Dr. AR. LAKSHMANAN, J. - (1.) Heard Mr. Mohan Parasaran, learned Additional Solicitor General for the appellant and Mr. Dipanker P. Gupta and Mr. T. L. vs. Iyer, learned senior counsel for the respondent.
(2.) Aggrieved against the order passed by the Division Bench of the High Court of Madras dt. 24.03.2004 in OSA Nos. 248 of 1989 and 59 of 1993, the above two appeals were filed.
(3.) The case on hand has a chequered history. The Government of Tamil Nadu formulated a scheme known as "Veeranam Project" to provide drinking water to the city of Chennai and thereby overcome the problem of acute water scarcity in the city of Chennai. In order to implement the aforesaid scheme, the Government invited tenders for manufacturing, supplying and delivering 1676 mm pre-stressed concrete pipes and fittings including transporting to site, laying, jointing and testing for raw water and clear water conveying, from Veeranam Tank to Chennai City. The Secretary to Government, Public Works Department requested for clearance of foreign exchange from the Government of India. This was done with a view to avoid delay in the project. The respondent herein submitted their tender. The tender submitted by the respondent was the lowest tender and on negotiation the same was accepted by the Government and the Government issued G.O.Ms.No. 1607 Public (Twad) Department accepting the tender of the respondent. Subsequently, the Government suggested that the respondent should approach ICICI Ltd. for foreign exchange loan. The Government accepted the request of the respondent for a hike in the tender amount in view of the reduction on foreign exchange component. An agreement was entered into between the respondent and the Chief Engineer, Public Works Department. The Government of India also approved the foreign collaboration arrangements. The import license for the gasket manufacturing unit was also cleared and a factory at Thirukalikundram was commenced and the equipment for manufacturing pipes was also received. The factory at Panrutti also commenced the operation and the equipment for manufacturing rubber gaskets was received in two shipments. The respondent sought extension of time till 31.12.1975 in order to complete the work. On considering the prevailing circumstances, the time for completion of work was extended till 30.06.1975. Again the respondent wrote to the appellant informing it that the work will not be completed even by 30.06.1976 and that it is impossible for them to carry out the work as per the original agreement, unless the rates are revised and on 30.06.1975, the work was abandoned by the respondent. Again a request was made for further extension of time and the time was also extended for completion of the work till 31.12.1975. The respondent stated that they were prepared to continue the work only if the rates are revised. The appellant further extended the time for completion of the work till 31.03.1976.;