Kabeer M. vs State Of Kerala

Shaji P. Chaly, J

Petitioner in both the writ petitions is one and the same person—a contractor engaged by the State Public Works Department for the work “Improvements to Vadakkumbad - Vanchipara - Gopurathildam road between km 0/000 to 3/300 (balance work)”, evident from Exhibit P1 selection notice.

W.P.(C) No. 1323 of 2023 is filed challenging Exhibit P21 order terminating the contract awarded to the petitioner; whereas, W.P.(C) No. 6039 of 2023 is filed challenging Exhibit P24 re-tender notification dated 18.02.2023 issued for the aforesaid work. Therefore, I heard them together and proposed to pass this common judgment.

Brief material facts for the disposal of the writ petition are as follows:

The work was originally awarded to one Mr. Faiz M.D, Kasaragod District. However, it was terminated at the risk and cost of the said person, allegedly when the application seeking revision of schedule of work, consequent to the enhancement of the width of the road from 3.5 meters to 5.5 meters, was pending consideration before the Chief Engineer, Public Works Department (Roads), Thiruvananthapuram, respondent No. 2. It was thereafter that a re-tender was invited and the consequent Exhibit P1 selection notice was issued to the petitioner. Pursuant to Exhibit P1 selection notice, petitioner has executed Ext. P2 agreement dated 17.05.2022 with the Superintending Engineer, Public Works Department (Roads) North Circle, Kozhikode, respondent No.3, on providing a performance guarantee of Rs.10,72,500/- and an additional performance guarantee of Rs. 37,42,802/- in accordance with Exhibit P1 selection notice. As per the agreement, the work is to be completed within 8 months, with a guarantee period of 36 months from the date of completion. Apparently, a milestone was also fixed in regard to the rate of progress, that is to say, 25% at the end of the third month; 75% at the end of the 6th month; and 100% at the end of 8th month. The amount of estimate was Rs.4,08,95,611.18.

According to the petitioner, when the work was in progress, it was proposed by the Superintending Engineer and the Executive Engineer, respondent Nos. 3 and 4, to enhance the width of the road from 3.5 meters to 5.5. meters. Therefore, it is contended, when the width of the road increases from 3.5 meters to 5.5 meters, it is necessary to revise the estimate in tune with the actual quantity of the work. The sum and substance of the contention advanced is that the revision of estimate has become essential and necessary as contemplated under clause 2111 of the PWD Manual Revised Edition, 2012. The contention put forth by the petitioner is that since the width of the road increases from 3.5 meters to 5.5. meters, the total quantity of the materials involved in the work would be increased to 100% above the original estimate, which was approved by respondent Nos. 2 and 3 at the time of issuance of tender notification, pursuant to which Exhibit P1 selection notice was issued to the petitioner.

Therefore, it is submitted that if the tender notification was issued after getting approval for revision of estimate in tune with the actual width of the road i.e, 5.5 meters to provide BM and BC, no such revision of estimate would have been necessary. But, in the instant case, according to the petitioner, tender notification was issued when the proposal for revision of estimate was pending consideration of theChief Engineer, Public Works Department (Roads), Thiruvananthapuram, respondent No.2, consequent to the claim raised by the original contractor Mr. Faiz M.D. It is also submitted that it is evident from sl. No. 18 of Exhibit P4, detailed estimate forming part of the agreement, that the width of the road from km 0/000 to 3/300 is 5.5 meters.

Accordingly, it is submitted that it was based on the quantity of the materials provided in the detailed estimate that the petitioner has submitted the bid agreeing to execute the work at a certain rate. It is further submitted that the quantity of such items may either increase or decrease. However, when the quantity increases, the provisions and procedures contemplated under clause 2111 of the PWD Manual would come into operation and only on getting the revision of estimate approved by the tender authority, the petitioner would get the right to commence the execution of the work based on the agreement executed with the Superintending Engineer, respondent No.3.

It is also contended that based on Ext.P4 detailed estimate of the work, the initial levels of the work were recorded by the petitioner, as per Exhibit P5 in the presence of the Assistant Engineer, the 6th respondent, and other officials and it seems, Ext.P5 was submitted to the 6th respondent, along with Exhibit P6 letter dated 14.7.2022. Therefore, it is pointed out that the petitioner would commence the work only if Ext.P5 initial levels were reported to the Chief Technical Examiner (CTE). It is also submitted that for reasons not known to the petitioner, the respondents have withheld the Ext.P5 initial levels, without reporting to the CTE and that even now, Ext.P5 initial levels were not reported to the CTE.

Anyhow, the 6th respondent, as per Exhibit P7 letter dated 18.7.2022, directed the petitioner to record the initial levels of the road at the width of 8 meters, which according to the petitioner, is deviating from the provisions of work contemplated in Ext.P4 detailed estimate. Thereafter, the Assistant Executive Engineer, the 5th respondent, has issued Exhibit P8 letter dated 20.7.2022, reiterating the directions issued in Ext.P7 letter.

Thereupon, the petitioner submitted Exhibit P9 representation dated 25.7.2022 before the 3rd respondent, requesting to revise the schedule of work attached to the agreement and Ext.P4 detailed estimate, by increasing the width of the road from 5.5 meters to 8 meters, to get the width of 5.5 meters for surface traffic.

The petitioner has also submitted Exhibits P10 and P11 representations dated 26.7.2022 and 01.08.2022 before respondent Nos. 5 and 3 respectively. In order to discuss the issue, a meeting was convened by the Superintending Engineer, respondent No.3, on 17.8.2022, as is evident from Exhibit P12 letter dated 19.8.2022, as per which the petitioner was directed to record the initial levels for the construction of the road at 8 meters, which according to the petitioner, is deviating from Ext.P4 detailed estimate and which was impermissible for want of approval of revision of estimate and the same was pending consideration before the Chief Engineer, respondent No.2.

The Executive Engineer, respondent No.4 then issued Exhibit P13 letter dated 03.9.2022 to the 3rd respondent, recommending to terminate the work, at the risk and cost of the petitioner, and to blacklist the petitioner. According to the petitioner, in Ext.P13, the Executive Engineer, respondent No.4, made the recommendation to award the work to an accredited agency or to execute the work through the Department, with malafide and fraudulent motives. The petitioner, on receipt of Ext.P13, submitted Exhibit P14 representation dated 12.9.2022 to the Superintending Engineer, respondent No.3, reiterating the request made in Ext.P9 representation.

Anyhow, as per Ext.P13 letter dated 13.09.2022, the Superintending Engineer issued Exhibit P15 letter dated 30.9.2022, directing the petitioner to commence the work within 7 days, failing which it was cautioned that coercive action would be initiated against him. The petitioner, on receipt of Ext.P15, submitted Exhibit P16 representation dated 10.10.2022 before the Superintending Engineer requesting to get the approval for revision of estimate to enable the petitioner to commence the work. However, the Superintending Engineer issued Exhibit P17 letter dated 30.11.2022 directing the petitioner to commence the work within 7 days, failing which it was specified that the work would be rearranged at his risk and cost.

Again, the petitioner has submitted Exhibit P18 representation dated 05.12.2022 before the Superintending Engineer, respondent No.3, reiterating the request made in Exhibits P9 and P14 representations seeking to revise the schedule of work attached to the agreement, increasing the width of the road from 5.5 meters to 8 meters, enabling the petitioner to commence the work.

Since no action was taken by the Superintending Engineer, petitioner has filed W.P.(C) No. 40025 of 2022 before this Court. This Court, as per the judgment dated 9.12.2022, directed the Superintending Engineer to consider Ext.P18 representation and pass a reasoned order, after providing an opportunity hearing to the petitioner, within two weeks, by keeping in abeyance all coercive actions.

Accordingly, the petitioner was heard and the request made by the petitioner was rejected as per Exhibit P21 communication dated 05.01.2023 terminating the contract awarded to the petitioner. Later, the Superintending Engineer issued Exhibit P22 inter-departmental communication dated 07.01.2023, to the Chief Engineer, respondent No.2, apparently on the basis of the communication issued by the Chief Engineer consequent to the letter submitted by the petitioner contractor. It is, thus, challenging the legality and correctness of Exhibit P21, the writ petition is filed.

The Assistant Executive Engineer, respondent No.5, has filed a counter affidavit refuting the claims and demands raised by the petitioner and also narrating the circumstances that led to the termination of the previous contract, and the reasons for the present impugned order.

According to the 5th respondent, the width of the road proposed to be constructed is 3.80 meters (width of tarring portion) and not 3.50 meters as claimed by the petitioner. The proposal was made for improving the road to BM and BC standards with a 3.80 meters wide carriage way. That apart, construction of concrete drains, concrete culverts, side protection works, traffic safety works etc. were also included in the sanctioned estimate. But, when the work was started by the previous contractor, the people of the locality and the MLA requested the Department to form the carriage way (Tarring width) to 5.50 meters instead of 3.80 meters proposed in the estimate.

The Department has agreed to consider the proposal made by the local people and MLA and submitted a revised estimate for the work for obtaining sanction. At that point of time, the original contractor was doing the road formation work; but, the work was very slow and therefore the Department had to terminate the contract at the risk and cost of the contractor. It seems, consequent to the termination, the proposed revised estimate also was cancelled and the Department had decided to carry out the work as envisaged in the original sanctioned estimate with 3.80 meter-wide road and the balance work awarded to the petitioner was tendered accordingly.

Therefore, according to the respondent No. 5, the contentions made by the petitioner relying upon the provisions of PWD manual is correct, but the same has no relevance to the work awarded to the petitioner. The sum and substance of the contention advanced is that the attempt of the petitioner is to make out a case on the basis of the claim raised by the previous contractor for revision of estimate on the basis of the earlier demand for widening the carriage way to 5.50 meters, which is not in force at all, since the same was cancelled after the termination of the previous contract. Therefore, according to the 5th respondent, the petitioner has not made out a case of arbitrariness or illegality.

That apart, it is stated that if any of the quantities so worked out exceeds the quantities in the agreement, the contractor is bound to execute the said items of work at his agreed rates till 125% of the agreed quantity and he is entitled to get negotiated rates for quantities executed above 125% based on agreement conditions. Therefore, the respondent No. 5 seeks dismissal of the writ petition,

A reply affidavit is filed by the petitioner reiterating the stand adopted in the writ petition and also relying upon other provisions of the PWD Manual.

I have heard the learned counsel for the petitioner Sri. Babu Joseph Kuruvathazha and the learned Special Government Pleader Sri. K.V. Manoj Kumar and perused the pleadings and material on record.

The deliberation of facts made above would make it clear that the petitioner has taken up the work in question after termination of a previous contract. It is an admitted fact that pursuant to Exhibit P1 selection notice, the petitioner has executed an agreement with the Superintending Engineer, respondent No.3 and therefore, he is bound by the agreement conditions.

From the facts narrated above, it is clear that the petitioner is relying upon Exhibit P3 proforma of the work issued by the Superintending Engineer as against the contract with the previous contractor and the consequent detailed estimate in regard to the same. This is a case where, even though consequent to the request of the Member of Legislative Assembly, a proposal was made to widen the carriageway to 5.8 meters and a detailed estimate was prepared, while the work was being carried out by the previous contractor, it was terminated consequent to the slow progress of the work.

Later, the proposal made for widening the carriageway was given up and the tender was invited with the carriageway of 3.8 meters. Therefore, the petitioner participated in the tender knowing well the nature of the work to be carried out. Even though in the communication issued by the Superintending Engineer and other authorities, it is stated that the level was to be done as 8 meters from 5.50 meters, it never directed the petitioner to carry out any work by extending the level to 5.50 meters and further to 8 meters. The level was directed to be shown for other purposes other than any development work of the road. Therefore, the contention advanced by the petitioner that consequent to the change of level and the directions issued by the respondents to submit the initial levels at 5.50 meters and later to 8 meters would enable the petitioner for revision of estimate, cannot be sustained, since it does not contemplate the widening of the carriageway as originally provided from 3.80 meters.

The petitioner has heavily relied upon Exhibit P22 inter-departmental correspondence by and between the Superintending Engineer and the Chief Engineer dated 07.01.2023. But, on a perusal of the same, it is categoric and clear that the Superintending Engineer had explained the circumstances to the Chief Engineer starting from the original award of the work to the previous contractor. The petitioner is attempting to make out a case that without a revision of estimate, the work cannot be commenced. The said contention advanced by the petitioner has no foundation at all for the basic reason that there is no deviation from the award of the contract to the petitioner as per Exhibit P1 selection notice.

It is quite clear and evident from the inter departmental correspondence that only 9% of the work is completed by the petitioner. Moreover, the interdepartmental correspondence can never be said to be a proof at all to arrive at a conclusion with respect to the case put forth by the petitioner. This I say because, it is only a correspondence issued by the Superintending Engineer, respondent No.3 consequent to certain queries raised by the Chief Engineer on account of the work in question done by the previous contractor and the circumstances leading to the termination of contract of the petitioner.

In my considered opinion, when the tender was conferred on the petitioner and the agreement was executed, the petitioner is duty bound to complete the work as agreed upon by and between the parties. The petitioner is not at all entitled to take advantage of the circumstances pointed out by the previous contractor and the previous proposal for the revision of estimate made by the officials, while the original tender was being proceeded with. This is more so when the respondents have decided to retain the width of the carriageway at 3.80 meters. It is an admitted fact that the petitioner has not carried out the work as specified in the work order at all, which is clear from the documents and the pleadings put forth by the petitioner itself.

This I say because, while executing an agreement with the petitioner, it is clear and evident from Exhibit P2 proforma of the work that a milestone was fixed with regard to the rate of progress and consequent to which at the end of third month, the petitioner had to attain 25%; 75% at the end of 6th month; and 100% at the end of 8th month. Therefore, from the pleadings put forth by the petitioner itself, it is quite clear that the petitioner could not attain the milestone prescribed as per the agreement executed by and between the parties. It is not in dispute that if the work is not carried out by the petitioner in terms of the agreement conditions, the tender authority is vested with ample powers to terminate the work. It was accordingly that proceedings were initiated against the petitioner.

In fact, various communications were issued to the petitioner to commence the work after preparing initial levels of 5.8 meters and later to 8 meters. But by saying one reason or another, in order to take advantage of the revision of the estimate recommended to the previous contractor, consequent to the proposal made by the MLA as well as the local people, the petitioner submitted representations. In fact, on the basis of the directions issued by this Court, they were considered and Exhibit P21 order of termination was passed assigning reasons.

Therefore, the sole question to be considered is whether the petitioner has made out any case of illegality or arbitrariness or any other legal infirmities justifying interference under Article 226 of the Constitution of India. In my considered opinion, the factual circumstances make it clear that the petitioner has not made out any such case and therefore, the petitioner is not entitled to secure any reliefs as are sought for in this writ petition. Therefore, no interference is required to Exhibit P21 termination order passed by the Superintending Engineer, respondent No.3. Consequently, the fresh tender invited by the Superintending Engineer, which is under challenge in W.P. (C) No. 6039 of 2023, has no legal basis or factual foundation.

The issue with respect to the termination of contract was considered by the Apex Court in State of Kerala v. M.K. Jose, (2015) 9 SCC 433], after having a threadbare survey of its previous relevant judgements on the point, wherein it is held as follows:

“12. As the factual narration would reveal, the respondent has been invoking the jurisdiction of the High Court under Article 226 of the Constitution on various occasions challenging every action which pertain to extension of time, denial of revised estimate by the State Government and many other facets of that nature and the High Court, we must say, has been generously passing orders for consideration by the appropriate authority, for grant of opportunity of being heard to the contractor and to consider his representation in accordance with law. This kind of orders in a contractual matter, in our considered view, is ill-conceived. They not only convert the controversy to a disturbing labyrinth, but encourage frivolous litigation. The competent authority might have mentioned that more than 50% work remained to be done but that should not have prompted the Appellate Bench hearing the intra-court appeal to appoint a Commission of two advocates and granting them liberty to take assistance of a competent engineer. As the Report would show, the Commission of two advocates have taken assistance of a retired Assistant Executive Engineer and submitted the Report. Though, the learned counsel for the State had not objected to the same, yet we really fail to fathom how a writ jurisdiction can be extended to cause a roving enquiry through a Commission and rely on the facts collected without granting opportunity to the State to file objections to the same and in the ultimate eventuate, cancel the order of termination of contract. What precisely was the quantum of work done and whether there had been a breach by the owner or the contractor, are required to be gone into by the appropriate legal forum.

A writ court should ordinarily not entertain a writ petition, if there is a breach of contract involving disputed questions of fact. The present case clearly indicates that the factual disputes are involved.”

It may be correct to say that, the writ court, under Article 226 of the Constitution would be justified in interfering with the termination of the contract, even if factual circumstances are involved in the matter of termination. However, in my considered opinion, a prerogative writ would normally be issued by the High Court, if the State or its instrumentalities has acted in absolute arbitrariness, illegality or unfairness. This is a case where the respondents have given sufficient opportunity to the petitioner to start the work. But, the petitioner, by saying baseless and unfounded reasons, has prolonged the contract, and despite the lapse of several months after the agreement period, the petitioner could not achieve the milestone; however, he could complete only 9% of the work awarded to him. Thinking so, I do not think, the petitioner is entitled to get any reliefs as are sought for in the said writ petition. Since I find that there is no illeglaity or other legal infirmities in terminating the contract, the challenge made in the latter writ petition to the re-tender has no sustenance and accordingly, it is liable to be dismissed.

Upshot of the above discussion is that, the writ petitions fail and accordingly, they are dismissed.