Decided on January 05,2021

Alok Kumar Choubey Appellant


Mohammad Rafiq, C.J. - (1.) This writ petition has been filed by Alok Kumar Choubey challenging validity of the order dated 22.12.2018 (Annexure-P/11), passed by the respondent No.5- Divisional Project Engineer, Public Works Department, Project Implementation Unit, Division Seoni, Seoni (M.P.), whereby the amount of performance guarantee (security) submitted by the petitioner for the work of construction of 100 Seater Chhatravas Building at Lakhnadon, District Seoni including water supply, sanitary fittings and electrification etc. was forfeited.
(2.) Mr. Shekhar Sharma, learned counsel for the petitioner submits that the petitioner is a proprietorship Firm and is registered as a "C" class contractor with the respondent-Department. Being the successful bidder, the petitioner was awarded the work for construction of the aforesaid building and Letter of Acceptance (for short "LOA") was issued in his favour on 02.06.2014. According to the terms of LOA, the petitioner was required to execute the entire work within 13 months excluding the rainy season. The cost of work was Rs.129.50 Lac. An agreement was executed between the petitioner and the respondents. The time period for maintenance of the constructed work prescribed in the said agreement was two years from the date of completion of the work. Reference is made to Clause 18 of the agreement, Clause 18.1 whereof stipulates that the defect liability period of work in the contract shall be as per the contract data. It is contended that as per the stipulation contained in the contract data, the defect liability period in accordance with Clause 18.3 (GCC) read with its corresponding clause in contract data shall be of two years. The respondents have wrongly relied on Clause 29 of the agreement and the corresponding clause of the contract data and have treated the additional period of three months, beyond the period of two years, also as part of the defect liability period/maintenance guarantee period. Learned counsel argued that the period of two years would start from the date of completion of the work. In the present case, petitioner completed said work on 08.03.2016 and the respondent No.4- Divisional Project Engineer, PWD had issued a completion certificate in that behalf to the petitioner on 30.05.2016. No defect whatsoever was pointed out in the work executed by the petitioner during the aforesaid period of two years. As per the terms of the contract, the petitioner would be entitled to refund of the performance guarantee furnished for the maintenance of the work. When the petitioner vide letter dated 03.05.2018 requested the respondent No.5- Divisional Project Engineer, PWD for refund of the amount deposited towards the security and performance guarantee, the respondents by communication dated 25.05.2018 (Annexure-R/2) required the petitioner to rectify the mistake in the work as per the inspection report dated 24.05.2018 submitted by the concerned Project Engineer. Learned counsel submitted that the respondents have misinterpreted the stipulation given in the contract data in respect of Clause 29 of the agreement, which only provides that the performance guarantee (security) shall be valid up to three months beyond the completion of the defect liability period. That however does not have the effect of extending the defect liability period by additional three months over and above the period of two years.
(3.) Mr. Swapnil Ganguly, learned Deputy Advocate General appearing for the respondents-State opposed the petition by contending that the writ petition should not be entertained as the petitioner has got efficacious alternative remedy in view of Clause 12 of the agreement, which provides for a dispute resolution system. The petitioner has to first approach the competent authority and, if the matter is not decided within 45 days, he can file appeal before the competent appellate authority within 30 days. If the grievance is still not redressed, he can approach Madhya Pradesh Arbitration Tribunal constituted under the provisions of Madhya Pradesh Madhaystam Adhikaran Adhiniyam, 1983 (for short "the Adhiniyam of 1983"). Learned Deputy Advocate General submitted that the petitioner does not automatically become entitle to get refund of the performance guarantee and security on expiry of maintenance period on 07.03.2018. Though the defect liability period/maintenance guarantee period for building work was two years after completion of work on 08.03.2016, but Clause 29 of the contract data makes it abundantly clear that the performance guarantee (security) shall be valid for a period of three months beyond the completion of defect liability period. Therefore, the performance guarantee/security, in this case shall remain valid till 07.06.2018 i.e., beyond three months from 07.03.2018. As the petitioner was duly communicated by letter dated 23.05.2018 to complete the maintenance work and rectify the mistake on the basis of the inspection report dated 24.05.2018, the respondents were not obliged to refund the performance guarantee/security to the petitioner.;

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