M/s v. IVI/s Gammon Engineers and Contractors Private . Limited

Order

This writ petition is filed seeking to declare the action of respondent No.2 - the Superintendent Engineer, Irrigation Circle No.1, Nagarkumool, in issuing the letter bearing Lr.No SE/Irrigation/C. I/NGKI/OT I I AEI lLift .3 1261 M dated 24. I 1 .2023, as being illegal and arbitrary and contrary to the Clause No.1.44 of the agreement and consequently direct respondent No.3 to release the security deposit of Rs.10,00,00,000/- (Rupees ten crores only) to the petitioner

2. Petitioner - M/s. Gammon Engineers & Contractors Private Limited is a company engaged in the business of carrying out various infrastructure and several contracts works on behalf of the Govemment of Telangana and other State Governments. In the tender process floated by the respondents, petitioner was declared successful bidder and was awarded work of execution of Stage - III Pumping Station (5X30 MV) of Kalwakurthy Lift Irrigation Scheme near Gudupally Gattu balancing reservolr near Gowreddipalli 2 Village, Gandipet Mandal, Mahabubnagar District (filr short' 'Project'). In furtherance thereof, petitioner entered into agreement No.l0/EPCMGJLIP/2005-06 dated 28.09.2005 (for short, 'Agreement') with Project Administrator &. Superintendent Engineer, Mahattna Gandhi Lift Irrigation Project i.e', respondent No.2.

3. It is stated that as per Clause 1 .44 of the General C'onditions (Instructions to bidders) (for short 'GTC') an amount of Rs.100 million rupees i.e., Rs.10,00,00,000/- (Rupees ten crores only) has to be deposited by the petitioner towards security deposit hy way of demand draf': in favour of Pay and Accounts Offrcer (PAO), MahabubnagrLr. Petitioner was obligated to deposit the sard amount to PAO or res;pondent No.2. The said amount will be released after one year of completion of contract period including the operation and maintenarce period, to the bidder. The Clause 1.44 ot'the GTC reads as undei: "a) l. A1 the timc ol signing the agreement as per ITB3, the successltrl bidder shall fumish Security Deposit for a sum of Rs.100 Million ,lRupees One Hundred Millions Only) by wa., of D.D. drawn iiom any nationalized Bank in favour of PAO, 3 Mahaboobnagar or bank Guarantee in favour of the Project Administrator & Superintending Engineer, NKLI Circle, Mahaboobnagar valid for a period of one year after completion of contract period including O&M period. EMD of successful bidder will be returned after furnishing of Security Deposit or adjusted towards security deposit."

4. [t is stated that petitioner submitted representation dated

23.06.2022 to respondent No.3 - the Executive Engineer, Inigation Division No.3, Nagarkumool, to issue completion certificate for the Project under Engineering, Procurement and Construction (EPC) Tumkey System. Accordingly, respondent No.3 issued completion ceftificate dated 29.07.2022 vide Lr.No.EEIIRRIGATION /DNNo.3/NGKLILIFT 3/DB/568M stating that petitioner - company has completed the work in all aspects including the operation and maintenance period by 21.08.2021. Thereafter, respondent No.3 addressed a letter dated 19.10.2022 to petitioner company vide Lr.No. EEARRIGATION/DNNo. 3A.,IGKL/LIFT- 3 /BD I 686 / lM requesting to prepare inventory of Pump House Materials, Drawings, Spares, Tools & Kits and handover the site as per the original EPC and subsequent agreement, conditions and norms 4 stipulated in the agreement to M/s. ESSVEE lnfrastructures' Hyderabad. ,\ccordingly, petitioner has handover the Punrp spares, Testing Equirment tools and tackles of Pumping Station of the Project to M/:;. ESSVEE Infrastructures, Hyderabad'

5. It is submitted that as per the Clause 1.44 of GTC, petitioner fumished bank guarantee at the time of Agreement and later requested rcspondent No.3 to receive cash of Rs 10 crores towards the security deposit from the running bill amount Accordingly, respondent No.3 recovered Rs.10,00,00,000/- and release<l the bank guarantee of Rs.10,00,00,000/- in favour of Axis Bank Limited Credit Managelnent Centre, Green Lands, Begumpet Road, Hyderabad. and addressed letter dated 06'08'2022 vide 1... 116. !,[/IRRIGATION/DN-3 AJGKL/S[ P DT lLlF' T -3 I 5 t 5 M' It is contended ttrat petitioner hled representation dated 26 'ti'18 '2023 to release the security of Rs.10,00,00,000/- as work entrusted to the petitioner - cornpany was completed including the operation and maintenance by 21.08.2021. Petitioner furnished work dompletion certificate dttted29.07.2022 issued by respondent No.3 along with representatic,n dated 26.08.2023 to respondent No.3 requesting for 5 release of security deposit. Respondent No.3 forwarded the representation dated 26.08.2023 of petitioner company to respondent No.2. Respondent No.3 issued lefier vide Lr.No.SE/ Irrigation/C.1/NGKL/OTl/AEULift-326tM dated 24.11.2023 stating that as per the Clause 3.5.9 it is not possible to release the security deposit of Rs.10,00,00,000/- without dropping the Audit paras/objections.

6. When the matter was listed for admission,

Mr. S. Rahul Reddy, leamed Special Govemment Pleader, representing leamed Additional Advocate General for respondents opposed the grant of interim order and sought time to get lnstructions. After giving reasonable opportunity of hearing, this Court has passed order on 11.03.2024, which reads as under: "When the matter was taken up for hearing on 23.02.2024, Mr. S. Rahul Reddy, leamed Special Govemment Pleadcr, rcpresenting learned Additional Advocate General, requested for time to get instructions. The matter was again listed on

26.02.2024 and again request was made by the leamed Special Govemment Pleader for adj ournment. Today, when the matter is listed, leamed Special Govemment Pleader submitted that counter is under 6 preparation irnd the same will be filed in a feu' days. l{e submitted that the bills submined by the petition towards completion of the work arc being rcconciled and dee ision will be taken shortly on the request of the petitioner for retrrrning thc security deposit amount of Rs.10,00,00,000/- (Rupees Ten Crorr: only). Learned counsel for the petitioner submitted that the srrbject contract arvarded to the petitioner vide Agreement No.10/EPC/MGJLIP12005 dated 28.09.2005 for MGKLI Lifr III cxecution of Stage-III Pumping Station (5x30 MW) of Kalvaku(hy [.ift Irrigation Scheme has been completed. Learned counsel referred to work completion certificate issued by the respondent No.3 vide Lr.No.Etr/lng/Dn.No.3/ Ngkl,T-ift.3/DB dated 29.07 .2022. Leamed counsel submittcd that as per clause 1.44 of the General Terms and Conditions, the security deposit shall be released to the contractor aftcr one year of the completion of the conlracl period including operation and maintenance. Learncd counsel for the petitioner asserted that the respondents have not raised any issues rvith regard to operation and maintenance and the question of conciliation of the amount as submitted by the leamed Special Govenrment Pleader does not arise. In vie w of the fact that the work completion certifir'ate is issued on 29.07.2022 and one year period also expired therefront, thcre shall be interim direction to the respondents to forthrvith rclease the security deposit amount ol Rs. 10,00,00.000/- (Rupees Ten Crore only) to the pelitroner, -r>--- 7 preferably, within a period of ten (10) days from the datc of receipt ofa copy of this order. List on 08.04.2024;' 7 . Later alleging non-compliance of the order 1 1 .03.2024 pasped by this Court, petitioner filed C.C. No.681 of 2024. During the course of hearing, it was informed by Mr. S. Rahul Reddy, learned Special Government Pleader representing leamed Additional Advocate General for respondents that petition has been filed to vacate the order dated 11.03.2024 and requested this Court to take up the vacate petition before hearing the contempt case. As per his request, the contempt case is taken up along with vacate petition

8. In the counter affidavlt along with vacate petition hled by respondents it is stated that the execution of Project on EPC basis is one of the packages of MGKLI Scheme. The Govemment had accorded the administrative sanction for Rs.1500 Crores vide G.O.Ms.No.65. This work of Execution of Stage-III Pumping Station was technically sanctioned for Rs.695 crores vlde PAR No.16/MGJLIP|2005-2006 dated 26.09.2005 and entrusted to petitioner company vide Agreement dated 28.09.2005 for 8 Rs.631,98,81,000/- (Rupees six hundred thirty-one crotes ninety eighty lakhs eighty-one thousand only) on EPC Basis. It is submitted that as per clause 1.44 of GTC, the amount of security deposit of R.s. 10,00,00,000/- will be released after on,: year of completion of contract period including operation and maintenance period to the bidder.

9. It is submitted that the according to the instructions contained in G.O.Ms.No.94 I&CAD Department dated 01.07.2003, rrn amount equivalent to 1oZ Estimated Contract Value (EMV) shall be collected from all participating bidders towards Eamest Money Deposit (EMD) and successful bidder shall pay balance, EMD of

1.5o2 of conlract value at the time of conclusion of the Agreement The Goverrunent while issuing guidelines for prioritized projects under EPC system vide Memo.No.5217lReforms/tl6 dated

23.02.2006 also made clear that as per rules, EMD is ci:llected at

2.5%o of the value of the contract and an amount of Rs.5,79,97 ,0251- was not collected from the petitioner (15,79,97,025 - 10,00,00,000: 5,79,97,0251 ) 9

10. ln the counter of the respondents it is stated the following paras of MGKLI Lift-l[ were printed in the Controller Audited General Performance Audit report for the year 2OOg-lO which reads as under: "ParaNo.2.2.6.4: l) The Earthwork excavation for surge pools and pump houses:- AII the lift packages envisaged construction of surge pools and pump houses which inter alia involve earthwork excavation. Audit noticed that during execution thcre was substantial reduction in the earthwork quantities. As such No reduction in payments to contractors despite reduction in earth work quantities, undue benefit to contractor at Rs. 39.0g Crores. 2) Delivery mains (Pipeline):- Similarly, there were reduction in the length of delivery mains as against the estimated length with attendant adverse consequences, No reductions in payments to contractors despite reduction in pipeline quantities excess in Rs. 42.53 Crores. 3) Tunnel:- In respect of tunnel rvoks under lift-lll package audit noticed that the amounts scheduled for payment to the contractors was far in excess of the amounts they would be eligible, considering the estimated cost and overall tender percentages quoted by them, amounts scheduled for payment to contractors were far in excess of the amounts payable Rs.54.42 Crores. ParaNo.2.2.7.2: 1) Clause relating to collection of EMD:- As per prevailing orders an Eamest Money deposit (EMD) of Rs.15.80 crores was to be collected at

2.5 percent on the agreement value of rs.631.99 crore. However. the NIT I 10 of I-ift -III package prescribed collection of Rs 10 crores as I MD This led to short collectjon of security of Rs.5.80 crores' JLIP -2 LAR 421106-07:- Major Irregularities -fhereafter Section-A:- Para No. 1(A), Short collection of EMD the agency was filled W'P' No'4'13/2009 in Rs.5,79,99.02ill-. Hon'ble A.P. l{igh Court Hyderabad. The I:Ion'ble High court of Andhra Pradesh, Hyderabad was disposed the case on 28.8.2009 and stated that as such there ,s no short recovery of EMD as per thc original terms and conditions of contract with the agency. The Accountant. Gcneral, Hyderabad has advised that address the Public Accounts Cornmittee of Telangana Stale legislature. Para No.l(B) In concct inclusion of LS Provision resulting to cxtra benefit ':o contractor of Rs.607.20 Lakhs. The latest ar:tion taken report is arvaited from the Accountant General, IJyderabad. Para No.l(C) Short recovery of VAT Rs.l1.49 Lakhs The short recovery of V A.T Rs.1 1,48,527i- had recovered in Running Acr:ount Bill No.l42nd & part vide C.B. Voucher No.96 Dt.16.09.2023. The latest action taken roport is awaited from the Accountant General, Hvderabad' JLIP -2 LAR 4I4l07-08:-Major lrregularities. Section:-A:- Para No.l' Savings due to change in dl:signs non- accrual to Go.rernment account Rs.19.21 Crores. Section:-B:- Para No.II. Unintended benfit to the agc'ncy due to thc agency dr.Le to inclusion of central excisc duty on electro mechanical Equipment in the IBM Rs.4428.59 Lakhs. Para No.III:- Non recovery of cess under the Building and Other construction .norks welfare cess Act, 1996 (Cess Act) Rs.2,.i1,52,682/-. The EPC agency was filed W.P.No.19995 of 2010 in thc Hon'ble High Court Hyderabad. The Hon'ble. High Court rvas issued interim stay as thcrc shall be interim stay of deduction of any amounts towards labour cess from the current bills of the petitioner. In view of the above a counter was filed in Hon'ble I{igh Court Hyderabad by the Superintending Engineer/MGJLIP, Circle, Mahabubnagar vide letter No. DEE I /Lift -3 /3 3 8 lM, Dt.22.9.20 I 0. The Judgement is awaited. Para No.IV:- Short recovery of NAC @0.25% on the work executed since LS XXV part Bill in LS XXV & part bill paid on 04.02.2008, Rs.5,79,596/- and short recovery of seigniorage charges by Rs.2000/- the recovery of NAC 0.25o/o for Rs. 5,79,596 instead of Rs.5,73,596/- and short recovery of seignoirage charges by Rs. 2000/-had recovered in RA bill No.i42 & part bill and paid vide C.B. Vocher No.96 Dt. 16.09.2023. The latest action taken report is awaited from the Accountant Ceneral, Hyderabad."

11. It is submitted that as per the Clause 1.26.6 of GTC with regard to income tax, surcharge on income tax ifany, and any other corporate tax, the employer shall not bear any tax liability in respect of the contracts irrespective of the mode of contracting and the bidder (whether domestic or foreign) shall be liable and responsible for payment of such tax. As per Clause No.3.3 of GTC employer reserves right to recover the amount from the contract performance guarantee, ifrequired and as per the Clause No.1.15.3(f), deductions such as income tax, works contract tax and other taxes and IZ recoveries shall be deducted from time to time as per the orders issued by the (iovemment

12. A replv afhdavit has been filed by the petitioner to the counter afhdavit of the respondents contending that audit objections of Section-A:- Para No.l(A) about short collection of EMD of Rs.5,79,99,025/- was dropped by the Accountant General (AG), Hyderabad, as per the order passed by this Court in W P' 'No 443 of 2OOg. The audit objection regarding Para No l(B) about the incorrect inclusion of LS provision resulting in extra benefit to the contractor to an amount of Rs'607.20 lakhs was also dropped by the AG, Hyderabad, and the same was informed to respondent No 3 by letter dated l').01.2024.

13. It is submitted that Para 1(C) of the short recovery '.rf VAT of Rs.l1.49 lakhs rvas also dropped by the AG, Hyderabail, and the same was informed to respondent No.3 by letter dated 1'9 '01'2024' The objection of Section-A:-Para No.l savings due to change in designs non-accrual to the Govemment account of Rs li)'21 crores is incorrect. The work was awarded to petitioner - compally on EPC 13 is for a sum of Rs.63 1,98,81,000/- (Rupees six hundred and thirry one crores ninety eight lakhs eighty one thousand only) and as per the said contract, the petitioner is bound to complete the work and hand over the Project to respondents, hence, the objection taken by AG about saving of Rs.19.21 crores is incorrect.

14. ln so far as, Section:-B:-para No.II, the unintended benefit due to agency inclusion of Central Excise Duty (CED) on E,lectro Magnetic Equipment (EME) in the Intemal Bench Marking (IBM) is Rs.4428.59 lakhs. It is stated that as per the respondents the estimate in the IBM for the Project covered by the Agreement dated

28.09.2005 is Rs.63955.16 crores which includes an amount of Rs.25423 lakhs towards EME and sum of Rs. 1713 lakhs towards 22 KV switch yards, while arriving at IBM value. The department has also included element of CED of 16.32%, on both the items totalling to Rs.4428.59 lakhs.

15. It is stated that petitioner has no knowledge about IBM as the respondents did not put the sdme in the public domain. petitioner quoted tender at Rs.631,98,81,000A which is 1.18% less than the t4 value of w()rk in the tender document. lt is subm itted that Government of lndia, Ministry of Finance, Deparlment ol Revenue, issued notifir:ation dated 08.01.2004 (for short 'notification 14 of 2004') and as per the said notification, the excise dutyicustoms duty was exempterd for the water supply projects in the pubiic interest' ln accordanr:e with the said notification, the District Collector, Mahabubnag,ar, issued a certificate exempting the EMI imported from other t:ountries and accordingly the exemption was granted' However, pctitioner has not received the said exemption from the respondents. I{ence, respondents are not entitled to state that petitioner has got unintended benefit of Rs.4428-59 lakhs. The Central Government has issued notification 14 of 2004 on

08.0 1.2004 and petitioner entered into Agreement on 28'09'2005 and as on date of agreement there is no CED on equipment utilised for water projects. Contrary to the notification 14 ol 2004, the respondents have included CED on IBM estimates and demanding the said anlount from the petitioner is illegal.

16. lt is submitted that W.P. No.19995 of 2010 was liled by the petitioner to declare the action of respondents therein in not 15 including the l%o towards labour cess in respect of the works allotted to the petitioner under the Agreement dated28.09.2005 and payments made on 26.06.2007 by revising the estimates as per U.O Note No.4763lPES.F8(Al)06-4 dated 28.02.2008 as illegal and consequential direction to respondents therein to include 1% labour cess entrusted to the petitioner under the Agreement. This Court by the order dated 01.05.2024 disposed of the said writ petition directing the respondents therein to verifo the bills of the petitioner and if corresponding amount is included in the estimate towards loZ labour cess, respondents therein can deduct upon the verifrcation, if respondents therein found that the corresponding amount is not included in the estimates, respondents therein shall not take any steps to deduct the amounVrecover the amount from the petitioner towards the labour cess. As respondents have not included the labour cess in the estimates, they are not entitled to collect Rs.2,31,52,682/- in view of the order dated 0l .05.2024 passed by this Court in W.P. No.19995 of 2010

17. lt is submitted that as per Para No.IV short recovery of NAC @ 0.25% totalling to Rs.5,79,5961- and shoft recovery of 16 seigniorage charges by Rs.20001, the said paragraph was dropped by the AG, tlyderabad, and the same was intimated to respondent No.3. The office of the Accountant General (Audit) T elangana, Hyderabad, addressed letter dated 18.07 '2024 to respondent No'3 informing thirt as per the records no paras pertaining to the Project are pending rvith Public Accounts Committee (PAC)'

18. Heard Mr. Ashok Reddy Kanathala, leamed counsel for the petitioner and Mr. S. Rahul Reddy, learned Special G'lvemment Pleader representing leamed Additional Advocate General lor respondents, and perused the material on record.

19. Learncd counsel for the petitioner submitted that lender was awarded to the petitioner for Rs.631,98,81,000/-. It is an EPC contract and based on the estimated value of the contract i.e., Rs.695 crores quoted by the respondents, petitioner has quoted

1.180% less and the tender was awarded to petitioner - company. The estimated value of the contract is prepared in consultation with various stakeholders and departments concemed- Learrred counsel submitted that bidder goes by the estimated value and no bidder t7 while submitting his bid scrutinizes minute aspects like exemptions and grants given by the Central Govemment. What matters is the estimated value of contract. Petitioner has completed the contract and handed over the entire Project to respondents. The terms of the contract cannot be deviated after work completion certificate is issued by respondent No.3 in terms of the Agreement dated

28.09.2005. After completion of one year, as per Clause 1.44 of the general terms and conditions, petitioner is entitled to receive the security deposit of Rs.10,00,00,000/- and action of respondents in not releasing the security deposit is arbitrary, unreasonable and malafide in nature.

20. Leamed counsel submitted that the contract was awarded to the petitioner in the year 2005 and it was completed in all aspects including the operation and maintenance on 21.08.2021. Only when the interim order dated 11.03.2024 was passed by this Court, respondents in order to overreach the said order have set up a false plea of unintended benefits, as an afterthought. The action of respondents is contemptuous, and they are liable to be punished, Learned counsel submitted that Clause 1.44 of GTC is binding on t8 the responderlts and Clause 3.5.9 (Discharge) of the Agreement which is relat,:d to final settlement cannot be invoked by them' 21 . Leame,C Special Govemment Pleader representing leamed Additional A dvocate General for respondents submitte<.i that the work completion certificate issued to the petitioner - company was not in accordance with the Clause 3.15 ' 10 of GTC' As per: the audit objections, arnount of Rs-4375.25 lakhs have to be deducted which is paid in excess to the petitioner in the running bills and the amount of Rs.10,00,tr0,000/- deposited by the petitioner as EMD is deducted towards part liability of the petitioner. It is submitted that letter vide Lr.No.EE/Ir.Div-3iABAIGKL/MGKLI-IU291M dated ?'6'04'2024 was issued by respondent No.3 to the petitioner, wherein petitioner was informed that it has availed exemption on Electro-Mechanical work by inolusion of CED in the IBM which resulled in the unintended benefit of Rs.4375.25 lakhs. The amount of Rs.10,00.00.000/- is available with respondents and petitioner was directed to remit excess amount in the running bills totalling to Rs.23,93,25.000/- (Rupees twenty-three crores ninety three lakhs J---- I l9 and twenty five thousand) under the Clause 3.15.10 by way of demand draft in favour of respondent No.3.

21. Leamed Special Govemment Pleader submitted that Clause

1.44 of GTC has to be read with Clause 3.15.10 and also Clauses

3.15.8 and 3.15.9 and merely because completion certificate was issued, petitioner cannot be granted relief. The Clause 3.15.10 reads as under: *3.15.10 Final Payment 1'he tsmployer's Representative shall issue to the Employer, with a copy to the Contractor, the Final Payment Certificate within a reasonable time after receiving the Final Statement and written discharge in accordance with Sub-Clause 3.15.8 and 3.15.9, stating: (a) the amount which is finally due and, (b) After giving credit to the Employer for all amounts previously paid by the Employer and for all sums to which the Employer is entitled, the balance, if any, due from the Employer to the Contractor or from the Contractor to the Employer as the case may be. If the Contractor has not applied for a Final payment Certificate in accordance with Sub-Clauses 3.15.8 and 3.15.9, the Employer,s Representative shall request the Contractor to do so. If the Contractor fails to make such an application within a reasonable time, the Employer's Representative shall issue the Final payment Certificate for such amount as he considers to be due.,, 20

23. The Clause 3.15.8 of GTC deats with manner in which application for final payment shall be made by the contractor and Clause 3.15.() provides that the contractor shall submit discharge acknowledging leceipt of futt and hnal payment. It is amply clear, Clause 3.15.10 o1'GTC can be invoked by the respondents within reasonable tirne after receiving final statement and written discharge in accordance with the Sub-Clauses 3.15.8 and 3.15.9 by giving detaits of thr: amount finalty due and for all sums to which the employer is r:ntitled, the balance, if any, due from the employer to the contractor or from the contractor to the employer. It is not the case of resp,:ndents, more particularly respondent No'3 that final payment cerlificate is not issued to the petitioner. Be that as it may, the contract was completed in the year 2021 ,, work completion cefiificate was issued to the petitioner on29.07.2022. One year has elapsed therr:after and in all faimess, respondents ought to have returned the deposit as per Clause 1.44 of GTC. Till writ petition was filed and interim order dated 11.03.2024 rvas passed by this Court there was no whisper about the alleged amounts due to the 2t respondents and the so called unintended benefits received by the petrtloner

24. According to the learned Special Govemment Pleader, the respondents are entitled to recover the taxlcustoms benefit availed by the petitioner as per the Clause 1.26.5 and 1.26.6 of the GTC which reads as under: Clause 1.26.5 If any statutory levies like custom duty and port charges in case of Imporled Goods, Sales Tax, Excise Duty and Surcharge in case of Domestic Goods are imposed in respect of the goods contracted to be supplied on or after the date of contract and before the expiry of the contractual date, such imposition or variation in levis shall bc to be employer account, and any variation on account of imposition of or variation in statutory levies on goods contracted to be supplied occurring after the expiry of the original contractual delivery date shall be to the Supplier's account. Clause 1.26.6 As regards the Indian Income tax, surcharge on Income 'fax if any and any other Corporate Tax, the employer shall not bear any tax liability in respect of the contracts irrespective of the mode of contracting. The bidder (whether domestic or foreign) shall be liable and rcsponsible for payment of such tax, if attracted under the provision of law. 22 As per Clause 1.26.5, custom duty, sales tax etc, are to be levied on the employer - respondents for the goods supplied on or afler date of the contract and before the expiry of contractual date' Alter expiry of contractual delivery date, statutory levies have to be paid by the contractor - petitioner. The said clause cannot be pressed into service by thi: respondents. It is because respondents have not paid any customs duty or sales tax. They claim that customs duty exemption ir; availed by the petitioner, thereby, petitioner has received unintended benefit. The leamed Special Government Pleader has not pointed out any clause in the agreement or general terms and conditions whereby the term "unintended henefit" is defined and recovery can be made in that regard' Respondents having kept silent for several years, without raising any objection, have come up r,vith this afterthought plea for extraneotts reasons' The terms of the contract have been consciously and dtrly entered into by the parties. The contract was successfully compli:ted by the petitioner which was duty acknowledged by the work c:ompletion certificate dated 29.01 .2022 issued by respondent No'3' Thus, the action of respondent authorities in trying to deviate from the terms 23 of the agreement and ignoring work oompletion oertificate dated

29.07.2022 and taking objection as an afterthought is arbitrary and unreasonable and violative of Article 14 ofthe Constitution of India. It is settled law "an act to be done in a particular manner has to be done in that manner only". The disputes arising out of statutory or commercial contracts are amenable to writ jurisdiction when the action of respondents is arbitrary, discriminatory and unreasonable, in view of the judgments of the Hon'ble Supreme Court in Surya Constructions v. State of Uttar Pradeshr, ABL International Limited v. Export Credit Guarantee Corporation of India Limited2 and Whirlpool Corporation v. Registrar of Trademarksr. In the above factual backdrop, the petitioner has made out a case for indulgence of this Court as the respondents have arbitrarily and unduly withheld the security deposit without any bonafide reasons.

25. It is relevant to point out that after lapse oftwo (2) years upon completion of the Project, letter dated 26.04.2024 was addressed by '2019 t6 scc 94 ' 2oo4 3 scc 533 ' 1998 8 scc I 24 respondent No.3 to the petitioner for recovering alleged unintended benefits accrued to the petitioner. According to the respondents, the objection with regard to unintended benefit of Rs.442l'i.59 lakhs (due to inclus;ion of excise duty on electromechanical equipment in IBM) was taken in the Audit Report of the year 2009-10. There is no explanation as to why action was not taken on such report for about 15 years, since then. In the letter No.AG(AU)/|S/AMG- IIlES-I(Report s)lP ACI2024-25/1 8 dated 1 8.07 .2024 fi led along with the reply affidavit of the petitioner, it is clarified by the OIfrce of the Accountant (ieneral (A[IDIT) that "no paras relating to the work "Execution of Stage-lll Pumping station (5X30MW) Mahatma Gandhi Kalvrakurthy Lift Irrigation Scheme Near Gudipallygattu near Gouridevipally (V), Gopalpet (M), Mahabubnagar District" are pending rvith Public Accounts Committee (PAC)." There is no rebuttal to said letter by the learned Special Govemmert Pleader, which in any case cannot form the subject matter of this case for the reasons stated in the preceding paragraphs.

26. Hence. without expressing any opinion on the letter dated

26.04.2024 issued by respondent No.3 - the Executive Engineer, 25 Irrigation Division No.3, Nagarkumool, the writ petition is allowed and respondents are directed to release security deposit of Rs.10,00,00,000/- (Rupees ten crores only) to the petitioner, within a period ofthree (3) weeks from the date ofreceipt ofa copy ofthis order. It is made clear respondents are at liberty to go ahead with the enquiry pursuant to the notice dated, 26.04.2024 issued by regpondent No.3, in accordance with law. There shall be no order as to costs. As a sequel thereto, miscellaneous applications, if any, pending in the writ petition stand closed IITRUE COPY,, SD,. T. ASSISTft1wt\s.',JJl ON OFFICER 'u'".'nn' '"',;!3",5[,t3)-,""',-1tl::]'ih,[:'T,:"il1ruffi 2. rhe superin"*""#,';;;ation, Dwision )l ooro"r," topucl .*n cou* ror the state i :l:?:11:::;il"1;"'" : iri;"n:*fl5,',15:tt33'"'"::::-, Hish court ror the state or . i*r-g#"'* ,ii.'"'"ot3Y"''ffi'E T Two CD CoPies ***,.13^1,u, GENERAL BSR GJP +*, HIGH COURT DATED: 2010112025 ORDER WP.No.4849 of 2024 k c (t\i- S r,'. 7 .b 01 F 2IJ25 -t oE5 c(' ALLOWING THE WRIT PETITION, WITHOUT COSTS 7{ \ ^1