IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY THIRD DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No. 6141 of 2004 Between: Munawar Hussaian S/o Ahmed Hussaian 19-4-14/2, Hashamabad, Hyderabad ..... PETITIONER AND 1 Commissioner Municipal Corporation of Hyderabad Hyd. 2 Superintending Engineer-II C.C.Complex Building, Municipal Corporation of Hyderabad Tank Bund Road, Hyd. 3 Executive Engineer Division III , Circle-I, Municipal Corporation of Hyderabad Sardar Mahal, South Zone, Hyd ....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 issued a writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the Lr. No.SE-II/MCH/T2, T3 & T5/2003-2004/2649 dt. 30/12/2003 issued by 1st respondent as being illegal, arbitrary violative of principles of natural justice and also violative of the respondents to forthwith pay the 20% of the amount which is payable to the petitioner as per the agreement dt. 14/07/2003 for the work done till 31st December 2003 which comes to Rs.3,72,504/- as well as 7 1/2% of the total amount of contract ie., Rs. 41,907/- which was deducted from the bill amount towards security deposit. Counsel for the Petitioner: MR.P.VENUGOPAL Counsel for the Respondents: MR.R.RADHA KRISHNA REDDY(SC FOR GHMC,SNC ZONE) The Court made the following : ORDER: In this Writ Petition, the petitioner challenges the order, dated 30.12.2003, issued in letter No.SE-II/MCH/T2,T3 & T5/2003-2004/2649 by the Commissioner, Municipal Corporation of Hyderabad-1st respondent, and seeks further direction to the respondents to pay 20% of the amount, which is payable to him as per the agreement, dated 14.07.2003, and also an amount of Rs.41,907/-, which was deducted towards security deposit. 2. The respondents have invited tenders for de-silting and annual maintenance of Storm Water Drains falling in 66-Maisaram & 67-Kanchanbagh Corporator Divisions and Barkas to Gurram Surplus Nala (KS9) in Division No.1 of the Municipal Corporation of Hyderabad. The petitioner-contractor was the successful tenderer, who has quoted his rate at Rs.19,43,073/- to undertake the said works. Pursuant to the acceptance of the bid of the petitioner, an agreement, dated 14.07.2003, was entered into by the respondents with the petitioner, subject to certain conditions. 3. The relevant clauses for disposal of this writ petition are Clauses-3 and 9 of the agreement, which read as under : “CLAUSE-3: This agreement is for a period of 12 (Twelve) Months i.e., from 01.05.2003 to 30.04.2004 on a trial basis subject to rendering a satisfactory service from time to time without any complaints or adverse remarks. However, the Commissioner, MCH/Additional Commissioner (Works), MCH reserve the right to terminate/cancel the contract prematurely i.e., before expiry of agreement period without giving prior notice and without assigning any reasons whatsoever.” “CLAUSE-9: Method of payment Payment to the First Party will be paid as follows: i) July - 20% ii) August - 10% iii) September - 10% iv) October - 10% v) November - 5% vi) December - 5% vii) January - 10% viii) February - 10% ix) March - 10% x) April - 10%” Whereas Clause-3 of the agreement empowers the 1st respondent to terminate the contract prematurely before expiry of the agreement period without giving any prior notice or assigning any reasons, Clause-9 gives the payment schedule with regard to method of payment of the value of the contract work. 4. In this case, during the currency of the contract, the Government has issued orders in G.O.Rt.No.1062 M.A., dated 12.08.2003, directing the 1st respondent to handover the entire maintenance and construction of sewerage drain works to the Hyderabad Metro Water Supply and Sewerage Board. In view of the orders issued by the Government, by exercising the powers under Clause-3 of the agreement, the 1st respondent has terminated the contract entered into with the petitioner, and issued orders in letter No.SE-II/MCH/T2,T3 & T5/2003-2004/2649, dated 30.12.2003. 5. In this writ petition, it is the grievance of the petitioner that though the contract is for a period of twelve months, the same was terminated without assigning any valid reasons. It is also his case that though he has completed the works to the extent of 60% by the date of termination of the contract, but the respondents have paid the bills only for 40% of the works completed by him, and the bills for the value of remaining 20% of the works were not paid without assigning any valid reason. It is the case of the petitioner that as per the method of payment, he was to complete 60% of works by the end of December 2003, and the bills were to be paid for the entire value of 60% of the works completed. As the contract was terminated at the end of December, by which time, he had already completed 60% of the works, he is entitled to receive the bills for the remaining 20% of the works done by him. 6. Though the writ petition is of the year 2003, no counter-affidavit is filed. But, based on the parawise remarks sent by the Executive Engineer, Division No.3, South Zone, Municipal Corporation of Hyderabad, it is submitted by the learned Standing Counsel appearing for the respondents that Clause-3 of the agreement entered into by the respondents with the petitioner, empowers the 1st respondent to terminate the contract prematurely i.e. before expiry of the agreement period without assigning any reasons. It is the further case of the respondents that coming to know about the orders issued by the Government for handing over the works to the Hyderabad Metro Water Supply and Sewerage Board vide orders in G.O.Rt.No.1062 M.A. dated 12.08.2003, the petitioner has stopped the works and he has completed only 40% of the works, for which, bills were already paid. While denying the claim of the petitioner for payment towards 20% more works, it is stated that the petitioner is not entitled to claim any amount and the respondents are not liable to pay any further amount to the petitioner, except an amount of Rs.41,907/-, which was deducted from his bills at the rate of 7.5% towards security deposit. 7. Although it is submitted by the learned counsel for the petitioner that the period of contract is 12 months, Clause-3 of the agreement clearly empowers the 1st respondent to terminate the contract prematurely. In view of the said Clause, it cannot be said that there is any bar for the respondents to terminate the contract, before the expiry of contract period. 8. So far as the claim of the petitioner for payment of the value of 20% of the works is concerned, while it is the case of the petitioner that he has completed 60% of the works, it is the case of the respondents that he has completed only 40% of the works, and he has stopped executing the works after the orders were passed by the Government, directing the 1st respondent to handover works to the Hyderabad Metro Works and Sewerage Board. 9. So far as the security deposit amount is concerned, it is stated that it is to be deducted from the bills payable to the petitioner. In view of the stand of the respondents that the petitioner has completed only 40% of the works, they are not liable to pay any further amounts to him. In this writ petition, excepting the factual dispute between the petitioner and the respondents with regard to the percentage of works completed by the petitioner by the date of termination, no other question arises for consideration. But, in the absence of recording any evidence, it is not possible for this Court to record any finding as to whether the petitioner has completed 40% of the works as stated by the learned counsel for the respondents, or 60% of the works as alleged by the petitioner. In that view of the matter, in the absence of any clear material before this Court so as to arrive at a conclusion that the petitioner has completed 60% of the works, no direction can be given for payment of the value of remaining 20% of the works, which, the petitioner is alleged to have completed by the end of December 2003. 10. So far as the security deposit is concerned, it is admitted that the respondents have deducted the amount at the rate of 7.5% from the bills payable to the petitioner and a total amount of Rs.41,907/- was deducted by the date of termination of the contract. As the said amount is lying with the respondents, the same has to be refunded to the petitioner. 11. For the aforesaid reasons, I do not find any merit to invalidate the order of termination, and for issuance of a direction for payment of value of 20% of the works, as claimed by the petitioner. At the same time, I do find that there is no reason for not paying the security deposit, which was deducted from the bills of the petitioner. Therefore, the respondents are directed to pay an amount of Rs.41,907/- (Rupees Forty one thousand nine hundred and seven only) to the petitioner, which was deducted from his bills towards security deposit, within a period of two months from the date of receipt of a copy of this order, if not already paid. In all other aspects, the claim of the petitioner is rejected. However, it is open for the petitioner to pursue any other remedy available under law, with regard to his other claims. 12. Subject to above directions, the writ petition is partly allowed to the extent indicated above. No order as to costs. ________________________ R. SUBHASH REDDY, J 23rd July, 2009 YVL/CBS THE HON’BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.6141 of 2004 23rd July, 2009 YVL/CBS