The defect liability period, joint venture agreements, and dispute resolution clauses in contracts were central to the court's decision.

ORDER :

A. Abhishek Reddy, J.

1. This writ petition is filed seeking the following relief :

"...direction or writ, particularly in the nature of mandamus duly declaring the letter of the 3rd respondent vide Ref. No. CRP/CVL/MNG/TN-76/2016-17/1536, dated 1.9.2020, advising to withhold the amount of Rs. 86,27,120/- from the bills to be paid in respect of a contract vide CRP/CVL/KGM/TN-63/2018-19, dated 19.11.2018, to recover the said amount on an alleged defect of contract vide CRP/CVL/MNG/TN-76/2016-17, dated 3.3.2017, as illegal, arbitrary, against the principles of natural justice, and consequently set aside the said letter, and direct the respondent SCCL to treat the existing four contracts vide MNG/CVL/TN-75/2018-19, CRP/MNG/CVL/TN-74/2018-19/98/365/7, CRP/MNG/CVL/TN-712018-19/19/418 & KGM/CVL/DB-1759/656 of the petitioner in joint venture with SRICO as independent and release the amounts as accrued on the said contracts..."

2. The petitioner, M/s. M. Damodaar Reddy, a partnership firm, being Class-I Contractor, engaged in the civil works for the last 25 years. For the purpose of bidding for a contract against a tender, dated 3.3.2017, floated by the Singareni Collieries Company Limited, respondent Nos. 1 to 3 in the year 2017 for the work of "Construction of Cement Concrete pavement at MNG OCP, Manuguru Area, Bhadradri Kothagudem District", the petitioner formed a Joint Venture (JV) in the name of SVC-MDR with M/s. Sri Venkateswara Constructions. The SVC-MDR (JV) emerged as successful bidder; entered into agreement with the respondents-Company; completed the work in time i.e., by 31.10.2018, to the satisfaction of the respondents and a certificate of Quality Control Inspection Report, dated 25.4.2019 was also issued in favour of SVC-MDR. Subsequently, the final bill was also settled.

3. Later, in response to the e-procurement tender Notice No. CRP/CVL/KGM/TN-63/2018-19, dated 19.11.2018 issued by the respondents-Company for "Construction of 3 Nos. 100 tonnes steel bunkers, connected gantries, Retaining wall and RCC foundations for 3 Nos. 500 TPH feeder breakers at JVR OC-II, Sathupalli, Khammam District, Telangana State", the petitioner formed a JV in the name of SRICO-MDR. The JV, SRICO-MDR emerged as successful bidder; contract was awarded in its favour; and after entering into an agreement on 19.11.2018 with the respondents-Company, the SRICO-MDR commenced the work. Whileso, the respondent No. 3 issued a letter, dated 1.9.2020 to the earlier JV i.e., SVC-MDR in relation to the tender works, dated 03.03.2017 stating that the Vigilance Enforcement Department had conducted an enquiry on the subject work and found that "the average core strength of 9 Nos. of cores is not satisfying the next 2 lower grades i.e., M-35 and M-30, hence the CC Pavement of size 140 x 70 m was rejected". Consequently, in its report, the Vigilance Department had recommended to "recover an amount of Rs. 86,27,120/- from M/s. SVC-MDR (JV), Paloncha, Bhadradri Kothagudem District". By the said letter, the respondent No. 3 advised the SVC-MDR to pay an amount of Rs. 86,27,120/- to the respondents-Company within 15 days. Moreover, on the same day, the respondent No. 3 requested the AGM (Civil)/MNG and DGM (Civil) KGM Area to withhold an amount of Rs. 86,27,120/- from the bills payable to the petitioner in the JV with SRICO (SRICO-MDR). Hence, the present writ petition.

4. The respondent Nos. 1 to 3 filed a counter-affidavit stating that M/s. SVC-MDR (JV) has concluded the agreement with the respondents-Company for "Construction of CC Pavement at MNG OCP, Manuguru Area, Bhadradri Kothagudem District" vide agreement, dated 7.12.2017; commenced the work and completed the same on 31.10.2018 with a delay of 3 months 21 days; and that the final bills were paid to M/s. SVC-MDR (JV) without imposing any penalty for the said delay. Subsequently, the respondent No. 4 had conducted an enquiry on the works done by M/s. SVC-MDR (JV) during 11.01.2018 to 31.10.2018 and thr