`IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE FIFTEENTH DAY OF DECEMBER TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE SRI JUSTICE K.C.BHANU WRIT PETITION NO.21976 OF 2010 Between : M/s. Coastal Engineering Constructions ... PETITIONER A N D The State of A.P. and others …RESPONDENTS THE HON'BLE SRI JUSTICE K.C. BHANU WRIT PETITION NO.21976 OF 2010 ORDER: This Writ Petition is filed seeking to declare the action of the respondents in not releasing and paying the final payment and further Security deposit amount payable to the petitioner with interest @18% per annum for the works executed by the petitioner pursuant to agreement No.08/05-06, dated 25.05.2005, which was sanctioned by respondent No.3, as arbitrary and illegal. 2. In the affidavit filed in support of the Writ Petition it is stated that respondent No.3 sanctioned the work for construction of main canal of Kovvada Kalva Reservoir Scheme and granted time upto 30.04.2007 for completion of the work. Thereafter, the work was stopped for some time due to the objections raised by the landowners with regard to payment of compensation to their lands. After repeated requests, the Revenue Department surveyed the land and after completion of survey work, the balance work was started and about 90% of the work was completed. Even after repeated requests, the Revenue Department could not hand over the land even after lapse of five years. Respondent No.5 submitted proposals to respondent No.4 for extension of time upto 31.12.2008 without levying liquidated damages, expecting that the Revenue Department would hand over the balance land. But, the land is not yet hand over in spite of repeated requests. Therefore, the petitioner could not execute balance 10% of the work. Respondent No.5 admitted that the petitioner had completed 90% of the work and paid bill amount of Rs.50,45,482/-. At the time of payment of the said amount, the respondents deducted 7.5% amount from the bill amount towards further security. The respondents would pay the FSD amount and final payment after completion of 90% of work. But, in general, the respondents will pay the final payment and FSD amount after completion of the entire work, when the respondents did not commit any default. But, in the present case, the respondents failed to hand over the balance work. Thereafter, the petitioner submitted representations on 17.12.2008 and 02.02.2010 and requested the respondents to settle the final payment and pay security deposit amount. In spite of the representations made by the petitioner, the respondents did not release the final payment and further security deposit amount payable to the petitioner for completion of 90% of the work. The respondents are also liable to pay interest @18% per annum on the final payment and security deposit amount from the due date till payment since the respondents committed default. The petitioner completed 90% of the work and the same was admitted by the respondents. Hence, the Writ Petition. 3. Respondent No.4 filed counter affidavit stating that the petitioner Company was allotted work on 25.05.2005 for construction of Kovvada Kalva Reservoir Scheme. As per the agreement three months time was granted for completion of the work. The petitioner Company did not complete the work within stipulated time, as the works were stopped due to the objection raised by the ryots for payment compensation. Thereafter, time was extended from time to time. An amount of Rs.50,45,482/- was paid to the contractor for the completed work. The Revenue Divisional Officer, addressed a letter to the Executive Engineer stating that the Land Acquisition process is time taking which involves enormous work. The final payment and release of deposits will be arranged only after completion of entire work plus defective liability period as per the agreement conditions. The work is not completed due to land acquisition problem. As per Clause 2.2.10 of L.S.Agreement the interest (or ) any other charges on deposits whatsoever will not be payable to the bidder. Only suitable extension of time will be granted for the loss of days due to delay in Land Acquisition. 4. Learned counsel for the petitioner contended that in pursuance of the agreement, the petitioner Company completed 90% of the contract work and it could not complete 10% of the work for the reason that the land was not handed over to it and in the near future also it is not possible for the Government to handover the site because no proceedings were initiated under the Land Acquisition Act for acquisition of land and hence, he prays to direct the respondents to pay the final bill payment relating to 90% of the work completed by the petitioner and also the security deposit. 5. On the other hand, learned Government Pleader appearing for the respondents contended that in terms of the agreement unless the contractor completes 100% of the contract work, the question of releasing the security amount and other amounts does not arise and hence, the Writ Petition is liable to be dismissed. 6. The parties are governed by the terms of the agreement. If there are any laches on the part of the contractors in completing the work in accordance with the agreement, they are not entitled to return of the security amount. In this case as per the agreement, the petitioner has completed 90% of the contract work within the time prescribed. Admittedly, the petitioner has not completed remaining 10% of the work. The reason is that the possession of the land has not been handed over to the petitioner so as to take up the remaining 10% of the work. Therefore, there is no negligence or inaction on the part of the petitioner in completing the remaining 10% of the work. There is correspondence going on with regard to the acquisition of certain land relating to private persons and as on today no proceedings have been initiated under the Land Acquisition Act for the purpose of acquiring land. 90% of the work was completed by 30.04.2007 itself. The respondents have not handed over the possession of the land for execution of remaining 10% of the work. As a matter of fact, letter addressed to the Superintending Engineer to release the bill amount including the security deposit amount to the petitioner so that as and when the land is acquired, the execution of the work can be entrusted to the contractor by calling tenders. In view of the fact that for the last four years, the Government is unable to handover the land in respect of 10% of the work, the petitioner could not execute the same. There is no inaction or negligence on the part of the petitioner in completing 10% of the contract work. Therefore, in the peculiar facts and circumstances of the case, the petitioner is entitled to the amount relating to 90% of the contract work and refund of security deposit amount and the respondents are directed to pay the same. 7. With the above direction, the Writ Petition is disposed of. There shall be no order as to costs. ______________ K.C.BHANU, J DECEMBER 15, 2011. YVL THE HON'BLE SRI JUSTICE K.C.BHANU WRIT PETITION NO.21976 OF 2010 15.12.2011 YVL