Union Of India & Ors vs Tantia Construction Pvt.Ltd

The Tender documents provided that the contract 4 work was to be completed within 15 months from the date of issuance of the letter of acceptance. Upon the tenders being opened on 27th December, 2006, the contract was awarded to the Respondent Company and a letter of acceptance was issued to the Respondent Company on 12th/13th February, 2007. The contract work was accepted at a cost of 19,11,02,221.84p.

4. On account of some of the procedural work, including the change of the span of the bridge, change in the design of the pier cap, the 5 requirement of shifting obstacles like a temple, police station, electrical pole, etc. and also due to heavy rains, the construction of the wall was delayed. The delay in preparation of the designs and drawings which involved the work of a specialized agency also contributed to the delay.

On such refusal the Railways floated a separate 6 Tender No.189 of 2008 for the additional work of the extended portion of the Viaduct for the Road Over-Bridge at Bailey Road. The approximate cost earmarked for the said work was 24.50 crores. As there was not much response to the said Tender, the date for submission of the Tender was extended from 9.4.2008 till 23.5.2008 and the assessed cost of work was revised and re-assessed at 26,35,96,878.63p. Corrigendums were issued from time to time in connection with the said Tender for the additional work and ultimately two firms, namely, Allied Infrastructures and Projects Pvt.

22. The facts disclosed reveal that on the basis of the Tender floated by the Petitioners for construction of a Rail Over-Bridge at Bailey Road over the proposed Railway Alignment over the Ganga Bridge, Patna, the Respondent Company had been awarded the contract at an approximate cost of 15.42 crores and it was stipulated that the 21 contract was to be completed within 15 months from the date of issuance of the letter of acceptance.

Bridge. Noting the problem that the Petitioners were faced with, with regard to the completion of the Rail Over-Bridge, the Respondent Company, keeping in mind its long association with the Railways, offered to complete the varied work at the same rates and conditions of contract, subject 16 to the applicability of the Price Variation Clause.

The problem appears to have begun at this stage when, on the basis of the said letter dated 12th April, 2008, the Petitioners directed the Respondent Company to continue with the unfinished portion of the plan.

24. We are of the view that the letter dated 12th April, 2008, did not cover the extended work on account of the alteration of the design and was confined to the work originally contracted for. We cannot lose sight of the fact that while the initial cost of the Tender was accepted for 19,11,01,221.84p., the costs for the extended work only was assessed at 24.50 crores and that two offers were received, which were for 34,11,16,279.39p. and 35,89,93,215.66p.

26. The submissions made on behalf of the Petitioners that in terms of Clause 23(2) of the Agreement, the Petitioners were entitled to alter and increase/decrease the scope of the work is not attracted to the facts of this case where the entire design of the Rail Over-Bridge was altered, converting the same into a completely new project.

28. We, therefore, see no reason to interfere with the views expressed by the High Court on the maintainability of the Writ Petition and also on its merits. The Special Leave Petition is, accordingly, dismissed, but without any order as to costs.