Partly allowed

M/s.Sri v.B.Constructions v. The State of Andhra Pradesh

Andhra Pradesh HC13 Oct 2023WP/23539/2022

Case brief

AI extract

What is this about?

This writ petition challenged notices threatening contract termination and deposit forfeiture for non-commencement of work. The Court found no valid notice of possession was issued to the petitioner as required by specifications, thereby justifying the delay. It set aside the impugned notices, clarified non-handing over of site excused delay, and directed a reasoned order on the refund claim.

What did the court decide?

Letters dated 06.06.2022 and 17.03.2022 set aside. Final authority directed to consider the petitioner's representation dated 13.06.2022 within four weeks.

M/s.Sri v.B.Constructions Vs… — Constitutional and Fundamental Rights | Andhra Pradesh HC (2023)

¶1

RC,J W.P.No.23539 of 2022

¶2

¶3

HON’BLE SRI JUSTICE RAVI CHEEMALAPATI WRIT PETITION No. 23539 of 2022

¶4

ORDER:

¶5

This Writ Petition has been filed invoking jurisdiction of this Court

¶6

under Article 226 of the Constitution of India for the following relief:

¶7

“…..issue order, writ or direction more particularly one in the nature of Writ of Mandamus declaring the action of the 3^rd respondent in issuing letters vide Lr.No.IDC/SE/VSP/DEE/Majjigudem LIS/2021-22/193, dated 06.06.2022 as well as Lr.No. IDC/SE/VSP/DEE/Majjigudem LIS/2021-22/801 dated 17.03.2022 insisting the petitioner firm to take immediate action for grounding the work “construction and Commissioning of Majjiguden Lift Irrigation Scheme on Vamsadhara Left Main Canal in Hiramandalam Mandal of Srikakulam District including operation of Scheme for five years”, failing which necessary action will be taken as per clause 60(a) of PS to APSS’, despite the explanation dated 13.06.2022 and without handing over the possession of the sites with proper documentation till date even after the lapse of more than 16 months from the date of agreement as illegal, arbitrary, violation of principles of natural justice and unconstitutional and consequently direct the respondent authorities to withdraw the contract agreement and refund the security deposit to the petitioner firm at the earliest…..”

¶8

The case of the petitioner, in brief is that, it is a private partnership

¶9

firm and it had executed several Drinking Water Schemes in RWS & S Department, Public Health Department and Lift Irrigation Schemes in APSIDC Limited in various places. In response to the Tender Notice No.02/2020-21, dated 01.09.2020 through ‘e’ Procurement platform, the

¶10

petitioner firm also participated in the tender and the tender quoted by the petitioner firm was approved vide proceedings No.IDC/MD/Tech/VJA/EE-

¶11

RC,J W.P.No.23539 of 2022

¶12

¶13

2/DEE-1/Majjigudem LIS/20-21/1617 dated 03.12.2020. Accordingly, work order was issued by Superintending Engineer, APSIDC Circle, Visakhapatnam vide proceedings dated 11.12.2020 duly inviting the petitioner to conclude agreement. Agreement was concluded on 23.01.2021 vide agreement No.06/2020-21 with a total contract value of Rs.6,51,06,510/- @ (+) 4.60% excess over estimated contract value of Rs.6,22,43,317/-. Thereafter, the petitioner firm started preliminary works like surveying, collection of soil samples at the place where the structures such as sump wells and delivery cisterns are to be constructed and other preliminary work like structural designs from 25.02.2021. The samples were sent to Soil Mechanics Laboratory, Andhra University and structural designs were submitted during the month of April, 2021 and they were approved by the 3^rd respondent vide proceedings dated 06.09.2021. The petitioner had also collected soil samples at private agriculture fields, without having any right of entry. For grounding the works, it needs handing over of sites required with proper documentation for sump wells, pump houses and delivery cisterns. However the 2^nd respondent did not hand over the sites with proper documentation till date.

¶14

It is the further case of the petitioner that, the 2^nd respondent is regularly issuing notices dated 17.02.2022, 17.03.2022 and 06.06.2022

¶15

RC,J W.P.No.23539 of 2022

¶16

¶17

duly threatening the petitioner that the contract will be terminated under clause 60(a) of PS to the Andhra Pradesh Detailed Standard Specifications (APDSS) in view of the lapse of the agreement period for completion of the works i.e. 12 months from the date of the agreement, which ended by 22.01.2022 without even handing over the possession of the sites with proper documentation. The attempts made by the petitioner firm approaching the authorities to hand over the possession went in vain. As per the provision P.S.58 of APDSS, the maximum time upto which contractor has to wait for giving possession of the site is two months from the date of agreement and if within that time, the site has not been put in his possession, he may rescind the contract and may get back the security deposit etc. Aggrieved by the action of the respondents in not handing over possession of the site despite several oral requests and moreover issuing the notices referred to supra in threatening the petitioner to terminate the contract under clause 60(a) of PS to APDSS without there being any fault from the petitioner firm, the petitioner firm made a representation to the 3^rd respondent dated 13.06.2022 insisting on withdrawal from the contract agreement and also requesting the authorities to refund its security deposit as per P.S. 58 to APDSS. The

¶18

RC,J W.P.No.23539 of 2022

¶19

¶20

inaction on the part of the respondents led the petitioner to file this writ petition.

¶21

The 2^nd respondent filed counter affidavit, denying the material averments of the writ affidavit, inter alia contending that, the writ affidavit does not disclose any valid or general grounds to grant the relief sought for. The respondent Nos. 3 & 4 issued notices to the petitioner regularly requesting the petitioner to start the work within seven (07) days, failing which proper action will be taken as per agreement conditions and as per clause 60(a) of PS to APDSS. The petitioner has not responded to any of the reminders/notices issued by the respondents. As such, as a last resort, the respondent No.3, in exercise of powers vested in him, has issued final notice to the petitioner on 06.06.2022 requesting to ground the work. Inspite of regular reminders, the petitioner firm has not responded to the notices and at last, after lapse of five (05) months after completion of 12 months of agreement period, has raised the issue the handing over of possession of site with proper documentation and withdrawing from the contract agreement as per clause 50 of PS to APDSS with mala fide intention. The head work site of the LI Scheme i.e. Sump well & Pump House is proposed in Government land adjacent to the source of the LI Scheme. The petitioner has not raised the issue before respondent Nos. 3

¶22

RC,J W.P.No.23539 of 2022

¶23

¶24

& 4 during the agreement period and also thereafter. If the agency encountered any hurdle in grounding the work at site, they could have brought to the notice of respondent Nos. 3 & 4 during the last 17 months period. Instead they replied by raising the issue to the final notice issued by the agreement authority. Foundation stone of the work was laid on 03.01.2019 and thereafter the petitioner has started preliminary works and grounded the head works in Government land adjacent to Vamsadhara left main canal, but there was no progress of the work further. The petitioner had not started any substantial work like Supplying of pipes, pumps and motors etc. The petitioner willfully did not make progress of the work. Consequently, the 3^rd respondent had issued a caution notice dated 19.04.2019. Meanwhile, the 1^st respondent vide UO Note No.FIN01FMUOASD(WRI)/80/2019 (Comp No 898809) 29.05.2019 has instructed to cancel the works sanctioned prior to 01.04.2019 but not grounded/carried out less than 25% of work. As the petitioner has not grounded the work by the time this orders have come into effect, the 3^rd respondent vide letter dated 22.08.2019 has cancelled the agreement in pursuance of the instructions received from the Government. If the petitioner has grounded and carried out the work as per the mile stone programme, 60 % work would have been completed and the agreement would not have been

¶25

RC,J W.P.No.23539 of 2022

¶26

¶27

cancelled. Subsequently, based on the clearance accorded by the Government for continuation of works, tenders were again called for with the rates of SOR 2019-20. The petitioner firm again participated in the tenders and the 3^rd respondent has concluded a fresh agreement with the petitioner firm. The period of agreement is 12 months i.e. upto 22.01.2022.

¶28

It is the further case of the 2^nd respondent that the farmers/ ayacutdars under the scheme have agreed in writing to construct delivery cisterns or any other civil work and laying of pipe lines by the petitioner in their Zeroith lands without asking for any compensation. Even regarding delivery cisterns, the farmers have submitted their willingness to work in their fields as the scheme is intended to provide water supply to their agricultural fields. The petitioner has grounded the work in the moth of 02/2010 before cancellation of initial agreement. Accordingly, the petitioner can immediately start all the components of work immediately after concluding agreement after revocation. The petitioner is well aware that the site is clear of all hurdles. As the proposed work site is Government land, the question of handing over the site will not arise. As per Clause 60(a) of PS to APDSS, time shall be considered essence of the contract. If, at any time the Executive Engineer is of the opinion that the

¶29

RC,J W.P.No.23539 of 2022

¶30

¶31

contractor is delaying commencement of the work or violating any of the provisions of the contract or is neglecting or delaying the progress of the work defined by the tabular statement “Rate of Progress” in the “Articles of agreement”, he shall so advise the contractor in writing and demand compliance. If the contractor neglects to comply with such demand within seven days after receipt of such notice, it shall then, or at any time thereafter, be lawful for the Executive Engineer to determine the contract, which determination shall carry with it the forfeiture of the Security deposit and the total of the amount withheld under Clause 68. The exercise undertaken by the respondent Nos. 3 & 4 in issuing notices/reminders to ground the work immediately is not at all contradictory to the agreement concluded between the parties. The petitioner has exploited every opportunity provided by the respondents and in turn criticizing and denouncing the department for the delay caused by the petitioner to ground the work. The petitioner has already caused loss not only to the exchequer but also to the farmers in terms of crop loss. The claim of the petitioner from withdrawing the contract as per clause 58 of PS to APDSS is not justifiable, acceptable and legal as there are no hurdles to ground the work at site. There are no merits in the petition and is liable to be dismissed.

¶32

RC,J W.P.No.23539 of 2022

¶33

¶34

Heard Sri Posani Venkateswarlu, learned senior counsel, for the petitioner and Sri V. Raja Manohar, learned counsel for the respondent Nos.2 to 4.

¶35

Sri Posani Venkateswarlu, learned senior counsel, in elaboration would submit that, P.S. 58 of Andhra Pradesh Detailed Standard Specifications empowers the contractor to withdraw from the contract and obtain refund of security deposit, in case handingover the site is delayed more than two months from the date of acceptance of the agreement by competent authority. The agreement was concluded on 21.01.2021. However, the authorities did not hand over the private agricultural lands with proper documentation, wherein sump wells, pump houses and delivery cisterns were to be constructed. Thus, the petitioner even though completed preliminary works like surveying and collection of soil reports, could not commence the work. The contents of the counter affidavit filed by the respondents are self contradictory. At one breath, the authorities say that, as the entire proposed work site is Government land, the question of handing over site will not arise. At another breath, they say that the farmers/ayacutdars under the scheme have agreed in writing to undertake construction works in their Zeroith lands. Thus, the contents of the counter affidavit clarify that entire proposed work site is not

¶36

RC,J W.P.No.23539 of 2022

¶37

¶38

Government land and that the private agricultural lands of the farmers/ayacutdars was not handed over with proper documentation as required. Therefore, there is no laches on the part of the petitioner for not commencing and concluding execution of the work as per the contract and it is only due to not handingpossession of the site only the petitioner could not commence the work. Thus, the authorities, who are at fault and who failed to hand over possession of the site even after lapse of more than 16 months from the date of agreement, cannot forfeit the Security deposit. Therefore, the action of the respondent authorities in issuing the impugned letters proposing action as per clause 60(a) of PS to APDSS, is illegal, arbitrary and unconstitutional. Hence, prayed to allow the writ petition directing the authorities to refund the security deposit.

¶39

On the other hand, Sri V. Raja Manohar, learned Standing counsel for respondent Nos.2 to 6, in elaboration would submit that, since the proposed work site is Government land, the question of handing over the site will not arise and moreover, the farmers in whose fields sump well, pump house are to be constructed have submitted their willingness to work in their fields and thus the contention of the petitioner that it could not commence the work due to failure of the authorities in handing over sites is false and the same is nothing but a ruse to evade the proposed action

¶40

RC,J W.P.No.23539 of 2022

¶41

¶42

under Clause 60(a) of PS to APDSS. As per clause 60(a) of PS to APDSS, if the contractor neglects to comply with the demand made by the authorities to ensure rate of progress as per Articles of agreement, it would be lawful for the authorities to determine the contract and such determination shall carry with it the forfeiture of the Security deposit and other amounts. Since the petitioner did not commence the work despite issuance of several notices and reminders, the impugned letters have been issued to the petitioner to ground the work within seven 07) days from the date of receipt or else, necessary action would be initiated as per clause 60(a) of PS to APDSS, as per the procedure contemplated under Andhra Pradesh Detailed Standard Specifications. There is neither procedural illegality nor irrationality nor violation of principles of natural justice as sought to be projected by the petitioner. Hence, prayed to dismiss the writ petition being meritless.

¶43

Perusal of the material available on record would indicate that, tender quoted by the petitioner firm was approved and pursuantly work order was issued duly inviting the petitioner firm to conclude agreement. Accordingly, agreement was concluded on 23.01.2021.

¶44

There is a dispute as to handing over the work site. According to the petitioner, the proposed work site was not handed over even after

¶45

RC,J W.P.No.23539 of 2022

¶46

¶47

lapse of 16 months from the date of contract, despite several oral requests made by the petitioner for handing over the site. As per the respondents, the proposed work site is government land and thus the question of handing over of site does not arise. Thus, the stand taken by the petitioner for not executing the work is nothing but a lame excuse only to shield itself from the proposed action contemplated under clause 60(a) of PS to APDSS.

¶48

Preliminary Specifications 58 & 60(a) of the Andhra Pradesh Detailed Standard Specifications are germane and they are extracted hereunder for easy reference and expediency.

¶49

“ P.S.58. Date of commencement and completion :- On notification of possession of the site (or premises) being given to the contractor by letter registered for acknowledgment as provided in paragraph 10 supra, he shall forthwith begin the work, shall regularly and continuously proceed with them, and shall complete the same (except for painting or other work which, in the opinion of the Executive Engineer, it may be desirable to delay) by the date of completion as defined in “Articles of Agreement”, subject, nevertheless, to the provisions of extension of time mentioned in the next clause. The contractor shall under no circumstances be entitled to claim any damages from Government if he incurs any expense or liabilities to payment under the contract before the date of commencement defined above. The contractor shall have the right to withdraw from the contract and obtain refund of his security deposit is such intimation of handingover the site is delayed more than two months from the date of acceptance of the agreement by competent authority.

¶50

RC,J W.P.No.23539 of 2022

¶51

¶52

P.S.60. Delays in commencement or progress or neglect of work and forfeiture of earnest money, security, deposit and withheld amounts :- (a) Time shall be considered as of the essence of the contract. If, at any time the Executive Engineer shall be of the opinion that contractor is delaying commencement of the work or violating any of the provisions of the contract or is neglecting or delaying the progress of the work as defined by the tabular statement “Rate of progress” in the “Articles of agreement”, he shall so advise the contractor in writing and at the same time, demand compliance. If the contractor neglects to comply with such demand within seven days after receipt of such notice, it shall then, or at any time thereafter, be lawful for the Executive Engineer to determine the contract, which determination shall carry with it the forfeiture of the security deposit and the total of the amount withheld under Clause 68 below, together with the value of such work as may have been executed and not paid for, or such proportion of such total sums, as shall be assessed by the Executive Engineer.

¶53

However, any authority higher in rank than the Executive Engineer may, in his absolute discretion, waive or modify any penalty or forfeiture imposed by the Executive Engineer, under the provisions of the clause.

¶54

(b) xxxxxx

¶55

¶56

As per Primary Specification 58 of APDS, on notification of

¶57

possession of the site (or premises) being given to the contractor by letter registered for acknowledgment, he shall forthwith begin the work. As per PS 60, time shall be considered as of the essence of the contract and if the

¶58

contractor neglects to comply with such demand within seven days after receipt of such notice, it shall then, or at any time thereafter, be lawful for

¶59

RC,J W.P.No.23539 of 2022

¶60

¶61

the Executive Engineer to determine the contract, which determination shall carry with it the forfeiture of the security deposit.

¶62

Though the respondent had taken up a specific contention that the proposed work site is Government land, however, in the same counter, it is stated that the farmers in whose fields sump well, pump house are to be constructed have submitted their willingness to work in their fields. As rightly contended by the learned senior counsel, these varying versions in the counter clears the cloud that the proposed work site comprises both government as well as private lands. The respondents did not file any proof to substantiate their contention regarding submission of willingness by the farmers of the private lands. Further, as per PS 58 of APDSS, notification of possession of the site (or premises) shall be given to the contractor by letter registered for acknowledgment. Except making mere assertions that possession of the work site has been handed over to the petitioner the authorities did not file any proof to show that they sent notification of possession of site to the petitioner. Thus, it is evident that possession of the work site has not been given to the petitioner under proper documentation to enable the petitioner to commence the work. Thus, there is every justification for the petitioner in not commencing the work. Failure on the part of the authorities in handing over possession of

¶63

RC,J W.P.No.23539 of 2022

¶64

¶65

the work site even after lapse of 16 months from the date of concluded contract, with proper documentation to the petitioner entitles the petitioner to withdraw from the contract and obtain refund of his security deposit as mentioned in PS 58 of APDSS. Being faulty in handing over possession of the work site, the respondents authorities are not entitled to forfeit the security deposit made by the petitioner. Therefore, issuance of the impugned proceedings by the 3^rd respondent insisting the petitioner firm to take immediate action for grounding the work within seven (07) days or else, necessary action will be taken as per clause 60(a) of PS to APDSS that too without passing any orders on the petitioner’s explanation dated 13.06.2022 is unwarranted and uncalled for.

¶66

In view of the above, the writ petition is disposed of, setting aside the letters of the 3^rd respondent vide Lr.No.IDC/SE/ VSP/DEE/Majjigudem LIS/2021-22/193, dated 06.06.2022 as well as Lr.No. IDC/SE/VSP/DEE/Majjigudem LIS/2021-22/801 dated 17.03.2022 are set aside. The authorities are directed to consider and pass appropriate orders on the representation made by the petitioner dated 13.06.2022 in accordance with law, duly taking into consideration PS 58 of APDSS and pass a reasoned order and communicate the same to the petitioner, within a

¶67

RC,J W.P.No.23539 of 2022

¶68

¶69

period of four (04) weeks from the date of receipt of copy of this order.

¶70

There shall be no order as to costs.

¶71

As sequel thereto, miscellaneous petition, if any, pending shall stand closed. Interim orders, if any, shall stand vacated.

¶72

_________________________ JUSTICE RAVI CHEEMALAPATI

¶73

13^th October, 2023 RR

¶74

RC,J W.P.No.23539 of 2022

¶75

¶76

HON’BLE SRI JUSTICE RAVI CHEEMALAPATI

¶77

WRIT PETTION No.23539 of 2022

¶78

13^th October, 2023

¶79

M/s.Sri v.B.Constructions v. The State of Andhra Pradesh

Case brief

What is this about?

What did the court decide?

M/s.Sri v.B.Constructions v. The State of Andhra Pradesh

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Thirumala Constructions Vs the State of Ap

M/ s. Yvr and Company, Vs The State of Andhra Pradesh

Newlife Medical Services Vs the State of Ap

Ramayanam Mohan Raju S/o. Sanjeeva Raju, Vs The State of Andhra Pradesh.

Sri Lakshmi Vigneshwara Constructions Vs the State of Andhra Pradesh

V Prabhakar Reddy Vs State of Andhra Pradesh