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2017 DIGILAW 92 (CHH)

Arunesh Kant Shrivastav v. State of Chhattisgarh

2017-02-21

ASHOK KUMAR PANDA, T.P.SHARMA

body2017
ORDER : Ashok Panda, Judicial Member This is a reference petition under Section 7 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 (in short the Adhiniyam, 1983) filed by the petitioner/claimant seeking an award of refund of Rs. 55,000/- as deposited with the respondents as earnest money in the form of FDR, for claim of Rs. 12,675/- deposited as security deposit, claim for Rs. 12,675/- deposited as performance guarantee total amounting to Rs. 80,350/- with interest on all 3 claims at the rate of 16% per annum. 2. An agreement No. 39/DL of 2006-07 vide (Article-"A") was entered between the petitioner and respondents for reconstruction and widening of weak and narrow culverts in K.M. 99/10, 100/6, 100/8, 100/10, 1001/1, 1002/2, 1004/4, 10022/2, 10022/4, 10022/4, 10031/2, 10036/8, 10037/8, 10039/8 and 140/2 of NH-200, work order was issued in favour of the petitioner on 01/03/2007 vide work order No. 509/SAC Bilaspur vide Ex.P-4, the amount of tender was 72.73 lacs, the Stipulated period for completion of work was 4 month excluding rainy season, work was not completed, the agreement was terminated on 15/5/2007 vide F.x.P-9, which was subsequently revived on 20/06/2007 vide Ex.P-12, petitioner had received Rs. 2,53,503/- for the work to the extent what he had executed. The contract was ultimately terminated on 15/02/2008 vide Ex.P-22, are not substantially disputed. 3. According to the petitioner, the petitioner had mobilised manpower and machinery at the work-site just after receipt of work order. But, the department did not provide the required drawing and designs, however, the petitioner commenced the widening of culverts in K.N. 100/6, 100/2 and 1002/2 as per the verbal instructions given by the Sub-Divisional Officer. He had been repeatedly requesting the department to provide drawing and designs so that he could complete the work but the department did not provide him drawing and design during the entire agreement period. Petitioner had applied for extension of time, however, the department did not answer the request under these circumstances the petitioner made a request to determine the contract under Clause 14 of the agreement but, surprisingly the department issued show cause notice to terminate the contract under Clause 3 of the agreement and illegally terminated the contract on 15/02/2008. Petitioner had applied for extension of time, however, the department did not answer the request under these circumstances the petitioner made a request to determine the contract under Clause 14 of the agreement but, surprisingly the department issued show cause notice to terminate the contract under Clause 3 of the agreement and illegally terminated the contract on 15/02/2008. Order of termination of contract under Clause 3 was illegal as the time had never been the essence of contract and the facts and circumstances of the case do not fall under the ambit of any of the eventualities provided in Clause 3 of the agreement. The petitioner had invoked Clause 28 of the agreement by making a quantified claim to the Superintendent Engineer on 14/03/2008 which came to be rejected on 13/11/ 2009. Being aggrieved by the order, the petitioner preferred an appeal to the Chief Engineer on 11/12/2009 but, the Chief Engineers did not make any order on his appeal. Hence this reference petition. 4. Respondents have contested the claims of the petitioner by tiling their written statement. They have pleaded that no verbal instructions were given to the petitioner. In fact, layout had already been supplied to the petitioner on 03/03/2007, however, the petitioner did not start the work. The contract was terminated by the Executive Engineers but, subsequently it was revived at the request of the petitioner. However, thereafter the petitioner did not commence the work. Many a times the petitioner was asked to execute the work but the petitioner had never been serious and willing to execute the work. The petitioner had executed the work only 3.39% of the total work worth Rs. 2,53,503/- as against the total amount of the work of Rs. 72,73.000/-. The petitioner had made a request for extension of time on 12/12/2007. The department had issued a letter on 08/01/2008 to the petitioner requesting therein to expedite the work within 10 days, otherwise, the department will proceed under Clause 3 of the agreement but, the petitioner paid no heed, of therefore, the contract was lawfully terminated under Clause 3 of the agreement. Since, the contract was terminated under Clause 3, the earnest money, security deposit and performance guarantee were liable to be forfeited and these deposits were lawfully forfeited. It is further stated that the reference petition is not maintainable which deserves to be disallowed and rejected. 5. Since, the contract was terminated under Clause 3, the earnest money, security deposit and performance guarantee were liable to be forfeited and these deposits were lawfully forfeited. It is further stated that the reference petition is not maintainable which deserves to be disallowed and rejected. 5. Heard the counsel appearing for the parties and perused the record. 6. Learned counsel appearing for the petitioner submitted that time was not the essence of the contract and, therefore, the contract ought not to have been terminated, apart from that, the facts and circumstances of the case do not fall under the ambit of Clause 3 of the agreement. It is therefore, termination of contract under Clause 3 is illegal and consequently the petitioner is entitled for the amount deposited with the respondents as earnest money, security deposit and performance guarantee. 7. Learned counsel appearing for the respondents, on the other hand, submitted that the documents filed by the petitioner clearly show that the petitioner had never been willing to execute the work, ultimately the contract was terminated under Clause 3 after affording an opportunity of hearing to the petitioner. 8. Question arises for determination is as to whether order of termination of contract under Clause 3 of the agreement was not just and proper? 9. Work order was issued on 09/03/2007 vide Ex.P-4. The petitioner wrote a letter to the respondents on 12/04/2007 vide Ex.P-5 which reflects that till 12/04/2007 the petitioner had not commenced the work. In this letter the petitioner had made a request for extension of time means he had sought extension of time without commencing the work. 10. Ex.P-6 filed by the petitioner shows that on 11/04/2007 respondent had issued a show cause notice to the petitioner, calling upon him show as to why the contract should not be terminated under Clause 3, as he had not commenced the work. In response to this show cause notice the petitioner wrote the letter dated 12/04/2007 Ex.P-5 wherein it was stated that drawing and design has not been provided to him. Answering this letter, the respondents communicated the petitioner that layout has already been supplied to him on 03/03/2007 vide their letter dated 30/04/2007 (Ex.P-7). 11. In response to this show cause notice the petitioner wrote the letter dated 12/04/2007 Ex.P-5 wherein it was stated that drawing and design has not been provided to him. Answering this letter, the respondents communicated the petitioner that layout has already been supplied to him on 03/03/2007 vide their letter dated 30/04/2007 (Ex.P-7). 11. Ex.P-7 filed by the petitioner shows that this letter was written by the Executive Engineer to the petitioner on 20/04/2007 which goes to show that some instructions were given to the petitioner which were not executed by him and till that date the work had not been commenced. Besides this requisite machinery such as Haper mixture was not brought at the work site despite several instructions given. Hume pipes were required for construction of culverts, requisite Hume pipes were also not found at the site. It reflects that the petitioner was not equipped with requisite machines and required materials for executing the work. 12. Vide Ex.P-14 dated 02/08/2007 the petitioner was asked to apply for extension of time. Since this letter was not responded, a second letter was issued by the department vide Ex.P-15 on 29/10/2007 again, for making an application for extension of time. Again the respondents wrote a letter on 14/ 11/2007 vide Ex,P-16 to apply for extension of time. All these communications were not responded by the petitioner. As per the agreement, the work was to be completed by 31/10/2007 till the expiry of stipulated period the petitioner had never made a request for extension of time but, made an application for extension of time vide Ex.P-17 on 12/12/2007 i.e. after the expiry of stipulated period. 13. It is also not in dispute that the petitioner had executed only 3.39% of the total work, worth Rs. 2,53,503/- as against cost of total work of Rs. 72,73,000/- during the entire period. 14. Vide Ex.P-19, on 08/01/2008 the respondents issued a show cause notice against the petitioner, calling upon him to show, as to why the contract should not be terminated under Clause 3 of the agreement. Again vide Ex.P-20 a show cause notice was given to the petitioner. On 22/01/2007 in response to this show cause notice, the petitioner Vide letter dated 15/02/2008 Ex.P-21 made a request to determine the contract under Clause 14 of the agreement. 15. Again vide Ex.P-20 a show cause notice was given to the petitioner. On 22/01/2007 in response to this show cause notice, the petitioner Vide letter dated 15/02/2008 Ex.P-21 made a request to determine the contract under Clause 14 of the agreement. 15. As per Clause 14 of the agreement if the total duration of suspension of work is more than 6 months on account of the stoppage of work on the part of department then only Clause 14 would be applicable. Here in this instant case, there is nothing on the record to show that the work was either suspended or stopped by the respondents. 16. Whereas Clause 3 of the agreement provides that an action can be taken by the Executive Engineer when the work is left incomplete, abandoned or delayed beyond the time limit permitted by the Executive Engineer. Under Clause 3 a contract can be terminated, if the contractor causes a fundamental breach of the contract. Clause 3 of the agreement provides that, if the contract, stops the work for 4 weeks and such, stoppage which has not been authorised by Executive Engineer or, where the contractor has delayed the completion a work or, where the contractor has not completed 30% of the value of construction work required to be completed in half of the completion period that would amount a fundamental breach of contract. Here in this case during the entire stipulated period the petitioner had only executed 3.39% of the total work which was a clear fundamental breach of contract and, therefore, the termination of contract under Clause 3 was just and proper and further the respondents were entitled to forfeit the earnest money, security deposit and performance guarantee deposited by the petitioner. 17. In view of the reasons aforementioned we are of the view that the reference petition filed by the petitioner is devoid of merits and deserves to be disallowed and rejected. It is hereby the reference petition is dismissed with cost. 18. The Petitioner shall not only bear his own cost but also bear the cost of respondents also. 19. Memo of cost be drawn up accordingly.