T. R. Trehan Construction Pvt. Ltd. v. Public Works Department
2015-01-05
P.K.JAISWAL, S.C.SHARMA
body2015
DigiLaw.ai
JUDGMENT : 1. Heard on the question of admission. By this petition under Article 226 of the Constitution of India, the petitioner is praying for quashment of the show cause notice dated 22.11.2014 (Annexure P/14) on the ground that respondent No. 3 does not hold the jurisdiction from the agreement to issue the impugned show cause notice. 2. Brief facts of the case are that the petitioner has entered into a work contract on 04.06.2011. As per the terms of the agreement, cement concrete pavement Old NH3 AB Road, Indore, kilometers 591/8 (60 M) to 559/6 (100 M) equivalent to 7.76 kilometers, including construction of bridge work, was awarded to him. The order to commence the work was issued by the respondents on 04.06.2011 and the period stipulated for completion of work is 16 months including rainy season to be reckoned after 30 days. Thus, the due date for completion of work is scheduled as on 04.11.2012. 3. It is contended that due to non-removal of obstruction from the work site, the respondent department initially extended completion time till 31.12.2012, but since clear work site was not handed over to the petitioner, therefore, extension for completion of work was granted to the petitioner till 31.03.2013. On 04.03.2013, again extension was granted till 03.11.2013. It is alleged that after completion of the work, payment of the petitioner has not been made, and therefore, he approached M.P. Arbitration Tribunal, Bhopal for quantified claim of Rs.6,40,00,894/- in various heads of price escalation. As per the averments made in the petition, the time was further extended till 30.04.2014. 4. On 22.11.2014, show cause notice under Clause 3 of the agreement was issued by the Executive Engineer, who is Engineer-in-Charge of the work for taking action against the petitioner for the breach of contract on his part. It is this action which is impugned in this writ petition. 5. Learned counsel for the petitioner has submitted that whether time is of the essence of the contract, is a question of intention of the parties to be gathered from the terms of the contract. Time can be made of the essence of the contract by fixing a further period for completion.
5. Learned counsel for the petitioner has submitted that whether time is of the essence of the contract, is a question of intention of the parties to be gathered from the terms of the contract. Time can be made of the essence of the contract by fixing a further period for completion. In support of the aforesaid, he has drawn our attention to the decision of the Apex Court in the case of M/s. Hind Construction Contractors v. State of Maharashtra reported in : (1979) 2 SCC 70 . 6. His contention is that in the present case, time was not the essence of the contract and thus the authority has no jurisdiction to issue show cause notice as per clause 3 (c) of the agreement. Clause 3 (c) of the agreement is relevant, which reads, as under: "Action when the work is left incomplete, abandoned or delayed beyond the permitted limit allowed by the Divisional Officer Clause 3 - In any case in which under any clause or clauses of this contract the contractor shall have rendered himself liable to pay compensation amounting to the whole of his security deposit (whether paid in one sum or deducted by installments) or committed a breach of any of the rules contained in Clause 24 or in the case of abandonment of the work, except due to permanent disability or death of the contractor, or any other cause, the Divisional Officer on behalf of the Governor of Madhya Pradesh shall give a notice before 15 days for work costing upto Rs.10.00 lacs and before 30 days for works costing above Rs.10.00 lacs and in the event of the contractor failing to comply with the directions contained in the said notice shall have power to adopt any of the following courses, as he may deem best in the interest of the Government.
(c) To measure up the work of the contractor and to take such part thereof as shall be unexecuted out of his hands and to give it to another contractor to complete in which case any expenses which may be incurred in excess of the sum which would have been paid to the original contractor if the whole work had been executed by him (of the amount of which excess certificate in writing of the Divisional Officer shall be final and conclusive) shall be borne and paid by the original contractor and may be deducted from any money due to him by Government under the contract or otherwise or from his security deposit or the proceeds of sale thereof or a sufficient part thereof." 7. In the case in hands, the petitioner contractor applied for extension from time to time as per Clause 5 of the agreement. The Competent Authority of respondent No. 1 granted extension from time to time subject to payment of penalty, as per terms of the contract. 8. We have gone through the terms and conditions of the agreement. 9. Determination of the question whether time is of essence of performance can be considered either with reference to contract as a whole or with reference to a particular term or condition of contract which is breached. In a contract relating to works contract, if time is specified for compliance of the work but with penalty and clause of rescission, time will become the essence only with reference to the completion of the work. Here, in the present case, as per the terms and conditions of the contract, the intention making time essence of the contract is clear. 10. If we read clause 3 of the agreement, it would clearly show that there was the intention of the parties to make the time to be of the essence of the contract. 11. In the case in hands, the time was essence of the contract, and therefore, sixteen months time was granted to the petitioner to complete the work, including rainy season. The petitioner could not complete the work in time, and therefore, he applied for extension of time, which was granted subject to payment of penalty. 12.
11. In the case in hands, the time was essence of the contract, and therefore, sixteen months time was granted to the petitioner to complete the work, including rainy season. The petitioner could not complete the work in time, and therefore, he applied for extension of time, which was granted subject to payment of penalty. 12. In view of the aforesaid, the contention of the learned counsel for the petitioner that the authority has no jurisdiction to issue show cause notice dated 22.11.2014 is devoid of substance because the authority who has issued the notice is Engineer-in-Charge of the Project. As per the terms of the contract, he is the Competent Authority to issue show cause notice. In case, the petitioner is dissatisfied with the order of the Competent Authority regarding imposition of penalty, he can challenge the same by taking recourse of law as per Clause 25 of the agreement. In the present writ petition, the question whether the petitioner is liable to pay penalty or not, is a disputed questions of fact, which could not be decided in a writ petition under Article 226 of the Constitution of India. 13. For the above mentioned reasons, the writ petition filed by the petitioner has no merit and is accordingly dismissed.