IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 19982 of 2008 Between: ..... PETITIONER AND .....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 The Court made the following : THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.19982 of 2007 ORDER: This writ petition has been filed by G.Ranga Swamy with a prayer to issue a writ, order or direction, more particularly, one in the nature of writ of Mandamus declaring the action of the Executive Engineer, A.P. Social Welfare Engineering Division, Kurnool-2nd respondent in issuing letter bearing No.684/HD/NABARD RIDF XI/ZPHX/07, dated 16.08.2007 as illegal and arbitrary and consequently direct the Superintending Engineer, A.P. Social Welfare Engineering Division, Kadapa-1st respondent; the Executive Engineer, A.P. Social Welfare Engineering Division, Kurnool-2nd respondent; the Vice-Chairman and Managing Director, A.P. Scheduled Caste Co-op. Finance Corporation Limited-3rd respondent; the Chief Engineer, Tribal and Social Welfare, Govt. of A.P.-4th respondent, to pay loss of Rs.7,77,656/- as per the Report of the Tahsildar, Nandikotkur, and apply the new SSR rates which came into force w.e.f. 01.06.2007 for the year 2007-2008. 2. The writ affidavit in brief is :- The petitioner is a registered Class-I Contractor in Government of Andhra Pradesh. The Superintending Engineer, A.P. Social Welfare Engineering Division, Kadapa-1st respondent called for tenders for construction of building for additional infrastructure facilities to Z.P.H.S. (Girls) at Nandikotkur. The work came to be entrusted to the petitioner as he offered 1.27% less over the estimate rate of Rs.49.00 Lakhs. The work should be completed within a period of nine months. The petitioner commenced earthwork in one block and dismantled part of the building for the other block. He excavated earth for foundation of building by providing new bore-well with new pump set and collected required material such as steel, cement, sand, 20 mm, 40 mm metal, centring plates etc. He paid advance amount to labour and also appointed site engineers and supervisors and took machinery on rent for executing the work. The 1st respondent instructed the 2nd respondent under Memo.No.9/DPEP/NABARD/B12/2001, dated 17.01.2007 to sop the work. Pursuant to the instructions of the 1st respondent, the 2nd respondent stopped the work on 25.01.2007. There was severe cyclone on 22.06.2007 and 23.06.2007 and thereby the collected material at the site came to be washed away. The 2nd respondent as well as the Deputy Executive Engineer (SW), Nandyal recommended to the higher ups to make good the loss of Rs.15.00 Lakhs sustained by the petitioner and apply new SSR rates which came into force from 01.06.2007. He made a representation on 10.08.2007 to the Chief Executive Officer, Zilla Parishad, Kurnool for estimation of loss due to natural calamities. Thereupon, the Chief Executive Officer, Zilla Parishad, Kurnool, entrusted the estimation of loss to the Tahsildar, Nandikotkur, who in turn requested the Assistant Engineer, P.R. Department, Nandikotkur, to submit a report on the representation of the petitioner. The Assistant Engineer, P.R. Department, Nandikotkur, submitted a report estimating the loss at Rs.7,77,656/-. Thereupon the Tahsildar, Nandikotkur, submitted a report to the Chief Executive Officer, Zilla Parishad, Kurnool, on 06.09.2007. The petitioner submitted a representation to the 2nd respondent on 24.06.2007 stating that he executed part of the works as agreed upon under agreement dated 02.01.2007 and requested for payment of loss of Rs.15.00 Lakhs sustained by him because of the severe cyclone and extend the agreement time with new SSR rates which came in to force from 01.06.2007. The 2nd respondent, on instructions of the 1st respondent, issued a letter bearing No.684/HD/NABARD RIDF XI/ZPHX/07, dated 16.08.2007 disowning the responsibility to reimburse the loss sustained by the petitioner and also negativing the request for payment of new SSR rates and instead directed the petitioner to commence the work. Assailing the action of the respondents in refusing to make good the loss sustained due to severe cyclone and application of new SSR rates, the petitioner choose to approach this Court invoking the jurisdiction under Article 226 of the Constitution of India with a prayer stated supra. 3. Notice before admission came to be ordered on 04.12.2007. The 2nd respondent filed counter-affidavit. P.Prathap Reddy has sworn to the counter-affidavit. The counter-affidavit in brief is:- Awarding the work of additional infrastructure facilities to the Z.P.H.S. (Girls), Nandikotkur village and Mandal at the rate of 1.27% less over the estimate contract value of Rs.45,75,326/- to the petitioner is not disputed. The petitioner entered into agreement with the 1st respondent vide Agreement No.SE/D3/2006-07DB, dated 02.01.2007 with regard to the awarded work. The petitioner started excavation of earth work in first week of January, 2007 and executed excavation work of 238.00 cubic meters, for which he was sanctioned and paid Rs.10,786/- on 29.09.2007. The Technical Consultant, office of the State Project Director, Sarva Shiksha Abhiyan, A.P., Hyderabad, through Memo. No.9/DPEP/NABARD/B.12/2001, dated 17.01.2007 advised the Executive Engineers of Social Welfare Engineering Wing to take action to complete only the works which are in advanced stage of construction and further informed not to ground any works till further instructions and not to call for tenders for the balance works till further funds are allotted for the total programme. As per the said instructions, the 2nd respondent informed all the Deputy Executive Engineers in-charge of the works to follow the instructions of the Technical Consultant and Chief Engineer (Tribal Welfare), Hyderabad, without fail. In those circumstances, the petitioner was asked to stop the work for the present. Thereafter, Additional Secretary to Government, Education (SE and Trg.) Department, vide Fax Memo.10861-A/Trg./A2/2007-1, dated 30.09.2007, permitted to ground all balance works before 30.08.2007 in respect of first batch and 15.10.2007 in respect of second batch. The work entrusted to the petitioner is in second batch. He was repeatedly informed to take necessary steps to speed up the work. The work was to be completed by October, 2007 as per the contract agreement. The time was extended from time to time. The petitioner submitted a representation on 26.06.2007 for extension of time with new SSR rates for material and to pay the amount to the work already done and reimbursement of loss of material. He was given a reply through the impugned proceedings in the writ petition. The petitioner submitted proposal for extension of agreement time to 31.07.2008 and the said proposal is still pending because of non-submission of ‘No Claim Certificate’ by the petitioner. The petitioner stopped the work on 25.01.2007 and shifted all men and material to the other places of work, which were allotted to him viz., Z.P.High School at Jonnagiri and Z.P. High School at Pathikonda by the Social Welfare Engineering Wing and utilized the same in the said works. The contention of the petitioner that floodwater washed away the material collected by him is incorrect. As per the conditions of agreement vide Condition No.23 and Clause No.3 settlement of disputes and claims, shall in the first place, be referred to and settled by the Engineer-in-Charge, who shall, within a period of thirty days after being requested by the contractor to do so, give written notice of his decision to the contractor. Upon receipt of the written notice of the decision of the Engineer-in-Charge, the contractor shall promptly proceed without delay to comply with such notice of decision. All claims of above Rs.50,000/- are to be settled by a civil Court and not by arbitration. Para.8 of the counter-affidavit needs to be noted and it is thus: “8. In reply to paras-8 to 10 of the affidavit filed in support of the writ petition, it is submitted that the petitioner’s representation, dated 26.06.2007 was considered on the advise of the 4th respondent and passed impugned orders stating that as per the contract agreement terms and conditions, Condition No.16 (Monsoon damages) says that damages due to rain or flood either in cutting or in banks shall have to be made good by the contractor till the work is handed over to the Department. The responsibility of De-silting and making good the damages due to rain or flood rests with the contractor. No extra payment is payable for such operations and the contractor shall therefore, have to take all necessary precautions to protect the work done during the construction period and also Sl.No.8 (Contractor’s risks) says that all risks of loss of or damage to physical property and of personal injury and death, which arise during and consequence of the performance of the contract are the responsibly of the contractor. According to G.O.Ms.No.122, PR & DR Dept., dated 30.03.2007 the petitioner can claim escalation of cement, steel and oil rates by approaching the Government. The petitioner is not entitled for new SSR rates for execution and completion of the said work. In spite of repeated notices the petitioner could not start the work and to complete the same. In view of the non completion of the work as per the schedule the school children are put to hardships and at any time, the NABARD will stop the granting of loan ;amounts for completion of the said works.” 4. The petitioner filed WPMP No.25771 of 2007 seeking interim relief. The interim relief sought for is as follows: “For the reasons stated in the affidavit filed in support of the above writ petition, it is hereby prayed that this Hon’ble Court may be pleased to direct the respondents to apply new SSR rates which was came into force w.e.f. 1.6.2007 for the year 2007-2008 for the construction of additional infrastructure facilities to Z.P.H.S. (Girls) at Nandikotkur in Kurnool District, pending disposal of the writ petition and pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.” If the interim relief is granted virtually it amounts to allowing the writ petition. It is well-known rule of practice and procedure that at interlocutory stage a relief, which is asked for and is available at the disposal of the matter is not granted. In that view of the matter, I deem it appropriate to take up the writ petition for final disposal at the admission stage. 5. Heard learned counsel appearing for the petitioner and perused the material brought on record. 6. Learned counsel appearing for the petitioner submits that the loss sustained by the petitioner because of severe cyclone has been estimated by the Tahsildar, Nandikotkur, in his letter dated 06.09.2007, to a tune of Rs.7,77,656/- and therefore, the petitioner is entitled to claim the same. A further submission has been made that new SSR rates came into force for the year 2007-2008 and therefore, for continuance of the work after the agreement period, the petitioner is entitled for new SSR rates. Virtually the petitioner asking to make good the alleged loss sustained by him due to severe cyclone on 22.06.207 and 23.06.2007. Learned counsel further submits that though the terms and conditions between the parties are governed by the agreement executed between them, a writ petition is maintainable as there is no dispute with regard to loss sustained by the petitioner because of severe cyclone on 22.06.2007 and 23.06.2007. In support of his submissions, reliance has been placed on the decision of the Supreme Court in ABL International Ltd. & Anr. V. Export Credit Guarantee Corporation of India Ltd. & Anr.[1], and the decision of this Court in B.R.G.K.S.V. Educational Society v. Government of A.P.[2]. 7. In ABL International Ltd. & Anr. V. Export Credit Guarantee Corporation of India Ltd. & Anr. (1 supra), the Supreme Court held as follows: “Therefore, it is clear from the above enunciation of law that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under Article 226 of the Constitution is not always bound to relegate the parties to a suit. In the above case of Gunwant Kaur ((1969) 3 SCC 769) this Court even went to the extent of holding that in a writ petition, if the facts require, even oral evidence can be taken. This clearly shows that in an appropriate case, the writ court has the jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact. 8. In B.R.G.K.S.V. Educational Society v. Government of A.P. (2 supra), it has been held that High Court can exercise its plenary power under Article 226 of the Constitution of India even in disputes arising out of non-statutory contracts depending upon the facts and circumstances of each case. 9. The respondents have specifically pleaded in the counter-affidavit that the work entrusted to the petitioner is governed by the agreement, dated 02.01.2007. The 2nd respondent also disputed the loss allegedly sustained by the petitioner because of cyclone on 22.06.2007 and 23.06.2007. There is a clause in the agreement whereunder the department is absolved to make good the loss sustained by the petitioner due to rain or flood. The relevant clause in the conditions of contract (general) reads as hereunder: “Damages due to rain or flood either in cutting or in banks shall have to be made good by the contractor till the work is handed over to the Department. The responsibility of de-silting and making good the damages due to rain or flood rests with the contractor. No extra payment is payable for such operations and the contractor shall therefore, have to take all necessary precautions to protect the work done during the construction period.” Even there is a clause in the conditions of contract (general) with regard to settlement of disputes, which reads as hereunder: “23.1. If any dispute of difference of any kind whatsoever arises between the department and the contractor in connection with, or arising out of the Contract, whether during the progress of the works or after their completion and whether before or after the termination, abandonment or breach of the contract, it shall in the first place, be referred to and settled by the Engineer-in-charge who shall, within a period of thirty days after being requested by the contractor to do so, give written notice of his decision to the contractor. Upon receipt of the written notice of the decision of the Engineer-in-charge the contractor shall promptly proceed without delay to comply with such notice of decision. 23.2. If the Engineer-in-charge fails to give notice of his decision in writing within a period of thirty days after being requested or if the contractor is dissatisfied with the notice of the decision of the Engineer- in-Charge, the Contractor may within thirty days after receiving the notice of decision appeal to the Department who shall offer an opportunity to the contractor to be heard and to offer evidence in support of his appeal, the Department shall give notice of his decision within a period of thirty days after the contractor has given the said evidence in support of his appeal, subject to arbitration, as hereinafter provided. Such decision of the Department in respect of every matter so referred shall be final and binding upon the contractor and shall forth with be given effect to by the contractor, who shall proceed with the execution of the works with all due diligence whether he requires arbitration as hereinafter provided, or not. If the Department has given written notice of his decision to the contractor and no claim to arbitration, has been communicated to him by the contractor within a period of thirty days from receipt of such notice the said decision shall remain final and binding upon the contractor. If the Department fail to give notice of his decision, as aforesaid within a period of thirty days after being requested as aforesaid, or if the contractor be dissatisfied with any such decision, then and in any such case the contractor within thirty days after the expiration of the first named period of thirty days as the case may be, require that the matter or matters in dispute be referred to arbitration as detailed below:- Settlement of claims: Settlement of claims for Rs.50,000/- and below by Arbitration. All disputes or difference arising of or relating to the contract shall be referred to the adjudication as follows:- (a) Claims upto a value of Rupees 10,000/-, - Superintending Engineer, Social Welfare, Engineering Wing. (b) Claims above Rs.10,000/- and upto Rupees 50,000/- -- Chief Engineer, (PR), Hyderabad. The arbitration shall be conducted in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The arbitrator shall state his reasons in passing the award. Claims above Rs.50,000/- All claims of above Rs.50,000/- are to be settled by a Civil Court of competent jurisdiction by way of civil suit and not by arbitration. A reference for adjudication under this clauses shall be made by the contractor within six months from the date of intimating the contractor of the preparation of final bill or his having accepted payment whichever is earlier.” A separate mechanism has been provided for settlement of disputes that have arisen while executing the contract between the parties. As per G.O.Ms.No.122, PR & DR Dept., dated 30.03.2007 the petitioner is not entitled for new SSR rates for execution and completion of the said work. Since the parties are governed by the conditions of the contract, the petitioner has to work out his remedies within the terms of the agreement. Therefore, the relief sought for by the petitioner in this writ petition is beyond the scope of jurisdiction of this Court under Article 226 of the Constitution of India. 10. Accordingly, the writ petition is dismissed at the admission stage. No costs. ______________________ B.SESHASAYANA REDDY, J. Date:23rd June, 2008. cs ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{ } [1] (2004) 3 Supreme Court Cases 553 [2] 2008 (2) ALT 297