The main legal point established in the judgment is that the terms of the tender agreements/contracts govern the payment of royalty and price escalation in royalty charges, and the impugned circular cannot be made applicable retrospectively.

JUDGMENT

N. B. Suryawanshi, J. - Rule. Rule made returnable forthwith. Heard finally by consent of learned counsel appearing for the parties.

2. Since in all these three petitions, the challenges raised, so also the grounds of challenge are same, they are heard together and are decided by this common judgment. The petitioner in these three petitions seeks quashing of Circular No. 9 dated 17.02.2020, issued by the respondent no. 1-V.I.D.C.

3. The petitioner is a partnership firm doing construction business and has been taking contracts from Government, first respondent and other authorities. The first respondent is a Corporation constituted for removing backlog of irrigation and for carrying out various irrigation projects in Vidarbha region. The first respondent from time to time issued tender notices in respect of construction of various projects. The petitioner filled in tenders and three tenders of the petitioner were accepted as follows :-

i) Construction of earthwork and structure along Minor-1 RD 2350M and its sub minor, Minor-2 L RD-3090M and its sub minor, tail minor RD-4330 and its sub minor of distributory D-5 at RD-5850 on Gosikhurd Righ Bank Canal.

ii) Construction of earthwork and structure TAS Minor No. 2 offtaking from main canal of Mokhaburdi Lift Irrigation Scheme.

iii) Work of construction of dam and head regulator of Shirud M.I. tank, Hinganghat, Dist. Wardha.

Accordingly, tender agreements/contracts were executed between the petitioner and respondent no. 1 and work orders were issued in favour of the petitioner on 27.05.2014, 19.12.2011 and 17.06.2014 respectively.

4. In accordance with the terms of the contract, the royalty charges were being deducted from the running bills of the petitioner. So far as escalation in the royalty charges are concerned, the same were calculated in accordance with the terms of the contract. The governing council of the first respondent in its 55th meeting dated 24.02.2014, passed resolution no. 55/6. On that basis, a circular dated 28.03.2016 was issued wherein, it was provided that from the bills of the contractor, the difference of price escalation in the royalty be recovered and proposal for refund of difference amount of increase in the royalty rates be submitted along with the demand for funds for payment of the bills.

On 16.11.2016, the Executive Engineer of first respondent addressed a communication to the Chief Engineer, Water Resources Department, Amravati by giving reference to a letter of Regional Office dated 30.09.2016. It was stated that the price escalation on the royalty shall be applicable to the royalty rates, which are included in the tender rates and the price escalation shall not be applicable to the difference in price increase in the royalty rates. Thereafter, by giving reference to the 55th meeting of the governing council and the resolution no. 55/6, circular no. 23 was issued by the second respondent on 30.12.2017, which states that while making the payments to the contractor, on account of increase in royalty levied on minor minerals, price escalation on royalty (as stipulated in the agreement/contract) shall not be deducted.

The royalty payment was being deducted from the running bills of the petitioner and the price escalation in the royalty charges was being calculated in terms of the tender agreement/contract.

5. The second respondent on 17.02.2020 issued circular no.9, reiterating the circular dated 28.03.2016 and communication dated 06.11.2016 and canceling circular no.23 dated 30.12.2017 thereby issuing revised instructions, by placing reliance on paragraph no.17 of the judgment of the Hon'ble Supreme Court in National Highway Authority of India ..Vrs.. Progressive MVR (JV), (2018) 14 SCC 688 . As per the revised instructions while calculating the price escalation as per the circular dated 28.03.2016 and letter dated 16.11.2016, the amount of royalty was to be deducted and the price escalation was to be calculated on the remaining amount. The S