A contractor cannot claim price escalation if the work execution exceeds stipulated timelines and lacks a price adjustment clause in the contract.

ORDER :

1. Through this writ petition, the writ petitioner sought to challenge the action of the respondents in not escalating/adjusting the price of steel, cement, labour and other materials as per G.O.Rt.No.111, T, R&B Department, dated 28.02.2024, G.O.Ms.No.94, T, R&B Department, dated 16.04.2008 and G.O.Ms.No.35, T, R&B Department, dated 30.01.2009 for the work covered under L.S. Agreement C.R.No.61/2020-21 entered into between the petitioner and respondent no.3, dated 23.12.2020.

2. The brief facts are that the petitioner was the successful bidder of the e-procurement Tender Notice no.38/T.O/2020-21, dated 09.09.2020 called for the purpose of construction of Court halls for VI Additional District & Sessions Judge & Senior Civil Judges Court, Markapur and accordingly an agreement was entered into by the petitioner with respondent no.3 on 23.12.2020, as per which the work has to be completed within 15 months i.e. by 22.03.2022. Though the work was technically sanctioned in the year 2019, for various reasons, the petitioner was allotted land in the month of August, 2023 and by the time the petitioner started to execute the work, there was a huge change in prices that escalated more than the estimated contract value. The petitioner made representations dated 17.06.2022 and 04.08.2022 to respondent no.3 for price escalation and unless the price is escalated/ adjusted, the petitioner would sustain huge loss. As per the recommendation of committee of Chief Engineers, the Government issued G.O.Rt.No.111, dated 28.02.2024 mentioning therein that price escalation/ adjustment is permitted for the work executed during the period from 02.11.2020 to 31.03.2023. Whereas the petitioner could only execute the work on 06.08.2023, since there was inordinate delay in allocation of land and laying of foundation stone. Unless price escalation in terms of the G.Os. referred to supra is granted, it would be highly impossible for him to proceed with the work. Despite repeated requests dated 04.08.2022 and 05.04.2024 there was no positive response from the respondents. Hence, prayed to direct the respondents to escalate the price for the subject work.

3. Heard Sri K.Varun Shyam Kumar, learned counsel for the petitioner, the learned Government Pleader for Roads & Buildings and Ms. S.Pranathi, learned Special Government Pleader attached to the office of the learned Advocate General.

4. Sri K.Varun Shyam Kumar, learned counsel, while reiterating the contents of the writ affidavit would contend that the delay in executing the work is solely attributable to respondent no.6 since the petitioner was not permitted to execute the work until foundation stone is laid in the month of August,2023 in relation to the work which was technically sanctioned in the year 2019 and thus there was huge escalation of prices as on the date of execution of the work on 06.08.2023 and therefore, the petitioner is entitled to get price escalation/adjustment in terms of the Government Orders without reference to the time line fixed therein or else the petitioner would be put to suffer huge financial loss for no fault of him and for the delay which is solely attributable to respondent no.6. Accordingly, prayed to allow the writ petition.

5. Whereas the learned counsel for respondents would contend that price escalation/adjustment will be applicable only when the works were executed within the time limit stipulated and if the subject works meet all other specifications envisaged in the Government Orders referred to by the petitioner, but as the subject works were executed by the petitioner beyond the time limit mentioned in G.O.Rt.No.111, dated 28.02.2024, the authorities had rightly declined to extent the benefit of