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2024 Supreme(Kar) 18

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. Nagaprasanna, J.
Aishwaryagiri Constructions Pvt. Ltd. – Petitioner
Versus
The State Of Karnataka Department Of Housing Vikasa Soudha and Ors. - Respondents
Writ Petition No.23054 OF 2022 (GM -SLUM)
Decided On : 23-01-2024

Advocates:
Advocate Appeared:
For the Petitioner:Sri. D.R.Ravishankar, Sr. Advocate For Sri. Saravana S., Advocate
For the Respondent:Sri. Spoorthy Hegde, HCGP, Sri. K.Shashikiran Shetty, Sr. Advocate A/W Sri B.B.Patil, Advocate

The main legal point established in the judgment is that the termination of a contract by the Karnataka Slum Development Board and the refusal to grant further extensions were justified under the provisions of the Karnataka Slum Development Board Act, 1973.

Headnote:

Construction Company - Termination of Contract - Karnataka Slum Development Board - [Karnataka Slum Development Board Act, 1973 - Section 9(ii), 9, 50] - The court discussed the provisions of the Karnataka Slum Development Board Act, 1973, particularly Section 9(ii) and 9, which empower the Board to grant extensions of time for completion of public works to contractors under certain circumstances. The court also considered Section 50, which outlines the grounds for termination of the contract. The interpretation and application of these provisions influenced the court's decision to reject the petitioner's plea for extension and uphold the termination of the contract.

Fact of the Case:

The petitioner, a construction company, entered into a contract with the Karnataka Slum Development Board for the construction of dwelling houses for slum dwellers. The petitioner failed to complete the project within the stipulated time, leading to the termination of the contract by the Board. The petitioner challenged the termination and subsequent rejection of representations in court.

Finding of the Court:

The court found that the termination of the contract by the Board was justified, as the petitioner had failed to complete the construction despite being granted multiple extensions. The court rejected the petitioner's plea for extension and directed the Board to issue appropriate work orders to complete the houses for slum dwellers within a specified time frame.

Issues: The main issues revolved around the termination of the contract by the Board, the petitioner's failure to complete the construction, and the rejection of the petitioner's representations for extension of time.

Ratio Decidendi: The court held that the termination of the contract was valid, as the petitioner had not fulfilled the conditions of the contract despite being granted extensions. The court also emphasized the importance of completing the construction for the benefit of the slum dwellers and refused to grant any further indulgence to the petitioner.

Final Decision: The petition was rejected, and the Board was directed to issue appropriate work orders to complete the houses for poor slum dwellers within a specified time frame.

ORDER :

The petitioner is before this Court calling in question order dated 17-10-2022 passed by the 3rd respondent/Karnataka Slum Development Board (‘the Board’ for short) rejecting the representations of the petitioner dated 06-09-2021 and 07-09-2021 and seeks a consequential direction directing the 3rd respondent to extend the time to conclude the work allotted to it in terms of three work orders dated 18-10-2014, 28-09-2015 and 23-08-2017.

2. Heard Sri D.R. Ravishankar, learned senior counsel appearing for the petitioner; Sri Spoorthy Hegde, learned High Court Government Pleader appearing for respondents 1 and 2 and Sri K. Shashikiran Shetty, learned Advocate General appearing for respondents 3 and 4.

3. Brief facts that lead the petitioner to this Court in the subject petition, as borne out from the pleadings are as follows:

The petitioner claims to be a construction company involved in construction of dwelling houses and claims to be the recipient of tenders from the hands of the 3rd respondent/Board on several occasions. The Board enters into a contract with the petitioner on 05-03-2016 pursuant to notification issued and the petitioner emerging as the successful bidder – L1 for construction of rehabilitation of dwelling houses for the slum dwellers floated by the Board. The work orders were said to have been issued to the petitioner on two dates viz., 05-03-2016 and 23-08-2017. The petitioner did not complete the project as was necessary under the contract which led the Board on 07-03-2018 to grant extension for a period of 654 days from the date on which the plots were given to its possession. The petitioner did not complete the project even then. Another extension was granted on 13-07-2020 for a period of one year viz., 365 days. On 27-07-2021 the contract awarded to the petitioner comes to be terminated. The petitioner then submits representations for grant of six months time to complete the entire award of work. Those representations were not considered and, therefore, three writ petitions, Writ Petition No.17531 of 2021, W.P.No.17536 of 2021 and W.P.No.17534 of 2021, were preferred before this Court. This Court disposed of all the writ petitions on 06-09-2022 directing consideration of those representations. On certain clarification, review petitions were preferred which also come to be turned down as the direction had already been issued to consider those representations. The result of the direction for consideration of the representations is the impugned order dated 17-10-2022. It is this order that has driven the petitioner to this Court in the subject petition.

4. The learned senior counsel Sri D.R. Ravishankar appearing for the petitioner would contend with vehemence that the petitioner has no doubt short completed the work allotted to it, but the termination happens unmindful of extension of term for completion of the contract by the 3rd respondent. It is the 3rd respondent who has not allotted the sites for construction well in time. If complete allotment had been done, there would have been no impediment for the petitioner to complete the work. He would seek a direction by quashment of the impugned order rejecting the representation, permitting reasonable time to conclude the work that is pending to be completed. It is his submission that the same work is now sought to be executed at two times the price that the petitioner would complete it. Therefore, it is a loss to the exchequer of the Board, as the petitioner is ready and willing to complete it within a time frame stipulated by this Court.

5. On the other hand, the learned Advocate General Sri Shashikiran Shetty appearing for the Board would vehemently refute the submissions to contend that the petitioner has been dodging the construction. Extension has been given not once but twice. Even after the third extension, the petitioner has not been able to ful

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