A contract's timelines affected by mutual agreements for delays allow claims for price escalation under applicable clauses, establishing equity in contractual relations with state entities.

JUDGMENT :

A.K. JAYASANKARAN NAMBIAR, J.

1. The respondents 1 to 4 in W.P.(C).No.17515 of 2022 are the appellants before us aggrieved by the judgment dated 09.12.2022 of the learned Single Judge in the writ petition.

2. The brief facts necessary for disposal of this Writ Appeal are as follows:

The 1^st appellant is a Government of India organisation for promoting the development and application of Space Science and Technology. It had invited tenders for establishment of a Mechanical Testing Research Laboratory for Propulsion Systems – Liquid Propulsion Systems Centre [LPSC] at Valiyamala, Thiruvananthapuram. Ext.P1 notice of tender was issued on 04.05.2019 and the period of completion of the work was stipulated as 12 months. The minimum validity of the tender was 120 days from the last date of receipt of tender. On account of a delay in technical evaluation and approval for opening of a price bid, the respondent/writ petitioner was requested to extend the validity of the tender on various occassions, which was apparently agreed to by the respondent without any objections or demur. Eventually, the technical bid was opened on 17.06.2019, and the price bid was opened on 05.11.2019. The work order was issued to the petitioner on 16.03.2020, and the agreement for the work was executed with the petitioner on 19.03.2020.

3. It would appear that even before the work could commence pursuant to the issuance of the work order, the Government of India declared a complete lock-down in connection with the Covid-19 pandemic on 22.03.2020. The 1^st appellant therefore intimated the respondent of the fact of lock-down. Thereafter, upon the partial lifting of the lock-down, there was a need to re-prioritize the works and therefore an administrative decision was taken by the 1^st appellant to postpone the execution of work awarded to the respondent by six months. Accordingly, Ext.P11 letter dated 23.06.2020 was issued to the respondent seeking his willingness to execute the work at a later date strictly as per the work order and the agreement that was executed. Ext.P11 letter was accepted by the respondent unconditionally by issuing Ext.R1(a) communication dated 24.06.2020. Pending confirmation of budget availability due to the re-prioritization of works post lock-down, the 1^st appellant once again wrote to the respondent by Ext.P13 letter dated 21.12.2020 seeking his willingness to execute the work at a later date after four months, again strictly in accordance with the work order and the agreement executed. The said letter was also unconditionally accepted by the respondent by Ext.R1(b) communication dated 07.01.2021. Thereafter Ext.P14 letter dated 10.03.2021 was issued by the 1^st appellant to the respondent to commence the construction activities for the work awarded within 15 days, and the site was handed over to him on 24.03.2021.

4. While so, the respondent/writ petitioner, by Ext.P15 letter dated 12.03.2021, requested the appellants to consider the application of Clause 10C(ii) of the General Conditions of the Contract that dealt with price escalation to the contract awarded to him. The letter was issued in the phase of the express provisions of the contract which made it clear that the price escalation clause was applicable only to contracts where the stipulated period for completion of the contract was beyond 12 months. The appellants considered the said request of the respondent along with another similar request dated 08.03.2022 and rejected the same by Ext.P17 communication dated 10.03.2022. A further reiteration of the request by the respondent on 17.03.2022 was also similarly rejected by Ext.P19 communication dated 19.04.2022. In the writ petition, the respondent/writ petitio