Jayaprakashan P vs State Of Kerala And Ors

Petitioner is an A class Government Contractor, who was awarded the work 'NABARD RIDF XX-construction of neervaram kalluvayal L1 scheme in Panamaram Panchayat Wayanad district'. Termination of contract as per Ext.P8 order is under challenge in this Writ Petition.

The petitioner executed Ext.P1 agreement on 4.3.2016. It is stated that on account of the protest of the owners of landed property and the nearby residents, the work got delayed. On the request of farmers the 6th respondent requested for a revised estimate as per Ext.P2 letter addressed to the 3rd respondent. The revised estimate was sanctioned only on 18.4.2018, after a period of 20 months. It is stated that in August, 2018, the area was affected with heavy flood and the work had to be stopped. Except the pipeline work, the petitioner could proceed with the work of transformer yard, other cable works and concrete works after the rain subsided. In the meanwhile, extension of time was granted till 3.6.2019 without imposing any fine. Even though the petitioner submitted Ext.P3 application for extension of time for the period from 3.6.19 to 31.3.2021, there was no response. The work relating to laying of 1.50 km PVC pipe and 350mm diameter D1 pipe was remaining. According to the petitioner, pipe manufacturing factory remained closed on account of Covid 19 pandemic and there was shortage of materials. The petitioner thereupon submitted Ext.P4 representation again requesting for time for the period from 3.6.19 to 31.3.2021. It was followed by Ext.P5 representation dt.8.1.2021. The petitioner further states that a meeting was convened by the District Collector on 13.1.2021 when it was decided to fix the time for completion of the work as 31.3.2021 and that the Department would co-operate with the extension of time in case the pipes were brought to the site before 20.2.2021. The petitioner states that the said decision was without ascertaining the factual circumstances because the pipes were to be obtained from Gujarat where the factories were remaining closed due to the scarcity of workers on account of the pandemic. Apart from that, in the absence of a valid agreement, the petitioner would not be able to take the risk of purchasing pipes spending such huge amount of about Rs.70 lakhs. Thereupon, the petitioner submitted Ext.P7 representation on 15.1.2021 before the 2nd respondent. Ext.P8 order of termination was passed thereupon on 25.01.2021, without considering her request.

The 2nd respondent has filed a statement. It is stated that the site was handed over to the contractor on 4.3.2016 fixing the date of completion as 3.3.2017; time was extended 5 times upto 3.6.2019 at the request of the contractor without imposing fine; the contractor did not turn up to complete the work despite several attempts from the part of the departmental officers; notices were given to contractor on 24.08.2020, 7.9.2020 and 6.11.2020 directing to resume the work; on receipt of the notice dt.6.11.2020, the petitioner attended the office and assured to complete the work before 28.2.2021; as per Ext.R2(a) letter the petitioner was informed that the NABARD XX tranche would be closed by 31.3.2021 and the contract would be terminated at his risk and cost, in the event of non-completion of the work; thereafter a meeting was held in the chamber of District Collector, Wayanad with the petitioner, NABARD officials and officials from the department; in that meeting it was unanimously decided that the work could be finished without any further extension; the petitioner instead of resuming the work submitted Ext.P7 letter on 15.1.2021 demanding further time and rate escalation; after consultation with the District Collector, who authorised the agreement authority to take a decision, the Department was forced to terminate the work at the risk and cost of the petitioner; petitioner has completed only 28% of the work; the rest of the work has to be rearranged through another agency and the loss sustained by the Government is to be recovered from the petitioner; extension of time was granted 5 times considering the request of the petitioner till 3.6.2019; sanctioning of revised estimate on 18.04.2018 did not stand in the way of carrying out the work of laying of DI pipes, since the length of DI pipes in the sanctioned revised estimate is less than that of the original agreement; departmental officials had not directed the petitioner to stop the work pending revision; on the other hand, the petitioner failed to arrange men and machinery to complete the work in time. Pointing out the conditions in Annexure R2(b) conditions of contract, it is stated that there is no provision for escalation of rates or extension of time beyond what is provided in the agreement. There was no response from the petitioner's side to resume or complete the work despite reciept of notices. Even after the meeting convened on 13.1.2021, in which the petitioner had participated, he did not turn up to resume the work. It is stated that the petitioner's request for further time extension was not forwarded to higher authorities as the petitioner did not respond to the repeated notices issued to him. The demand for price escalation of pipe items and also for the extension of time was contrary to the decision taken in the meeting and the conditions of contract. It is stated that it is the result of inaction on the part of the petitioner in arranging and completing the work within the agreed period. The petitioner was responsible for executing the works of pumphouse, culvert, concrete canals and D1 and PVC pipeline works, out of which he had completed the works only to the tune of Rs.64,26,127/- as against the revised estimate of Rs.3,15,75,121/- which comes to 28% of the work financially. It is stated that even after the site conditions became favourable, the petitioner had not turned up to complete the work. It is stated that after 2018 flood, he had executed only the work of transformer yard and duct cable during the period of December, 2018 to 30.1.2019, cost of which was only Rs.1.5 lakhs. It is stated that even though extension of time upto 03.06.2019 was granted from the offices of the respondent on 27.11.2019, the petitioner had attended their office only on 10.12.2020, after one year, for executing supplementary agreement, that too, after several reminders. It is submitted that several works using DI pipes are going on and therefore non availability of pipes is not at all a genuine reason. It is further stated that the petitioner had furnished a photocopy of the order dated 15.09.2020 claiming that advance payment was made for pipe, which was found not genuine. It is stated that the NABARD XX tranche will expire on 31.3.2021 and therefore the work has to be completed before that date.

The petitioner has filed a reply affidavit producing various communications in Exts.P10 to P12 and stating that request for extension from 03.06.2019 to 31.03.2020 was submitted on 02.08.2019 and there was no response even after subsequent requests. It is stated that the notices Exts.P10 and P11 notices dated 24.08.2020 and 07.09.2020 respectively were issued to him directing him to resume work when extension application of the petitioner was pending. It is stated that the petitioner could not have resumed the work in the absence of a valid agreement. Though he had submitted Ext.P4 representation for extension of time till 31.3.2021 in response to Ext.P12 communication, the respondents did not issue any orders for extension and therefore there was no question of resuming the work in the absence of a valid agreement. It is stated that though he had pointed out the same in the meeting, his submission was not considered. It is also stated that he made enquiries as to the cost of pipes immediately on the very next day of the meeting held on 30.1.2021 when he came to know that there was 40% escalation in price. Thereupon he submitted Ext.P7 representation on 15.1.2021 stating that he would not be able to resume the work in the absence of any extension from 03.06.2019 as a sum of Rs.70 lakhs is necessary towards the cost of the pipes. The petitioner stated that he had completed 56% of the work, relying on Ext.P13 progress report issued by the Minor Irrigation Sub Division. Without revising the estimate and getting it sanctioned, it was not possible to resume the work. It is stated that even in the absence of a stop memo when a revised estimate is pending, work could not have been continued as measurement has to be entered on each day. According to the petitioner, the decision taken on 13.01.2021 was without considering the practical difficulties and without considering the expiry of the agreement. It is stated that 20 months' time was taken for getting the revised estimate and that the Department alone is responsible for the delay of that much period. According to him, the fact that the 5 extensions were granted without penalty, would show that the default was not on the part of the contractor. It is stated that the 2nd respondent, who refused to forward the applications submitted by the petitioner, committed dereliction of duty; the 20 months' time for revised sanction and thereafter the refusal to extend the agreement has resulted in delay in completing the work . It is stated that even during the time when the area was affected by the flood, the petitioner completed the work of transformer yard and duct cable, even when the Revenue Department had to remove tonnes of sand from the field on account of the flood and it became impossible for the petitioner to do the pipeline work in the field. When there is 40% escalation in price on account of the delay of 5 years caused by the Department, the petitioner cannot be asked to carry out the work at the pre-revised rates. According to the petitioner, the order of termination with risk and cost is illegal.

I heard the learned Counsel for the petitioner and the learned Government Pleader.

Ext.P8 order of termination is issued for non-completion of work. The work is to be executed in terms of the contract entered. In the present case, both sides agree that the time for completion was extended several times and that there was no extension of time after 03.06.2019.

The materials on record would show that the petitioner continued to seek for extension of time by submitting petitions after petitions and the respondents continued to issue orders after orders directing the petitioner to resume the work. There was neither extension nor resumption. Petitioner's demand is not only for extension but for escalation of rates also. But it is stated that the conditions of contract did not provide for any escalation of rate. It would appear that the petitioner is not inclined to continue the work at the original rates even if extension is granted. This Court would not be in a position to determine whether the petitioner deserves escalation of rate or to direct the respondents to revise the rates, as the petitioner was awarded the work on contract.

Regarding the contention of the petitioner that he lost 20 months' time on account of sanctioning of revised estimates and the delay was not at his instance, the admitted facts would show that the original time for completion of work was one year. The petitioner admits that time was granted till 03.06.2019 as against the scheduled date of completion of 03.03.2017. The petitioner admits that he received the notices directing resumption of work. But according to him, when his applications for extension of time was pending and there was no extension of agreement or any response to his applications, it was not necessary to act upon those notices.

The pleadings would show that there is absolutely no co-operation between the agreement authority and the contractor. The learned Government Pleader argued that the respondents lost confidence in the petitioner. In such circumstances, it woud not be proper for this Court even to direct the respondents to re-consider the issue.

When there is contract entered into between the petitioner and the respondents and the respondents have terminated the contract in accordance with the conditions of contract, this Court is not expected to interfere with it. Whether there was breach of conditions or not would be a matter to be adjudicated after adducing evidence. Even regarding the quantum of work executed, there is dispute between the parties.

Therefore, I am of the view that a Writ Petition under Article 226 of the Constitution of India would not be the proper remedy available to the petitioner. Hence, I dismiss the Writ Petition. The petitioner would be free to agitate the matter before the appropriate forum.