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2014 DIGILAW 979 (JHR)

Somnath Pathak v. State of Jharkhand

2014-09-16

SHREE CHANDRASHEKHAR

body2014
Order Seeking quashing of order dated 8.8.2013 terminating Agreement No. 2 S.B.D./2011-12 dated 4.7.2011 and for a direction upon the respondents to release all dues against the said agreement with statutory interest from the due date, the petitioner has approached this Court by filing the present writ petition. 2. The brief facts of the case are that, the Agreement No.2 S.B.D./2011-12 was executed for re-construction of Pakur-Barharba Road from 0.00 k.m. to 12 k.ms. for a total contract value of approximately Rs.12,01,76,020.00. The work was to commence from 4.7.2011 and it was to be completed by 3.10.2012 however, the site was not handed over in full to the contractor due to which the work under the agreement could not be completed and therefore, the petitioner made representations dated 30.10.2011 intimating the difficulties faced by the contractor in execution of work. By letter dated 1.12.2011, 10.12.2011, 13.12.2011, 4.1.2012, 9.1.2012 & 22.1.2013 the petitioner again wrote to the Executive Engineer and others indicating the difficulties faced by the contractor. Vide letter dated 17.4.2013 a show-cause notice was issued to the petitioner to show cause why the agreement be not terminated. The petitioner submitted his reply on 30.6.2013 however, vide letter dated 8.8.2013 the Agreement No.2 S.B.D./2011-12 has been terminated. 3. A counter-affidavit has been filed on behalf of the respondents stating that the petitioner was directed vide letters dated 10.5.2012, 9.10.2012 & 17.12.2012 to complete the work under Agreement No.2 S.B.D./2011-12 however, the contractor did not take interest to complete the work. Vide letter dated 27.12.2012, the Executive Engineer recommended that the Agreement No.2 S.B.D./2011-12 should be terminated and therefore, in the light of the above facts a show-cause notice date 17.4.2013 was issued to the petitioner. On 1.8.2013 a Press notice was issued for taking final measurement under Agreement No.2 S.B.D./2011-12 and the final measurement has been taken on due date. It is further submitted that there were enough stretches available to the contractor to continue the work however, the petitioner always tried to misguide the Department pretending that there is a land dispute. In fact only a small stretch of land was under dispute which would not have been prevented the petitioner from completing the entire work. 4. Heard the learned counsel for the parties and perused the documents on record. 5. In fact only a small stretch of land was under dispute which would not have been prevented the petitioner from completing the entire work. 4. Heard the learned counsel for the parties and perused the documents on record. 5. The learned counsel appearing for the petitioner has submitted that the respondent-State of Jharkhand has admitted that the site was not handed over to the contractor and even the land falling within the stretches 0.00 k.m. to 12.00 k.ms. were not fully acquired and thus, the employer committed fundamental breach of terms to the contract and therefore, the termination vide letter dated 8.8.2013 is not sustainable in law. It is further submitted that in view of Section 67 of the Indian Contract Act once a party to the contract admits non-performance of the terms of contract, the contract cannot be terminated and damages cannot be realized from the other parties The learned counsel for the petitioner has relied on a judgment of the Hon'ble Supreme Court in "Haryana Financial Corpn. and Another vs. Rajesh Gupta" reported in (2010)1 SCC 655 and a judgment of this Court in "Modi Projects Ltd. vs. State of Jharkhand & Ors." [in W.P(C) No. 2791 of 2010]. Referring to the 'supplementary affidavit, the learned counsel for the petitioner has submitted that in terms of the Clause 48 which deals with retention, the respondents are not justified in retaining the entire amount due to the petitioner. Referring to the order of termination dated 8.8.2013 the learned counsel for the petitioner has submitted that a perusal of the letter dated 8.8.2013 and letter dated 5.8.2013, copy of which has been annexed along with the counter-affidavit filed by the respondents, would disclose that though under the contract the Chief Engineer, Communication is the employer the decision for terminating contract has not been taken by the employer and thus, termination order dated 8.8.2013 suffers from non-application of mind. 6. Mrs. Debolina Sen Hirani, J.C. to Mr. Jai Prakash (A.A.G.) appearing for the respondent-State of Jharkhand has reiterated the stand taken in the counter-affidavit and submitted that admittedly the work was not completed within the stipulated time. The reasons advanced by the petitioner for not completing the work in time has not been found correct and therefore, the Agreement No.2 S.B.D./2011-12 has been terminated vide order dated 8.8.2013. The reasons advanced by the petitioner for not completing the work in time has not been found correct and therefore, the Agreement No.2 S.B.D./2011-12 has been terminated vide order dated 8.8.2013. Referring to the Item No. 29 of the Contract Data, the learned counsel for the respondent-State of Jharkhand has submitted that in terms of Item No. 29, the liquidated damages has been calculated and by filing the reply to I.A. No.8930 of 2013, the respondent-State of Jharkhand has brought on record detailed calculation in this regard. It is further submitted that the Agreement No. 2 S.B.D./2011-12 has been signed by the Executive Engineer and a perusal of letter dated 5.8.2013 would disclose that the Chief Engineer delegated power to the Executive Engineer for taking appropriate decision in the matter. 7. I have carefully considered the submission of the learned counsel for the parties and perused the documents on record. 8. From the facts disclosed in the present proceeding, it appears that under the contract, the contractor was required to commence work from 4.7.2011 and the work was to be completed on or before 3.10.2012. The letter dated 10.5.2012 by the Executive Engineer written to the petitioner on which the petitioner has placed reliance, also indicates that the petitioner was directed to continue work. After about 11 months, a show-cause notice dated 17.4.2013 was issued which indicates that out of 12.00 k.ms. the petitioner was able to complete the work for only about 8.00 k.m. of re-construction of road. The reply submitted by the petitioner refers to the inability of the petitioner to arrange fund as well as the petitioner not keeping good health and he himself remaining away to Bombay in connection with his treatment. The learned counsel for the petitioner has referred to notification for acquisition of land to submit that the land on the stretches of 0.00 to 12.00 k.ms. was not fully required (sic-acquired?) and thus, there was no fault on the part of the contractor. A perusal of the said notifications a copy of which has been annexed with writ petition indicates that the said notification was issued only with respect to acquisition for 9 bighas, 12 kathas and 8 dhurs equivalent to 3.18 acres of land. The petitioner has not produced on record the details of completion of 8 k.ms. of reconstruction of road to establish that it was completed within time. The petitioner has not produced on record the details of completion of 8 k.ms. of reconstruction of road to establish that it was completed within time. The materials brought on record do not indicate that acquisition of land was the reason due to which the petitioner could not complete the work under Agreement No.2 S.B.D./2011-12 within stipulated time. It is a matter of record that even 10 months after the stipulated date for completion of the work, the petitioner wc1s not able to complete the work. In view of the aforesaid, in so far as challenge to termination of agreement vide letter dated 8.8.2013 is concerned, it fails. In so far as, a direction to the respondents for release of dues with statutory interest against the Agreement No.2 S.B.D./2011-12 is concerned, clause 60 deals with the situation where the contract has been terminated. It provides that after the contract has been terminated the engineer shall issue certificate for the value of work done less advance payment upto the date of issue of certificate and also after deducting other recovery due in terms of the contract. By filing affidavit, the respondent-State of Jharkhand has brought on record the calculation for the amount which includes the total work done by the contractor and the amount of liquidated damages calculated in terms of clause 29 of the Contract Data. In the present writ petition, no challenge has been made with respect to any recovery from the petitioner. If the petitioner is aggrieved by the recovery sought to be made by the respondents, it is open to the petitioner to work out remedies in accordance with law. 9. In the result, I find no merit in the writ petition and accordingly, it is dismissed.