The High Court allowed a writ petition to quash an administrative order directing refund of Rs. 1,84,257 paid under an escalation clause. The court ruled that a subsequent government circular withdrawing the clause benefit could not apply to work completed before the circular's issuance.
Impugned order dated 27.9.1996 directing refund of Rs. 1,84,257/- is quashed.
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O.J.C. No. 17343 of 1997
13. 06.03.2017 The petitioner had entered into a contract with the opposite p
arty for performance of some work. Admittedly, the contract was entered into for a period of e
leven months effective from 26.2.1992 to 25.1.1993. It is also admitted that the work was comp
leted within time and the entire payment was also made.
2. The dispute in the present writ petition is with regard to escalation clause,
the benefit of which was granted to the petitioner-Firm. It is contended that on granting the
benefit of escalation clause with regard to increase in labour cost, the petitioner was found
entitled for payment of
Rs. 1,84,257/-, which amount was duly paid to the petitioner. It was after the contract had be
en completed within time, which was upto 25.1.1993, that on 23.2.1993, a circular was issued b
y the State Government whereby the benefit of the escalation clause in agreement was withdrawn
.
3. The submission of the learned counsel for the petitioner is that the benefit,
as per the agreement, was given to the petitioner and a circular which was issued after the ex
ecution of the agreement, and even after the completion of the contract, could not be made app
licable to the case of the petitioner.
4. Learned Addl. Government Advocate has tried to justify the passing of the impu
gned order for recovery of the amount on the basis that the petitioner had not actually given
the extra wages to the labourers.
5. On a perusal of the impugned order dated 27.9.1996 whereby the petitioner has
been asked to refund the amount of Rs. 1,84,257/- on account of excess payment, it is clear th
at the same is solely based on the circular dated 23.2.1993 and not on any such count that no
excess payment was made by the contractor to the labourers.
6. In our view, no additional ground, which has been taken in the counter affidav
it and is not there in the impugned order, can be taken into consideration. On the face of it,
the impugned order, directing the petitioner to refund the amount, is solely based on a subse
quent circular issued on 23.2.1993, which was after the completion of the contract and as such
, we are of the firm view that the same would not be applicable to the case of the petitioner.
7. Accordingly, we allow this writ petition and quash the impugned order dated 27
.9.1996 passed by the Executive Engineer, Mayurbhanj M.I. Division.
.......
( VINEET SARAN )
CHIEF JUSTICE
....
( DR. B.R.SARANGI )
JUDGE
dm
-2-
2 issues framed by the court
Whether a government circular withdrawing the benefit of an escalation clause issued after contract completion can apply retroactively to recover payments already made.
Whether the refund order is maintainable when the only ground for recovery is a circular issued after the contract period.
Petitioner-Firm
State Government
VINEET SARAN
DR. B.R.SARANGI
As recorded by the court registry
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