Joseph Vilangandan vs Executive Engineer (P. W. D. ), Ernakulams

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1978 Supreme(SC) 117

SUPREME COURT OF INDIA
R.S. SARKARIA AND P.S. KAILASAM, JJ.
Joseph Vilangandan, Appellant
Versus
The Executive Engineer (P.W.D.), Ernakulam and others, Respondents.
Civil Appeal No. 2448 of 1968
Decided on 20-3-1978.
Advocates appeared
Mr. T. C. Raghavan, Sr. Advocate (M/s. Sardar Bahadur Saharya and Vishnu Bahadur Saharya, Advocates with him), for Appellant; Mr. S. V. Gupte Sr. Advocate (Mr. K. M. K. Nair, Advocate with him), for Respondents.

Advocates:
K.M.NAYAR, S.V.Gupta, SARDAR BAHADUR SAHARYA, T.C.RAGHAVAN, VISHNU BAHADUR SAHARYA

Headnote:
Constitution of India – Article 226 - Power or jurisdiction – Illegal and arbitrary – However Executive Engineer finally communicated his order cancelling the contract and informing the appellant that "the work is being arranged at your risk and loss through other agencies after declaring you as a defaulter and debarring you from taking further contract under the Division - To challenge this order of the Executive Engineer, debarring the appellant from taking further contract under the Division, a Writ Petition (O. P. No. 2869 of 1968) under Art. 226 of the Constitution was filed by the appellant in the Kerala High Court. It was contended in the petition that the said Order (Ex. P-8) of the Executive Engineer, was ultra vires, illegal and unconstitutional as it violated the appellants fundamental rights guaranteed under Art. 19 (1) (f) & (g) of the Constitution. He further maintained that Respondent 1 was not right in holding the appellant a defaulter; nor had he any power or jurisdiction to black-list or debar the appellant from taking further contracts in Division – Held, Controversy in the instant case, therefore, narrows dawn into the issue, whether such an opportunity was given to the appellant. Answer to this question will turn on an interpretation of the Notice, dated April 17, 1968 (Ex. P-8) given by the Executive Engineer to the appellant. This Notice has been extracted in a foregoing part of this judgment. The material sentence therein is : "You are therefore requested to show cause... why the work may not be arranged otherwise at your risk and loss, through other agencies after debarring you as a defaulter crucial words are those that have been underlined. They take their colour from the context. Construed along with the links of the sentence which precede and succeed them, the words "debarring you as a defaulter", could be understood as conveying no more than that an action with reference to the contract in question, only, was under contemplation. There are no words in the notice which could give a clear intimation to the addressee that it was proposed to debar him from taking any contract, whatever, in future under the Department. A perusal of the appellants reply (Ex. P-7), dated May 20, 1968, sent to the Executive Engineer, also appears to show that by the word "debarring" mentioned in the Executive Engineers letter dated April 17, 1968 (Ex. P-6), he understood as debarring him from executing the contract in question after declaring him a defaulter, and the getting the same work done by other agencies, at his risk and loss. All that has been said in Ex. P-7 by the appellant is directed to justify that the non-execution of the contract was not due to his fault, but due to the delay on the part of the Department in handing over the building to him for starting the work within the time specified in the Agreement, and consequently, if any loss would be incurred by the Department in getting the work done through any other agency, he would not be liable to make good the same. In short, the letter (Ex. P-6) dated April 17, 1968 from the Executive Engineer, did not give any clear notice to the appellant that action to debar him from taking in future any contract, whatever, under the Department or its Ernakulam Division was in contemplation. The appellant was thus not afforded adequate opportunity to represent against the impugned action - This being the position, the rule in Erusian Equipments case (ibid) (AIR 1975 SC 266) will be attracted with full force. While conceding that the State can enter into contract with any person it chooses and no person has a fundamental right to insist that the Government must enter into a contract with him, this Court observed - Appeal allowed

JUDGMENT

SARKARIA, J.: — This appeal by special leave directed against a Division Bench judgment of the Kerala High Court raises a question with regard to the validity of an order dated June 20, 1968 whereby the Executive Engineer debarred the appellant from taking any further contract under the Buildings & Roads Division, Ernakulam.

2. The appellant is a Government Contractor of 16 years standing. He has been executing major building contracts. The Executive Engineer, P.W.D., Ernakulam (Respondent No. 1) invited tenders for executing certain repairs to the English and Mathematics Blocks of the Maharaja College at Ernakulam. The appellant submitted a tender, dated March 8, 1967, for doing this work. In response to a letter from Respondent No. 1, the appellant sent his consent letter, dated March 27, 1967 (Ex. P-1), agreeing to reduce rates of certain items of the work, on the condition that "as soon as the Selection Notice is issued the building should be got vacated to facilitate the starting of the work." The tender was then accepted by the Executive Engineer and a Selection Notice was issued to the appellant on March 31, 1967, in which it was, inter alia, stated that the "facilities for carrying out the work will be given as soon as you start the work."

3. A formal agreement was executed on April 26, 1967, by the appellant and the Executive Engineer. Condition No. 4 of the Agreement stipulated that

"time shall be considered as the essence of the agreement and the contractor hereby agrees to commence the work as soon as the agreement is accepted by the competent authority (Executive Engineer) and the site (or premises) is handed over to him (contractor) as provided for in the conditions and to complete the work within 6 months from the date of such handing over of the site (or premises)."

4. The appellant alleged that in spite of his request, the Executive Engineer and his Assistants (Respondents 2 to 4) took no steps to hand over the building in order to enable him to start the work. The repair work could commence only after the removal of the electric wirings, and such removal was not done up to July 10, 1967.

5. In the meantime, the Engineers strike supervened, in which Respondents 1 to 4 participated. The period of six months for carrying out the work expired before the Engineers strike came to an end.

6. On October 27, 1967, the appellant wrote a letter to the Executive Engineer (Respondent 1), requesting for release from the contract. He stated :

"Due to some unavoidable circumstances the building has not been got vacated so far. The completion period as per the tender for the work i.e. six months is over. Now the cost of materials and labour have increased considerably. In the above circumstances I request that I may kindly be released from the above agreement of work and the security may be released."

7. On April 17, 1968, the Executive Engineer sent a notice (Ex. P-6) to the appellant, which reads as follows :

"The fulfillment of the undertaking given by the department to give facilities to carry out the work as soon as you start the work was not even necessitated as you have failed even to commence the work as per the terms of the contract.....

You are therefore requested to show cause within 7 days from the date of this notice why the work may not be arranged otherwise at your risk and loss, through other agencies after debarring you as a defaulter and making good the loss that may accrue to the department, from your subsisting contracts in this Division." (Emphasis supplied).

8. The appellant, on May 20, 1968, sent a reply asserting that he committed no default, that he had collected the required wooden materials necessary for starting the work, immediately after the execution of the Agreement, and that the delay in starting the work was only due to the delay in handing over the building to him.

9. However, the Executive Engineer finally communicated his order, dated June 20, 1968 (Ex. P-8), cancelling the contract and infor

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