TMI Blog2011 (4) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Single Judge of the High Court, which order was affirmed by the Division Bench. 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. We endorse the view of the High Court that notwithstanding the provisions relating to the Arbitration Clause contained in the agreement, the High Court was fully within its competence to entertain and dispose of the Writ Petition filed on behalf of the Respondent Company. - Special Leave Petition (C) No. 18914 of 2010 - - - Dated:- 18-4-2011 - Altamas Kabir And Cyriac Joseph,JJ. JUDGMENT Altamas Kabir, J. 1. The sole Respondent, M/s. Tantia Construction Pvt. Ltd., filed writ petition, being CWJC No.14055 of 2008, against the Petitioners herein, inter alia, for the issuance of a writ in the nature of Certiorari for quashing the order dated 18th August, 2008, passed by the Deputy Chief Engineer (Construction), Ganga Rail Bridge, East Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um height of 15 meters on both sides of the Rail Over-Bridge. 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 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 account of changes in the design whereby the Viaduct had to be extended involving an additional cost of 36.11 crores, the Petitioner No.6 requested the Respondent Company to convey its consent for execution of the complete work, including the revised work. By its letter dated 13th February, 2008, the Respondent Company wrote back to the Petitioner No.6 that they did not want to take up the construction of the extended Viaduct which was not covered in the Agreement dated 30th April, 2007. The Respondent Company refused to give their consent for the execution of the complete work at the revised cost of 36.11 crores. On such refusal the Railways floated a separate Tender No.189 of 2008 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the directions given by the Railway Authorities for completion of the entire work, including the extended work. It was the contention of the Respondent Company that having failed to get any suitable response to the fresh Tender floated in respect of the additional work, it was not open to the Petitioners to compel it to complete the same at an arbitrarily low price, particularly when the additional work was not part of the original Tender. 10. The learned Single Judge accepted the case made out by the Respondent Company, holding that there was no breach of the agreement entered into between the Petitioners and the Respondent Company, since it was the Petitioners themselves who had altered the agreement by separately tendering the extended work. The learned Single Judge observed that consequently the entire work could not be thrust upon the Respondent Company and the Railways was free to get the Viaduct constructed separately by any other contractor, as it had contemplated earlier. The learned Single Judge further observed that since the Respondent Company was ready to do the balance work from the left-over tender, the rescinding of the entire work by the Railways and to re-ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions of Contract on 10th October, 2008, indicating that after the expiry of the notice, the contract would stand rescinded and the work under the contract would be carried out at the risk and cost and consequences of the Respondent Company. The said notice was followed by a letter dated 17th October, 2008 sent to the Respondent Company by the Petitioners rescinding the contract and informing the company that the work under the contract would be carried out at the company's risk and cost. 15. It was also submitted that the agreement between the parties provided for arbitration in respect of all disputes and differences of any kind arising out of or in connection with the contract whether during the progress of work or after its completion and whether before or after the termination of the contract. It was urged that in view of the said arbitration clause, the Writ Court was not competent to decide the issue involved in the dispute which had been raised by the Respondent Company. 16. It was lastly contended that the scope of the work did not change, despite the variation of the design and planning. It was submitted that it was only a case where the quantity of the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s intention to execute the entire work, including the variation on account of the alteration of the design, at the same rates and the terms and conditions and that such offer was confined only in respect of the balance work left over from the contract executed on 27th December, 2006. Mr. Chakraborty submitted that the same would be evident from the fact that in the letter of 12th April, 2008, it had also been indicated that the Respondent Company would have no claim for reduction in quantity by more than 25% in the agreement. Mr. Chakraborty submitted that the Petitioners had clearly misunderstood the scope and intent of the letter dated 12th April, 2008, written on behalf of the Respondent Company and had interpreted the same to mean that its offer also covered the extended work on account of the change in the design of the Rail Over-Bridge. 18. It was also contended that since the Petitioners had illegally terminated the contract with the Respondent Company, the Writ Court had stepped in to correct such injustice. In fact, Mr. Chakraborty also submitted that the objection taken on behalf of the Petitioners that the relief of the Respondent Company lay in arbitration proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on an erroneous interpretation of the contents of the letter dated 12th April, 2008, written on behalf of the Respondent Company and the termination had, therefore, been rightly quashed by the High Court. 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 contract was to be completed within 15 months from the date of issuance of the letter of acceptance. Admittedly, on the contract being awarded to the Respondent Company, the letter of acceptance was issued on 12th/13th February, 2007, and an agreement was thereafter entered into between the East Central Railways and the Respondent Company in respect of the contract work. Admittedly, on account of the procedural delays, the work could not be completed within the stipulated period of 15 months from the date of issuance of the letter of acceptance. The procedural delay was mainly on account of the fact that the work on the approach road could commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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.respectively. This was only with regard to the extended portion of the work on account of change in design. The Respondent Company was expected to complete the entire work which comprised both the work covered under the initial Tender and the extended work covered by the second Tender. The Respondent had all along expressed its unwillingness to take up the extended work and for whatever reason, it agreed to complete the balance work of the initial contract at the same rates as quoted earlier, despite the fact that a long time had elapsed between the awarding of the contract and the actual execution thereof. 25. In our view, the Respondent Company has satisfactorily explained their position regarding their offer being confined only to the balance work of the original Tender and not to the extended work. The delay occasioned in starting the work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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