M/S C.T Ramanathan Infrastructure Pvt. Ltd. v Union of India and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **WEDNESDAY,THE 27TH DAY OF FEBRUARY 2019 / 8TH PHALGUNA, 1940** ## **WP(C).No. 2301 of 2019** ## **PETITIONER/S:** **M/S C.T RAMANATHAN INFRASTRUCTURE PVT.LTD FLAT NO.4/3. SK ENCLAVE, 2ND FLOOR, NEW 4, OLD 47, NOWROJI ROAD, CHETPET, CHENNAIR -600031, REPRESENTED BY ITS MANAGING DIRECTOR, R ADAIKALAVAN, FLAT NO.4/3. SK ENCLAVE, 2ND FLOOR, OLD NO.47, NOWROJI ROAD, CHETPET, CHENNAI-600031.** **BY ADVS. SRI.SAIJO HASSAN SHRI V.K.RAFEEK, CGC SMT.P.PARVATHY SMT.SURYA P SHAJI SRI.BENOJ C AUGUSTIN SRI.K.MOHANAKANNAN SRI.U.M.HASSAN** ## **RESPONDENT/S:** **1 UNION OF INDIA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, CENTRAL PUBLIC WORKS DEPARTMENT, NEW DELHI-110001. 2 SUPERINTENDING ENGINEER, CENTRAL PUBLIC WORKS DEPARTMENT, CALICUT CENTRAL CIRCLE, M.S. BABURAJ ROAD, P.O.KALLAI, KOZHIKODE (CALICUT)-673003. 3 EXECUTIVE ENGINEER, CENTRAL PUBLIC WORKS DEPARTMENT, TRICHUR CENTRAL DIVISION, MUNDASSERY MEMORIAL BUILDING, CHEMBUKKAVU, TRICHUR-680020. 4 ECECUTIVE ENGINEER, CENTRAL PUBLIC WORKS DEPARTMENT, IIT PALAKKAD PROJECT DIVISION, PALAKKAD-678623.** **BY ADV. SMT.SREEKALA K.L., CGC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20.02.2019, THE COURT ON 27.2.2019 DELIVERED THE FOLLOWING:** ## **ANU SIVARAMAN, J. ----------------------------------------------W.P(C).No. 2301 of 2019 ----------------------------------------------Dated this the 27[th] day of February, 2019** ## **JUDGMENT** Heard learned counsel for the petitioner and the learned Central Government Counsel appearing for the respondents. 2. The relief sought for in the writ petition is to quash Exhibit P16 notice of termination of contract. Directions are also sought for to the respondents to permit the petitioner to complete the works as per the agreement after rescheduling the milestones. 3. The Central Public Works Department (CPWD) invited tender for the work of construction of transit campus for IIT, Palakkad. The construction of convention centre blocks and auditorium including internal water supply, sanitary, drainage, internal electrical installations, lifts and down comer fire fighting system were included in the tender. By Exhibit P1 dated 18.2.2017, the petitioner's tender was accepted and agreement executed with a time of completion of 270 days from 12.3.2017. According to the petitioner, major portion of the work was completed. On 10.2.2018, the petitioner had sought extension of time which was allowed by letter dated 7.3.2018 and the milestone was rescheduled by the 4[th] respondent by letter dated 7.3.2018. It is stated that further communications had also been issued seeking further extension of time on valid grounds and the competent authority, under Clause 5 of the agreement, rescheduled the milestones and revised the 3 _**WP(C).2301/19**_ date of completion as 8.9.2018. It is stated that due to unprecedented rain and floods in August, 2018, which occurred at the site which was very close to the Malampuzha Dam, the petitioner lost several working days. The petitioner, therefore, sought further time to complete the academic block on or before 31.10.2018. It is stated that a further undertaking was also given by the petitioner to complete the auditorium on 10.11.2018. Though request for interim payment was made, the same was not entertained, it is submitted. It is stated that by Exhibit P11 letter dated 22.11.2018, it is intimated that some revisions in the work are carried out. The petitioner submitted Exhibit P12 reply stating that there is delay in issuing drawing by the respondents and other hindrances beyond the control of the contractor and sought time till March, 2019 to complete the entire project. By Exhibit P13, the petitioner was informed that the approval of shop drawing will take some time in view of the fact that it was raised by the contractor 345 days after issuance of the drawing. The petitioner was informed that the programme chart for completion of RCC structure has not been received and the labour was not deployed. The petitioner was required to submit the programme chart on an assumption that the shop drawing will be approved by 5.12.2018. However, Exhibit P14 letter was again issued by the petitioner seeking rescheduling of the work with completion date as 7.11.2019. Thereafter, Exhibit P16 proceedings have been issued terminating the 4 _**WP(C).2301/19**_ contract and rearranging the work as also stating that the petitioner will not be allowed to participate in the tender process for the balance work. This order is under challenge. 4. Learned counsel for the petitioner would submit that no personal hearing preceded Exhibit P16 proceedings and that the entire proceedings are vitiated on that ground alone. It is contended that when an order visiting the petitioner with such serious civil consequences was being issued, the petitioner ought to have been put on notice and heard. It is contended that Exhibit P16 proceedings issued without hearing the petitioner is per se illegal and invalid. Exhibit P16 is also attacked on the ground that Exhibit P13 communication itself shows that the shop drawing would be approved only by 5.12.2018. It is stated that requiring the petitioner to complete the work without even approving the shop drawing is completely unreasonable and unjustified. It is also stated that there was no consideration of the unprecedented natural calamities which occurred in August, 2018, while terminating the contract. It is stated that neither the proceedings revising the date for completion as 7.9.2018 by Exhibit P20 nor the later proceedings of the respondents had considered the delay caused due to the floods in the carrying out of the works. It is contended that the petitioner had completed major portion of the work as agreed and that the award of the work to another contractor at this stage would result in a revision of rates 5 _**WP(C).2301/19**_ which would be detrimental to the interest of the respondents. Learned counsel for the petitioner contends that the petitioner has specifically undertaken to carry out the work at the agreed rates without delay which will be in the interest of the respondents as well, since undue wastage of public funds can be avoided. 5. A detailed counter affidavit has been placed on record by the respondents. It is submitted by the learned Central Government Counsel appearing for the respondents that the petitioner had delayed the completion of the work unjustifiably on several occasions. The petitioner had been specifically put on notice that the delay cannot be excused. It is stated that the annexure produced along with Exhibit P16 would show the complete consideration of each of the points raised by the petitioner and the shortfalls noticed by the respondents and the reason for the termination of the contract. It is stated that the rate at which the work had been carried out by the petitioner was clearly estimated and the competent authority had found that the petitioner will take at least 24 months to complete the work which is not acceptable to the department. It is therefore contended that each of the contentions of the petitioner had been clearly considered in Exhibit P16 as is evident from the annexures thereto and that there is no occasion for this Court to interfere with the matter, since the speedy completion of the work is being insisted on only for public interest. It is further contended that the direction contained in Exhibit 6 _**WP(C).2301/19**_ P16 that the petitioner will not be permitted to participate in the tender for the balance work is specifically provided in the tender conditions itself and that it is a term which had been agreed to by the petitioner as well. 6. It is stated that on the strength of the documents produced that the petitioner had been repeatedly put on notice of the shortfalls and the lags in the completion of the work repeatedly and that the petitioner had not taken steps to deploy necessary personnel and to speed up the work to the satisfaction of the respondents. It is stated that the work is crucial in nature for the preparation of the campus, since classes have to be started without delay and that the respondents are well within their power in terminating the contract and directing completion of the work by other contractors. It is further contended that there is an efficacious remedy of arbitration available to the petitioner in case he has any grievances. 7. Learned counsel for the petitioner would contend that the contention raised with regard to alternate remedy is completely untenable, since availability of alternate remedy of arbitration cannot affect the powers of this Court under Article 226 of the Constitution of India to interfere in appropriate cases. Reliance is placed by the petitioner on _**Union of India v. Tantia Construction Pvt. Ltd.**_ [(2011) 5 SCC 697] and _**Mariamma Roy v. Indian Bank and Others**_ [(2009) SCC 16 187] in support of his contention. Relying on the 7 _**WP(C).2301/19**_ decision of the Apex Court in _**Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi**_ [AIR 1978 SC 851], learned counsel for the petitioner would contend that the further grounds stated in the counter affidavit that a part of the work of the auditorium was taken away by the petitioner and had been completed by an alternative contractor cannot be pressed into service to support the impugned order, since no such consideration is shown in Exhibit P16. 8. I notice that extensive pleadings are placed on record in this case. The question to be decided by this Court is apparently one with regard to a dispute between the contracting parties as to the termination of a contract. The entire aspects of the matter are settled by the terms out in the notice inviting tender, the model conditions and the agreement between the parties. The petitioner had admittedly taken up the work undertaking to complete the same within 270 days from the date of handing over of the site. This, admittedly, did not happen. The petitioner sought several extensions of time. The last of such extensions was granted on 10.8.2018 by Exhibit P20. The time extended also expired on 7.9.2018. The contention of the petitioner is that occurrence of floods in August, 2018 has not been considered either in Exhibit P20 or in the later proceedings. However, from an examination of the reasoning as contained in Annexure A of Exhibit P16 order, it is clear that the contention of the petitioner that the delay occurred due to the floods has specifically referred to and considered 8 _**WP(C).2301/19**_ by the respondents. The delay due to abandonment of the site for two months due to the floods has been specifically noted in the reply of the department to serial No.2 of the reply furnished by the petitioner to the show cause notice. It has been specifically found that the said delay was not the reason for the non completion of the work by the petitioner. Annexure to Exhibit P16 specifically states that several show cause notices had been issued and that there was still severe shortfalls in the number of labourers engaged by the petitioner. The specific lag in the work with description of the work and the remarks as to the progress of the same is also found in Annexure-I. The petitioner has sought further time upto 7.11.2019 for the completion of the work. Taking note of progress in the work at present, the respondents have come to the conclusion that there will be a further delay of at least 24 months more for the completion of the work. 9. I am of the opinion that in the facts and circumstances of the instant case as detailed above, the contention of the learned counsel for the petitioner that the petitioner was not heard and it's contentions were not considered before Exhibit P16 order of termination was issued is completely unsustainable. The further contention that the petitioner is atleast to be permitted to participate in the tender for the balance work cannot also be accepted in view of the fact that the contract as entered into between the parties contains a specific clause that in case termination is effected for any fault of the contractor, such contractor 9 _**WP(C).2301/19**_ would not be permitted to participate in the tender for the balance work. I am, therefore, of the opinion that the impugned order does not suffer from any arbitrariness or perversity which would render it amenable to judicial review by this Court. Leaving open all the contentions of the parties to be adjudicated in appropriate proceedings, the writ petition is dismissed. The respondents are free to go on with the tender proceedings in accordance with law. Sd/- **ANU SIVARAMAN JUDGE** _vgs_ 10 _**WP(C).2301/19**_ ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** - **EXHIBIT P1 TRUE COPY OF THE LETTER NO.54(4)/TRCD/2017/151 DATED 18/2/2017 ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT P2 TRUE COPY OF THE LETTER DATED 6/3/2017 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT.** - **EXHIBIT P3 TRUE COPY OF THE LETTER DATED 10/2/2018 ISSUED BY THE PETITIONER TO THE 4TH RESPONDENT.** - **EXHIBIT P4 TRUE COPY OF THE LETTERS DATED 22/3/2018 SUBMITTED BEFORE THE 4TH RESPONDENT.** - **EXHIBIT P5 TRUE COPY OF THE LETTER NO.23(756)(4) (B)/CCC/2018/25(H) DATED 6/4/2018 ISSUED BY THE 2ND RESPONDENT.** - **EXHIBIT P6 TRUE COPY OF THE REPLY LETTER DATED 29/9/2018 ISSUED TO THE 4TH RESPONDENT.** - **EXHIBIT P7 TRUE COPY OF THE REPLY LETTER DATED 12/10/2018 ISSUED TO THE 4TH RESPONDENT.** - **EXHIBIT P8 TRUE COPY OF THE LETTER NO.23(9)/IITPPD/2018-19/471 DATED 29/10/2018 ISSUED BY THE 4TH RESPONDENT.** - **EXHIBIT P9 TRUE COPY OF THE LETTER DATED 22/11/2018 ISSUED BY THE PETITIONER TO THE 4TH RESPONDENT.** - **EXHIBIT P10 TRUE COPY OF THE LETTER NO. 23/ (9)/IITPPD/2018-19/498 DATED 8/11/2018 ISSUED BY THE 4TH RESPONDENT.** - **EXHIBIT P11 TRUE COPY OF THE LETTER NO. 23(9)/IITPPD/2018-19/535 DATED 22/11/2018 ISSUED BY THE 4TH RESPONDENT.** - **EXHIBIT P12 TRUE COPY OF THE LETTER DATED 25/10/2018 SUBMITTED BEFORE THE 4TH RESPONDENT.** **EXHIBIT P13 TRUE COPY OF THE LETTER NO. 23(9)/IITPPD/2018-19/534 DATED 22/11/2018 ISSUED BY THE 4TH RESPONDENT.** 11 _**WP(C).2301/19**_ |**EXHIBIT P14**|**TRUE COPY OF THE LETTER DATED 30/11/2018**| |---|---| ||**SUBMITTED BEFORE THE 4TH RESPONDENT.**| |**EXHIBIT P15**|**TRUE COPY OF THE LETTER DATED 7/12/2018**| ||**ISSUED BY THE 4TH RESPONDENT.**| |**EXHIBIT P16**|**TRUE COPY OF THE NOTICE NO.**| ||**23(9)/IITPPD/2018-19/633 DATED 29/12/2018**| ||**ISSUED BY THE 4TH RESPONDENT.**|