Case: Pimpri Chinchwad Municipal Corporation &amp; Others Vs. M/s. Gayatri Construction Company &amp; Another

3. Background facts in a nutshell are as follows:Writ Petition was filed by respondents 1 and 2 taking the stand that respondent No.1 was awarded a contract for the work of improvement and widening of part of the Thermax-Telco-Bhosari road which was divided in three phases and contract for Phase-III (Approx. 3.7 Kms.) was given to the them, whereas the tender of Phase-II with its cost at Rs.8,61,63,048/- was awarded to another party (Approx. 3.3 Kms.) Though the tender amount was Rs.9 crores with a discount at 9.01%, the contract price was fixed at Rs.8,18,91,000/- and the letter by the Corporation to the respondents was given on 7/4/2005 and the work was to be completed within 12 months from that date. There is no dispute that the work was not completed and the corporation released an advertisement published in some of the local newspapers on 30/6/2006 inviting tenders for the improvement and widening of four roads, including the road which was the subject matter of the contract awarded to the respondents i.e. Item No. 3-A - Telco road. The approximate costs of this road in the advertisement has been shown to be Rs.30 crores as against the original tender cost of Rs.17.6 crores. After the advertisement was released, the respondents were issued a letter dated 19/7/2006 informing the Corporations decision to take action under clause 3(a) of the contract and the respondents were called upon to remain present for final measurement on 27/6/2006. The respondents submitted a representation on 25/7/2006 and by its letter dated 1/8/2006 the corporation reiterated its action as per the letter dated 19/7/2006. The respondents approached the High Court on 22/8/2006 after they had submitted another representation on 4/8/20006 to the Corporation and the Corporation confirmed the decision to stop work. The respondents filed writ petition challenging action of appellants in releasing the advertisement and inviting fresh tenders on 30/6/2006 for the very same work which is part of the contract awarded to the respondents i.e. Item No.3-A Improvement and Widening of remaining stretch of Telco Road and consequently the attempt to terminate the contract post facto by invoking clause 3(a) of the contract.The present appellants filed an affidavit in reply and raised a preliminary objection as to the maintainability of the writ petition. It was contended that the writ petitioners had an alternative remedy for enforcement of the contract. In matters flowing from the contract, a petition under Article 226 of the Constitution of India, 1950 (in short the ‘Constitution) cannot be maintained. Further, disputed questions are involved. On merits it was also contended that it was the contractor firm which was responsible for not maintaining the contractual terms and in spite of the contractual period having been over, the work could not be completed and the contractors went on insisting that the entire stretch of the road be handed over to them so as to start and complete the work. In short the contractors failed to complete the work in 12 months time and therefore the contract was terminated.The High Court found that though Clause 58 of the agreement provided for in house remedy of representation for settlement of disputes that cannot stand in the way of the writ petition being entertained. It was submitted by writ petitioners that the cost of completing the work would be much higher than what would have been payable to the writ petitioners. The High Court referred to the Minutes of the Corporation and held that the writ petitioners were justified in challenging the Corporations action to invite fresh tenders for the work allotted to it. It also referred to the undertaking given by the writ petitioners to the effect that they were ready and willing to execute the work but were unable to do so for several reasons. The High Court, therefore, directed the Corporation not to complete the work and to maintain status quo in respect of Phase-III of Telco Road as well as the tenders received for the said work in response to the advertisement which was impugned before the High Court.

Court's reasoning:
13. Therefore, the High Court ought not to have entertained the writ petition. Additionally, it appears that by order dated 17.1.2007 interim stay of the impugned order was granted and was continued by order dated 12.2.2007. It is pointed out by learned counsel for the appellants that since the order of the High Court was stayed and there was urgency in the matter fresh tenders were called for. Three persons submitted the bids and the work has already been allotted and a considerable portion of the work has already been completed. In view of aforesaid, we set aside the impugned order of the High Court and direct dismissal of the writ petition. It is however open to the respondents-writ petitioners to seek such remedy, if so advised, as is available in law. We do not express any opinion in that regard.