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2011 Supreme(SC) 424

2011 (3) Supreme 294
SUPREME COURT OF INDIA
Altamas Kabir and Cyriac Joseph, JJ.
Union of India & Ors. — Petitioners
versus
Tantia Construction Pvt. Ltd. — Respondent
Special Leave Petition (C) No.18914 of 2010
Decided on : 18-4-2011

Headnote:(a) Government Contract – The scope of work extended by modifying the design of the original work – Tenders received for extended work alone amounting to more than the original work – Construction Company cannot be compelled to execute the whole work including the modified and extended design within the ambit of the original contract. (Paras 24 and 25)

        (b) Constitution of India – Article 226 – Notwithstanding the provisions relating to the Arbitration Clause contained in the agreement, the Writ Petition would be maintainable. (Para 27)

        (2003) 2 SCC 107; (2001) 10 SCC 491; (1998) 8 SCC 1; (2009) 14 SCC 451; (2010) 3 SCC 321 – Relied upon

       Facts of the case:

        This case pertains to terms of government contract.

       Finding of the Court:

        Termination of contract on the ground of refusal to execute extended work within the original contract is unjustified.

       Result : Appeal dismissed.

       

JUDGMENT

Altamas Kabir, J. —

1. The sole Respondent, M/s. Tantia Construction Pvt. Ltd., filed writ petition, being CWJC No.14055 of 2008, against the Petitioners herein, inter alia, for the issuance of a writ in the nature of Certiorari for quashing the order dated 18th August, 2008, passed by the Deputy Chief Engineer (Construction), Ganga Rail Bridge, East Central Railway, Dighaghat, Patna, calling upon the Respondent Company to execute the enlarged/extended quantity of the contract work pursuant to Tender No.76 of 06-07. Further relief has been prayed for by the Respondent Company for a writ in the nature of Mandamus directing the Petitioners herein to let it complete the reduced quantity of work relating to the construction of the Rail Over-Bridge at Bailey Road, which did not include the additional work in respect of the extended portion of the Viaduct and to close the contract and, thereafter, to make payment for the contract work which it had executed pursuant to the aforesaid Tender.

2. During the hearing of the writ petition several issues were identified regarding the Petitioners’ right to force the Company to execute the additional work of constructing the Viaduct which was neither within the scope of the work nor within the schedule of work comprised in Tender No.76 of 06-07. A connected issue was also identified as to whether in a Risk and Cost Tender, the nature of work provided for in the Tender could be altered and whether such action would be in violation of Articles 14 and 19(1)(g) of the Constitution of India, besides being against the principles of natural justice and contrary to the clauses in the General Conditions of Contract included in the Tender document.

3. It appears that on 12th December, 2006, the East Central Railways (ECR) invited Risk and Cost Tender No.76 of 06-07 for the work of construction of a Rail Over-Bridge at Bailey Road over the proposed Railway Alignment over the Ganga Bridge at Patna for an approximate cost of 15.42 crores. The Tender documents provided that the contract work was to be completed within 15 months from the date of issuance of the letter of acceptance. Upon the tenders being opened on 27th December, 2006, the contract was awarded to the Respondent Company and a letter of acceptance was issued to the Respondent Company on 12th/13th February, 2007. The contract work was accepted at a cost of 19,11,02,221.84p. and an agreement was thereafter entered into between the East Central Railways and the Respondent Company in respect of the contract work, whereby a Rail Over-Bridge was to be constructed with two abutments on both sides and three piers in between. The work also included 500 meters of approach road with Reinforced Earth Retaining Walls to a maximum height of 15 meters on both sides of the Rail Over-Bridge.

4. On account of some of the procedural work, including the change of the span of the bridge, change in the design of the pier cap, the requirement of shifting obstacles like a temple, police station, electrical pole, etc. and also due to heavy rains, the construction of the wall was delayed. The delay in preparation of the designs and drawings which involved the work of a specialized agency also contributed to the delay. On account of changes in the design whereby the Viaduct had to be extended involving an additional cost of 36.11 crores, the Petitioner No.6 requested the Respondent Company to convey its consent for execution of the complete work, including the revised work. By its letter dated 13th February, 2008, the Respondent Company wrote back to the Petitioner No.6 that they did not want to take up the construction of the extended Viaduct which was not covered in the Agreement dated 30th April, 2007. The Respondent Company refused to give their consent for the execution of the complete work at the revised cost of 36.11 crores. On such refusal the Railways floated a separate Tender No.189 of 2008 for the additional work of the extended portion of the Viad

























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