By virtue of Ext.P1 letter issued by the 2nd respondent, the petitioner is awarded with the contract work of 'NABARD RIDF-VIII Mukkur – Punnamon – Nellimoodu Road, in Kunnanthanam and Mallappally Panchayaths'. The petitioner executed R2(a) agreement and started the work in the year 2003. With respect to the construction of a 'Box Culvert' in the route, considerable deviation has to be affected from the original plan and estimate. The petitioner executed huge quantity of additional works in this regard, based on directions issued by the executing authorities. Eventhough revision of the estimate and sanction of additional funds were requested by the 2nd respondent, it was not approved by the Evaluation Committee at the District Level, which was constituted with respect to the NABARD aided works. Exts.P3 and P4 Minutes of the NABARD Evaluation Committee held on 3.5.2007 would indicate that the revised estimate was considered, but it was found that no technical sanction can be given for any escalated amount, since there was no Administrative Sanction obtained. Therefore it was recommended to close the work at the existing stage within the probable estimated cost allowed by NABARD and to undertake the remaining works as a new contract, after discussion in the Block Panchayath. It is evident from Ext.R2(f), which is the copy of the resolution adopted by the Block Panchayath on 11.5.2007 that, pursuant to the recommendations made by the Evaluation Committee, it was decided to seek permission of NABARD to close the work at the existing stage. There is evidence to the effect that, before taking such a decision the Block Panchayath in its meeting held on 7.3.2005 had resolved to revise the estimate of the work in question and to seek for allocation of additional fund to the tune of Rs.20,00,000/-. From Exts.P5 and P6 it is evident that on such basis the estimate was re-casted and revised. However it is evident that since sanction for revision of the estimate was not obtained the work was decided to be closed at the existing stage, as mentioned above. On the basis of the above said decision the contract bill was prepared with respect to the works completed by the petitioner and the 2nd respondent had forwarded it for approval of the Project Officer at the District Level. Even though the bill was prepared and it was forwarded during September 2007 payment of the balance amount of the contract due to the petitioner was not affected, despite repeated requests. Subsequently, the 2nd respondent had issued Ext.P10 proceedings alleging that the petitioner had failed to complete the work inspite of several notices issued and therefore it was decided to cancel the contract and to re-tender the work at the risk and cost of the petitioner, after forfeiting the Security Deposit and Retension Amount. Reference contained in Ext.P10 will reveal that such a proceeding was issued based on the decision taken by the Block Panchayath on 26.10.2007. Copy of the said resolution is produced along with the counter affidavit as Ext.R2(h). It is evident that the Block Panchayath had reconsidered its earlier decision, because the NABARD has not responded to the request made to close the work at the existing stage and since there was complaints received from the public. The petitioner thereafter submitted passed Ext.P11 notice requesting to settle the contract and to effect payment of the balance amount, in accordance with the bill prepared, alongwith refund of Security Deposit and Retension Amount. But in Ext.P12 reply sent on behalf of the 1st respondent it was alleged that, the petitioner had failed in completing the work within the time stipulated in the contract. It is at this stage the petitioner has filed this writ petition challenging such actions.
2. It is admitted that there was a decision taken in the District Level Committee to close the work and to undertake the remaining works as a new contract. It is further admitted that a closure bill was prepared on that basis. But it is stated that in Ext.R2(h) that, it was decided to re-tender the work at the risk and cost of the petitioner, since the petitioner had committed breach of the agreement. It is contended that in the earlier resolution there was no decision taken to effect payment to the petitioner. Under the above mentioned circumstances, the petitioner is approaching this court aggrieved by Ext.P10 proceedings issued by the 2nd the respondent and inter alia seeking direction for settlement of the contract bill and for payment of the balance amount.
3. In the counter affidavit filed on behalf of respondents 1 and 2 it is contended that the Block Panchayath is entitled to cancel the contract, in case there is default on the part of the Contractor in completing the agreed work within the time stipulated. It was disputed that the petitioner had undertaken the extra work in accordance with the directions given by the higher authorities. It is contended that the petitioner is not entitled to get the balance amount of the contract bill, because there was default on his part to complete the work. It is stated that the District Level Co-ordination Committee of NABARD had never resolved to close the above said work and to rearrange the balance work as new contract. But the minutes of the meeting contains only an observation of the official authority as well as the general directions issued for completion of the work. It is further stated Ext.R2(f) resolution dated 11.5.2000 adopted by the Block Panchayath is only to the effect of closing the work at the present stage, subject to permission to be obtained from NABARD. But it is mentioned that NABARD has not responded to the proposal submitted by the Block Panchayath and therefore the 6th respondent could not grant technical sanction for closure of the work at the existing stage. In the counter affidavit it is mentioned that, Ext.R2(f) resolution was adopted as a bonafide attempt to settle the dispute by resolving to revise the work estimate, based on the excess expenditure incurred by the petitioner due to the alleged non-inclusion of required works in the work estimate. It is only on that basis the direction was issued to prepare a revised estimate, as per Ext.R2(g). Since the revised estimate was not approved by the 6th respondent, the Panchayath had decided in public interest to attempt for closure of work at the existing stage, subject to permission from the NABARD with respect to execution of the remaining work. Since NABARD has not responded to such request and has not sanctioned any amount for completion of the remaining works, Ext.R2(h) decision was taken by the Panchayath in order to avoid the stale mate. It is pointed out that Ext.R2 series notices were issued to the petitioner requesting him to complete the work and also intimating that on failure stringent action of termination will be taken. It is stated that public pressure is mounting upon the respondent Panchayath for expeditious completion of the road work in question. Hence the termination was affected and it was decided to re-tender the work at the risk and cost of the petitioner. Since the petitioner had defaulted in completion of the contract work, the decision taken in this regard is perfectly legal and justifiable, is the contention.
4. The history of the contract work as enumerated in various documents would reveal that, undertaking of additional work with respect to construction of a culvert, was not in dispute. It is evident from Ext.P4 that the higher authorities like Superintending Engineer and Chief Engineer had visited the work site and instructed to undertake the additional work with respect to the bridge in question. It is further evident that the authorities have prepared a revised estimate and forwarded the same for approval, seeking for allocation of additional funds. It is also evident that, when such revised estimate was not approved, it was decided to close the work at the present condition and to tender the remaining works as a new contract. The decision taken at the meeting of the Evaluation Committee and the subsequent resolution adopted by the Block Panchayath would clearly indicate the above facts. It is further evident that on the basis of such decisions a final bill with respect to the works executed by the petitioner was prepared and it was forwarded for approval. That being the position, can it be alleged that the petitioner had failed to complete the work within the contract period, is the question mooted for decision. It is evident that Ext.R2(i) to R2(n) notices were issued at different stages by the 2nd respondent requiring the petitioner to complete the work and threatening that on failure the tender will be cancelled. But some of such notices were issued only at a later stage when the proposal for tendering for the remaining work was not approved by the NABARD. It is admitted from the pleading of respondents 1 and 2 as well as in the documents that, the earlier decision was reconsidered only on the basis that the NABARD had failed to approve the proposal for tendering the remaining works as a new contract.
5. Under the above mentioned circumstances, it is evident that no default in completion of the work could be alleged against the petitioner, in strict terms of the contract agreement executed. All the attendant circumstances would reveal that the petitioner was given an impression that the work will be closed at the existing condition and that the remaining work will be tendered as a separate contract. Therefore the impugned proceedings now issued by the 2nd respondent as per Ext.P10 to re- tender the work at the risk and cost of the petitioner and to forfeit the amount of Security Deposit and Retension Amount, cannot be sustained. It is for the respondents to consider either revision of the estimate or to approve the closure of the work at the existing stage and to float a new tender with respect to the remaining works.
6. Therefore this writ petition is allowed and Ext.P10 is hereby quashed. The respondents are directed to consider the matter afresh and to take an appropriate decision with respect to completion of the work in accordance with the directions contained herein above. Necessary steps for payment of balance amount due under the final bill prepared to the petitioner should also be taken simultaneously.
7. In the interest of justice it is directed that the matter shall be dealt with urgently and an appropriate decision shall be taken at the earliest possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment. Payment if any due to the petitioner under the final bill shall be affected subject to such decision.
SKV Sd/-
C.K.ABDUL REHIM, JUDGE.