IN THE GAUHATI HIGH COURT (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
MANISH CHOUDHURY, J.
M/s. M.K. Dhiroomal Associates JV, a Joint Venture of M/s M.K. Engineering and M/s Shiroomal and Sons Pvt. Ltd. – Appellant
Versus
Union of India – Respondent
Writ Petition (C) No. 6103 of 2012, Writ Petition (C) No. 266 of 2012
Decided on : 21-09-2023
Constitution of India, 1950 - Article 226, 299 [1], 14 - Contract Agreement - Execution of contract-work - Writ petition has been preferred to assail a Final Variation Statement issued in relation to a contract agreement - Held, Petitioner has assailed action on part of respondent N.F. Railway authorities to recover amount as vitiation amount and has sought for a direction to respondent to disburse amount - Respondent in this case had worked out vitiation amount by comparing rates quoted by Jiten Chandra Das as L-1 bidder with rates quoted by two other bidders - Respondent have raised a plea to effect that dispute raised is arbitrable, Court in view of findings already arrived at in writ petition, W.P.[C] and elapse of a time period of more than a decade, does not find it appropriate to relegate parties to arbitration at this distant point of time - Railway authorities in seeking to recover sum from final bill amount in relation to Contract Agreement being arbitrary and not in conformity with Article 14 of Constitution of India, is not to be enforced - Writ petition is allowed.
JUDGMENT :
As both the writ petitions instituted under Article 226 of the Constitution of India involve similar nature of challenge, the same are taken up together at the request of the learned counsel for the parties, as they have stated that exchange of pleadings in both the writ petitions is complete.
2. The petitioners in both the writ petitions are represented by Mr. M. Biswas, learned counsel; the respondents in the writ petition, W.P.[C] no. 266/2012 are represented by Dr. B.N. Gogoi, learned Standing Counsel, N.F. Railway; and the respondents in the writ petition, W.P.[C] no. 6103/2012 are represented by Mr. B.K. Das, learned Additional Standing Counsel, N.F. Railway.
3. As the nature of challenge in both the writ petitions are similar, the facts, pleadings and issues involved in the writ petition, W.P.[C] no. 6103/2012 are taken up for discussion, at first.
Writ Petition, W.P.[C] no. 6103/2012 :
4. The writ petition, W.P.[C] no. 6103/2012 has been preferred to assail a Final Variation Statement issued vide Letter no. W/60/CON/BB/NB-Dyke/DBRT/2006/22/120 dated 08.12.2010 in relation to a contract agreement, that is, Contract Agreement no. CON/Bogibeel/120 dated 27.02.2007. In addition, the petitioner has also sought setting aside and quashing of a Letter no. W/60/CON/NB/Dyke/120/02 dated 03.01.2011; and another Letter no. W/60/CON/Bogibeel/NB-Dyke/SPTR/120 dated 05.01.2011 issued by the respondent N.F. Railway authorities. Assailment is also made to Clause 6.0 contained in the Contract Agreement, executed between the petitioner and the respondent N.F. Railway authorities on 27.02.2007, with regard to its inapplicability.
5. In order to understand and appreciate the challenge made, it is necessary to narrate the background events, which have led to the issuance of the Final Variation Statement and the impugned Letters, in brief, at the inception.
5.1. In the year 2006, the respondent N.F. Railway authorities vide Tender no. CE/CON/Bogibeel/NB Dyke/2006/22 invited bids from intending eligible bidders for execution of a contract-work viz. “Raising, widening, strengthening of North bank dyke by earthwork in filling to form embankment & formation with mechanical compaction and other ancillary works in between Chainage 0.5 km upstream of Bridge Centre Line perpendicular to Bogibeel Bridge centre line [Service road] to Ch. 7.0 Km downstream of Bridge centre line along with perpendicular to Bogibeel Bridge centre line at North bank of River Brahmaputra in connection with Bogibeel Bridge Project [Gr.2]” [‘the Contract-Work’, for short]. Responding to the Tender no. CE/CON/Bogibeel/NB Dyke/2006/22, the petitioner which is a joint venture concern of two entities, submitted its Offer on 14.08.2006. The Offer of the petitioner was accepted by the Competent Authority in the respondent N.F. Railway for and on behalf of the President of India at a total cost of Rs. 18,74,69,000/-, as quoted by the petitioner, and an Acceptance Letter bearing no. W/362/CON/BBI/NB-Dyke/DBRT/2006/22 dated 12.12.2006 stood issued under the hand of the Chief Engineer/Construction-3/N.F. Railway, Maligaon O/o the General Manager [Construction], Maligaon, Guwahati.
5.2. With the issuance of the Acceptance Letter dated 12.12.2006, the petitioner was authorized to commence the Contract-Work and to ensure completion of the Contract-Work within the stipulated period of time, mentioned therein. By the Acceptance Letter dated 12.12.2006, the petitioner was informed that Earnest Money Deposit to the extent of Rs. 34,09,540/-, deposited by it, would be retained as a part of the Security Deposit and rest of the amount towards the Security Deposit would be deducted from CC bills as per conditions of the Contract Agreement. The petitioner was asked to execute a formal Contract Agreement for the Contract-Work and to deposit a Performance Guarantee in the form of an irrevoca
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