IMPORTANT POINT
The court affirmed that contractual obligations must be honored when supported by competent authority approvals and committee recommendations, reinforcing the binding nature of such decisions.

ORDER :

1. Heard Sri A. Sudershan Reddy, the learned Senior designate counsel appearing on behalf of Petitioner, the learned Deputy Solicitor General of India appearing on behalf of respondent No. 1 and Smt. Anjali Agarwal appearing on behalf of respondent Nos.2 and 3.

2. The petitioner approached the Court seeking prayer as under:

“.........to pass an order, direction or Writ particularly one in the nature of WRIT OF MANDAMUS declaring the action of the Respondent Nos 1 to 3 in depriving and denying the Petitioner's Constitutional rights by withholding the amounts due and payable to the Petitioner inspite of approval of Chief Engineer/Competent Authority i.e., respondent No. 2 and also as recommended by pre-arbitration committee in relation to claims 2 and 4 in respect of completed works under agreement No. 46/CAO/C/SC/2010, dated 15-09-2010 as arbitrary, illegal and unconstitutional and consequently direct the Respondents to release the Petitioner's amounts forthwith and pass such other order or orders.......”

3. PERUSED THE RECORD:

(A) The approval dated 30.03.2011 of the Chief Engineer/Competent Authority i.e., Respondent No. 2, in favour of the Petitioner, reads as under:

Approval of Chief Admn. Officer/Con/SC is hereby communicated for the variation to a net and gross value of Rs.12,44,85,096.85Ps. Variation statement is sent herewith, in duplicate, alongwith rate analysis for verification and early return.

The subject work was awarded to M/s. S.K. Swamy & Co. Bangalore at an agreement value of Rs.8,36,88,936.85 Ps.

Dy. CE/C/GTL has submitted First variation vide letter dated 18-03-2011(P-178)

Dy. CE/C has mentioned in the letter that during execution it is necessitated to operate one additional NS item extra over item No. 1 & 2 of Schedule-A for cutting rock and scooping out the debris outside the area to enable to complete the box pushing. Accordingly the variation statement is submitted duly proposing additional NS item for extra over for box pushing hard rock strata for a quantity of 2.875 Sqm per RM with a rate of Rs.14,325/-amounting to Rs.4,11,84,375/- which works out to gross excess of 49.12% over the agreement value.

As per the details of rate for additional NS item submitted by Dy.CE/.C

Rate for R M-Rs.6,73,000 (Agt.No. 11/Dy.CE/CN/MAS/2009, dated 06.04.2009)

Box size 5.50 x 3.66m=20.13 Sqm per RM

Rate for Sq m per RM=6,73,000/20.13=33,432.69 Rate for Sq.m per R M for item No. 1 & 2

Of Schedule-A of the same Agt. =19,107.73

Difference in Rate

14,324.95 or Say

Rs.14,325 Sq.m per RM

However, CAO/C has approved this proposal for a quantity 3840 Sqm pr RM with a rate of Rs. 10,624/- vide N-

8. Therefore the details for additional NS item will be as below:

Financial implications:

Original Agt.Value Rs.8,36,88,936.85

Value of one addl.N.S.item Rs.4,07,96,160.00

Net & Gross value Rs.12,44,85,096.85

Net & Gross excess and

percentage Rs.4,07,96,160.00 (i.e.48.75%)

Negotiations required for

one addl NS item Rs.4,07,96,160.00

Dy.CE/C has certified that there is no vitiation due to variation, since no savings occurred vide letter date 18.03.2011 (F-178).

Administrative approval of CE/C is required to the First variation in terms of item no. 9 of part A of SOP 2009, to process further with Finance for concurrence. Since the overall excess is exceeded beyon