Disposed

M/S Tripathi Brothers v. State of U.P. and 5 Others

Allahabad HC18 Nov 2019WRIC/26640/2019

Case brief

AI extract

What is this about?

The court allowed writ petitions seeking payment of undisputed contract money. While the respondent initially delayed payment for over a year, the court accepted the explanation that an EPFO seizure temporarily froze the bank account. The court dismissed the recall application for contemptuous conduct but discharged the show-cause notices and directed respondents to consider a claim for 6% interes

What did the court decide?

Writ petitions disposed; recall application rejected; show-cause notices against officials quashed/discharge granted; respondents directed to consider interest claim.

M/S Tripathi Brothers Vs State of U.P… — Contract and Commercial Disputes | Allahabad HC (2019)

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Court No. - 1

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1. Case :- WRIT - C No. - 26640 of 2019

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Petitioner :- M/S Tripathi Brothers Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- J.P. Pandey,Bhagwan Dutt Pandey Counsel for Respondent :- C.S.C.,Kapil Dev Singh Rathore

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2. Case :- WRIT - C No. - 26971 of 2019

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Petitioner :- M/S Tripathi Brothers Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- J.P. Pandey Counsel for Respondent :- C.S.C.,Kapil Dev Singh Rathore 3. Case :- WRIT - C No. - 26996 of 2019

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Petitioner :- M/S Tripathi Brothers Respondent :- State Of U.P. And 5 Others Counsel for Petitioner :- J.P. Pandey, Bhagwan Dutt Pandey Counsel for Respondent :- C.S.C., Kapil Dev Singh Rathore

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Hon'ble Ramesh Sinha,J. Hon'ble Ajit Kumar,J.

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Heard Shri J.P. Pandey and Shri B.D. Pandey, learned counsel for petitioner, Shri Neeraj Tripathi, learned Additional Advocate General assisted by Dr. D.K. Tiwari appearing for the State-respondents.

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In compliance of our order dated 05.11.2019 personal affidavits have been filed by the K. Balaji, Managing Director, Purvanchal Vidyut Vitran Nigam Limited, Varanasi and Shri Anil Kumar Awasthi, Director (Finance), Purvanchal Vidyut Vitran Nigam Limited, Varanasi respectively and both these officers are also personally present before this Court.

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Putting the record straight we may note that this writ petition and other connected matters have come to be filed before this Court invoking our extraordinary jurisdiction under Article 226 of the Constitution for a writ of mandamus to the respondents particularly respondents No. 2 and 3 for taking a positive action for payment of the contract money, which is admitted to the respondents in view of the recommendation made by the Superintending Engineer to the Chief Engineer, Supply Division, Gorakhpur Division, Gorakhpur on 1st of August, 2019 with a copy of the 2nd and 3rd respondents for necessary compliance at their end.

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In the ordinary circumstances, this Court does not interfere in the matters of payment of contract money as non-payment or withholding of such contract money calls for adjudication of the factual dispute regarding the work carried out and the quality of work and the satisfaction of the first party to the contract that had entered into agreement with contractor for carrying out certain works; but where the amount is admitted one to the authorities and after due inspection and verification of the work done by the second party to the contract and recommendation is made for necessary payment of the due amount of the contractor against the work carried out, we find no justification for withholding the such amount by the government and its authorities for no justifiable reason.

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The case in hand and the connected matters are of such kind and therefore, initially while we entertained these matters on 13th of August, 2019, the counsel appearing for the Corporation prayed for time to have instructions in the matter and accordingly we granted time. On 16.09.2019 the matter could not be taken up and on 24th September, 2019 again the counsel appearing for the respondent Corporation prayed for further time and the time was allowed.

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It is thereafter when the matter was taken up on 14.10.2019, again, the counsel appearing for the respondents No. 2 and 3 demanded further time, this Court granted further time on ground that earlier the accounts of Corporation were seized and now the matter was pending before the Director (Finance), who shall take the decision soon and this is how the matter was posted for 05th of November. On 05th of November, a recall application was filed in Court in respect to our order dated 14.10.2019 on behalf of the respondents No. 2 and 3. This Court could not understand as to how the recall application came to be filed in respect of an order which was passed after hearing the counsel for the respondent Corporation and therefore, took a serious view of the matter and passed the following order:-

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"Heard Sri Bhagwan Dutt Pandey, learned counsel for the petitioner and Sri Kapil Dev Singh Rathore, learned counsel for respondent no.3.

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On last occasion we had passed a detailed order requiring the Director (Finance)-Respondent no.3 to come up with the explanation to justify his non-action on the recommendation for the payment forwarded to him by the Superintendent Engineer against the work carried out by the petitioner under agreement.

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Today Sri Rathore, learned counsel for the respondent no.3 has filed recall application which is taken on record.

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This is a case where the petitioner is claiming certain amount of money which the respondent has agreed to pay if the work is carried out as per the terms of the agreement executed on 7.4.2018. The petitioner having completed the work, made a request for payment and it appears that after the work got verified the Superintending Engineer vide letter dated 4.2.2019 made a recommendation to the Director to release the amount. The second recommendation was made on 21.2.2019, however, when nothing was done in the matter, at the end of the Director, the petitioner himself sent a letter on 30.4.2019 to the Managing Director, copy whereof has been filed as one of the annexure in the writ petition. There is another letter appended with the writ petition, of the Superintending Engineer addressed to the Chief Engineer dated 1.8.2019 in which statement has been made that recommendation had already been forwarded for payment to the Managing Director and as and when the fund is released, the payment shall be made.

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It is in the above background that we had granted time to Sri Rathore, learned counsel for Respondent No.3 on 24.9.2019 to have instruction in the matter and if so desired, to file counter affidavit. However, when the matter was next taken up on 14.10.2019, Sri Rathore pleaded that the matter was still engaging the attention of the Director (Finance)Respondent No.3, who has to take final decision in the matter.

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Considering the fact that no counter affidavit was filed and no plausible explanation was submitted to the Court, the approach of the Director (Finance) in the matter appeared to be quite casual one and accordingly we directed him to file his personal affidavit for the laxity shown in the matter vide order dated 14.10.2019.

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To our utter astonishment, today instead of filing the affidavit explaining away the reasons, a recall application has been filed in respect of our order dated 14.10.2019. From the perusal of the entire affidavit, we find that paragraph-7 of the recall application offers explanation that runs as under:

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"That with regard to decision with regard to payment to the petitioner, it is humbly submitted that while the matter of the petitioner was being considered certain queries, came into light regarding which the bills of the petitioner has been remitted for clarifying the issues. In view of the above, the final decision in the matter could not be taken. Thus, instant matter requires some more time approximately four weeks for considering the matter."

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From bare reading of the aforesaid paragraph, we find that the explanation submitted is quite vague and is sketchy as either import of our order dated 14.10.2019 has not been understood or is sought to the circumvented deliberately. The officer in the rank of the Director (Finance) of Purvanchal Vidyut Vitran Nigam Ltd. Varanasi, a Managing Director is supposed to have some sense of responsibility to show sincerity when the highest Court of the State has required him to furnish an explanation for the delay or laxity shown in the matter. The manner in which the paragraph is worded without furnishing any details regarding enquiry and the steps taken, if any and the intrinsic material if available that might have compelled him to release the amount, the explanation is liable to be rejected.

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It is very painful to record that the approach of the Director (Finance) is an attempt to over-reach our order, an act not only deserves reprimand but liable to be called in contempt. Respect to the majesty of the Court and speedy justice to save precious time of the public is the hallmark of any efficient judicial system and we would be failing in our duty if we condone such careless approach of the high ranking officials as has come to be reflected in the present case.

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Let the Director (Finance), Purvanchal Vidyut Vitran Nigam Ltd. Varanasi-Respondent No.3 as well as the Managing Director, Purvanchal Vidyut Vitran Nigam Ltd., Purvanchal Vidyut Bhawan, Varanasi be present before this Court to explain their conduct in the matter alongwith their personal affidavits on the next date fixed.

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List this case on 18.11.2019 alongwith Writ C Nos.26971 of 2019 and 26996 of 2019."

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Today, both the respondents No. 2 and 3 have appeared in person before this Court and have filed their respective personal affidavits as well as Exemption Application from personal appearance.

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In the personal affidavits of the respective respondents that are verbatim same in the very second paragraph they have expressed their unconditional apology and have reiterated their faith and regards in the majesty of this Hon'ble Court and thereafter certain facts have been stated as to how the payments were sanctioned for the work carried out by the contractors pursuant to the reports submitted in that regard but for certain unavoidable circumstances caused by the seizure of the account of the Purvanchal Vidyut Vitran Nigam Limited, Varanasi on 23rd September, 2019 by the Employees Provident Fund Commissioner exercising the power under Section 8-F of the E.P.F. Act, putting a halt to all kind of transactions from the account.

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Writ - C No. 31657 of 2019 was filed against the seizure of the account, which was finally disposed of on 01.10.2019 and the bank account came to be unfreezed only on 04.10.2019. A formal verification thereafter was directed on 22.10.2019 and a final report has come to be submitted on 13.11.2019 regarding the completion of work and satisfaction in respect thereof by the Chief Engineer and it is on 15.11.2019 thereafter that payments have been made to the contractors in respect of the petitioners and all the petitioners in connected matters.

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It has been urged that the payments have been made from the General Fund Account and a Request Letter has been forwarded to the U.P. Power Corporation Limited on 16.11.2019 to further release all the funds which have been diverted towards the payment. From the facts as have come to

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be stated in the affidavits and on a pointed query made to the learned counsel for petitioners, in that regard he has also admitted that the payments have been made.

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In such above view of the matter as the payments have come to be withheld only on account of seizure of the bank account between 23rd of September, 2019 and 04.10.2019, the excuse of the respondents that the payments could not be made and there was no deliberate attempt to withhold the payment under any circumstance, appeals to be genuine.

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At this stage, learned counsel for petitioners submits that work completion had been done in December, 2018 itself and yet payments have been withheld for no justified reasons and even recommendation is of 1st of August, 2019 and he argues, had the authorities discharged their onerous duty quite diligently and honestly, such a situation would not have arisen and the petitioner would not have been forced to file the present petition. Under the circumstances, therefore, he pleads the petitioners are also entitled for interest for such delayed payment at least @ 12 per cent and in support of his argument, learned counsel for petitioners has placed reliance upon a judgment of the Apex Court in the case of M/s. Surya Constructions Vs. State of U.P. and others in Civil Appeal No. 2610 of 2019 decided on 8th of March, 2019. In the said case the Court had directed for payment of interest @ 6 per cent per annum for the delayed payment of contract money. The Court had observed in the said case that if the amount payable to the appellant was wholly undisputable, then, the State behaves arbitrarily in withholding such admitted amount and even in the realm of contract, the High Court could interfere under Article 226 of the Constitution of India. In the said case there was no dispute of amount and it is because of non availability of the fund that payment could not be made. The High Court had dismissed the writ petition for the reason that claim of contract money involves disputed questions of facts.

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Allowing the Special Leave Petition the Apex Court observed thus:-

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"It is clear, therefore, from the aforesaid order dated 22.03.2014 that there is no dispute as to the amount that has to be paid to the appellant. Despite this, when the appellant knocked at the doors of the High Court in a writ petition being Writ Civil No. 25216/2014, the impugned judgment dated 02.05.2014 dismissed the writ petition stating that disputed questions of fact arise and that the amount due arises out of a contract. We are afraid the High Court was wholly incorrect inasmuch as there was no disputed question of fact. On the contrary, the amount payable to the appellant is wholly undisputed. Equally, it is well settled that where the State behaves arbitrarily, even in the realm of contract, the High Court could interfere

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under Article 226 of the Constitution of India ['ABL International Ltd. and Another v. Export Credit Guarantee Corporation of India Ltd. and Others' (2004 (3) SCC 553)].

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This being the case and the work having been completed long back in 2009, we direct the Uttar Pradesh Jal Nigam to make the necessary payment within a period of four weeks from today. Given the long period of delay, interest at the rate of 6 per cent per annum may also be awarded.

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The appeal stands disposed of accordingly."

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In the present case we also find that in personal affidavit filed today the amount of contract money due to the petitioner from the respondents has not been disputed. It has also not been stated anywhere that there was any delay in completion of the work. Rather the note appended to the report is of the Chief Engineer dated 13.11.2019 is that the work was completed well within time.

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If it is the case that work was completed well within time, then, there was certainly no occasion to withhold the amount of contract money for over a period of one year as has happened in the present case. The Managing Director who is present in person before this Court has assured the Court that in case if an application is filed by petitioner of the present writ petition and petitioners in connected matters for necessary interest for delayed payment of the contract money, their grievance shall be looked into sympathetically and in light of the judgment of Apex Court in the case of M/s. Surya Constructions (supra).

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In such above view of the matter and the considerate approach of the Managing Director before this Court in considering the application for interest of the petitioners and the fact that petitioners have already been paid with the contract money, we are condoning the conduct of the Managing Director and the Director (Finance) and discharging the notices against them. Their Exemption Applications are accordingly accepted and allowed.

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The Recall Application on behalf of respondent No. 3 stands rejected.

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All the writ petitions are disposed of finally with direction that in case if the petitioners in this petition and in connected matters move appropriate application seeking payment of interest, their application shall by sympathetically considered by the respondents in light of the judgment of the Supreme Court in the case of M/s. Surya Constructions (supra) and an appropriate order shall be passed within a period of six weeks from the date of production of a certified copy of this order

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along with applications.

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Order Date :- 18.11.2019 LBY

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(Ajit Kumar, J.) (Ramesh Sinha, J.)

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Court No. - 1

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Case :- WRIT - C No. - 26640 of 2019

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