Research › Search › Judgment

J&K High Court · body

2022 DIGILAW 188 (JK)

Saran Aircon Private Ltd v. Union Territory of J&K

2022-04-22

RAJNESH OSWAL

body2022
JUDGMENT : 1. This writ petition has been filed by the petitioner-company for release of payment of contract amount of Rs.7,45,000/- for completion of work “supply, installation, testing and commission of three way mixing valves actuator and Butterfly valves along with allied job with air handling units installed at Convention Hall Canal Road, Jammu.” 2. It is stated that the petitioner being the lowest bidder was allotted the contract for the work mentioned above vide allotment order dated 16.02.2018 and the total value of the contract including all taxes and duties was Rs.7,45,000/-. The petitioner executed the contract within the stipulated time to the satisfaction of the respondents but despite completion of the work, the amount was not released in favour of the petitioner. The petitioner also sent a legal notice dated 12.04.2019 upon respondent Nos. 2, 4 and 7 for release of the aforesaid amount but the payment was not released. However, respondent No. 4 vide its reply dated 06.05.2019 stated that the matter was taken with the respondent No. 7 through various correspondence besides meeting him personally on the subject matter on 24.04.2019 wherein it was assured by the respondent No. 7 that as and when the funds are received, the payment shall be released to the petitioner. The respondent No. 4 vide its communication dated 02.05.2019 requested the respondent No. 7 to release the funds to the extent of Rs.7,45,000/-. Thereafter, the petitioner again made a representation dated 29.07.2020 to the respondents for release of the amount but nothing was done. The petitioner has placed on record copy of the allotment order and legal notice and various communications as referred above. 3. Reply stands filed by the respondents. In the reply filed by respondent Nos. 1 to 6, it is stated that vide communications dated 04.08.2018, 16.10.2018, 27.11.2018, 02.05.2019 and 14.05.2019, the respondent No. 7 was requested that the funds amounting to Rs.7,45,000/- may be released at the earliest to avoid litigation in the matter. It is also stated that respondent No. 7 and respondent No. 4 have drawn an agreement for operation and maintenance of HVAC, DG Sets, Servo Stabilizers and hot water generator in the Convention Center at Jammu on 09.11.2017 as a party 1st and party 2nd respectively. It is also stated that respondent No. 7 and respondent No. 4 have drawn an agreement for operation and maintenance of HVAC, DG Sets, Servo Stabilizers and hot water generator in the Convention Center at Jammu on 09.11.2017 as a party 1st and party 2nd respectively. It is further stated that before the commencement of agreement, on 16.09.2017 certain shortcomings were observed at Convention Center and list of damaged/non-functional components/equipments in Convention Center was prepared and the Chief Engineer, Mechanical Engineering Department (MED) Jammu, respondent No. 2 herein vide letter dated 01.11.2017 was approached by respondent No. 4 to take up the matter with the Director Hospitality and Protocol Department Jammu i.e. the respondent No. 7 herein so that required works as per the list be carried out before the execution of Annual Maintenance Contract(AMC) of electro-mechanical equipments. It is further stated that respondent No. 2 took up the matter of shortcomings at the Convention Center with the respondent No. 7 vide communication dated 08.11.2017 and requested for a joint inspections of Engineering Incharge at Hospitality and Protocol with Executive Engineer MH&CH Division for detailed estimate for conducting repairs and funds to be released for the repairs. Subsequently, AMC will commence for smooth functioning of Convention Centre Jammu. It is further stated that after e-tendering, the work order amounting to Rs.7,45,000/- was placed with the petitioner company in the interest of Government work and respondent No. 4 has requested respondent No. 2 to take up the matter with respondent No. 7 vide letter dated 19.07.2018 to release the funds amounting to Rs.7,45,000/- so that contractor/petitioner's liability be cleared. In a nutshell, the stand of the respondent Nos. 1 to 6 is that the delay in making the payment to the petitioner is not on the their part but on the part of respondent No. 7. 4. Respondent No. 7 has also filed the response in which it has been stated that the writ of mandamus commanding the respondents for the disbursement of an amount of Rs.7,45,000/- in his favour is not maintainable as the aforesaid amount is a disputed one and further that the petitioner has a remedy of filing a suit. 4. Respondent No. 7 has also filed the response in which it has been stated that the writ of mandamus commanding the respondents for the disbursement of an amount of Rs.7,45,000/- in his favour is not maintainable as the aforesaid amount is a disputed one and further that the petitioner has a remedy of filing a suit. It is further stated that respondent No. 7 had never permitted, allowed or authorized the respondent No. 4 to either float a tender or allot the alleged work to anybody therefore, claim if any is required to be satisfied by the respondent No. 4. It is also stated that after formal inauguration of the Convention Center at Jammu in the year, 2016, the Directorate of Hospitality and Protocol felt it necessary to arrange an Annual Maintenance Contract (AMC) of Air Conditioning System to ensure smooth functioning of the Convention Center. Accordingly, offers were received from Mechanical Engineering Department, Jammu and Voltas Co. (who had provided/executed the Air Conditioning work) after site/equipment inspections. Both the offers were scrutinized/analyzed by the Directorate of Hospitality and Protocol and finally the Directorate entered into an agreement with MED Jammu for an amount of Rs. 29 lacs annually, initially for a period of 24 months for the operation and maintenance of the Air Conditioning Plants. This AMC agreement was executed on 09.11.2017 between the Executive Engineer, Mechanical Hospital and CH Division Jammu and Director Hospitality and Protocol, J&K to be effective from 15.11.2017 to 14.11.2019. The said agreement continues on extension basis till date. Regular transfer of funds to MED has been made as per the conditions of the Agreement (on quarterly basis @ Rs. 7.25 lacs). It is further stated that as far as the work executed by the petitioner is concerned, the same has been allotted to the petitioner by the respondent No. 4 without the prior approval of the answering respondent and during the period when the AMC with the respondent No. 4 was in force and therefore, must be considered as a part of the AMC for which the answering respondent has already made payments to respondent No. 4. Moreover, respondent No. 7 has not authorized the MED, Jammu to take on its own any component of work which is beyond the scope of AMC agreement without the knowledge and approval of respondent No. 7. Moreover, respondent No. 7 has not authorized the MED, Jammu to take on its own any component of work which is beyond the scope of AMC agreement without the knowledge and approval of respondent No. 7. It is also stated that for any kind of additional work/component of work which is not covered under the AMC agreement, there is a set procedure for executing such works. 5. Mr. Tarun Sharma, learned counsel for the petitioner has vehemently argued that the liability is admitted by the respondent Nos. 1 to 6 and there are no disputed questions of facts, as such the respondents are required to make the payment of the contract amount to the petitioner along with interest. 6. Per contra, Mr. Ravinder Gupta, learned counsel for the respondent Nos. 1 to 6 has vehemently argued that the funds are required to be released by the respondent No. 7 with regard to the work executed by the petitioner. On the contrary, Mr. Eishan Dadhichi, learned counsel for respondent No. 7 has vehemently argued that the work has been executed without the consent of respondent No. 7 and the respondent No. 7 cannot be saddled with any responsibility to make the payment for the work executed by the petitioner at the instance of respondent No. 4. 7. With the consent of learned counsels the matter was finally heard and the record was also perused. 8. Petitioner's counsel, during the course of hearing, has placed on record the Notice Inviting Tender (NIT). This is an admitted fact that the petitioner executed the work allotted to him by the respondent No. 4 after the petitioner was declared as lowest bidder in NIT vide No. MHDJ/DB/e/2017-18/49 dated 12.01.2018. As per allotment order dated 16.02.2018, the value of the contract was Rs.7,45,000/- and the respondent Nos. 1 to 6 in their response have admitted that the petitioner executed the work successfully and also from the various communications relied upon by the respondent Nos. 1 to 6, it is evident that the petitioner is entitled to the contract amount amounting to Rs.7,45,000/-. The dispute is only with regard to the inter se liability of the respondents. 1 to 6 in their response have admitted that the petitioner executed the work successfully and also from the various communications relied upon by the respondent Nos. 1 to 6, it is evident that the petitioner is entitled to the contract amount amounting to Rs.7,45,000/-. The dispute is only with regard to the inter se liability of the respondents. Response of the respondents 1 to 6 is that the work was got executed by respondent No. 4 on behalf of respondent No. 7 whereas respondent No. 7 has stated that there was Annual Maintenance Contract (AMC) with respondent No. 4 and the amount, if payable to the petitioner, forms part of the AMC contract with the respondent Nos. 4 and 7. It is also the stand of the respondent No. 7 that respondent Nos. 1 to 6 could not have executed any work beyond the scope of AMC without the authorization of the respondent No. 7. 9. Be that as it may, it is very unfortunate that the two Wings of a Government are fighting with each other so as to shift the liability upon each other, for the work executed by the petitioner for the Government. It is not the case in which the work has been done by the petitioner without any tender but work order was allotted to him after the petitioner emerged as successful bidder in e-tender mentioned above floated by the respondent No. 4 on behalf of the Governor of then State. Merely, shifting of the liability by the respondent Nos. 1 to 6 and 7 upon each other cannot result in denial of the admitted amount to the petitioner. The Hon'ble Supreme Court in M/s Surya Constructions vs. the State of Uttar Pradesh and others 2019 (16) SCC 794 has held as under : “It is clear, therefore, from the aforesaid order dated 22.03.2014 that there is no dispute as to the amount that has to be paid to the appellant. Despite this, when the appellant at the doors of the High Court in a writ petition being Writ Civil No. 25216/2014, the impugned judgment dated 02.05.2014 dismissed the writ petition stating that disputed questions of fact arise and that the amount due arises out of a contract. We are afraid the High Court was wholly incorrect inasmuch as there was no disputed question of fact. We are afraid the High Court was wholly incorrect inasmuch as there was no disputed question of fact. On the contrary, the amount payable to the appellant is wholly undisputed. Equally, it is well settled that where the State behaves arbitrarily, even in the realm of contract, the High Court could interfere under Article 226 of the Constitution of India [ABL International Ltd. and Author v. Export Credit Guarantee Corporation of India Ltd and others, ( 2004 (3) SCC 553 )]” 10. As the tender was floated by the respondent No. 4 and the contract was allotted to the petitioner by the respondent No. 4 and said contract amount is not in dispute, therefore, petition filed by the petitioner deserves to be allowed. 11. In view of all what has been discussed above, without commenting upon inter se claims of respondents 1 to 6 and 7, the present petition is allowed and disposed of with a direction to the respondent No. 4 to release the amount of Rs.7,45,000/- in favour of the petitioner within the period of three months from the date a copy of this order is made available to the respondent No. 4 and in the event, the amount is not released in favour of the petitioner within the above mentioned period, the respondent No. 4 shall be under further obligation to pay interest at the rate of 6% per annum from 11.04.2019 till the payment is made. 12. Disposed of.