IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MARLI VANKUNG, KARDAK ETE, JJ.
Mr. Toshi Longkumer – Appellant
Versus
The Union Of India And Ors – Respondent
WA 5 of 2021
Decided on : 27-09-2023
Arbitral Agreement - Additional Works Payment Dispute - Agreement dated 22.08.2005, Section-2, Clause-3 - 22.09.2011, 07.04.2017 - The court discussed the existence of an arbitral agreement, enforceability of unconscionable contractual agreement, and rates for additional works completed in 2012. The court found that the jurisdiction of the court under Article 226 of the Constitution cannot be ousted by an agreement executed between the parties. The court set aside the finding of the learned Single Judge and remanded the matter back for disposal of the writ petition on merits.
Fact of the Case:
The appellant's firm sought direction to the respondents to pay for additional works carried out in 2012 as per the revised price/rate sanctioned. The appellant's firm completed the additional works but was paid at the old rate in the original agreement dated 22.08.2005, leading to a payment dispute.
Finding of the Court:
The court found that the jurisdiction of the court under Article 226 of the Constitution cannot be ousted by an agreement executed between the parties. The court set aside the finding of the learned Single Judge and remanded the matter back for disposal of the writ petition on merits.
Issues: The issues were whether an arbitral agreement between the parties was enforceable in law and whether an unconscionable contractual agreement can be enforced in the eye of the law.
Ratio Decidendi: The court held that the mere existence of alternate forums where the aggrieved party may secure relief does not create a legal bar on a High Court to exercise its writ jurisdiction. The court also found that the learned Single Judge had erred in deciding that the nature of issues involved required leading of evidence and that the writ Court cannot adjudicate into the matter.
Final Decision: The court remanded the matter back to the Single Judge for disposal of the writ petition on merits.
JUDGMENT :
M.Vankung, J.
Heard Mr. Imti Longjem, learned counsel for the appellant along with Mr. Yangerwati, learned CGSC for respondent Nos. 1 and 2, and Mr. Pfosekho Pfotte, learned counsel for respondent Nos. 3 to 5.
2. Mr. Imti Longjem, learned counsel for the appellant submits that this appeal is preferred against the judgment and order dated 09.04.2021 passed in WP(C)/263(K)/2018. The learned counsel submits that the writ petition was filed by the present appellant seeking direction to the respondent Nos. 3, 4 and 5 to pay the petitioner’s firm for the additional works carried out in the year 2012 in terms of the revised price/rate sanctioned vide letter dated 29.09.2011 which was communicated to the petitioner’s Firm vide letter dated 06.01.2012.
3. The case of the appellant was that the appellant’s Firm participated in the tender process for construction of Phase-A (Pkg-II) buildings for Jawahar Navodaya Vidyalaya (JNV) at Chare, District Tuensang, Nagaland. The scope of the work was mentioned in the Price Bid Document (Volume-II) of the tender document of the contract. The contract was awarded to the appellant’s Firm for a total price of Rs.4,36,01,897.26/-(Rupees Four crores Thirty Six lakhs One Thousand Eight hundred Ninety Seven and paise Twenty Six) only. Pursuant thereto an agreement dated 22.08.2005 was executed between the respondent No. 3 and the appellant’s Firm. The appellant was to complete all the works within 10 (ten) months from the tenth day of issuance of the letter dated 20.05.2005. However, due to many factors beyond the control of the appellant the works continued up to the year 2013, wherein it is admitted by the appellant that he could not complete the construction of Kitchen and Dining Hall which was a part of the scope of the work.
4. The respondent No. 4 vide letter dated 25.11.2010 had in the meanwhile forwarded the Re-Revised Preliminary Estimate (Re-RPE) to the respondent No. 2 incorporating the cost details required for completion of the construction of the Phase-I works at JNV, Tuensang. This letter included additional works desired by the Principal, JNV, Tuensang. Consequently, the respondent No. 2 vide letter dated 29.09.2011 approved the revised estimate. The approval included the additional works which were required at the site and the project for additional works was awarded to the appellant/petitioners. Accordingly, the appellant carried out the additional works required which are construction of play field, boundary wall fencing and retaining walls.
5. Thereafter, in letter dated 12.08.2013, the contract awarded to the appellant was terminated on the ground that the work has not been completed within the stipulated period in terms of the agreement dated 22.08.2005. The letter also mentioned that the appellant will be entitled only for the works which was completed, and accordingly inventory was prepared as per which the appellant was entitled to be paid Rs.23,78,174/-(Rupees Twenty Three Lakhs Seventy Eight Thousand One Hundred Seventy Four) only for the works completed. The appellant/petitioner’s firm was also informed that the earnest money and security deposits stands forfeited. Accordingly, as per the inventory prepared the petitioner’s firm was entitled to be paid Rs.23,78,174/- for works completed. However, the petitioner was also served with a letter dated 29.03.2016 under Section-2, Clause-3 of the Contract Agreement, stating that the petitioner’s firm was to deposit before the respondent No.3 a sum of Rs.2,18,60,493/-. The said amount was towards payment of security deposits and the expenditure to be incurred to complete the remaining unexecuted buildings. The appellant being aggrieved filed WP(C)/81(K)/2016 before this court wherein in the judgment and order dated 30.08.2016, the writ petition was disposed by holding that the respondents were liable to pay the amount of Rs.23,78,174/-to the petitioner.
6. In so far as the additional works executed and completed by the petitioner
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