Satyam Shivam Sundram, through proprietor Raju Prasad v. State of Jharkhand, through Secretary, Rural works Department, Government of Jharkhand
2020-05-21
RAJESH SHANKAR
body2020
DigiLaw.ai
JUDGMENT : 1. This case is taken up through audio/video conferencing. 2. The present writ petition has been filed for issuance of direction upon the respondents to make payment of outstanding dues of Rs.7,45,830/- pending since 5th December, 2014, earnest money of Rs.22,33,366/- deposited in the bank and security amount of Rs.21,90,000/- with 15% interest from the due date i.e. 5th December, 2014 till actual date of payment. 3. The factual background of the case as stated in the writ petition is that the petitioner participated in the tender invited by the Executive Engineer, Rural Works Division, Pakur- respondent no.4 for construction of road from Pakur Dhuliyan, Main Road, Chanchki to Nawada via Prithivi Nagar, Chand Nagar, Gandhaipur School i.e. for a distance of 4.850 Kms. for the financial year 2012-13. The petitioner being the successful bidder executed an agreement with the respondent no.4 for an amount of Rs.4,46,67,322/- and it deposited earnest money of Rs.22,33,366/-. The work order was issued by the respondent no.4 in favour of the petitioner vide letter no.1194/Pakur dated 6th June, 2013 and the work was completed within the given time frame i.e. by 5th December, 2014. It has been averred in the writ petition that the respondents made payment of Rs.4,38,80,000/- towards the said work after making proper measurement and verification of the worksite. However, after completion of the work, the respondents did not clear the dues of Rs.7,45,830/-, which was due to be paid in terms with the agreement. The respondent no.4 issued letter no.407/Pakur dated 19th February, 2015 to the Principal Secretary, Rural Works Department, Government of Jharkhand- respondent no.3 intimating that vide letter no.01-319/2012-1384(Anu.) dated 10th May, 2013, an amount of Rs.4,46,67,322/- was sanctioned against which allotment was made to the extent of Rs.4,38,80,000/- and, thus, there was a requirement of allotment of Rs.7,45,830/- for the purpose of payment regarding actual work done assessed by the competent authority after physical verification. The petitioner made request to the respondent no.4 for making payment of the outstanding dues, however, no heed was paid. The petitioner also wrote letter to the respondent no.3 raising its grievance, however, the same was also remained unresponded. Hence, the present writ petition. 4.
The petitioner made request to the respondent no.4 for making payment of the outstanding dues, however, no heed was paid. The petitioner also wrote letter to the respondent no.3 raising its grievance, however, the same was also remained unresponded. Hence, the present writ petition. 4. A counter affidavit has been filed on behalf of the respondents stating inter alia that the work was finally completed on 5th December, 2014 and 5% of the bid amount was retained as earnest money, whereas 5% of the final bill was deducted and retained as security deposit for defect liability period of three years i.e. till 14th December, 2017 in view of Clause 27 of the F2 Agreement. During defect liability period, it was found after inspection that the road constructed by the petitioner was in damaged condition and was full of pot holes. In spite of several directions issued by the respondent no.4 and other authorities, the said road was not repaired during the defect liability period. The petitioner, in fact, did not repair the said road till filing of the counter affidavit. It has also been stated that the petitioner has executed less earth cutting work to the extent of 500.263 cubic meter and as such the differential amount of Rs.43,192/- was deducted from the sanctioned agreement amount of Rs.4,46,67,322/- and the petitioner was already paid Rs.4,38,80,000/-. As such, the remaining amount due to be paid against the final bill was Rs.7,44,130/- only, however, the petitioner has wrongly mentioned the due amount for payment as Rs.7,45,830/-. It has further been stated in the counter affidavit that after preparation of the final bill, the payment of due amount was not made to the petitioner in time, since there was no fund available with the department. Subsequently, the respondent no.4 sent letter to the respondent no.3 for allotment of fund. However, after receiving the aforesaid allotment and before releasing it to the petitioner, the respondent no.4 along with the Assistant Engineer and the Junior Engineer of the concerned works division made inspection/enquiry of the site and found that the construction of road was not up to the mark and there were several defects in the said newly constructed road. Even after issuance of direction to the petitioner to remove the defect, the same was not responded by it.
Even after issuance of direction to the petitioner to remove the defect, the same was not responded by it. The condition of the said road started deteriorating during the defect liability period of three years from the date of completion of the work, as such the respondent no.4 did not pass the final bill. The earnest money of Rs.22,33,366/- and the security deposit to the extent of Rs.21,90,000/-, which are 10% of the total deductions in terms with the agreement dated 6th June, 2013 could have been released in favour of the petitioner after the defect liability period of three years. 5. Heard learned counsel for the parties and perused the materials available on record. The petitioner has prayed for release of the earnest money of Rs.22,33,366/-, security deposit of Rs.21,90,000/- and outstanding due of final bill to the extent of Rs.7,45,830/-. 6. The Hon’ble Supreme Court in plethora of judgments has held that ordinarily the money claims arising out of contractual obligations are not to be entertained by the constitutional courts barring exceptional circumstances. In a recent judgment, rendered in the case of Punjab National Bank & Ors. Vs. Atmanand Singh & Ors. [SLP(C) No.11603/2017 decided on 6th May, 2020], reported in 2020 SCC Online SC 433, the Hon’ble Supreme Court has held as under:- “17. The appellant-Bank has rightly invited our attention to the Constitution Bench decision of this Court in Thansingh Nathmal (supra). In paragraph 7, the Court dealt with the scope of jurisdiction of the High Court under Article 226 of the Constitution in the following words:— “7. … The jurisdiction of the High Court under Article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Articles. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. Resort that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy.
Resort that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. (emphasis supplied) Similarly, another Constitution Bench decision in Suganmal (supra) dealt with the scope of jurisdiction under Article 226 of the Constitution. In paragraph 6 of the said decision, the Court observed thus:— “6. On the first point, we are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. … We do not find any good reason to extend this principle and therefore hold that no petition for the issue of a writ of mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claims a right.” (emphasis supplied) And again, in paragraph 9, the Court observed as follows:— “9.
We therefore hold that normally petitions solely praying for the refund of money against the State by a writ of mandamus are not to be entertained. The aggrieved party has the right of going to the civil court for claiming the amount and it is open to the State to raise all possible defences to the claim, defences which cannot, in most cases, be appropriately raised and considered in the exercise of writ jurisdiction.” (emphasis supplied) In Smt. Gunwant Kaur (supra) relied upon by the respondent No. 1, in paragraph 14, the Court observed thus:— “14. The High Court observed that they will not determine disputed question of fact in a writ petition. But what facts were in dispute and what were admitted could only be determined after an affidavit in reply was filed by the State. The High Court, however, proceeded to dismiss the petition in limine. The High Court is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. In a petition under Article 226 the High Court has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition.
When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. Rejection of a petition inlimine will normally be justified, where the High Court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons.” (emphasis supplied) We restate the above position that when the petition raises questions of fact of complex nature, such as in the present case, which may for their determination require oral and documentary evidence to be produced and proved by the concerned party and also because the relief sought is merely for ordering a refund of money, the High Court should be loath in entertaining such writ petition and instead must relegate the parties to remedy of a civil suit. Had it been a case where material facts referred to in the writ petition are admitted facts or indisputable facts, the High Court may be justified in examining the claim of the writ petitioner on its own merits in accordance with law.” 7. In the aforesaid case, the Hon’ble Supreme Court after having considered various earlier judicial pronouncements has held that when the refund of money is claimed by filing a writ petition and the question of facts raised inter alia is so complex in nature, which requires production of various documents and leading of evidences, the High Court should relegate the parties to seek civil remedy. However, in case of admitted facts, the High Court may grant relief to the petitioner by examining the case on its own merit. 8.
However, in case of admitted facts, the High Court may grant relief to the petitioner by examining the case on its own merit. 8. In the present case, the specific stand of the respondents is that during inspection of the work within the defect liability period, several defects were found in the construction work executed by the petitioner and even after issuance of direction to it to cure the said defects, the same was not responded and as such the aforesaid payment has retained by them. So far as the retention of the earnest money and security deposit are concerned, the specific stand of the respondents is that the same have been retained in terms with the agreement, as in the inspection conducted during the defect liability period, several defects in the work were found. However, so far as the petitioner’s claim for payment of outstanding dues of final bill amounting to Rs.7,45,830/- is concerned, it has been stated in the counter affidavit that the petitioner has executed less earth cutting work to the extent of 500.263 cubic meter and as such the differential amount of Rs.43,192/- has been deducted from the agreement amount and the actual dues comes to Rs.7,44,130/- only which could not be paid to the petitioner immediately after completion of work due to non-availability of fund. Thus, it has, in fact, been admitted by the respondents that there was no any impediment or any such condition in the agreement to release the said due amount to the petitioner, rather only due to non-availability of fund, the same could not be released in its favour. It also appears that the respondent no.4 had written letter to the respondent no.3 on 9th January, 2015 for allotting the fund of Rs.1,02,45,830/- for payment of final bill to the petitioner, however, Rs.95,00,000/- was only allotted which was released in favour of the petitioner on 10th February, 2015 after due verification of the work. The conduct of the respondents, thus, suggests that if the required fund had been available with the department, the same would have been released in favour of the petitioner, as there was no hurdle in doing so.
The conduct of the respondents, thus, suggests that if the required fund had been available with the department, the same would have been released in favour of the petitioner, as there was no hurdle in doing so. Now the respondents have taken stand that since the petitioner did not comply their direction to repair the defects in the constructed road during defect liability period of three years, the pending bill of Rs.7,44,130/- has not been released in favour of the petitioner, however, no such condition of agreement has been brought to the notice of the Court. 9. Though the earnest money and the security deposit have been retained by the respondents, claiming that the same is permissible in accordance with the terms of the agreement, as the work done by the petitioner was not up to the mark, yet the dues against the final bill amounting to Rs.7,44,130/- has been admitted by them and no specific provision has been mentioned so as to justify the retention of the said amount. In fact, it is evident that the same was not paid to the petitioner immediately after completion of the work only due to non-availability of the required fund. Admittedly, the respondents inspected the work after completion of the same and on getting satisfied, the part payment towards the agreement i.e. Rs.95,00,000/- was made. Thus, in my opinion, the petitioner should not be penalized for the own fault of the respondent authorities. 10. In the case of Union of India Vs. Vertex Broadcasting Co. (P) Ltd. & Ors., reported in (2015)16 SCC 198, the Hon’ble Supreme Court has held as under: “12. If the licence fee and the earnest money have been forfeited unjustifiably by the Union, as we are inclined to hold, naturally, the licensees would be entitled to payment of interest. Award of interest is a measure of recompense for delayed payment. Interest also seeks to offset the decline in the value of money with time. Taking into account the totality of the facts and circumstances of the case, we are of the view that interest @ 6% p.a. from the date that the amounts were forfeited by the Union (licence fee and the earnest money) would serve the ends of justice. We, therefore, order accordingly and direct the Union to pay all such amounts along with interest at 6% p.a. within a period of eight weeks.” 11.
We, therefore, order accordingly and direct the Union to pay all such amounts along with interest at 6% p.a. within a period of eight weeks.” 11. Having considered the facts available on record, I am of the view that the respondent authorities have arbitrarily retained the bill amount of Rs.7,44,130/- without any justified reason and as such they are bound to release the same in favour of the petitioner. If the respondents had executed the agreement with the petitioner for a specific amount, it was their duty to have the sufficient fund for the purpose of payment. Thus, the respondents are also bound to make payment of interest for delayed payment @ 6% per annum from the date the final bill was prepared till the actual date of payment. So far as the dispute with respect to earnest money and the security deposit are concerned, this Court is not inclined to interfere in the writ jurisdiction. 12. Accordingly, the respondent authorities are directed to make payment of Rs.7,44,130/- against the final bill of the petitioner along with interest @ 6% per annum with effect from the date of preparation of the final bill within three months from the date of receipt/production of a copy of this order. 13. It is, however, clarified that no determination with regard to factual dispute between the parties has been made and the petitioner is at liberty to take appropriate recourse as provided under the law for redressal of its subsisting grievance in terms with the agreement. 14. The writ petition is, accordingly, partly allowed with the aforesaid observations and directions.