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1995 Supreme(Online)(J&K) 6

JAMMU AND KASHMIR HIGH COURT
Mr. S. M. Rizvi, J
Ghulam Mohammad Dar v. State of J. and K. and Others
Writ Petition No. 303 of 1991



Advocates:
For the Appellants/Petitioners: Mr. Haroon Rashid
For the Respondents: Mr. R. Kapoor

Contractual obligations can invoke writ jurisdiction if government delays or failures cause undue harm, justifying payment escalations.

Headnote:(A) Writ Jurisdiction - Article 226 of the Constitution - Disputes in contractual obligations - The court’s extraordinary jurisdiction permits intervention in contractual matters where delays and non-payment by the government occurred due to no fault of the petitioner, leading to significant losses. (Paras 20-26)

(B) Escalation of Rates - 42% increment - The court upheld that the petitioner was entitled to a 42% escalation in contract rates due to delays in work completion attributable to the government, as agreed in supplementary agreements and government orders. (Paras 12, 30-31)

(C) Interest - The court ordered the government to pay interest at 15% on delayed payments to the petitioner, acknowledging the undue delays as a form of harassment. (Paras 30-31)

Facts of the case:
Petitioner contracted for construction work in 1979 but faced delays due to late provision of drawings by the government. Extensions were granted, but the petitioner sought additional payments due to market rate fluctuations.

Findings of Court:
The court found the delays caused by the government justified the petitioner's claims for payment increases and interest.

Issues: The primary issues included whether the court could intervene in what was argued to be contractual obligations and the entitlement to revised rates and interest on delayed payments.

Ratio Decidendi: The court ruled it had the jurisdiction to intervene in contractual matters when justified, particularly in cases of government negligence and subsequent market escalations affecting the contractor's financial position.

Result: The petition was allowed, with directions for payment of escalated rates and interest.

Table of Content
1. delay due to government actions impacting contract execution. (Para 1 , 2 , 3 , 4 , 5)
2. petitioner is entitled to 42% payment escalation based on agreements. (Para 8 , 11 , 12)
3. writ jurisdiction can address contract disputes when alternative remedies are insufficient. (Para 20 , 21 , 24 , 26)
4. order for payment of interest on due amounts retained unlawfully. (Para 30 , 31 , 32)

1. The background and short resume of the facts require to be put on record to appreciate the contentions raised in this petition.

2. Way back in the year 1979, in response to the notice of inviting tenders issued under No. EE / 500 - BH / IV - 34/102-37 dated 24-5-1979, the petitioner also tendered for construction of Radio Therapy, Mortuary, Workers facilities, Pump House and Guard Room for 500 Bed Hospital at Soura, Srinagar. The work seems to have been allotted in favour of the petitioner vide Chief Engineer, Project Organization, J. and K. Srinagar's order No. CEP / 113 of 1979 dated 25-10-1979 issued vide endorsement No. CEP / 3094-3102 dated 25-10-1979 at a contract of Rupees 32,05,787.15 and an agreement was accordingly drawn on 14-12-1979. Besides the conditions of contract, some additional conditions and stipulations seem to have been entered into by the parties, whereunder the Contractor / petitioner was to be given an advance of 10% of the contract value against bank guarantee for total amount @ 12% interest per annum and the amount plus interest was stipulated to be recovered from the running bills of the contractor on pro - rata basis.

3. The period of completion of work was stipulated ending March 1980. The petitioner could not complete the work by the end of the stipulated period of December 1980 because of the fact that drawings for the work were issued to him in piece - meals and works for which no drawings were issued to him up to the expiry of the date of completion and as such, work could not be completed because of the default of the Department, which caused heavy loss to the petitioner.

4. This is an admitted fact from the records that the delay has been caused in providing drawings and other facilities to the petitioner as per stipulations by the Government. The correspondence resting on the file does make mention of this fact. For example in one of the correspondence on the file produced by the parties, a letter purported to have been addressed to the Chief Engineer, Project Organization, J. and K. Cheshmashahi, Srinagar, wherein at para No. 4 it is stated as under: -
"In this connection it may be submitted here that the contract for construction of Radio Therapy was allotted to M/s. Ghulam Mohammad Dar Contractor and agreement was drawn up with the contractor. The construction could not be completed by the contractor within scheduled period of completion and the delay cannot be attributed to the contractor. The contractor stopped the work of construction of Hot Area with the reasons that he has to sustain the loss due to delay and fluctuation of market rates....... ......"

5. This fact is further substantiated by the recommendations made by the Executive Engineer of the Project to the Chief Engineer, when extension of time was solicited for completion of the work allotted. In that letter also, the Executive Engineer has in unambiguous terms admitted as under: -
"Since the work has delayed due to the reasons not attributable to the contractor, as such, it is recommended that extension in completion period may kindly be granted up to the end of November, 1983."

6. The recommendations seems to have been duly accepted by the Development Commissioner, Public Works Department (Projects), J. and K. under his No. DCP / 3952 dated 29-9-1984 by observing as under: -
"In view of the circumstances explained and as also recommended by you, extension in completion period upto end of November, 1983 is hereby granted in favour of the contractor."

7. It has also been projected by the petitioner before the authorities that the












































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