Back
2018 Supreme(Pat) 201
IN THE HIGH COURT OF JUDICATURE AT PATNA
VIKASH JAIN, J.
NCC Ltd. through its authorized representative Mr. Buddha Raju Appala Narasimha Raju, Son of Late Venkatapathi Raju - Petitioner
Versus
The State of Bihar, through its Principal Secretary, Water Resources Department, Govt. of Bihar, Secretariat, Patna, Bihar - Respondent
Civil Writ Jurisdiction Case No.2616 of 2017
Decided On : 23-02-2018
For the Petitioner:Mr. Y.V. Giri, Sr. Advocate, Ms. Fauzia Shakil, Mr. Balaji Verma, Advocate
For the State : Mr. Lalit Kishore, AG, Mr. Vikash Kumar, Mr. Harish Kumar, Adv.
Unilateral modification of contract terms is impermissible after the agreement has been entered into, and the court upheld the sanctity of the original contract terms.
Headnote:
Contract - Impugned Circular - Clause 13 of ITB, Clause 4A, Clause 13.1.2, Clause 15 of the Appendix - The court discussed the impugned circular dated 13.06.2011 and its impact on the contract terms. It highlighted the clauses of the Instructions to Bidders and the General Conditions of Contract to support the petitioner's argument that the impugned circular sought to unilaterally modify the terms of the contract, which was impermissible in law. The court found merit in the writ petition and quashed the impugned circular and order.
Fact of the Case:
The petitioner entered into a contract with the respondent-State for execution of work. Subsequently, an impugned circular was issued, altering the method of applying the percentage rate, which affected the contract terms. The petitioner sought relief from the court against the circular and the consequent order.
Finding of the Court:
The court found that the impugned circular and order unilaterally modified the contract terms, which was impermissible. It held that the agreement between the parties was for a fixed amount, and the respondents could not retrospectively impact the terms of the agreement. The court quashed the impugned circular and order.
Issues: The issues revolved around the validity of the impugned circular and order, the interpretation of the contract terms, and the permissibility of unilaterally modifying the contract.
Ratio Decidendi: The court's decision was based on the interpretation of the contract terms, specifically clauses related to bid prices, duties, taxes, and the percentage rate method. It emphasized that the respondents could not unilaterally rewrite the contract terms after the agreement had been entered into.
Final Decision: The impugned Circular No. 948 dated 13.06.2011 and the impugned order dated 22.09.2015 were quashed, and the writ petition was allowed.
The present writ petition has been filed for the following reliefs —
(i) For issuance of a writ, order or direction in the nature of a declaration, declaring that the impugned circular dated 13.06.2011 is not applicable to the contract dated 06.08.2009 and cannot have the effect of overriding, novating or altering the terms of the said Contract; Or
(ii) For issuance of a writ, order or direction in the nature of certiorari quashing and setting aside the impugned circular dated 13.06.2011 issued by the Respondent no. 1; and
(iii) For issuance of a Writ, Order or direction in the nature of mandamus, directing the Respondents herein to pay strictly as per the terms of the contract; and
(iv) For issuance of a Writ, Order or direction in the nature of certiorari quashing and setting aside the impugned order dated 22.09.2015 whereby the respondent no. 1 has disposed of the petitioner’s representations by non - application of mind, arbitrarily and illegally; and
(v) Ad-interim ex-parte direct the respondents herein to release the amounts due and payable to the petitioner and withheld by the respondents by placing reliance on the impugned circular during the pendency of the present proceedings;
(vi) For any other alternative or consequential reliefs for which the petitioner is entitled by this Hon’ble Court in the facts and circumstances of the present case.
2. The broad facts of the case according to the petitioner are that pursuant to an NIT issued by the respondent-State for execution of work relating to restoration of Eastern Gandak Canal System including Gandak Barrage under Rashtriya Sam Vikash Yojna, the petitioner offered to perform the work at 44.53% of the estimated tender value of Rs. 310.54 crores. The rates in the BOQ specifically included the applicable royalty and duties. The total amount of the petitioner’s bid came to Rs. 448,83,67,313/- and for which a letter of acceptance dated 03.07.2009 was issued in favour of the petitioner. This was followed by an agreement dated 06.08.2009 entered into between the parties for a cost of Rs. 448,83,67,313/-. The tender documents included the Instructions to Bidders (“ITB” for short) which formed part of the agreement and clause 13.1.2 thereof stipulated, inter alia, that all duties, taxes and other levies payable by the Contractor should be included in the rates, prices and total bid price submitted by the bidder. The General Conditions of Contract forming part of the agreement also provided vide clause 4A as follows —
“4A. In case of Percentage Rate Tenders, tenderers shall fill up the usual printed form, stating at what percentage below/above (in figures as well as in words) the total estimated cost given in Schedule of Quantities at Schedule-A, he will be willing to execute the work. Tenders, which propose any alteration in the work specified in the said form of invitation tender, or in the time allowed for carrying out the work, or which contain any other conditions of any sort, will be liable to rejection. No single tender shall include more than one work but contractors who wish to tender for two or more works shall submit separate tender for each. Tender shall have the name and number of the works to which they refer, written on the envelope.
If for any special reasons, the contract provides for the payments for work done to be made at a specified percentage below or above the rates entered in the sanctioned estimate of the work (or the Scheduled of Rates) it should be stated in clear terms in the contract that the deductions or additions, as the case may be of the percentage, will be calculated on the gross, and not the net amounts of the bills for work done and in fixing the percentage it should be borne in mind that the calculations will be made.”
On this basis and pursuant to the contract, a notice to proceed with the work dated 06.08.2009 was issued to the petitioner at a bid price of Rs. 448,83,67,313/-. The petitioner accordingly commenced the work.
3. It appears tha
