Basant Bagde vs Hindustan Prefab Ltd.

Neeraj Kishan Kaul, J.—The present appeal arises out of the order of the learned single Judge dated 19th March, 2009. Briefly, stated the facts of the case are; the respondent No. 1 issued notice on 20th March, 2008 inviting sealed tenders for construction of houses with infrastructure in Raipur city. Under Clause 5 of the Special Conditions of Contract, the tenderer was required to quote rates on percentage basis below/at par/above the SOR of 1999. On 1st April, 2008, the competent authority amended the SOR of 1999 and increased the rate of item No. 8 of Chapter 4 (steel) from Rs. 24 per kg. to Rs. 50 per kg. As per the appellant( the original petitioner in the writ petition), the tender document stated that the bid was to be made on percentage basis of SOR of 1999 and its amendments are applicable for such tenders and, therefore, once an amendment of a scheduled item is made ipso facto same would apply to the tender in question.

On 3rd April, 2008 the petitioner submitted its tender on percentage rate basis of SOR of 1999 after taking into account the amended rates. The respondent No. 1 entered into an agreement with the appellant at Delhi awarding 5 packages to the appellant. Pursuant to the award of the said contract the appellant commenced work. The appellant submitted its running account bill for the work executed on 18th September, 2008 to respondent No. 1. In the said bill the appellant while calculating the rate of steel took into account the rate of steel as amended on 1st April, 2008 by the competent authority. The respondent No. 1 vide its letter dated 18th September, 2008 refused to calculate the bill on the basis of the revised rates of steel on the ground that though the Engineer-in-Chief, Public Works Department, Chhattisgarh has left the decision to respondent No. 1 HPL with respect to implementation of the said revised rates, the same had not been done by HPL till date. Accordingly, as per the petitioner, it was left with no alternative but to file the writ petition out of which the present appeal arises.

By our order dated 21st May, 2009, State of Chattisgarh was impleaded as respondent. Notice was issued and served on the State of Chattisgarh. However, no one appeared on behalf of the State of Chattisgarh today.

The learned single Judge dismissed the writ petition of the appellant on the ground of alternative remedy as also on the ground that this High Court have no territorial jurisdiction. The learned single Judge while dismissing the writ petition imposed a cost of Rs. 50,000/- on the appellant.

The senior counsel for the appellant has drawn our attention to letter dated 1st April, 2008 (page 38 of the paper book) issued by the Public Works Department, Raipur whereby the rates were increased from Rs. 24/- to Rs. 50/- per kg. The learned senior counsel then drew our attention to letter dated 2nd September, 2008 written by respondent No. 1 to the Public Works Department, Chattisgarh, Raipur whereby respondent No. 1 sought directions as to whether rate should be fixed at Rs. 50/- per kg. according to the amendment order or at Rs. 24/- per kg. The learned senior counsel also relied on the letter dated 10th September, 2008 (page 64 of the paper book) wherein the Public Works Department, Chattisgarh, Raipur categorically stated that the rate had been increased from Rs. 24/- to Rs. 50/- per kg. and directed respondent No. 1 to take a decision at its level in respect of bills as per the contract. Our attention was also drawn to letter dated 18th September, 2008 (page 44 of the paper book) written by respondent No. 1 wherein the respondent No. 1 had stated that the Public Works Department, Chattisgarh, Raipur had directed that the appropriate decision be taken by respondent No. 1. However, no decision had been taken by respondent No. 1 on the said issue.

In view of the categorical stand of the respondent No. 1 that they had been directed by the Public Works Department, Chattisgarh to take a decision in the matter, we fail to understand as to why the said decision has not yet been taken by them. We, accordingly, deem it fit to direct respondent No. 1 to take a decision in the said matter within a period of two weeks. We may also add here that we are unable to agree with the view of the learned single Judge that this Court does not have any territorial jurisdiction to entertain the matter. It is pertinent to mention that the entire tender process took place in Delhi, the work order was issued from Delhi, all securities and EMDs were deposited at Delhi by the appellant, agreement was entered between the parties at Delhi and bills were made from Delhi. As per Clause 5 of the agreement, dispute between the parties was subject to jurisdiction of the Delhi courts. Thus, clearly part of the cause of action had arisen in Delhi and this High Court does have the territorial jurisdiction to entertain the writ petition. We also do not agree with the finding of the learned single Judge that being a contractual matter the appellant could not invoke the writ jurisdiction. It is well settled that even in contractual matters if the action of the State and its instrumentalities is arbitrary, unreasonable and illegal, the Court can exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. In ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and Others, the Supreme Court observed that the question whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentality, by an aggrieved party is no more res integra and is settled by a large number of judicial pronouncements of the Supreme Court. On a given set of facts if �the State� acts in an arbitrary manner even in a matter of contract, an aggrieved party can approach the court by way of writ under Article 226 of the Constitution and the court depending on facts of the said case is empowered to grant the relief. In the present case there has been an amendment to the rates on the basis of which the appellant has raised its demand. No decision has been taken on the bills raised by the appellant as per the revised rates. This indecision and inaction clearly is unacceptable and unreasonable. We have, accordingly, directed respondent No. 1 which had floated the tender enquiry on behalf of the State of Chattisgarh to take a decision within a period of two weeks. It will be open to the appellant to take appropriate remedies in accordance with law in case it is aggrieved by the decision of the respondent No. 1. With these observations, the present appeal as also the writ petition stand disposed of as nothing further survives in the same.

We also deem it fit and proper, in the light of our above discussion, to waive the costs imposed on the appellant by the learned single Judge. It is ordered accordingly.