The High Court
Case Details
IN THE CUTTACK THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 31151 of 2022 Sanjay Kumar Agrawal others State of Odisha and others -versus- ….. Petitioner Petitioner S.K. Acharya, Advocate Mr. S.K. Acharya …. Opposite Opposite Parties H.M.Dhal, AGA Mr. H.M.Dhal
Legal Reasoning
CORAM: DR. JUSTICE B.R. SARANGI DR. JUSTICE B.R. SARANGI MR. JUSTICE BIRAJA PRASANNA BIRAJA PRASANNA SATAPATHY Order No.
Decision
ORDER 24.11.2022 01. This matter is taken taken up through hybrid mode. 2. The Petitioner Petitioner challenges the order dated 23rd August August, 2022 of Opposite Party No.2 in respect of imposition of penalty @ @ 1 % on the value of the work executed beyond the stipulated period. value of the work executed beyond the stipulated 3. The Petitioner Petitioner is a Super-class Contractor and executed executed an agreement for the work “Rural Piped Water Supply to Village Rural Piped Water Supply to Village-Rahurahaldi under Rahurahaldi under Dharamgarh Block in Kalahandi District” with stipulation Dharamgarh Block in Kalahandi District” stipulation to complete 19th December, 2021. The work could not be the same by 19 within the stipulated period and continued up to 30th July, 2022 within the stipulated period and continued up to . The work could not be completed July, 2022. Such completion of work beyond the stipulated date was permitted by the completion of work beyond the stipulated date was permitted by the Opposite Parties subsequently in order dated 23rd August, 2022 Opposite Parties subsequently in order dated August, 2022 under Annexure-3. The grievance is that in the said order while The Petitioner’s grievance is that in the said order while Page 1 of 5 Page granting sanction extension of time, the condition to levy sanction for extension of time, the condition to levy penalty @ 1% has been without has been imposed illegally and arbitrarily without considering genuine genuine causes of hindrances. 4. Learned counsel submits counsel appearing for the Petitioner submits that before levying levying such penalty, no notice was sent nor nor any opportunity of being heard was granted to the Petitioner. Petitioner. He further submits submits that due to hindrances relating to issues issues like standing crops at work site, unavailability of Govt. Land etc. standing crops at work site, unavailability of Govt. Land etc., Petitioner could not complete the work within the stipulated Petitioner could stipulated time. It is also submitted that para 3.5.5 (V) of the OPWD Code as submitted that para 3.5.5 (V) of the OPWD Code as referred in the impugned order does not prescribe imposition imposition of penalty while granting speaks otherwise. granting extension of time, but it speaks otherwise. 5. Mr. P.P. Mohanty, . P.P. Mohanty, learned Additional Government Advocate learned Additional Government Advocate submits that since since the Petitioner could not complete the the work within the stipulated time, as per recommendation of the technical within the stipulated time, as per recommendation of the technical within the stipulated time, as per recommendation of the technical committee, the penalty was the penalty was levied in terms of the provision provision in para 3.5.5 (V) of of the OPWD Code, Vol.I. Clause (V) of para 3.5.5 of the OPWD Code, Vol.I reads as 6. Clause (V) of para 3.5.5 of the OPWD Code, Vol.I reads as Clause (V) of para 3.5.5 of the OPWD Code, Vol.I reads as under: “Percentage Contract will be in addition of item “Percentage item rate, lump sum contractors etc. In such contracts the rate, lump sum contractors etc. In such contracts the rate, lump sum contractors etc. In such contracts the mention estimated rate schedule of quantities shall mention estimated rate schedule of quantities shall of such Contractor such item and amount thereof. The Contractor has to mention percentage excess or less over the has to mention percentage excess or less over the has to mention percentage excess or less over the estimated cost (in figures as well as words) in the estimated cost (in figures as well as words) in the estimated cost (in figures as well as words) in the prescribed format appended to the tender document. prescribed format appended to the tender document. prescribed format appended to the tender document. Contractors participated in the tender for more more The Contractors Page 2 of 5 Page than one work may offer conditional rebate. Rebate than one work may offer conditional rebate. Rebate than one work may offer conditional rebate. Rebate offer submitted in separate sealed envelope shall be offer submitted in separate sealed envelope shall be offer submitted in separate sealed envelope shall be opened, declared and recorded first. The rebate so opened, declared and recorded first. The rebate so opened, declared and recorded first. The rebate so all offered, shall be considered after opening of all offered, packages called in the same tender notice. The The packages Contractors who wish to tender for two or more more Contractors shall submit separate tender for each. Each Each work shall submit shall have the name and number of the the tender envelope. to which they refer, written on the envelope. works The adopted format for percentage rate is same as percentage rate is same as The adopted format for that of the form adopted for item rate tenders but that of the form adopted tenders but word “item rate” shall be replaced by by the word be “percentage rate” and the contract form may be “percentage named as P-1. In this for time is the essence. The The named as P Contractor is required to maintain a c ertain rate of Contractor is required to maintain a certain rate of progress specified in the contract. The contract can progress specified in the contract. The contract can progress specified in the contract. The contract can the progress also be terminated with penalty when the progress also be terminated of work is not as per the conditions of contract . The of work is not as per the conditions of contract. The quantity mentioned can be increased or reduced to quantity mentioned can be increased or reduced to quantity mentioned can be increased or reduced to tems subject to a the extent of 10% for individual items subject to a the extent of 10% for individual i it maximum of 5% over the estimated cost. If maximum exceeds the limit stated above prior approval of exceeds making competent authority is mandatory before making competent any payment. The period of completion is fixed and any payment. The period of completion is fixed and any payment. The period of completion is fixed and cannot be altered except in case of exceptional exceptional cannot circumstances with due approval of next higher higher circumstances authority. authority. In case of percentage Rate tenders, only percentage In case of percentage Rate tenders, only percentage In case of percentage Rate tenders, only percentage Percentage quoted by quoted shall be considered. Percentage quoted by quoted shall the Contractor shall be accurately filled in figures the Contractor shall be accurately filled in figures the Contractor shall be accurately filled in figures discrepancy. If any and words, so that there is no discrepancy. If any and words, so that there is no in discrepancy is found in the percentage quoted discrepancy is by and figures, then the percentage quoted by words the Contractor in words shall be taken as correct. If the Contractor in words shall be taken as correct. If the Contractor in words shall be taken as correct. If discrepancy is found in the percentage quoted quoted any discrepancy in percentage excess/less and total rate quoted by in percentage by as the Contractor Contractor then percentage will be taken tender tender correct. The percentage quoted in correct. without mentioning excess or and not not without be supported with the corresponding amount will be supported less the Page 3 of 5 Page write treated as excess. The Contractor will write treated point percentage excess or less upto one decimal point percentage only. If he writes the percentage excess or less upto only. If he writes the percentage excess or less upto only. If he writes the percentage excess or less upto two or more decimal point, the first decimal point two or more decimal point, the first decimal point two or more decimal point, the first decimal point off. only be considered without rounding off. shall only e rates Where the Contractor has omitted to quote th Where the Contractor has omitted to quote the rates either in figures and words the officer opening the either in figures and words the officer opening the either in figures and words the officer opening the tender should record the omission. Bills for percentage rate tenders shall be prepared at Bills for percentage rate tenders shall be prepared at Bills for percentage rate tenders shall be prepared at the estimated rates for individual items only and the the estimated rates for individual items only and the the estimated rates for individual items only and the percentage percentage excess or or substracted substracted from the gross amount of the bill. less shall be added This may not be applicable to the works funded by This may not be applicable to the works funded by This may not be applicable to the works funded by World Bank and other external agencies, in which World Bank and other external agencies, in which World Bank and other external agencies, in which case their their guidelines shall be followed.” (emphasis supplied) supplied) 7. As per the submission submission of the Petitioner, imposition of penalty @ is grossly illegal and arbitrary since the contract has not been 1% is grossly illegal and arbitrary since the contract has not is grossly illegal and arbitrary since the contract has not terminated, but but extension of time has been granted. Further Further as per Annexure-3, extension of time was granted without extension of time was granted without any any price escalation and without any monetary compensation. We find substantial force force in the contention of the Petitioner. Because, Because, it is not completion the case where the contract has been terminated for non- completion the case where the contract has been terminated for non of the work within the stipulated time. Clause (V) of para of the work within the stipulated time. Clause (V) of para 3.5.5 of the OPWD Code Code Vol.I prescribes that the contract contract can be terminated with with penalty when the progress of work is not not as per the conditions of contract. So when the contract has conditions of contract. not been terminated, rather an extension of time has been granted as terminated, rather an extension of time has been granted as terminated, rather an extension of time has been granted as permissible in the the terms of contract (Clause-4), the levy of of penalty @ 1% by resorting resorting to para 3.5.5 (V) of the OPWD Code, Code, appears unjustified in the the circumstances of the case. Accordingly, the the same is Page 4 of 5 Page quashed. liable to be quashed. 8. The writ petition is allowed and Annexure is quashed to the The writ petition is allowed and Annexure-3 is quashed to the extent of levy of penalty @ 1%. The Opposite Parties are further extent of levy of penalty @ . The Opposite Parties are further directed to release the withheld bill value of the Petitioner for the directed to release the withheld bill value of the Petitioner for the directed to release the withheld bill value of the Petitioner for the work, if any, in favour of the Petitioner within a period of two work, if any, in favour of the Petitioner within a period of two work, if any, in favour of the Petitioner within a period of two months from the this order. the date of receipt of a certified copy of this order. Urgent certified copy of this order be granted on proper 9. Urgent certified copy of this order be granted on proper Urgent certified copy of this order be granted on proper application. (DR. B.R. SARANGI) (DR. B.R. SARANGI JUDGE (B.P.SATAPATHY SATAPATHY) JUDGE Subrat Page 5 of 5 Page