IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR FRIDAY, THE 5TH MARCH 2010 / 14TH PHALGUNA 1931 WP(C).No. 14398 of 2006(L) -------------------------------------- PETITIONER: ------------------- MONSON JOB @ MANOJ, KALLUKULAM HOUSE, PATHANAMTHITTA. BY ADV. MR.S.A. RAZZAK. RESPONDENTS: ------------------------ 1. THE COMMISSIONER, COMMISSIONERATE OF RURAL DEVELOPMENT, GOVERNMENT OF KERALA, L.M.S.COMPOUND, THIRUVANANTHAPURAM-695 033. 2. THE PROJECT OFFICER, DISTRICT RURAL DEVELOPMENT AGENCY, KOTTAYAM. 3. GOVERNMENT OF INDIA, MINISTRY OF RURAL DEVELOPMENT, REPRESENTED BY SECRETARY, KRISHI BHAVAN, NEW DELHI-110 001. R1 & R2 BY GOVERNMENT PLEADER MR. K. RAMESH, R3 BY MR.GEORGE JOSEPH, ADDL.CGSC. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/02/2010, THE COURT ON 05/03/2010 DELIVERED THE FOLLOWING: W.P.(C). NO.14398/2006-L: APPENDIX PETITIONERS' EXHIBITS & ANNEXURE: EXT.P.1: COPY OF THE AGREEMENT DTD. 16/05/2005. EXT.P.2: COPY OF THE REPORT DTD. 07/09/2002. EXT.P.3: COPY OF THE APPROVAL LETTER DTD. 20/11/02 OF THE SUPERINTENDING ENGINEER. EXT.P.4: COPY OF THE TAX DEDUCTION CERTIFICATE FOR THE 1ST PART BILL FOR RS.22,61,060/-. EXT.P.5; COPY OF THE TAX DEDUCTION CERTIFICATE FOR THE 2ND PART BILL FOR RS.18,89,320/-. EXT.P.6: COPY OF THE TAX DEDUCTION CERTIFICATE FOR THE 3RD PART BILL FOR RS.15,93,700/-. EXT.P.7: COPY OF THE INSPECTION NOTE DTD. 27/08/2003. EXT.P.8: COPY OF THE LETTER NO.A3/3359/2001/C/DRDA DTD. 17/11/2003. EXT.P.9: COPY OF THE LETTER NO. 26244/JRY-3/03/CRD DTD. 10/12/2003. EXT.P.10: COPY OF THE 3RD RESPONDENT'S RELEVANT LETTER DTD. 16/02/2004. EXT.P.11: COPY OF THE CONSEQUENTIAL REPORT DTD. 08/03/2004. EXT.P.12: COPY OF THE PETITIONER'S REPRESENTATION DTD. 22/07/2004. EXT.P.13: COPY OF THE JUDGMENT DTD. 05/01/2006 IN W.P.(C).NO.32624/2005 (H). EXT.P.14: COPY OF THE LETTER DTD. 21/02/2006 OF RS. EXT.P.15: COPY OF THE ORDER NO. 27346/JRY-3/05/CRD DTD. 19/05/2006. EXT.P.16: COPY OF THE ORDER NO.A3/3359/01/DRDA DTD. 30/06 RESPONDENTS' EXHIBIT: EXT.R2.A: COPY OF THE LETTER DTD. 22/03/2004. //TRUE COPY// P.S. TO JUDGE. Prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No. 14398 of 2006-L - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 5th day of March, 2010. JUDGMENT Aggrieved by the termination of contract at the risk and cost of the petitioner, the petitioner has filed this writ petition. The impugned order has been produced as Ext.P16. 2. The petitioner was awarded with the contract under the scheme framed by the Central Government, viz. Central Government Rural Roads Connectivity Scheme in Erattupettah Block. Ext.P1 is the copy of the agreement. The work involved is the construction of two roads. The agreement is dated 16.5.2002 and the time stipulated for completing the work was 24.1.2003. The site was formally handed over on 23.5.2002, but the petitioner contends that the initial levels were reported for sanction of the Superintending Engineer only on 7.9.2002 as evidenced by Ext.P2. By Ext.P3, the Superintending Engineer approved the initial levels on 20.11.2002. The work was started accordingly and the various part bills have been sanctioned to him as evidenced by Exts.P4 to P6. 3. There was an inspection by the Joint Director, NRRDA (National Rural Roads Development Agency) and the inspection report has been wpc 14398/2006 2 produced as Ext.P7. The inspection report showed that there was a suggestion for changing the alignment with reduced gradient and to prepare a revised estimate. 4. Thereafter, the Project Officer, the second respondent herein, who is a party to Ext.P1 agreement, requested the first respondent for sanction to complete the road as per the estimate already sanctioned and approved. The above proposal was made stating that the land owners are not willing to surrender more agricultural land for the construction of the road and 80% of the works have been completed. The petitioner submits that in the light of these developments, the work had to be stopped awaiting further orders. The first respondent addressed the third respondent, Ministry of Rural Development, Government of India, in the matter for giving sanction to complete the road as per the already sanctioned estimate. This was followed by another inspection and the same is evident from Ext.P10 letter issued by the Director addressed to the Prof. of Engineering, College of Engineering, Thiruvananthapuram, who was directed to conduct the site inspection. On the basis of the inspection, Ext.P11 report was forwarded by the second respondent to the first respondent. 5. As no further action was being taken in the matter, the petitioner, by Ext.P12 representation addressed to the second respondent requested to wpc 14398/2006 3 take a decision without delay to complete the work after providing a hike in the rates also. He approached this Court by filing W.P.(C) No.32624/2005 which was disposed of by Ext.P13 judgment dated 5.1.2006 directing the first respondent herein to take a decision in the matter in accordance with law, after affording an opportunity of being heard to the petitioner. Immediately, the petitioner was served with Ext.P14 notice by the second respondent informing him that the work has not been completed and unless it is completed within 15 days, the agreement will be cancelled. Ext.P15 is the communication by the Commissioner of Rural Development in answer to his representation stating that no hike in the rates is allowable. Finally, by Ext.P16, the work was terminated at his risk and cost and further it was proposed to recover the same by appropriate legal action. 6. The respondents have filed a counter affidavit justifying the order. 7. Heard Shri S.A. Razak, learned counsel for the petitioner and learned Govt. Pleader. 8. Shri S.A. Razak, learned counsel for the petitioner submitted that the view taken in Ext.P16 cannot be supported. The petitioner was proceeding with the work in the right earnest and 80% of the work was completed to the satisfaction of all and there was no default on his part at all. At the time an inspection was conducted by the Central agency, viz. the wpc 14398/2006 4 Joint Director who suggested a realignment, and thereafter he was asked to stop the work which is evident from Ext.P8 also. It is not a case where the petitioner, in violation of the obligations under the contract, had stopped the work. It is only at the instance of the concerned officials, the work had to be stopped. It is evident from the various communications that respondents 2 and 3 were also seeking for the sanction of the Central agency to continue the work as per the sanctioned estimate without any modification, in view of the difficulty to get surrender of required land by the land owners and the said action was finalized only by Ext.P11 dated 8.3.2004. It is therefore submitted that the decision to terminate the contract at his risk and cost is clearly arbitrary. It is further pointed out that only after this Court directed the respondents to consider the representation filed as Ext.P12 as per Ext.P13 judgment, immediately Ext.P14 notice was issued even before the first respondent communicated their decision as per Ext.P15. It is submitted that the department is trying to wriggle out of their responsibilities in the matter by merely blaming the petitioner for the delay. It is further contended that the stand taken in the counter affidavit that there was no direction to stop the work, is not correct and the same is belied by the contents of Ext.P8 and other documents. 9. What is pointed out in the counter affidavit and argued by the wpc 14398/2006 5 learned Govt. Pleader is that there was no written communication to the petitioner to stop the work or to deviate from the programme and he was bound to complete the work and the communication between respondents 1 and 2 and the Central agency are only routine communications and he ought to have completed the work. 10. Herein, some of the relevant aspects have to be discussed That the work was being earnestly performed by the petitioner is clear from Exts.P4 to P6 part bills evidencing payment for a total amount of nearly Rs.57 lakhs. Ext.P8 is the copy of the report forwarded by the second respondent to the first respondent after the Joint Director of the Central agency inspected the sites. In relation to Melukavumattom – Kalluvettam Road, it is stated as follows: “Work of the above road is in good progress. 80% of the formation of the road and protection work completed. Out of 10 culverts 6 Nos have been completed. Approximately Rs.30 lakhs have been spent for the construction of the road. Most of the inhabitants of this road are Scheduled Tribes. Work of the above road is stopped as per the above note. Considering these facts, gradient given to this road may be admitted and sanction may be given to complete the road at the earliest as per the already sanctioned and approved estimate.” wpc 14398/2006 6 In regard to the second road, viz. Ottayeetti – Thazhathukattupara Road, the following are the contents of Ext.P8: “As per the above referred inspection note, gradient between 0.90m and 800-1020m is steep and Joint Director has directed to re align the portion. Land owners in the chainages of road are willing to surrender the extra land free of cost for the construction of this road. Instructions have already been given to Assistant Engineer, Erattupetta Block for preparing the topographical survey and revised estimate of this road. Construction has completed 80% of th formation of the road. The construction of the road is in good progress and formation of the road is nearing completion.” The above position may please be informed to Government of India and sanction may please be obtained to complete the work as suggested above.” 11. Therefore, the following important aspects are clear from Ext.P8. It is based on the letter of the Joint Director, NRRDA and the inspection report. It is clear that in respect of these two roads, the Joint Director had directed to realign the work. Ext.P7 is the inspection report by the Central agency which will reveal that he had found that the gradient is too steep and therefore the topographical survey has to be conducted by the Project Implementing Unit to facilitate the realignment. Preparation of revised estimate has also been suggested. Therefore, the entire thing was dependent upon the preparation of revised estimate after fixing the wpc 14398/2006 7 realignment in respect of both the roads which is evident from a combined reading of Exts.P7 and P8. That is why in Ext.P8 it is specifically requested that approval may be granted for the estimate prepared, as difficulties arose with regard to the surrender of land by the land owners for construction of the roads as proposed by the Central agency. What is suggested in Ext.P8 is to obtain a sanction from the Central agency itself for completing the work in respect of these two roads as per the approved estimate. It is clear from Ext.P8 itself that the work has been stopped as per the note issued by the Central agency. It cannot therefore be said that stopping of the work is a unilateral act on the part of the petitioner. True that written communications have not been served on the petitioner to stop the work, but in the light of the inspection report of the Central agency it is clear that the work had to be stopped as the realignment had to be undertaken, if sanctioned. This is further reinforced by the letter Ext.P9 from the first respondent to the Ministry of Rural Development, Government of India, viz. the third respondent herein. This is dated 10.12.2003. In respect of both these works, after referring to the inspection reports, sanction has been sought to complete the roads at the earliest, as already sanctioned and as per the approved estimate. Therefore, it is ununderstandable as to how respondents 1 and 2 could have turned round wpc 14398/2006 8 later to put the entire blame on the petitioner for stopping the work. 12. It is evident from Exts.P10 and P11 that the Central Agency wanted to conduct another inspection and deputed Dr. K.P. Isaac, Professor in Civil Engineering, College of Engineering, Thiruvananthapuram to inspect the site and to furnish a detailed report regarding the existing conditions and guidance given by him in this regard. That the work has already been delayed, is clearly stated in Ext.P10 itself and actually the Central agency wanted to depute him so as to complete the execution of the work after assessing the various local conditions. Again, the second respondent after the visit by the said Professor, addressed the first respondent by Ext.P1 stating that even after meetings of the land owners and the Panchayath members were called several times, the land owners are not willing to surrender land for additional length as suggested. It is evident from Ext.P11 that the State Technical Authority for PMGSY, during the visit, directed to demarcate additional length for easing the gradient. Evidently, therefore, the same was under contemplation and therefore the petitioner could not have completed the work as per the original alignments. 13. These facts were pointed by the petitioner in Ext.P12 wherein he has stated that because of the delay there had been hike in the cost of diesel, wpc 14398/2006 9 steel, cement, sand, rubble and metal. 14. Therefore, the stand taken in Exts.P14 and P15 by the respondents herein that there was no hurdle from any corner to complete the work in the stipulated time, cannot be accepted at its face value. This is clearly a distorted attempt to pass the buck to the petitioner for the delay occurred which was not because of any inaction on his part and 80% of the work was already over also. In fact, a reading of Ext.P16 shows that the notices have been issued to him only from 31.10.2005 onwards which is even after receipt of Ext.P12 request made by the petitioner. They were issued long period after Exts.P10 and P11 were addressed to the respective parties. This also justifies the conclusion that the work was stopped after the period of inspection by the Joint Director, NRRDA and as sanction was sought for by the first respondent from the Central Government to complete the work as per the original estimate. In fact, the Ministry agreed to proceed with the work only by Ext.R2(a) letter. Para 2 of Ext.R2(a) evidences the decision of the Ministry in the following words: “……this Ministry hereby agrees to allow the Executing Agency to complete the road with gradients marginally more than the exceptional gradient on limited stretches with necessary cautionary boards indicating the steep gradient. However, the State Government may ensure that such instances of providing wpc 14398/2006 10 steep gradients beyond the permissible values should not get repeated and the State Executing Agency has to prepare a comprehensive DPR and make sure that all geometric parameters are as per Rural Roads Manual for any project submitted for consideration in future.” Finally, it is requested that “further necessary action to complete the road work may please be taken accordingly.” 15. These are documents in support of the plea of the petitioner that he cannot be blamed at all for the stoppage of work and there was actually a proposal for realignment and to revise the estimate. What is attempted in the counter affidavit is to show that no written communications were issued to the petitioner to stop the work or deviate from the programme. The evidence, as above, shows the other way, especially Ext.P8 which records that the work remained stopped already, in view of the intervening developments. 16. In that view of the matter, the termination of the work at the risk and cost of the petitioner is clearly arbitrary and is without any application of mind and also without considering the relevant aspects. Any administrative decision in such circumstances cannot survive. 17. The termination of the work at the risk and cost of the petitioner, wpc 14398/2006 11 cannot therefore be upheld and the petitioner cannot be saddled with any liability for the loss and damages as indicated in Ext.P16. Hence, Ext.P16 is quashed. The learned counsel for the petitioner had submitted that various amounts towards bank guarantee, performance guarantee, redemption amount, security and balance payment are due to the petitoner. There will be a direction to the respondents to release the various amounts due to the petitioner towards bank guarantee, performance guarantee, redemption amount, security and the balance payment, if any, for the work already done. The same will be quantified and disbursed within a period of three months from the date of receipt of a copy of this judgment. The writ petition is allowed as above. No costs. (T.R. Ramachandran Nair, Judge.) kav/