High Court
Case Details
WP(C) 1062/2013 BEFORE HON’BLE MR. JUSTICE UJJAL BHUYAN These two writ petitions are based on identical facts and raise the same issue f or adjudication. Hence, both the writ petitions were heard together and are bein g disposed of by this common judgment and order. 2. Petitioner responded to Notice Inviting Tender (NIT) issued by the Publi c Works Department (PWD), Government of Assam for construction and maintenance o f rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY). Pursuant thereto, petitioner was awarded two contracts, the contracts being Phase-VII Package No. As- 19-112 and Phase No. VII Package No. AS-19-104, both in Nagaon district. Pac kage No. As- 19-112, which is the subject matter of WP(C) No. 1062/2013, was awa rded to the petitioner at the contract price of Rs. 4,55,32,184.00 whereas Packa ge No. As-19-104, which is the subject matter of WP(C) No. 1080/2013, was awarde d to the petitioner at the contract price of Rs. 8,90,17,675.00. 3. In case of Package No. As-19-112, petitioner deposited an amount of Rs. 11,38,306.00 before the respondents as 2.5% Performance Security. Thereafter, pe titioner raised running bills from time to time where-from an amount of Rs. 5,45 ,276.00 was deducted as 5% Security Deposit. A further amount of Rs. 2,82,638.00 was also deducted as 2.5% Performance Security. Thus, a total amount of Rs. 19, 66,220.00 is lying with the respondents as Security Deposit and Performance Secu rity in respect of Package No. AS-19-112. 4. In so far Package No. As-19-104 is concerned, petitioner had deposited an amount of Rs. 22,25,442.00 with the respondents as 2.5% Performance Security. In the course of execution of the contract work, petitioner had raised running bills from time to time, from which an amount of Rs. 16,94,328.00 was deducted a s 5% Security Deposit. A further sum of Rs. 5,93,156.00 was deducted as 2.5% Per formance Security. Thus, total amount of Rs. 45,12,926.00 is lying with the resp ondents as Security Deposit and Performance Security in connection with Package No. As- 19-104. 5. While executing the above two contract works, petitioner fell ill. His illness was diagnosed as Tuberculosis. Petitioner started taking treatment from 24.08.2011. 6. On 26.08.2011, petitioner informed the Executive Engineer, PWD (Nagaon S tate Road Division) about his illness and stated that completion of the awarded contract works within the stipulated time would depend on his physical condition . 7. Attending physician of the petitioner after examining him, advised rest for a period of 1(one) year in view of his illness as per medical certificate da ted 24.10.2011. 8. According to the petitioner, he had informed the Chief Engineer, PWD (Ro ads) (respondent No. 3) about the above medical advice and requested the said au thority to get the above two contract works executed by another party. 9. It appears that Package No. As-19-112 was terminated on 08.02.2012 and Package No. As-19-104 was terminated on 06.06.2012. Executive Engineer, PWD (Nag aon State Road Division) informed the Chief Engineer, PWD (Roads), Assam vide le tter dated 25.10.2012 about the illness of the petitioner, forwarding therewith the application of the petitioner. Chief Engineer was also informed about the te rmination of contract. Petitioner submitted separate representations dated 05.01.2013 before th 10. e Chief Engineer, PWD (Roads) informing the said authority that his health condi tion had deteriorated and his financial condition was such that he was unable t o meet the medical expenses which had adversely affected him and his family memb ers. He, therefore, requested the said authority to refund the Performance Secur ity and Security Deposit so as to enable him to avail better treatment. 11. As no decision was taken on his representations, petitioner has filed th e present two writ petitions seeking a direction to the respondents to refund th e Security Deposit and Performance Security lying with the respondent in respect of both the contract works. 12. Identical affidavits have been filed by respondent No.3 in both the case
Legal Reasoning
Heard Mr. H. Sarma, learned counsel for the petitioner and Mr. D.P. Bora s. It is stated that letter of the petitioner informing about his illness was re ceived by the respondent No. 5 after cancellation of the contract works. Applica tions of the petitioner were received by respondent No. 5 only on 25.10.2012. It is further stated that as per Clause 26 of the General Conditions of Contract, an amount of 20% of the balance work value is to be paid by the contractor to th e employer in case of termination of work. In respect of Package No. As-19-112, the value of balance work being assessed at Rs. 3,93,82,662.00, 20% of the same comes to Rs. 67,96,532.00. Total Security Deposit and Performance Security of th e petitioner lying with the department is only Rs. 19,86,219.00. Thus, payment d ue to the employer (department) is more that the payment due to the petitioner. 13. In case of Package No. As-19-104, value of the balance work is Rs. 5,63, 14,400.00. 20% of the aforesaid amount comes to Rs. 1,12,62,800.00. As against t he above, total Security Deposit and Performance Security of the petitioner lyin g with the department is Rs. 45,12,926.00. Thus, payment due to the employer (de partment) is more than the payment due to the petitioner. Since petitioner did n ot inform the respondents regarding his illness on time, contract works awarded to the petitioner were terminated due to poor performance and not on medical gro unds. Contract works were withdrawn from the petitioner by invoking Clause 52.2 of the General Conditions of Contract. Therefore, petitioner is not entitled to refund of Security Deposit and Performance Security. 14. Petitioner in his reply affidavits has disputed the above stand taken by respondent No. 3 and has asserted that he had informed respondent No. 5 about h is illness on 26.08.2011. He has stated that till he fell ill, there were no def iciencies in his work. Because of his serious illness from which he has not yet recovered, he could not complete the work. Therefore, termination of the contrac ts on the ground of poor performance would not be justified. 15. h, learned Standing counsel, PWD. 16. Mr. H. Sarma, learned counsel for the petitioner submits that petitioner had executed 45% of the work in both the contracts before he was afflicted by T uberculosis. Till the time he fell ill, performance of the petitioner was good. Further, when he became physically ill and could not execute the contract, he hi mself informed respondent No. 5 that the two contract works should be awarded to another party. In the circumstances of the case, termination of the two contrac ts on the ground of poor performance was not at all justified. Referring to Clau se 4.3 of the General Conditions of Contract (Part-II), learned counsel for the petitioner submits that the two contracts awarded to the petitioner should be cl osed without levying any damages/compensation as provided in Clause 53 of the co ntract agreement. In view thereof, respondents should refund the Security Deposi t and Performance Security to the petitioner. 17. Mr. D.P. Borah, learned Standing counsel, PWD, refers to the averments m ade in the counter-affidavits and submits that as because petitioner did not inf orm the respondents on time, the contracts were terminated by invoking Clause 52 .2 of the General Conditions of Contract. He, however, fairly submits that the d epartment does not dispute the illness of the petitioner and the inability to co mplete execution of the works because of poor health condition. 18. 19. Submissions made have been considered. As already noticed above, the illness of the petitioner is not disputed. It is also not disputed that because of his illness, petitioner could not compl ete the two contract works. Only dispute is, according to the respondents, petit ioner did not inform them about his illness on time which led to termination of the contract works. This, however, is disputed by the petitioner as according to the petitioner he had immediately informed respondent No. 5 about his illness a nd inability to continue with the works alongwith the medical advice to take res t for 1(one) year. 20. Without entering into the aforesaid controversy, a fair resolution of th e dispute can be arrived at if a pragmatic and reasonable view of Clause 4.3 of the General Conditions of Contract (Part-II) is taken. The said clause provides that if the contractor, who is an individual or a proprietory concern, during the subsistenc e of the contract dies or becomes permanently incapacitated and where the surviv ing partners are only minors, the contract shall be closed without levying any d amages/compensation as provided in Clause 53 of the contract agreement. In the p resent case, the contractor i.e., the petitioner is an individual. He has been i ncapacitated by serious illness preventing him from executing the contract works . It is not a case that petitioner had committed fundamental breach of contract but it was because of reasons beyond his control that he could not execute the w orks. In the context of the contract, taking of complete rest for 1(one) year as per medical advice would amount to permanent incapacitation within the meaning of Clause 4.3. 21. In such circumstances, Court is of the view that decision of the respond ents not to refund the Security Deposit and Performance Security to the petition er is not justified. 22. Accordingly, respondent No. 3 is directed to release/refund the Security Deposit and Performance Security in respect of both the works to the petitioner within a period of 30 (thirty) days from the date of receipt of a certified cop y of this order. 23.
Decision
Both the writ petitions are accordingly allowed. However, there shall be no order as to cost.