Krishna Shelters, Rept. By its Chairman & Managing Director K. A. Raghavendra v. Union of India, Central Public Works Department, Represented by Chief Manager (SZ)
2017-06-23
ASHOK B.HINCHIGERI
body2017
DigiLaw.ai
JUDGMENT : 1. The petitioner’s grievance is over the termination of the contracts awarded to it by the respondents. The tenders floated are for the construction of sports complex, apartments for faculty and non-faculty members and multistoried boys’ hostel on the campus of National Institute of Technology, Surathkal. The facts are narrated with reference to W.P.No.21883/2016. 2. Sri M.V.V. Ramana, learned counsel for the petitioner submits that the termination of the contract is premature. Under the agreement entered into between the parties, the petitioner has the time to complete the project by 05.12.2016, the impugned order determining the contract is passed on 26.04.2016. 3. He submits that the implementation of the construction- project is delayed only because of the looseness of the soil. He submits that the petitioner is not being allowed to complete the work; that the petitioner’s machinery worth Rs.4.00 crores are lying on the site of construction. He submits that the termination of the contract in question would affect the execution of the works in respect of the other contracts by the petitioner. He submits that the sheds put up by the petitioner are being used by the subsequent contractors chosen by the respondents. He submits that the respondents are appropriating Rs.6-7 crores, which is not permissible as the petitioner is in no way liable to pay the same to the respondents. 4. He submits that there is no agreement for arbitration as per Section 7 of the Arbitration and Conciliation Act, 1996, because the contractor is required to exhaust the remedy of approaching the Superintending Engineer. If the Superintending Engineer’s decision is not acceptable to him, he has to file an appeal to the Chief Engineer. Only thereafter he has to avail of the arbitration remedy. As the Superintending Engineer and the Chief Engineer are all the officers of the respondents, no fair adjudication can be expected from them. It is under these circumstances that the petitioner is entitled to the redressal of his grievances on the original side in the proceedings under Article 226 of the Constitution of India. 5. He relies on the Apex Court’s judgment in the case of JAGDISH CHANDER vs. RAMESH CHANDER AND OTHERS reported in (2007) 5 SCC 719 .
It is under these circumstances that the petitioner is entitled to the redressal of his grievances on the original side in the proceedings under Article 226 of the Constitution of India. 5. He relies on the Apex Court’s judgment in the case of JAGDISH CHANDER vs. RAMESH CHANDER AND OTHERS reported in (2007) 5 SCC 719 . Head-Note A portion, read out by him, is as follows: “A. Arbitration and Conciliation Act, 1996-S.7-Arbitration agreement/clause-What constitutes-Principles therefor, exhaustively summarized-Presence of concluded consent of the parties to refer disputes to arbitration-Necessity of-Held, mere use of the word “arbitration” or “arbitrator” in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration-Such an agreement is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future-Hence, in present case clause in question stating that disputes “shall be referred for arbitration if the parties so determine”, was not an arbitration clause since the expression “determine” indicates that the parties were required to reach a decision by application of mind-The main attribute of an arbitration agreement, namely, consensus ad idem to refer the disputes to arbitration was missing-Lastly, parties could not be referred to arbitration or an arbitrator appointed under S.11 on the basis of such a clause under S.89 CPC-Reasons for, explained. “ 6. He submits that Clause 29 of the agreement provides for having a lien pending finalization or adjudication of any claim and that therefore the respondents ought not to have terminated the contract. 7. Without prejudice to these submissions, he submits that the matter could be resolved by referring the matter to mediation. 8. Sri Prabhulinga Navadagi, learned Additional Solicitor General of India appearing for the respondents submits that the petitioner has not been adhering to the timeline prescribed under the agreement. He submits that as on the date of terminating the contract, the petitioner ought to have completed 65% of the works. On the other hand, he has completed only 16% of the works. After terminating the contract awarded to the petitioner, the respondents issued fresh tender notification and awarded the contract work to others for the completion of the unfinished works. As third party interests have come in, no status-quo ante can be restored at the instance of the petitioner. 9.
On the other hand, he has completed only 16% of the works. After terminating the contract awarded to the petitioner, the respondents issued fresh tender notification and awarded the contract work to others for the completion of the unfinished works. As third party interests have come in, no status-quo ante can be restored at the instance of the petitioner. 9. He submits that the petitioner’s grievance, if any, are to be ventilated before the arbitrator provided under Clause 25 of the agreement between the parties. He submits that the petitioner has executed two kinds of bank guarantees. One is for the performance of the work and the other is a security for the repayment of the mobilization. 10. He has also relied on this Court’s order, dated 14.12.2016 passed in W.P.No.51735/2016 in the case of M/s.SRI KRISHNA SHELTERS PVT. LTD. vs. PROJECT MANAGEMENT GROUP, INDIAN INSTITUTE OF SCIENCE for advancing the submission that when a petition raises the questions of facts of complex nature, which may for their determination require oral evidence to be taken and on that account, the dispute may not appropriately be tried in writ petition. 11. The submissions of the learned counsel have received my thoughtful consideration. The question that arises for my consideration is whether the sustainability or otherwise of the orders terminating the contract can be examined when the matter involves seriously disputed questions of facts? 12. Whether the looseness of the soil came in the way of the petitioner executing the project, whether the delay in executing the project was avoidable, what percentage of work is completed etc. cannot be gone into in the proceedings under Article 226 of the Constitution of India. When the agreement provides for the dispute resolution by making representation to the superintending Engineer, by filling an appeal to the Chief Engineer, by approaching the arbitrator, the writ remedy is not available to the petitioner. I may usefully refer to the Apex Court’s judgment in the case of reported in JOSHI TECHNOLOGIES INERNATIONAL INC.
When the agreement provides for the dispute resolution by making representation to the superintending Engineer, by filling an appeal to the Chief Engineer, by approaching the arbitrator, the writ remedy is not available to the petitioner. I may usefully refer to the Apex Court’s judgment in the case of reported in JOSHI TECHNOLOGIES INERNATIONAL INC. vs. UNION OF INDIA reported in (2015) 7 SCC 728 , wherein it is held that whenever a particular mode of settlement of disputes is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution of India and relegate the party to the said mode of settlement, particularly when the settlement of disputes is to be resorted through the means of arbitration. 13. The question of referring the matter to mediation does not arise, as the arbitration is provided for. The petitioner’s prayer for direction to the respondents to consider its request for the rescheduling of the works cannot be acceded to, because the third party interests have come in. It is not in dispute that the respondents have awarded the execution of the unfinished works to other contractors subsequently. They are not made parties to this petition. In their absence, it is not proper to either give a direction for the rescheduling of works or to quash the order cancelling the contract. Besides, the petitioner has also not challenged the subsequent orders awarding the contract to others. 14. It is also profitable to refer to the Hon’ble Supreme Court’s decision in the case of P.R.MURALIDHARAN AND OTHERS vs. SWAMI DHARMANANDA THEERTHA PADAR AND OTHERS reported in (2006) 4 SCC 501 , wherein it is held that a writ of mandamus cannot be sought for directing protection in respect of the property, status or right, which remains to be adjudicated upon and when such adjudication can be done in a properly instituted civil suit. 15. For all the aforesaid reasons, I dismiss these petitions. However, it is made clear that the dismissal of these petitions would not come in the way of the petitioners resorting to the initiation of arbitration proceedings or of any other proceedings, which are open to it in law. 16. At this juncture, the petitioner’s learned advocate requests that the interim order granted earlier be extended. It is trite that the interim order merges in the final order.
16. At this juncture, the petitioner’s learned advocate requests that the interim order granted earlier be extended. It is trite that the interim order merges in the final order. When the writ petitions are dismissed, there is no question of extending the interim order. 17. No arguments are advanced on the pending I.A.s. As the main matter itself is taken up for disposal, the I.A.s are dismissed as not pressed and as having become unnecessary.