THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY Writ Petition No.23742 of 2014 Between:
Dated 09th December, 2014 M/s.GVR Infra Projects Ltd., And …Petitioner Government of Andhra Pradesh, rep.by its Principal Secretary – Irrigation & CAD, A.P.Secretariat, Hyderabad and others …Respondents Counsel for the petitioner: Sri C.Raghu Counsel for the respondents: AGP for Irrigation & CAD (AP) The Court made the following:
ORDER:
This writ petition is filed for a mandamus to declare the inaction of respondent Nos.2 and 4 in passing appropriate orders on the petitioner’s claim made vide letter bearing No.GVRIPL/ Hyd/Pennar Delta Pkg No.34/1/2013, dated 07.02.2013, as illegal and arbitrary.
I have heard Sri C.Raghu, learned counsel for the petitioner, the learned Assistant Government Pleader for Irrigation & CAD (AP) appearing for the respondents and perused the record.
In pursuance of the tender notice, dated 04.02.2008, issued by respondent No.3, the petitioner has submitted its bid for the work pertaining to Modernisation of Pennar Delta System. As the petitioner has emerged as the successful bidder, the contract for the value of Rs.76,89,16,175/- was awarded to it under agreement, dated 19.05.2008. The period of contract was 24 months. As per the agreement conditions, the petitioner was paid to a tune of Rs.3,84,45,160/- towards Mobilisation advance. The petitioner has furnished bank guarantee against the said sum. As the execution of the contract did not take place due to various reasons beyond the control of the petitioner, respondent No.1 has issued Memo No.5751/M&MI/R1/A2/2012, dated 20.12.2012, wherein it has closed the contract under Section 56 of the Indian Contract Act, 1872 (for short ‘the Act’) on the ground of impossibility of performance and not under Clause-58 of PS to APDSS.
The petitioner pleaded with respect to which there is no dispute that after closure of the contract, it has made a detailed claim vide its letter, dated 07.02.2013, to respondent No.4 who is Engineer-in- charge under the contract, making a claim of Rs.25,54,84,246/- towards the expenditure allegedly incurred by the petitioner under various heads. As no decision was taken by respondent No.4, the petitioner has submitted its claim to respondent No.2 as per Clause-
23.2 of the General Conditions of Contract (Part-A).
The grievance of the petitioner is that while respondent Nos.2 and 4 have not settled its claim, they have been proposing to encash the bank guarantee in connection with the Mobilisation advance.
In the counter affidavit filed on behalf of the respondents, there is no reference to the petitioner’s claim.
This is not a case where the contract was terminated due to default on the part of the petitioner. The fact that the contract was closed under Section 56 of the Act makes it evident that the contract has got frustrated as it has become impossible to perform the contract. Therefore, if the petitioner has incurred expenditure in part performance of the contract, the respondents are bound to reimburse the same. As rightly pleaded by the petitioner, unless its claim is adjudicated by respondent No.2 as per Clause-23.2 of the General Conditions of Contract, there can be no justification for the respondents to encash the bank guarantee furnished by it as security for receiving the Mobilisation advance. Indeed, under Clause-49.6.1 of the General Conditions of Contract (Part-D), the advance loans shall be deducted from the intermediate payments under the contract. The petitioner pleaded that negligible payment has been made to it towards the expenditure incurred by it and that if its claims are settled properly, it will be entitled to receive more amount from the respondents than the amount of Mobilisation advance received by it.
In the light of the above facts, respondent No.2 is directed to dispose of the petitioner’s claim, after notice to it, within two months from the date of receipt of a copy of this order. Till such disposal, the respondents shall not encash the bank guarantee furnished by the petitioner.
Subject to the above directions, the writ petition is disposed of.
As a sequel to disposal of the writ petition, W.P.M.P.No.29764 of 2014 and W.V.M.P.No.2917 of 2014 shall stand disposed of as infructuous.
C.V.NAGARJUNA REDDY, J 09th December, 2014
VGB