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2015 Supreme(Jhk) 357
IN THE HIGH COURT OF JHARKHAND AT RANCHI
SHREE CHANDRASHEKHAR, J.
Satyam Engineering & Construction, through its Proprietor, namely, Rajesh Kumar Bhagat - Petitioner
Versus
State of Jharkhand & Ors. - Respondents
W.P.(C) No. 6820 of 2013
Decided On : 01.04.2015
Advocate Appeared:
For the Petitioner:Mrs. Neelam Tiwary, Advocate.
For the State : Mr. Atanu Banerjee, G.A.
Orders passed by a court with jurisdiction must be complied with and cannot be ignored.
Headnote:
Deduction - Contract Dispute - Clause 23 of the tender conditions - 5% deduction - Arbitration clause
Fact of the Case:
The petitioner, a proprietorship firm, completed a work but was not paid the balance amount. The respondent ordered a 5% deduction, alleging defects in the work. The petitioner approached the court after the respondent's order was challenged.
Finding of the Court:
The court found that the deduction was arbitrary and in violation of the contract terms. The court also rejected the plea questioning the maintainability of the writ petition based on the arbitration clause.
Issues: Non-payment of balance amount, arbitrary deduction, and maintainability of the writ petition based on the arbitration clause.
Ratio Decidendi: The court emphasized that orders passed by a court with jurisdiction must be complied with and cannot be ignored. The court also held that the writ petition was maintainable due to noncompliance with a previous court order.
Final Decision: The court issued a writ of mandamus to ensure payment of the balance amount with interest to the petitioner, warning of contempt proceedings if not complied with.
1. Aggrieved by order dated 11.07.2013 whereby, the respondent no.2 ordered 5% deduction from the total amount payable to the petitioner and for a direction to the respondents to pay the balance amount of Rs. 6,78,593/- with penal interest to the petitioner, the present writ petition has been filed.
2. The petitioner is a proprietorship firm, which was awarded work mentioned at Sl. No. 16 in NIT No. 01 of 2007-08. Vide letter dated 14.02.2008, the date of completion of work was fixed as 25.03.2008. Though, the work was completed, payment of balance amount of Rs. 6,78,593/- was not made to the petitioner and therefore, the petitioner approached this Court in W.P.(C) No. 1842 of 2011. The writ petition was disposed of vide order dated 01.08.2011 directing the respondent no.2 to decide the claim of the petitioner expeditiously, preferably within a period of four weeks. Consequently, the respondent no. 2 passed order dated 11.07.2013, which has been challenged in the writ petition.
3. Heard the learned counsel for the parties and perused the documents on record.
4. The learned counsel for the petitioner submits that though the work was completed on 30.05.2008 and in terms of Clause 23 of the tender conditions the defect liability period was 5 years only however, 5% deduction from the total amount has been made on an allegation that the BT work done by the petitioner has been found of lesser thickness and it was found uprooted in certain patches.
5. In the counter-affidavit, the respondents have taken a stand that the contractor failed to maintain the road for 5 years which resulted in deterioration of the road and therefore, it was decided to deduct 5 % from the value of the work. Mr. Atanu Banerjee, the learned Government Advocate appearing for the respondent-State of Jharkhand reiterates the stand taken in the counter-affidavit and submits that the certificate issued by the junior officer is not binding and it is always open to the higher authorities to issue direction for inspection. It is further submitted that in view of a specific clause for arbitration in the agreement, the present writ petition is not maintainable.
6. The tender document dated 14.02.2008 refers to letter dated 29.07.2006 which mandates retention of 10% as security deposit. Clause 23 of the tender conditions provides that the defect liability period would be 5 years and during the said period the contractor on 15 days notice is required to carry the repair work, failing which the work would be completed from the security deposit of the contractor. It is not in dispute that the petitioner completed the work on 30.05.2008 and thus, the defect liability period would end on 30.05.2013. From the impugned order dated 11.07.2013, it is apparent that on the basis of an inspection carried on 04.07.2013, the respondent no. 2 ordered deduction of 5% from the work value. As noticed above, in terms of the tender conditions, after the defect liability period was over the contractor was not liable to maintain the road and thus, deduction of 5% is absolutely arbitrary. Moreover, under Clause 23, during the defect liability period deduction on account of expenses incurred for repairing, if the contractor on 15 days notice has failed to remove the defect, is permissible whereas, respondent no. 5 has ordered 5% deduction. In the proceeding of W.P.(C) No. 1842 of 2011 or even in the present proceeding, it is not pleaded that 15 days notice was given to the contractor for repair work which it has failed to carry. It is also not averred that repair work has been undertaken by the department nonetheless, deduction of 5% has been ordered by the respondent no. 2. Impugned order dated 11.07.2013 is whimsical and it has been passed in gross violation of the terms of the contract. Vide order dated 01.08.2011 in W.P.(C) No. 1842 of 2011, this Court ordered respondent no. 2 to make payment of the admitted amount with reasonable interest. The said direction of this Court has also be
