M/s. M.A. Waheed, Engineers & Contractors Vs State of Andhra Pradesh, Rep. by its Principal Secretary

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[3457]

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APHC010399262013

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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction)

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FRIDAY,T H E FOURTEENTH DAY OF NOVEMBE R TW O THOUSAND AND TWENTY FIVE PRESENT

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THE HONOURABLE SRI JUSTICE HARINATH.N WRIT PETITION Nos.22711, 23788 and 39333 OF 2013

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WRIT PETITION NO: 22711/2013 Between:

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M/S. M.A. WAHEED, ENGINEERS & CONTRACTORS, A PROPRIETARY CONCERN, HAVIN G ITS OFFICE AT FLAT NO.101, RO Y AL REGENCY APARTMENT MEH D IPATNAM, HYDERABAD - 500 028 REP. BY ITS PROPRIETOR M.A. W AHEED

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...PETITIONER

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AND

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1. STATE OF ANDHR A PRADESH REP BY ITS PRINCIPA L SECRETARY, MUNICIPAL ADMI N ISTRATION & URBAN DEVELO P MENT (EL ) DEPARTMENT, SECRETARIAT, HYDERABAD - 500 022

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VIJAYAWADA MUNI C IPAL CORPORATION, VIJAYAWADA - 520 001, REP. BY ITS COMMISSIO N ER

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...RESPONDENT(S): Petition under Articl e 226 of the Constitution of India pr a ying that in the circumstances stated in th e affidavit filed therewith, the High Cour t may be pleased toto issue an appropriate w rit, order or direction more particularly o n e in the nature of Writ of Mandamus declari n g the letter bearing No.Rc E9-128167/2009 dated 15-072013 of the 2nd Respond e nt as illegal, arbitrary and in violation o f the principles of natural justice and conseq u ently direct the Respondents not to re c over any amount from the running and futu r e bills payable to the Petitioner in res p ect of any of the works executed by it unde r the 2nd Respondent towards the alleg e d excess amount in respect of the work of " Providing 600mm dia DI K9 pumping m ain from market area pumping station to S T P at Jakkampudi" under Agreement No. 2 9/2009-10 dated 20-08-2009

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IA NO: 1 OF 2013(WVMP 3904 OF 2013

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Petition under Sectio n 151 CPC praying that in the circumsta n ces stated in the affidavit filed in support of t he petition, the High Court may be pleased to vacate the interim stay granted in W P No. 22711 of 2013 on dated 23.8.201 3 and dismiss the writ petition

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IA NO: 2 OF 2013(WPMP 27846 OF 2013

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Petition under Sectio n 151 CPC praying that in the circumsta n ces stated in the affidavit filed in support of the petition, the High Court may be pl e ased to suspend the operation of the letter bearing No.Rc.E9-128167/2009 dated 15-07-2013 of the 2nd Respondent, pending d isposal of the present Writ Petition

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IA NO: 1 OF 2018

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Petition under Sectio n 151 CPC praying that in the circumsta n ces stated in the affidavit filed in support of t he petition, the High Court may be pleased to review the order dated 19.06.2018 pa s sed in WP.No. 22711/2013 and to pass

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WP.Nos.22711, 23788 and 39333 of 2013

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IA NO: 2 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 106 days in presenting the above review petition and to pass Counsel for the Petitioner:

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1.N SIVA REDDY

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Counsel for the Respondent(S):

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1.R SUDHEER(S C)

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2.GP FOR MUNCIPAL ADMN AND URBAN DEV

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3.S.V.S.S.SIVARAM SC For VMC

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WRIT PETITION NO: 23788/2013

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Between:

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M/S. M.A. WAHEED,, ENGINEERS & CONTRACTORS A PROPRIETARY CONCERN, HAVING ITS OFFICE AT FLAT NO.101, ROYAL REGENCY APARTMENT MEHDIPATNAM, HYDERABAD - 500 028 REP. BY ITS PROPRIETOR M.A. WAHEED

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...PETITIONER

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AND

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1. STATE OF ANDHRA PRADESH REP BY ITS PRINCIPAL SECRETARY, MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT (EL ) DEPARTMENT SECRETARIAT, HYDERABAD - 500 022.

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VIJAYAWADA MUNICIPAL CORPORATION, VIJAYAWADA - 520 001 REP. BY ITS COMMISSIONER

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...RESPONDENT(S):

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the letter bearing No.Rc E9-13161012008 dated 15-072013 of the 2nd Respondent as illegal, arbitrary and in violation of the principles of natural justice and consequently direct the Respondents not to recover any amount from the running and future bills payable to the Petitioner in respect of any of the works executed by it under the 2nd Respondent towards the alleged excess amount in respect of the work of "Providing 450mm dia DI K9 pumping main from HB Colony pumping station to STP at Jakkampudi" under Agreement No. 57/2008-09 dated 2612-2008

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IA NO: 1 OF 2013(WVMP 3909 OF 2013

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim stay granted in W.P.No. 23788 of 2013 on dated 16.8.2013

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IA NO: 2 OF 2013(WPMP 29242 OF 2013

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the letter bearing No. Rc.E9-131610/2008 dated 15-07-2013 of the 2nd Respondent, pending disposal of the present Writ Petition

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IA NO: 1 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 106 days in presenting the above Review Petition and to pass

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WP.Nos.22711, 23788 and 39333 of 2013

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IA NO: 2 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to review the order dated 19.6.2018 passed in WP No. 23788 of 2013 and to pass

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IA NO: 3 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to dispense with filing of the certified copy of the order dated 19.06.2018 passed in W.P.No. 23788/2013 and to pass

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Counsel for the Petitioner:

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1.N SIVA REDDY

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Counsel for the Respondent(S):

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1.R SUDHEER(S C)

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2.GP FOR MUNCIPAL ADMN AND URBAN DEV 3.S.V.S.S.SIVARAM SC For VMC

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WRIT PETITION NO: 39333/2013

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Between:

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M/S. M.A. WAHEED, ENGINEERS, & CONTRACTORS A PROPRIETARY CONCERN, HAVING ITS OFFICE AT FLAT NO.101, ROYAL REGENCY APARTMENT MEHDIPATNAM, HYDERABAD - 500 028 REP. BY ITS PROPRIETOR M.A. WAHEED

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...PETITIONER

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AND

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STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL SECRETARY, MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT (EL) DEPARTMENT SECRETARIAT, HYDERABAD - 500 022.

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VIJAYAWADA MUNICIPAL CORPORATION, VIJAYAWADA - 520 001 REP. BY ITS COMMISSIONER

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...RESPONDENT(S):

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue an appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the letter bearing No.Rc E9-131612/2008 dated 15-072013 of the 2nd Respondent as illegal, arbitrary and in violation of the principles of natural justice and consequently direct the Respondents not to recover any amount from the running and future bills payable to the Petitioner in respect of any of the works executed by it under the 2nd Respondent towards the alleged excess amount in respect of the work of "Providing 450mm dia DI K9 pumping main from Kabela Pumping Station to STP at Jakkampudi" under Agreement No. 58/2008-09 dated 2612-2008

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IA NO: 1 OF 2013(WPMP 48852 OF 2013

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the letter bearing No. Rc E9-131612/2008 dated 15-07-2013 of the 2nd Respondent, pending disposal of the present Writ Petition.

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IA NO: 1 OF 2015(WVMP 2504 OF 2015

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased vacate the interim order dated 02.01.2014 passed in WP.No. 39333 of 2013 and dismiss the

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WP.Nos.22711, 23788 and 39333 of 2013

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min writ petition costs by taking into consideration of the directions of Vigilance & Enforcement Department (V&E) of A.P. dated 11.02.2011 and Memo dated 16.04.2012 issued by Principal Secretary to Government (MA & UD Department) Regarding excess payment made to petitioner/contractors as per Agreement clauses, otherwise the respondent Corporation and pass

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IA NO: 2 OF 2015(WPMP 121456 OF 2015

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased IA NO: 1 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 106 days in presenting the above review petition and to pass IA NO: 2 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to review the order dated 19.6.2018 passed in WP.No. 39333/2013 and to pass IA NO: 3 OF 2018

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to dispense with filing of the certified copy of the order dated 19.06.2018 passed in WP.No. 39333/2013 and to pass Counsel for the Petitioner:

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1.N SIVA REDDY

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Counsel for the Respondent(S):

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1.R SUDHEER(S C)

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2.GP FOR MUNCIPAL ADMN AND URBAN DEV

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3.S.V.S.S.SIVARAM SC For VMC

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The Court made the following:

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WP.Nos.22711, 23788 and 39333 of 2013

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THE HONOURABLE SRI JUSTICE HARINATH.N

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WRIT PETITION Nos.22711, 23788 and 39333 of 2013

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COMMON ORDER:-

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The petitioner i.e., M/s. M.A.Waheed, engineers & Contractors in all the writ petitions aggrieved by the impugned notices dated 15.07.2023 issued by the respondent No.2 proposing to recover the alleged excess amounts paid over the invoice rate in the work relating to 600 MM Dia D-I K9 and 450 MM Dia D-I K9. The petitioner supplied the pipelines as required by the 2^nd respondent. Agreements relating to the works were also executed successfully.

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The learned counsel appearing for the petitioner submits that tenders are invited from Class-I Contractors for supplying pipes of various dimensions. The petitioners awarded the tender being the lowest bidder. The petitioner was completed major portion of the work, however, the remaining portion of the work could not be executed within the stipulated time as the respondent authority could not obtain necessary permissions from South Central Railway Authorities to cross the railway track for laying the pipeline. It is submitted that the respondents could not obtain permission from South Central Railway as on the date of handing over the site to the petitioners.

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It is submitted that the petitioner waited for almost four years patiently to enable the respondent authority to obtain the requisite permission from the South Central Railway. However, as the respondents could not obtain the permission from the railway authorities, the petitioner submitted a letter

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WP.Nos.22711, 23788 and 39333 of 2013

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requesting the 2^nd respondent to release the final bill payment by closing the contract.

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The 2^nd respondent did not conclude the contract as desired by the petitioners nor could secure the permission from the railway authorities, however, released payment to the petitioner for the work done and also withheld some amounts. It is submitted that the payments were released by the respondents after being fully satisfied with the material supplied and after the quality control department cleared the supplies from the quality point of view.

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The learned counsel for petitioner submits that Clause 46 of the agreement deals with price adjustment and on account of a delay on part of the respondent the petitioner is eligible for price adjustment. The 2^nd respondent applied the price adjustment clause and deducted the amount from the running bills during the periods 2009 to 2012. The price adjustment clause permitted either parties to refer to the prevailing price of pig iron and charge accordingly. As there was a dip in the price of the pig iron the 2^nd respondent was entitled to deduct the amount from the running bills and the petitioner also did not object for the same.

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While the things stood thus, the 2^nd respondent issued a letter dated 15.07.2013 notifying the petitioner about the alleged excess payments made to the petitioner and proposing to recover the same from the running bills. The 2^nd respondent proposed to recover an amount of Rs.59,42,402/from the petitioner’s running account bills as the 2^nd respondent had made excess payment over and above the invoice rate of 600 MM Dia DI K9 and

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WP.Nos.22711, 23788 and 39333 of 2013

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recovery of an amount of Rs.1,16,006/- and Rs.15,05,859/- from the petitioners running bills as the respondent made excess payments over and above the invoice rate of 450 MM Dia DI K9.

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The learned counsel for petitioner submits that the impugned notices notifying the petitioner of the proposed deduction from the running bills cannot withstand the scrutiny of law. It is submitted that price of the pig iron is based on the SSR rates fixed by the Government basing on the prevailing rates. It is submitted that the petitioner participated in the bid after having verified the SSR Rates fixed by the state.

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The proof of purchase of pipes of various diameter was submitted by the petitioner by enclosing the invoices. It is submitted that the 2^nd respondent after having notified the SSR rates cannot referred to the invoice rates and determine to deduct amounts from the petitioner running bills.

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The 2^nd respondent has filed a counter and also a vacate petition. The learned standing counsel for the 2^nd respondent submits that Vigilance Enquiry was ordered with regard to various works relating to supply of pipelines. It is also submitted that the Vigilance and Enforcement Department had given a report on 11.02.2011 categorically stating that the cost of DI Pipes is to be paid as per the invoice rates of DI Pipes. In pursuance of the said report the Principal Secretary MA&UD had given a memo No.5167/E1/2011-2012, dated 16.04.2012 for recovery of excess payments with respect to the works completed by the petitioner.

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The Chief Engineer of the 2^nd respondent issued a Circular Memo dated 28.04.2012 to reconcile the payments made towards price adjustment

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WP.Nos.22711, 23788 and 39333 of 2013

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scheme and to verify whether there is any discrepancy in the payments made and further to submit a compliance report. It is also submitted that having found the excess amount paid as compared to the invoice price the excess amounts paid to the petitioner or sought to be recover.

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Heard the learned counsel for petitioner and the learned standing counsel for the 2^nd respondent. Perused the material on record.

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The dispute in the present batch of writ petitions arose on account of the respondent authority taking into consideration the invoices submitted by the petitioner as the bench mark for determining the price of the material supplied. The 2^nd respondent ought to refer to the SSR rate fixed by the 2^nd respondent for payment of the bills. The SSR rate is arrived at by the principle employer after taking into account the prevailing market price and the availability of the required material. The bidders would also refer to the SSR rate fixed by the principle employer before proposing to bid for any tender.

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The look out of the 2^nd respondent would be whether the material supplied by the contractor meets the standard quality control and quality assurance test. The price at which the contractor procures the material would be of no relevance for the 2^nd respondent after the SSR rate is fixed by the respondent authority.

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The claim of the 2^nd respondent taking into account the invoices furnished by the petitioner and determining to recover the alleged excess payment from the running bills cannot be justified. The learned standing counsel for the 2^nd respondent sought time to place relevant material on record and

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WP.Nos.22711, 23788 and 39333 of 2013

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several adjournments were granted. The learned standing counsel for the 2^nd respondent has reported that the relevant material is not traceable and orders be passed on merits.

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The impugned proceedings are devoid of any details as to what was the modus adopted for determining the alleged excess payment over the invoice rate. When the SSR rate was already fixed for procurement of the pig iron the 2^nd respondent ought not to have referred to the copies of invoices submitted by the petitioner. The copies of invoices were furnished by the petitioner to substantiate the legitimate supply having procured the material from the then subsisting vendor. The proof of purchase for the supplies made cannot over ride the SSR rates fixed by the state. The SSR rates is a part of the agreement which is executed and entered between the petitioner and the Chief Engineer i.e., the 2^nd respondent, the same amounts to the concluded contract.

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The impugned notices proposing to recover from the running account bills of the petitioner deserve to be set aside as the said proposal of the 2^nd respondent runs contrary to the agreed terms and conditions of contract, agreed rates of procurement and supply. The 2^nd respondent is not justified in issuing impugned notices. The dispute raised by the 2^nd respondent determining the alleged excess payment in a unilateral manner cannot sustain the scrutiny of law and logic.

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The Clause – 23 of the General Conditions of the Contract relates to settlement of disputes, the 2^nd respondent ought to have invoke the said clauses and refer the dispute for resolving in terms of the said clause. No

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WP.Nos.22711, 23788 and 39333 of 2013

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such effort is made by the 2^nd respondent. It is also reported that the 2^nd respondent is unable to produce any material before this Court which caused issuance of the impugned notice of recovery dated 15.07.2013.

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On these grounds, this Court is of the considered view that the 2^nd respondent is not justified in issuing the impugned notices. Accordingly, the impugned notices i.e., Rc.E9-128167/2009, dated 15.07.2013 in WP.No.22711 of 2013, Rc.E9-131610/2008, dated 15.07.2013 in WP.No.23788 of 2013 and Rc.E9-131612/2008, dated 15.07.2013 in Wp.No.39333 of 2013 ae hereby set aside.

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