HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No. 3801 OF 2011 . DATED 20th July, 2011 BETWEEN Gali Subba Raju …Petitioner And The Government of Andhra Pradesh, Rep. by its Principal Secretary to Government (Projects), I & CAD Department, AP Secretariat, Hyderabad and ors ….Respondents. HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No. 3801 of 2011 ORDER: The petitioner is aggrieved by the action of the first respondent in rejecting the proposal under order dated 24.12.2010 for allowing relevant SSR rates for the work entrusted to him under agreement No. 56 DC/2002-03, dated 28.03.2003. It is the case of the petitioner that the excavation of main canal of Maddigadda Reservoir project from Km. 13.410 to 14.00 was entrusted to him under L.S. Agreement No. 56 DC/2002-03, dated 28.03.2003 at 7.80% excess over the ECV. Four months’ time was stipulated to complete the said work. The alignment of the said canal runs through the reserve Forest area of Addatigala range and as such obtaining of clearance from the Forest Department was a pre-condition for the commencement of the said work. It is the further case of the petitioner that though the work entrusted to him was required to be completed within four months as stipulated in the agreement entered into, he could not commence the work even after a lapse of many years due to non- receipt of clearance from the Forest Department. After obtaining the requisite clearance from the Forest Department, the Executive Engineer, Y.I.Division, Peddapuram under his letter dated 6.2.2009 had directed the petitioner to commence the work. Since the execution of the work in the year 2009 at the old rates of 2003 would not be feasible, the petitioner submitted a representation to the respondents on 12.01.2009 requesting to arrange for the then current SSR rates in as much as there is huge variation between the rates quoted at the time of entering into the agreement in the year 2003 and the prevailing market rates. It has been averred that pursuant to the filing of the further representation on 11.07.2009, the third respondent under his letter dated 6.6.2009 forwarded the said representations to the second respondent along with the recommendations of the Executive Engineer, Y.I. Division, peddapuram. It is his case that even the second respondent under his letter dated 16.7.2009 favourably recommended his case to the first respondent for escalation of SSR rates. It is the grievance of the petitioner that the first respondent under the impugned proceedings rejected the proposal of the petitioner for allowing the relevant SSR rates in respect of the work entrusted to him. Hence the present Writ Petition. Counter affidavit is filed on behalf of the third respondent. While denying the averments made in the writ affidavit, it is stated in the counter affidavit that in respect of the subject work, the agreement was concluded on 28.03.2003 to complete the work within four months thereform i.e. by 27.07.2003. Though the period of agreement was over by 27.07.2003, the petitioner had not completed the work entrusted to him and thus there is no subsisting of contract between the petitioner and the Department, in as much as there was also no extension of time thereto. The Forest clearance was given on 13.12.2007 and in as much as there was abnormal delay in handing over the site, the contractors in reach Nos. 2,3 & 4 sought to refund their deposits and close the agreements and accordingly the needful was done and tender notification afresh was given for the said reaches. It is stated that even after receipt of the Forest clearance on 13.12.2007, the petitioner did not commence his work as per his representation dated 21.11.2006 wherein the petitioner expressed his willingness to complete the work by 31.3.2007, but he kept quite up to 12.1.2009 and now came up with representation seeking revision of agreement rates as per new SSR i.e. SSR 2008-09. It is further stated that to complete the balance work, tenders were called for afresh on 22.06.2011 and if the petitioner is interested, he can participate in the fresh tender process. Heard the learned Counsel for the petitioner and the learned Government Pleader for the respondents. Perused the entire case file. From time to time the Courts have been defining the extent and the limit of the High Court while exercising power under Article 226 of the Constitution in respect of contractual obligations between a citizen and the State. It is a well settled law that the disputes relating to contracts cannot be agitated under Article 226 of the Constitution of India. The award of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not be acceptable the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great due care and caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene. Further it is to be seen that the agreement entered into by the petitioner expired by 27.07.2003. Though the petitioner contended that Forest clearance was not received upto 13.12.2007 and site was not handed over to him, even after receipt of the Forest clearance, neither the petitioner entered into an agreement afresh nor requested the respondents to extend the time of agreement. Having kept quite up to 12.01.2009, now the petitioner came up with representation for revision of agreement rates as per SSR 2008-09. It is not understandable as to how the petitioner can ask for revision of new SSR rates when there is no subsisting agreement in between them. The petitioner neither asked for extension of agreement which had been concluded on 28.03.2003 nor entered into a new agreement afresh. As such, the petitioner cannot ask for enforcement of contractual obligations of the agreement which had expired on 27.7.2003. More so, Clause 14 of the agreement entered into between the petitioner and the State specifically deals with the time stipulation for completion of the subject work. Clause 22 deals with settlement of disputes. Clause 22.3 provides that any disputes and differences arising out of or relating to the contract shall be referred to adjudication through arbitration proceedings if the settlement of the claim is below Rs,50,000/- and all claims over and above Rs.50,000/- shall be decided by the Civil Court of competent jurisdiction by way of a regular suit. For the foregoing discussion, I do not find any merit in the Writ Petition and the same is accordingly dismissed. There shall be no order as to costs. -------------------------------------- JUSTICE ASHUTOSH MOHUNTA Dated 20th July, 2011. Msnro