Ayub Ali], [2006] 9 SCC 524 [New Okhla Industrial Development Authority Vs. Kendriya Karamchari Sahkari Grih Nirman Samiti], [2006] 10 SCC 236 [Noble Resources Ltd. Vs. State of Orissa] and [2013] 5 SCC 470 [Rajasthan State Industrial Development Investment Corporation Vs. Diamond & Gem Development Corporation]. 6. Learned counsel for the respondent urged that the judgment under appeal warranted no interference. The Learned Single Judge on facts had rightly held that if works had been allotted to the respondent, executed without deficiencies, any procedural infirmity by the officers concerned in awarding of the works cannot be sufficient justification to deny payment. The Cabinet vigilance had said nothing about the respondent. In the circumstances, the amount claimed was not a disputed amount. The report of the Cabinet vigilance having been received, even under the order in CWJC No. 3742of 2000, the present order called for no interference. A deliberate controversy of facts was sought to be created where none existed. 7. The Cabinet vigilance had said nothing about the respondent. In the circumstances, the amount claimed was not a disputed amount. The report of the Cabinet vigilance having been received, even under the order in CWJC No. 3742of 2000, the present order called for no interference. A deliberate controversy of facts was sought to be created where none existed. 7. At no stage had the appellants issued any show cause notice to the respondent during execution of the works that it was being undertaken without proper authorisation or improper technical specifications. No show cause notice was issued for improper or deficient discharge of obligations under the contract. Reliance on Special case no. 18 of 2010 was completely misconceived. The respondent was not impleaded as an accused or allegations made against him. Since he was not a party to the case, the judgment does not bind and cannot interdict him in any manner or be utilised for denying payment to him. 8. Even if the appellants contend any disputed facts, a writ petition was not absolutely barred as held in [2004] 3 SCC 553 [ABL International Ltd. Vs. Export Credit Guarantee Corporation of India]. Reliance was further placed on A.I.R. 2008 SC 1771 [Bhikhubhai Vithlabhai Patel Vs State Of Gujarat ] , A.I.R. 1981 SC 1681 [Hindustan Sugar Mills Vs. State of Rajasthan], A.I.R. 1991 SC 101 [Delhi Transport Corporation Vs. D.T.C. Mazdoor Congress], A.I.R. 1979 Patna 179 [ Kadam Lal Yadav Vs. Additional Member Board of Revenue], A.I.R. 1979 SC 1628 [Ramana Dayaram Shetty Vs. International Airport Authority of India], A.I.R. 2008 SC 1101 [Food Corporation of India Vs. SEIL Ltd.], A.I.R. 2001 SC 803 [Gaya Prasad Vs. Pradeep Srivastava], 2007 [1] PLJR 253 [Amit Pharmaceuticals Vs. State of Bihar] and 2000 [2] PLJR 164 [M/s. S. S. L steel Ltd. Vs. Union of India]. 9. We have considered the submissions on behalf of the parties. The normal rule is that no writ petition shall lie on disputed facts. Equally, if resolution of the disputed facts is clearly possible to the satisfaction of the Court from the materials on record, the writ jurisdiction Court is not barred. Likewise no writ petition shall lie for a money claim. The Civil Court is the appropriate jurisdiction for the same. But, yet again if the dues are admitted, and payment denied without valid justification in the law, it amounts to arbitrariness. Likewise no writ petition shall lie for a money claim. The Civil Court is the appropriate jurisdiction for the same. But, yet again if the dues are admitted, and payment denied without valid justification in the law, it amounts to arbitrariness. In such circumstances, the writ Court, in the given facts of a case for reasons discussed can direct payment. 10. In 1962 Supp (1) SCR 242 [Burmah Construction Co. Vs. State of Orissa] it was observed : “6….The High Court normally does not entertain a petition under Article 226 of the Constitution to enforce a civil liability arising out of a breach of contract or a tort to pay an amount of money due to the claimant and leaves it to the aggrieved party to agitate the question in a civil suit filed for that purpose. But an order for payment of money may sometimes be made in a petition under Article 226 of the Constitution against the State or against an officer of the State to enforce a statutory obligation……” Similar view was expressed in New Okhla Industrial Development Authority [supra] observing :– “13. In a petition under Article 226, the High Court has jurisdiction to try issues both of fact and law. When the petition raises complex questions of fact which may, for their determination, require oral evidence to be taken and on that account the High Court is of the view that the disputed statement may not be appropriately tried in a writ petition, the High Court should ordinarily decline to try the petition.” In A B L International [supra] it was held as follows :– “28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. Vs. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. Vs. Registrar of Trade Marks.) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.” 11. If the very works plan was technically flawed, approval of the estimate and allotment of funds were still awaited, the works were allotted without the same, two measurement books existed with contradictory entries, seven spurs were opined to be old and only four out of twelve had been constructed fresh, execution of the works was found doubtful and the genuineness of the bills were in doubt after enquiry, serious and complex disputed questions of facts were arising for consideration and the claim could not be said to be of admitted dues. The fact that the Contractor may not be answerable for the same cannot vest jurisdiction in the Writ Court under Article 226 of the Constitution. It is not that the Contractor is remediless. He can invoke the arbitration clause 23 of the agreement or the normal civil jurisdiction for enforcement of a money claim and prove his case by appropriate evidence and cross-examination. To hold simplicitor that the Contractor had been allotted works and had executed them, ipso facto the respondent was entitled to payment irrespective of all other considerations, shall tantamount to enforcement of an illegal contract awarded by an officer of the State without authority being countenanced by the Court putting its seal of approval on the illegality. The government is not answerable for the acts of its officers done beyond authority. If it were to be so, an unscrupulous government officer can create obligations on the government contrary to law in connivance with the Contractor which would be both against public policy and would result in squandering of the tax payers money for personal aggrandisement. 12. The respondent had voluntarily signed the contract documents. If it were to be so, an unscrupulous government officer can create obligations on the government contrary to law in connivance with the Contractor which would be both against public policy and would result in squandering of the tax payers money for personal aggrandisement. 12. The respondent had voluntarily signed the contract documents. Clause 23 provided for an arbitration clause for resolution of disputes. In A B L International [supra] it has been observed on the alternative remedies in a contract dispute as follows :– “14….. It is seen from the above extract that in that case because of an arbitration clause in the contract, the Court refused to invoke the remedy under Article 226 of the Constitution. We have specifically inquired from the parties to the present appeal before us and we have been told that there is no such arbitration clause in the contract in question. It is well known that if the parties to a dispute had agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless of course both the parties to the dispute agree on another mode of dispute resolution…..” 13. In CWJC No. 3742of 2000, the appellants had objected to the maintainability of the writ petition for payment of contractual dues. The Learned Single Judge had opined that no positive directions could be made for payment. If the dues were found to be admitted payment should be made. The Cabinet vigilance report opined that there were serious deficiencies for the manner in which the technical specifications had been prepared and approved, works were allotted and executed, provisions of the PWD Code had been violated. The Secretary by a reasoned order dated 16.3.2004 held that there were serious procedural deficiencies in award and execution of the works raising doubts about the genuineness of the bills themselves to hold that the respondent was not entitled to payment. 14. The Learned Single Judge in the order under appeal, did not discuss the order of the Cabinet Vigilance or that of the Secretary dated 16.3.2004, the illegality in the same or how it was factually erroneous. A wrong question was posed by the Court that allotment of work was not in dispute. 14. The Learned Single Judge in the order under appeal, did not discuss the order of the Cabinet Vigilance or that of the Secretary dated 16.3.2004, the illegality in the same or how it was factually erroneous. A wrong question was posed by the Court that allotment of work was not in dispute. A factually erroneous conclusion was arrived that the work had been concluded successfully as per specifications and that there were only certain procedural deficiency in the award of works attributable to the authorities/officers. Since the respondent was not answerable for the same and the liability committee had recommended payment, the respondent could not be allowed to suffer. The fact whether any action had been taken against the officers indicted in the Cabinet Vigilance report was an entirely different matter and could not have been a factor for grant of relief. The reliance on S.S.L. Ltd [supra] in our opinion was misplaced. It related to cancellation of a contract and direction to accept supplies and make payment as they were manufactured as per exact specifications and there was no other buyer for the same in the market. Likewise Binay Kumar Singh [supra] again had no application as it related to a case where the cheque for final payment had been drawn up but delivery was wrongly being withheld on certain objections of the liability committee. It was not a case where there were serious procedural deficiency in the award of the works and approval of the technical plan by the competent authority. 15. The appellants have aptly relied on Jain Plastics [supra] to contend that the writ petition itself was not maintainable holding as follows :– “3. Settled law—writ is not the remedy for enforcing contractual obligations. It is to be reiterated that writ petition under Article 226 is not the proper proceedings for adjudicating such disputes. Under the law, it was open to the respondent to approach the court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. In (2000) 10 SCC 649 [Haryana Urban Development Authority Vs. Anupama Patnaik] it was observed :– “3. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. In (2000) 10 SCC 649 [Haryana Urban Development Authority Vs. Anupama Patnaik] it was observed :– “3. It is rather strange that a simple claim for money was made in a writ petition and was entertained by the High Court and allowed. There are several disputed questions of fact. Each party is alleging that the other party is guilty of violation of the terms of the allotment. The matter is not covered by any statutory provisions. The writ petition itself was misconceived and not ought to have been entertained….” 16. In view of the observations in the order under appeal for lack of any action against the government officers indicted by the Cabinet Vigilance and reiterated in the order of the Secretary dated 16.3.2004 we queried the appellants regarding these seven named officers. The evasive replies and reluctance of the appellants to take any action led us to order on 12.5.2010 that a F.I.R. be registered on basis of order dated 16.3.2004. Vigilance case no.50 of 2010 was then registered on 12.7.2010. Curiously, the appellants did not include the respondent though the entire allegations were of conspiracy. The challenge by the respondent to our order in S L P (Civil) 2706-2707) /2011 was unsuccessful on 21.2.2011. 17. The Order in Special case 18 of 2013, is not a new subsequent fact strictly speaking. It is only the reiteration of the Cabinet Vigilance report and the order dated 16.3.2004 of the Secretary. On contest after examination of documents and evidence the Special Court has held that no order was obtained by the Department for doing the works in question and neither allotment had been made. Provisions of the PWD Code had been violated. The integrity of the bills was doubtful. Entries in the measurement book had been forged. Wrong and fraudulent measurement of old and new spurs without doing work on the spot had been prepared. The measurement book had not been filled up on the spot based on actual measurement but had been prepared sitting in the office. The integrity of the bills was doubtful. Entries in the measurement book had been forged. Wrong and fraudulent measurement of old and new spurs without doing work on the spot had been prepared. The measurement book had not been filled up on the spot based on actual measurement but had been prepared sitting in the office. The report of the engineer of Technical Examination Cell stated that the technical plan related to the work in question does not contain the averaging plan of the River, there was no perpendicular and transverse line, whereas the estimate of such a big amount has to be made after making a detailed survey of upstream and downstream so that exact quantity of the work should have been assessed on the basis of the natural flow of the River. The members of the liability committee and the scrutiny committee had not examined the workplace and their opinion was seriously disputed by the Department. 18. Subsequent events, in the given facts of a case, arising during the pendency of the case if relevant can and must be seen to prevent not only miscarriage of justice but also to ensure that the Court applies the correct law. This is all the more important if the jurisdiction is discretionary. In (2002) 2 SCC 256 [Om Prakash Gupta Vs. Ranbir B. Goyal ] it was observed :– “11. The ordinary rule of civil law is that the rights of the parties stand crystallised on the date of the institution of the suit and, therefore, the decree in a suit should accord with the rights of the parties as they stood at the commencement of the lis. However, the Court has power to take note of subsequent events and mould the relief accordingly subject to the following conditions being satisfied: (i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted; (ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and (iii) that such subsequent event is brought to the notice of the court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. In Pasupuleti Venkateswarlu v. Motor & General Traders this Court held that a fact arising after the lis, coming to the notice of the court and having a fundamental impact on the right to relief or the manner of moulding it and brought diligently to the notice of the court cannot be blinked at. The court may in such cases bend the rules of procedure if no specific provision of law or rule of fair play is violated for it would promote substantial justice provided that there is absence of other disentitling factors or just circumstances. The Court speaking through Krishna Iyer, J. affirmed the proposition that the court can, so long as the litigation pends, take note of updated facts to promote substantial justice. However, the Court cautioned: (i) the event should be one as would stultify or render inept the decretal remedy, (ii) rules of procedure may be bent if no specific provision or fair play is violated and there is no other special circumstance repelling resort to that course in law or justice, (iii) such cognizance of subsequent events and developments should be cautious, and (iv) the rules of fairness to both sides should be scrupulously obeyed.” 19. We have considered each of the judgements relied upon on behalf of the respondents. Except for SEIL (supra) and Amit Pharmaceuticals (supra) the others have no relevance to the present controversy. Even the former are distinguishable as they related to a claim in undisputed facts. 20. The fact that the respondent was not a party to the Vigilance case or that no allegations have been made against him or that the judgement therefore does not bind him may be relevant considerations if the respondent were to file a Suit for money claim in the Civil Court. We say nothing about the same. But undoubtedly the same facts bar the exercise of writ jurisdiction under Article 226 of the Constitution. 21. Having given our anxious consideration to the facts of the case and the law applicable, we are unable to sustain the order under Appeal. The order dated 7.2.2006 is set aside. The Appeal is allowed. DINESH KUMAR SINGH, J.:–I agree.