ZERINA MARINES PVT LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) The petitioner is a limited company registered under the Companies Act, 1956 which undertakes civil contract work. In the present writ petition, the petitioner has challenged the. action of the opp parties in closing the contract awarded in its favour for "excavation of Right Bank Canal including structures of Rengali Irrigation Project RD.74.00 Km. to 79.00 Km (Reach-III)" under Agreement No. 39-F2/98 executed by Opp. Party No. 2, as has been intimated to the petitioner by Opp. Party No. 2 under his letter dated 4-7-2002 under Annexure-18 to the writ petition.

(2.) The case of the petitioner is that after the above contract work was awarded to it on execution of the agreement referred to above, as the work was to be completed by 28-1-2000, the petitioner immediately mobilized the men, material and machineries and started execution of the said work i.e. excavation of the canal. After proceeding to execute the work to a certain extent, the petitioner found that it was not possible to proceed further with the work as a patch of forest land was coming in the canal alignment which required necessary clearance from the Forest Department and also some electric poles with high tension line were falling in the canal alignment. The petitioner further found that the land for the proposed canal which was to pass through village Gundichapada has not been acquired and handed over to the petitioner for carrying out the excavation work. The petitioner, therefore, repeatedly brought this fact to the notice of Opp. Party No. 2 with a request to remove the hindrances so that the work can be completed within the stipulated period. It is stated by the petitioner that as the delay in execution of the work was not attributable to it, necessary extension of time was granted to the petitioner with normal escalation as per the terms and conditions of the agreement, but without any financial benefit beyond the provisions of the agreement. Such extension of time was intimated to the petitioner by the Chief Engineer by his letter dated '4-8-2000 under Annexure-A/2 to the counter affidavit filed by the Opp. Parties. The petitioner has made out a case in the writ petition that Opp. Party No. 2-the Executive Engineer by his letter dated 30-4-2001, Annexure-3 requested the Divsional Manager of the concerned electrical division for shifting the electric poles coming in the alignment of the canal. In spite of the same, as the electric poles were not removed nor the revised drawing and designs were handed over to the petitioner, the petitioner by various letters intimated Opp. Party No. 2 with a request for necessary action to continue execution of the contract work. According to the petitioner the lands coming in the alignment of the canal were also not acquired in spite of the letter of the Under Secretary to Government to the Collector, Dhenkanal under Annexure-7. The petitioner time and again has brought this fact to the notice of Opp. Party No. 2 and also ventilated its grievance that it is suffering from financial loss due to delay in progress of the work. Opp. Party No. 2 under his letter dated 22-2-2002 under Annexure-9, intimated the petitioner that action is being taken for removal of electric poles and for acquisition of the land. It appears that the petitioner subsequently also continued to intimate the authority for removing the obstacles in order to execute the contract work within the shortest period. In letter under Annexure-17 to the writ petition, the petitioner sought for extension of further time to complete the contract work stating therein that the delay in execution of the work cannot be attributed to it. According to the petitioner, Opp. Party No. 2 without looking into the grievance of the petitioner, issued the letter under Annexure-18 intimating the petitioner that the Government has ordered to close the contract and accordingly the contract as per the agreement was closed with effect from 4-7-2002.

(3.) A counter affidavit has been filed by Opp. Party No. 2 from which it reveals that the petitioner having not completed the contract work even after extension of time, further extension of time applied for by the petitioner was not granted by the authorities and the tender committee opined to close the contract since the progress by the petitioner was very slow. The minutes of the meeting of the tender committee with regard to the request for extension of time made by the petitioner has been annexed to the counter affidavit as Annexure-B/2. A rejoinder affidavit has been filed by the petitioner stating, inter alia, that the petitioner has executed the work over the land which was made available to it and the further progress of the work was affected due to the hindrances as already stated in the writ petition. The petitioner has filed a further affidavit at the time of hearing of the case stating therein that it is ready and willing to execute and complete the balance contract work as per the terms and conditions of the agreement subject to necessary co-operation from the pp. Parties with regard to handing over necessary land free from all hindrances, providing necessary drawing and designs and on paying arrear amount towards the work already executed along with prompt payment of running bills raised during execution of the balance work. The petitioner has undertaken in the said affidavit that if it would be allowed to execute the balance work, the same would be completed by 31-12-2005 failing which the petitioner will face penal consequences under the agreement. In the counter to the said affidavit filed by the opp. Parties, reliance has been placed on a letter of the petitioner which was issued by it in December, 2001 agreeing therein that it would not claim any escalation beyond the agreement provision.