The court ruled that escalation of prices for procurement of minor minerals is permissible where the designated quarry was closed due to external factors, contradicting the initial denial based on a misinterpretation of bidding contract terms.

JUDGMENT :

MURAHARI SRI RAMAN, J.

1. Questioning the legality and tenability of Order dated 09.06.2022 passed by the Superintending Engineer, Rural Works Division, Bhadrak, opposite party No.3 (Annexure-7) passed in pursuance of decision taken by a Committee in its meeting held on 09.06.2022 (Annexure- 6) in compliance of Order dated 15.03.2022 passed in W.P.(C) No.3773 of 2022 of this Court, in rejecting the claim of the petitioner with respect to price variation/escalation for transportation of minor minerals for use in the work “Improvement to Road and CD Works under Pradhan Mantri Gram Sadak Yojana” vide Package No.OR-04-320(A)/PMGSY-III (Batch-II) (Barapada Kandava PWD Road to PWD Road Panpadi Chhak via Bodakpatna, Odanga, Sarmara, Gohira, Jirina in the district of Bhadrak for the year 2021-22 pertaining to Agreement No.09/PMGSY-III of 2021-22, dated 01.12.2021, the petitioner approached this Court by way of filing this writ petition to invoke power of judicial review under Article 226 of the Constitution of India, with the following prayer(s):

“It is therefore, humbly prayed that this Hon‟ble Court may graciously be pleased:

i. To admit the writ petition, issue Rule Nisi;

ii. call upon the opposite parties to show cause as to why the rejection of petitioner‟s claim vide order dated 09.06.2022 under Annexure-7 shall not be set-aside and be directed to pay the escalation prices incurred by the petitioner.

iii. and if the opposite parties fail to show cause or show insufficient cause, to make the said Rule absolute by issuing writ of mandamus directing the opposite party No.3 to pay the petitioner the admitted dues towards variation prices incurred for procurement of minor minerals as this Hon‟ble Court deems fit and proper;

And/or to pass such other order(s), direction(s) as this Hon‟ble Court deems just, fit, equitable and proper in the facts and circumstances of the present case;

And for this act of kindness, the petitioner shall as in duty bound ever pray.”

Facts:

2. Factual matrix unfurled by the writ petitioner, a works contractor engaged in the business of execution of works of civil construction, emanates that in response to the Notice Inviting Tender dated 06.08.2021 (for short, “NIT”), submitted his bid for “Improvement to Roads & CD Works under Pradhan Mantri Gram Sadak Yojana (PMGSY) of Barapada Kandava PWD Road to PWD Road Panpadi Chhak via Bodakpatna, Odanga, Sarmara, Gohira, Jirina” in the district of Bhadrak valued at Rs.3,81,49,328/-.

2.1. Being declared successful bidder in the competitive bidding, he was awarded with the work for execution to be commenced from 01.12.2021 and as per agreement date of completion was stipulated as 31.10.2022 with contract price fixed at Rs.3,81,49,328/-, which is 7.77% less than the corresponding estimated cost of Rs.3,79,84,665/- besides maintenance cost of Rs.31,16,071/-.

2.2. Consequent upon the said agreement, the petitioner commenced the work in question as per the specifications under the Bill of Quantity (“BOQ”, in short). The agreed cost and/or the bid price, based on the estimates given by the Rural Works Sub-Division, included the procurement of minor minerals, such as moorum, metal, chips and dust (for convenience collectively be referred to as “minerals” hereinafter) from Kupari Quarry sourced by the opposite parties. Basing on the same, the bid price was furnished and the cost was agreed upon by the petitioner, which is 7.77% less than the corresponding estimated cost for execution of said work.

2.3. Kupari Quarry, the sole lead provided by the Rural Works Sub-Division in its estimates, remained closed for under