IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE R.SUBHASH REDDY WRIT PETITION NO : 16392 of 2004 Between: M/s.Sri Laxmi Engineering Company, 6-3-886, Flat No.305/A, My Home Hill View Apartments, Somajiguda, Hyderabad-82, rep., by its Managing Partner K.Sagar Rao ..... PETITIONER AND 1 The Govt. of A.P., rep., by its Additional Secretary, Irrigation and Command Area Development Department, Secretariat Buildings, Hyderabad. 2 The Chief Engineer, Minor Irrigation, Erramanzil, Hyderabad. 3 The Superintending Engineer, Irrigation Circle, Chittoor. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ, order or direction one in the nature of mandamus declaring the proceedings of the 1st respondent in D.O.Letter No.9299/V&E.1/03-4 dated 10-6-2004, as arbitrary, illegal, violative of principles of natural justice and violative of the Fundamental and Constitutional Rights guaranteed under Articles 14 and 300-A of the Constitution of India and set aside the same. Counsel for the Petitioner:MR.S.SRINIVAS REDDY Counsel for the Respondent No.: GP FOR IRRIGATION & COMM AREA DEV. The Court made the following : THE HON'BLE MR. JUSTICE R.SUBHASH REDDY Writ Petition No.16392 of 2004 ORDER: In this Writ Petition the petitioner has challenged the proceedings of the Government dated 10-06-2004 issued in letter No.9299/V&E.1/03-4 and the consequential notice issued by the Superintending Engineer, I & CAD Department, Irrigation Circle, Chittoor dated 30-08-2004 issued in Proceedings No.EC.4/C.383. 2. The petitioner entered into an agreement dated 15-02-1999 vide agreement No.31 SE/98-99 to execute the contract of the work for Rs.2,15,88,825/-. The petitioner quoted 36% less than the estimated contract value and the time stipulated for completion of the project is 18 months. For one reason or the other, the work could not be completed by the petitioner and hence the contract entered into by the petitioner was terminated under Clause 60 (a) of A.P.D.S.S. Subsequently, balance work, which is valued at Rs.211 lakhs was entrusted to another contractor by name D.Nagaraju at 6% less than the estimated rates. As per the terms of the agreement, as there was loss to the Government on account of not completing the work as per the agreed terms, steps have been taken to recover the differential amount from the petitioner. In view of the enquiry report of Vigilance and Enforcement Department, a letter has been addressed by the Government to the Superintending Engineer to recover an amount of Rs.63.30 lakhs from the petitioner. As per the directions of the Government, a further notice dated 30-08-2004 is issued by the Superintending Engineer to recover an amount of Rs.63.30 lakhs from the petitioner company from the existing deposits or the deposits available in any Government Department as per the Rules/Agreement conditions. At the stage of admission, by order dated 15-09-2004, this Court directed the respondents not to recover the amounts, as per the impugned orders, pending further orders and the said orders were made absolute by further order dated 28-01-2009. In this Writ Petition, it is mainly contended by the learned counsel Sri S.Srinivasa Reddy, appearing for the petitioner that impugned proceedings are not preceded by any notice and enquiry and the demand made by the Superintending Engineer, Irrigation Circle, is pursuant to letter of the Government dated 10-06-2004. 3. In the counter-affidavit filed by the Superintending Engineer, Irrigation Circle, Chittoor, it is stated that pursuant to termination of the contract under clause 60 (a) of A.P.D.S.S., only an amount of Rs.1,00,000/- was ordered to be forfeited. As the said orders were issued misinterpreting the clause under the contract, the Vigilance and Enforcement Department has recommended for recovery of an amount of Rs.63.30 lakhs, that is the difference of tender percentage between the first and second agencies on the balance work costing about Rs.211 lakhs. But, in the counter-affidavit, respondents are not disputed about non-issuance of any enquiry notice to the petitioner before arriving at the figure. 4. As per the agreed terms, in view of the termination of the contract, though there is a power to recover the differential amount from the contractor, who failed to execute the contract as per the terms, before arriving to the amount, which is to be recovered, and before taking steps for recovery of amount straightaway, at least respondents ought to have issued a show cause notice. When the matter has come up on the last occasion, the learned Government Pleader was asked to enquire as to Whether any notice was issued to the petitioner before the impugned demand notice issued by the Superintending Engineer consequent upon the instructions issued by the Government in D.O. Letter No.10-06-2004. 5. To day, when the matter is taken up, it is fairly submitted by the learned Government Pleader that the impugned proceedings were not preceded by a notice and no opportunity was given to the petitioner. 6. In view of the said submission of the learned Government Pleader that no notice was issued to the petitioner before issuing impugned proceedings, on that short ground, I set aside the proceedings dated 30- 08-2004 issued in proceedings No.EC.4/C.383. However, this will not preclude the respondents to issue show cause notice giving particulars of the amount of recovery to be effected from the petitioner and give an opportunity to him and pass appropriate orders. It is made clear that if any amounts are due from the petitioner and are to be recovered in accordance with the conditions of the agreement entered by the petitioner, it is open to the respondents to recover the same by passing appropriate orders after giving opportunity to the petitioner. 7. The Writ Petition is disposed of subject to above direction. No order as to costs. ___________________ R.SUBHASH REDDY, J. 30th March, 2009. Skmr IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE R.SUBHASH REDDY WRIT PETITION NO : 16392 of 2004 Between: M/s.Sri Laxmi Engineering Company, 6-3-886, Flat No.305/A, My Home Hill View Apartments, Somajiguda, Hyderabad-82, rep., by its Managing Partner K.Sagar Rao ..... PETITIONER AND 1 The Govt. of A.P., rep., by its Additional Secretary, Irrigation and Command Area Development Department, Secretariat Buildings, Hyderabad. 2 The Chief Engineer, Minor Irrigation, Erramanzil, Hyderabad. 3 The Superintending Engineer, Irrigation Circle, Chittoor. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an appropriate writ, order or direction one in the nature of mandamus declaring the proceedings of the 1st respondent in D.O.Letter No.9299/V&E.1/03-4 dated 10-6-2004, as arbitrary, illegal, violative of principles of natural justice and violative of the Fundamental and Constitutional Rights guaranteed under Articles 14 and 300-A of the Constitution of India and set aside the same Counsel for the Petitioner:MR.S.SRINIVAS REDDY Counsel for the Respondent No.: GP FOR IRRIGATION & COMM AREA DEV. The Court made the following : ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{RS}