Allowed

M/s Surendra Prasad And Company v. The State Of Bihar and Ors.

Patna HC11 Feb 2013CWJC/2680/2013

Case brief

AI extract

What is this about?

This court allowed a writ petition challenging the petitioner's inclusion in a defaulter list by the State. Relying on the principle that State authorities cannot unilaterally declare a contractor a defaulter when counter-allegations exist against them, the court quashed the relevant order.

What did the court decide?

The writ application is allowed and the letter dated 6.12.2012 is quashed in so far as it relates to the petitioner.

M/s Surendra Prasad And Company Vs The State… — Contract and Commercial Disputes | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA

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Civil Writ Jurisdiction Case No.2680 of 2013

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====================================================== M/S Surendra Prasad and Company, having its office at VillageAnandpura, P.S. Kadirganj Nawada, District- Nawada through its partner namely Anup Kumar, son of Sri Surendra Prasad, Resident of VillageAnandpura, P.S. Kadirganj Nawada, District-Nawada .... .... Petitioner/s

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Versus

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The State of Bihar through the Principal Secretary, Rural Works Department, Government of Bihar, Patna

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Principal Secretary, Rural Works Department, Government of Bihar, Patna

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Principal Secretary, Public Works Department, Government of Bihar, Patna

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Engineer-in-Chief, Rural Works Department, Government of Bihar, Patna

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Superintending Engineer, Rural Works Division, Work Circle, Nawada

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Executive Engineer, Rural Works Department (W) Division) Nawada

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Executive Engineer, Public Works Department, Road Construction Division, Nawada

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Executive Engineer, Public Works Department, Building Division, Nawada

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.... .... Respondent/s

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====================================================== Appearance : For the Petitioner/s : Mr. S.A.Narayan, Sr. Advocate Mr. Sanjeet Kumar Mr. Rajeev Ranjan For the State : Mr.P.N.Shahi, AAG-XIV Mr. Ritesh Kr. No.1. ======================================================

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CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER

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Patna High Court CWJC No.2680 of 2013 (2) dt.11-02-2013

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2 11-02-2013

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Heard learned counsel for the petitioner and learned counsel for the State.

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The petitioner is aggrieved by inclusion of his name in 123 pages list of defaulters issued by the Engineer-inChief, Rural Works Department on 6.12.2012 where his name appears at Sl. No. 21, as a result of which the petitioner-firm has been declared a defaulter and prohibited from participating in any subsequent tender.

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Learned counsel for the petitioner submits that by the order dated 10.1.2013 passed by this Court in CWJC no. 19809/2011 (M/s. NCC Ltd Vs. The State of Bihar and others) and analogous case, this Court has already decided the issue that if the contractor does not admit the default and makes counter allegations regarding the default on the part of the other side or there being other good reasons for the progress of the work not being to the extent of 80% of the target then it is not open to the respondent-authorities of the State to declare the contractor as a defaulter without the issue being adjudicated by an adjudicatory authority, i.e., a Court or Arbitral Tribunal.

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It is urged by learned counsel for the petitioner that in the present matter the petitioner was given contract for construction of rural roads under the Pradhan Mandri Gram Sarak Yojana (PMGSY) but the encroachment free site was not provided as a large number of roads were to be constructed on raiyati lands and there being obstruction by the raiyats as no compensation had been awarded to them for the construction of the public road over their lands.

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It is also submitted that out of six projects the petitioner has already completed one of them and made more

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Patna High Court CWJC No.2680 of 2013 (2) dt.11-02-2013

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than 80% progress in another road and even with respect to other projects, it is not the petitioner who is a defaulter rather it was obligatory upon the respondents to have provided encroachment free site.

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In M/s. NCC Ltd. case (supra) this Court has

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held as follows:-

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“The said proposition laid down by the Apex Court applies squarely in the present situation where the petitioners have been declared defaulters by alleging breach of contractual terms on their part and as being liable and at fault on account of the slow progress of the work as compared to what was required under the contract. This should be specially so since the petitioners not only do not admit such allegation of liability and fault on their part as made by the respondents but have on the contrary raised the plea of liability and fault on the part of the State authorities in the matter on various grounds. It is evident that the authorities of the State cannot be permitted to decide such matter which involves liability on the part of the State officials also. Thus, even if it is accepted that the authorities of the State have the power to debar a contractor from participating in future contract after they are declared defaulter on account of not making the targeted progress to the extent of 80% in the work, still the finding regarding the default cannot be made by the State authorities and that must come from a proper adjudicatory forum, whether a court or arbitral tribunal. Only after such finding it can be open to the authorities of the State to declare a contractor as a defaulter and debar it from participating in future tenders. It is evident that the effect of such declaration as defaulter and debarment would have serious civil consequence on the party concerned and cannot be left to be decided by the party which has made allegation against whom also there is counter allegation

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Patna High Court CWJC No.2680 of 2013 (2) dt.11-02-2013

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by the contractor concerned.”

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(supra).

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Learned counsel for the State is unable to show as to how the aforesaid proposition laid down by this Court in the M/s. NCC Ltd. case (supra) does not apply to the facts of the present case.

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This Court is of the view that the present matter is squarely covered by its decision in M/s. NCC Ltd. case (supra). The writ application is, accordingly, allowed and the letter dated 6.12.2012 is quashed in so far as it relates to the petitioner.

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S.Pandey/- (Ramesh Kumar Datta, J)

M/s Surendra Prasad And Company v. The State Of Bihar and Ors.

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M/s Surendra Prasad And Company v. The State Of Bihar and Ors.

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