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2023 DIGILAW 1231 (RAJ)

Nelakuduru Infra Sriganesh Jv, Through Its Authorized Representative Sh. Vineeth Nelakuduru v. Union Of India, Through Its General Manager, North-Western Railways

2023-06-02

PUSHPENDRA SINGH BHATI

body2023
ORDER : 1. On 30.05.2023, the matter was heard and the order was reserved, on the application preferred by the respondents under Article 226 (3) of the Constitution of India seeking vacation of the ex parte interim order dated 13.03.2023 passed in the present petition. 2. As per the pleaded facts, the respondents issued a tender bearing no.NWR/SC/FL-DNA/Civil-419150307-R for the works of construction of major bridges (12 in number) and minor bridges (PSC Slab) from km 0.00 to km. 108.750 between Phulera-Degana Section of Jodhpur Division. 2.1. The petitioner applied pursuant to the said tender, upon being declared as a successful bidder, and the respondent no.5 vide Letter of Acceptance (L.O.A.) dated 25.02.2019, informed the petitioner that its tender for the works had been accepted for a contract price of Rs.29,70,55,223.89/-. The works in question were initially to be completed within a period of 18 months and the petitioner was called upon to execute and register an agreement with the respondents in regard thereto. 2.2. Thereafter, the petitioner addressed various letters to the respondents and requested them to extend the concurrency of the contract from time to time. The respondents time and again had granted extension of time to carryout and complete the works, without any penalty. 2.3. The respondents issued first 7 days’ notice dated 04.06.2022 to the petitioner in terms of Clause 62 of the General Conditions of Contract, 2014 (hereinafter referred as Contract, 2014) by which the petitioner was required to show the adequate progress of the works; the petitioner submitted a reply to the said notice. Thereafter, the respondents and the petitioner entered into a supplementary agreement dated 09.06.2022. The petitioner filed an application on 19.06.2022 for extension of currency of the contract in question. 2.4. The respondents again issued second 7 days’ notice on 16.07.2022 to the petitioner, again requiring the petitioner to show the adequate progress of the works; the petitioner filed a reply to the said notice also. 2.5. In response to the application submitted by the petitioner dated 19.06.2022, the respondents vide letter dated 14.10.2022 had extended the currency of the contract in question from 01.08.2022 to 31.01.2023. The respondents issued third and fourth 7 days’ notices dated 18.10.2022 and 20.01.2023, in regard to the same progress of the works, and alleging failure on the part of the petitioner to show the same. The respondents issued third and fourth 7 days’ notices dated 18.10.2022 and 20.01.2023, in regard to the same progress of the works, and alleging failure on the part of the petitioner to show the same. The respondents also issued first 48 hours notice dated 30.10.2022 for completion of the works in question, but the same was withdrawn in the meeting dated 01.11.2022, on the request made by the petitioner in its reply dated 31.10.2022. 2.6. Thereafter, the petitioner again applied for extension of the currency of the contract in question, which was accordingly, extended from 01.02.2023 to 28.02.2023 by the respondents vide letter dated 04.02.2023, while imposing a penalty of Rs.15,000/- per week upon the petitioner. 2.7. The respondents issued a fifth 7 days’ notice dated 09.02.2023 to the petitioner, which was replied on 16.02.2023 by the petitioner; thereafter, again a 48 hours notice was issued on 20.02.2023, which as per the petitioner, was received on 02.03.2023. Subsequently however, the respondents issued the impugned termination notice dated 24.02.2023, terminating the contract in question. 3. Mr. R.N. Mathur, learned Senior Counsel assisted by Mr.Nishit Shah, appearing on behalf of the petitioner, submitted that the aforementioned 7 days’ notice (five in number) were issued to the petitioner by the respondents seeking the progress report of the works in question only, and not for termination of the contract in question. Therefore, as per learned Senior Counsel, the impugned termination notice is not sustainable in the eye of law. 3.1. Learned Senior Counsel further submitted that the first 48 hours notice was withdrawn by the respondents in the joint meeting on 01.11.2022; whereafter, the respondents granted the extension of the contract agreement in question, but suddenly, issued another 48 hours notice dated 20.02.2023 (received by the petitioner on 02.03.2023), and ultimately, the impugned termination notice was issued on 24.02.2023, which cannot be sustained in the eye of law. 3.2. Learned Senior Counsel also submitted that there had been a nation-wide lock down due to Covid-19 pandemic (1st, 2nd and 3rd waves), and thus, due to unavailability of manpower and labour force, the works in question got delayed; but despite being aware of such a situation, the impugned termination notice was issued. 3.3. 3.2. Learned Senior Counsel also submitted that there had been a nation-wide lock down due to Covid-19 pandemic (1st, 2nd and 3rd waves), and thus, due to unavailability of manpower and labour force, the works in question got delayed; but despite being aware of such a situation, the impugned termination notice was issued. 3.3. Learned Senior Counsel further submitted that the 48 hours notice dated 20.02.2023 was actually received and delivered at the place of the petitioner only on 02.03.2023, and the same was confirmed by the Department of Posts, and therefore, the said notice was not served upon the petitioner prior to 02.03.2023; but despite the fact that the said notice was not served upon the petitioner in time, the impugned termination notice was issued by the respondents; on that count also, the impugned action of the respondents cannot be sustained in the eye of law. 3.4. Learned Senior Counsel also submitted that the petitioner still is ready and willing to complete the works in question, and that, there is an alternative remedy available, as per Clauses 63 and 64 of the General Conditions of Contract, 2014, which clearly provides for an arbitration clause. 3.5. In support of his submissions, learned Senior Counsel relied upon the following judgments- a) Perkins Eastman Architects DPC and Anr. Vs HSCC (INDIA) Ltd. (Arbitration Application No. 32 of 2019, decided on 26.11.2019) passed by the Hon’ble Apex Court; b) BJCL Srinath (JV) Vs The State of Bihar & Ors. (Civil Writ Jurisdiction Case No.14700 of 2019 decided on 09.07.2021) passed by Hon’ble High Court of Patna. 4. On the other hand, Mr. R.D. Rastogi, learned Additional Solicitor General & Senior Advocate assisted by Mr. Vivek Shrimali & Mr. P.D. Bohra appearing on behalf of the respondents, while opposing the aforesaid submissions made on behalf of the petitioners, submitted that the petitioner was granted total extensions on eight different occasions (five extensions without penalty and three extensions with penalty), for completing the works in question, but despite the same, the petitioner could not complete the works in question, within the time stipulated therein. 4.1. 4.1. It was further submitted that even the total five 7 days’ notices for completing the works were issued to the petitioner, as per the Clause 62 of the General Conditions of Contract, 2014, but neither the petitioner could show the adequate progress of the works in question, nor could he complete the works in question; also two 48 hours notices were issued to the petitioner, but despite of that also, the petitioner did not compete the works in question; thus, in that backdrop, the impugned termination notice was issued by the respondents, which is justified in law. 4.2. It was also submitted that the works in question, being public infrastructural projects, have to be completed on high priority basis, and therefore, looking into the same, the interim order dated 13.03.2023 deserves to be vacated. 4.3. In support of such submissions, reliance was placed upon the judgment rendered by the Hon’ble Apex Court in the case of N.G. Projects Limited Vs Vinod Kumar Jain & Ors. (2022) 6 SCC 127 . 4.4. It was further submitted that as per the settled proposition of law, before passing any interim order, the parameters, which are required to be taken into due consideration, are prima facie case, balance of convenience and irreparable loss; but in the present case, the petitioner completely failed to satisfy such requirements of law; thus, on that count also, the interim order deserves to be vacated. 4.5. It was also submitted that the authorized representatives of the petitioner wilfully concealed a very important fact that 48 hours notice dated 20.02.2023 was also sent through e-mail on the same day, and therefore, the petitioner has made false averments that the said notice was received only on 02.03.2023; on that count also, the interim order dated 13.03.2023 deserves to be vacated. 4.6. It was further submitted that request for appointment of an arbitrator in this case, is not acceptable by the respondents, because the petitioner did not make such a prayer in the writ petition and the petitioner has also not filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. 4.7. Learned ASG, in support of his submissions, has also placed reliance on the judgment rendered Hon’ble Apex Court in the case of Manohar Lal (Dead) BY LRS. Vs Urgasen (Dead) BY LRS. & Ors. (2010) 11 SCC 557 . 4.8. 4.7. Learned ASG, in support of his submissions, has also placed reliance on the judgment rendered Hon’ble Apex Court in the case of Manohar Lal (Dead) BY LRS. Vs Urgasen (Dead) BY LRS. & Ors. (2010) 11 SCC 557 . 4.8. It was also submitted that the impugned termination order was passed by the respondents, after due compliance of the parameters of the contract in question, more particularly, in view of the fact that the petitioner, despite several extensions, failed to complete the works in question. Therefore, as per the learned ASG, the scope of judicial review is very limited in the writ jurisdiction. 5. Heard learned counsel for the parties as well as perused the record of the case along with judgments cited at the Bar. 6. This Court observes that the contract in question has been awarded to the petitioner by the respondents on the basis of the aforementioned tender. After allotment of the tender, the timeline for completion of work was extended by the respondent on various occasions. 7. This Court further observes that the total five 7 days’ notice were issued to the petitioner by the respondents, as per Clause 62 of the General Conditions of Contract, 2014 for showing the adequate progress of works in question, and seeking the details of programme for completing such works. Thereafter the first 48 hours notice dated 30.10.2022 was issued by the respondents, but the same was withdrawn in the joint meeting held on 01.11.2022. 8. This Court also observes that the respondents again issued the second 48 hours notice, in term of the Clause 62 of the General Conditions of Contract, 2014, to the petitioner on 20.02.2023, with the same subject matter i.e. delay in progress and completion of the works in question, and seeking explanation in that regard from the petitioner. 9. This Court also observes that the aforesaid notice was sent through the India Post as well as E-mail (as informed by the learned ASG) on the same day i.e. 20.02.2023; however, as per the respondents, looking into the repeated failures on the part of the petitioner in informing the adequate progress of the works in question and completion of the same, the impugned termination notice was issued. 10. 10. This Court further observes that the notice in question i.e. 20.02.2023 was served to the petitioner, and also the respondents intimated the petitioner for completing the works in question, before passing the impugned termination notice. 11. This Court also observes that the works in question are the projects of public important, and thus, the delay in completion of the same, would cause an irreparable loss, and would certain affect the public at large. 12. This Court is also conscious of the precedent law laid down by the Hon’ble Apex Court in the case M/s N.G. Projects Limited (supra); relevant portion of which is reproduced as hereunder:- “Any public work must progress without interruption. This requires consideration whether a court’s intervention in public works should be minimal. Smooth functioning of Public works projects can be effectively managed through a monitoring system and regulatory mechanism. The role of courts in this exercise is to interfere to the minimum extent so that public works projects will not be impeded or stalled.” 21. Since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project. Such provision should be kept in view even by the Writ Court while exercising its jurisdiction under Article 226 of the Constitution of India.” 13. This Court is further conscious of the precedent law laid down by the Hon’ble Apex Court in the case M/s N.G. Projects Limited (Supra) further followed by this Hon’ble Court in the case of Mangi Lal & Ors Vs State of Rajasthan (S.B. Civil Writ Petition No. 17570/2022, decided on 24.04.2023); relevant portion of which is reproduced as hereunder:- “14. This Court is also conscious of the precedent law laid down by the Hon’ble Apex Court in the case of National High Speed Rail Corpn. Ltd. v. Montecarlo Ltd., 2022 SCC OnLine SC 111, reference whereof has also been made in the judgment rendered in M/s N.G. Projects Limited (supra). The relevant portion of the judgment rendered in National High Speed Rail Corpn. Ltd. (supra), is reproduced as hereunder: “95. Ltd. v. Montecarlo Ltd., 2022 SCC OnLine SC 111, reference whereof has also been made in the judgment rendered in M/s N.G. Projects Limited (supra). The relevant portion of the judgment rendered in National High Speed Rail Corpn. Ltd. (supra), is reproduced as hereunder: “95. Even while entertaining the writ petition and/or granting the stay which ultimately may delay the execution of the Mega projects, it must be remembered that it may seriously impede the execution of the projects of public importance and disables the State and/or its agencies/instrumentalities from discharging the constitutional and legal obligation towards the citizens. Therefore, the High Courts should be extremely careful and circumspect in exercise of its discretion while entertaining such petitions and/or while granting stay in such matters. Even in a case where the High Court is of the prima facie opinion that the decision is as such perverse and/or arbitrary and/or suffers from mala fides and/or favouritism, while entertaining such writ petition and/or pass any appropriate interim order, High Court may put to the writ petitioner's notice that in case the petitioner loses and there is a delay in execution of the project due to such proceedings initiated by him/it, he/they may be saddled with the damages caused for delay in execution of such projects, which may be due to such frivolous litigations initiated by him/it. With these words of caution and advise, we rest the matter there and leave it to the wisdom of the concerned Court(s), which ultimately may look to the larger public interest and the national interest involved.” 14. Thus, looking into the aforementioned precedential backdrop, and looking into the factual matrix of the case and the fact that the works in question are National projects of public importance, the application filed by the respondents under 226 (3) of the Constitution of India is allowed; accordingly, the interim order dated 13.03.2023 passed in the present case, stands vacated. 15. Let the writ petition be listed for final hearing. However, in the meanwhile, as already observed in the order dated 30.05.2023 passed by this Court, the performance guarantee furnished by the petitioner is extended till 04.07.2023.