BSBK PRIVATE LIMITED Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) Since the issue raised in the above captioned Writ Petitions filed by the petitioner bearing W.P.(C) No. 3339/2023; W.P.(C) No. 3807 of 2023 and W.P.(C) No. 5057 of 2023 are common, they are being disposed of by this Common Order.

(2.) The relief(s) sought in the above-stated petitions are stated herein below:-

(3.) The facts in a nutshell are that the Municipal Corporation, Bilaspur invited bids on 24/12/2018 for the construction of 5785 Nos. of houses including water supply, sanitary and electrification works under the Pradhan Mantri Awas Yojna ' Housing for all in Bilaspur, Chhattisgarh using Conventional / Monolithic / Precast Technologies including complete external infrastructure work except external electrification. The petitioner participated in the tender process and being the lowest bidder, was awarded the work vide order dtd. 7/3/2019 issued by respondent No. 4. The total contract value as per the work order was Rs.2,62,11,92,000.00 on a lump sum basis and the time period stipulated for the completion of the work was 36 months including the rainy season. An agreement was entered into between the petitioner and respondent No. 3 on 7/3/2019. The petitioner vide its letter dtd. 3/5/2019 addressed to respondent No. 3 requested for handing over of sites free from all encumbrances by the end of June, 2019. On 25/5/2019, the petitioner again wrote a letter to respondent No. 4 to hand over the sites. It was specifically stated in the letter that not handing over the sites would lead to a delay in the completion of the work. On 10/7/2019, the petitioner again requested respondent No. 4 and pointed out that out of 37 work sites, only one work site at Madhuwan had been made available and that site was also occupied by some anti-social elements. On 17/8/2019 and 15/11/2019, the petitioner again requested respondent No. 4 to provide sites enabling it to start the construction work. The petitioner vide letter dtd. 9/4/2020 expressed its concerns with regard to non-handing of work sites leading to delay in the project program and also incurring of financial losses. It was highlighted in the letter that only 609 Dwelling Units as against the total number of 5785 have been handed over. The petitioner wrote a letter to the State Government bringing to its notice the communication made to respondent No. 4 on multiple occasions. On 29/6/2021, the petitioner addressed a letter to respondent No. 3 making a complaint to the effect that only 1827 Dwelling Units out of 5785 have been provided. It was also specifically stated in the letter that the cost of materials and labour had increased substantially since the time of execution of the Agreement, as such, the petitioner sought provision for price escalation for the works done after the end of the contractual period, as the delay caused was not attributable to it. The petitioner also flagged the delay in payment of the latest RA Bills vide its letter dtd. 24/3/2021 and also raised issues of delay in handing over of work sites and delay in clearance of RA Bills again and again vide its letters dtd. 31/7/2021, 27/8/2021, 6/9/2021 and 23/10/2021 addressed to respondents No. 3, 4 as well as the Director, Directorate of Urban Administration and Development. The petitioner again addressed the detailed letters dtd. 10/11/2021 and 7/1/2022 to respondent No. 3 raising the issues of ' (i) delayed handing over of work sites; and (ii) price escalation of input costs. For the first time response was given by respondent No. 4 on 9/2/2022 wherein it was stated that according to Clause 3.26 of the Agreement, there is no provision for price escalation. It was stated in the letter that the work sites for 1058 Dwelling Units were made available for starting construction activities, whereas 2900 Dwelling Units had slums over them and would be handed over within one year. It was also stated that payment to the petitioner against pending bills would be made after receipt of funds from beneficiary grants and the State Government. The petitioner addressed a letter dtd. 7/2/2022 to respondents No. 3 and 4 pointing out that non-payment of its outstanding bills had constrained it to slow down the work and ultimately to suspend the same as the petitioner was unable to clear its onward liabilities. It was stated in the letter dtd. 9/2/2022 that the petitioner would be entitled to price escalation as the contract was being prolonged due to the non-fulfilment of contractual obligations by the Municipal Corporation. On 7/3/2022, the petitioner sought an extension of time on the instance of the respondents without levy of liquidated damages with payment of price escalation. On 23/9/2022, 10/10/2022 and 10/11/2022, the petitioner addressed letters to respondent No. 3 raising issues of delay / non-handing of work sites; delay in clearance of RA Bills and need for price escalation. The petitioner received a letter dtd. 5/12/2022 issued by respondent No. 2, wherein the status of work sites was repeated as was stated in the earlier letter dtd. 9/2/2022. It was also stated that the decision as to price escalation could not be taken at the level of the Municipal Corporation. The petitioner was served with final notice dtd. 23/12/2022 threatening termination of the petitioner's contract making allegations that the petitioner had not restarted the work despite payment of Rs.7.92 crores. In response, the petitioner wrote a letter to respondent No. 3 on 24/12/2022 communicating that it was remobilizing the work related to 1827 Dwelling Units and would also mobilize for the work sites pertaining to 1058 Dwelling Units once the work sites are handed over free from all encumbrances. The petitioner additionally brought to the notice of respondent No. 3 to the effect that GST rates have been enhanced from 12% to 18% therefore sought payment of the additional GST under Clause 3.27 of the Agreement. The petitioner wrote letters on 24/1/2023, 22/2/2023 and 16/3/2023 to the respondents raising issues of delay in handing over of work sites, clearance of bills, escalation of costs and escalation of GST rates. On 16/2/2023, the State Government sought comments from the State Urban Development Agency (SUDA) on another joint representation made by the petitioner and other contractors. Vide letter dtd. 17/3/2023 addressed to the petitioner, respondent No. 4 sought a proposal from the petitioner for the extension of time along with a modified work program in view of the expiry of the original contractual period. The petitioner vide letter dtd. 21/3/2023 addressed to respondent No. 3 submitted a proposal for the extension of time for the construction of 1972 Dwelling Units and also submitted a modified work program. The petitioner received another letter dtd. 20/4/2023 issued by respondent No. 4, wherein it was stated that the issues of GST and price escalation had already been raised by the contractors before the State Government and resolution thereof could only be taken at the level of the State Government. In the same letter, it was stated that out of a total of 5785 houses, 1914 Dwelling Units proposed in slums had been curtailed and finally, the time period for completion of the work was extended till 31/12/2024 without imposition of penalty. The petitioner addressed its letter to respondent No. 3 on 25/4/2023 communicating the extension of Bank Guarantees for a period of 06 months and further seeking resolution of the outstanding issues of price escalation and GST. Vide letter dtd. 17/5/2023; respondent No. 3 threatened the petitioner to terminate the contract according to Clause 1.18 of the Agreement. The petitioner filed a reply to that notice on 5/6/2023. Respondent No. 4 directed the petitioner vide letter dtd. 13/6/2023 to complete the foundation work of incomplete houses by 30/6/2023 and that letter was responded to by the petitioner on 19/6/2023. Another notice was issued by respondent No. 4 on 20/6/2023 threatening the termination of the contract under Clause 1.18 (ii) (a) of the Agreement if 'desirable progress' was not achieved within a period of 07 days. The petitioner filed a reply to the said notice on 24/6/2023 stating that there was no breach of any provision of the Contract and also made a request for payment of escalation and reimbursement of differential amount of GST. The SUDA sought the point-wise response of the Municipal Corporation, Bilaspur pursuant to a letter dtd. 16/2/2023. The Municipal Corporation made an allegation of the slow progress of work by the petitioner vide letter dtd. 3/7/2023. The petitioner in its detailed response dtd. 8/7/2023 addressed to the Municipal Corporation, Bilaspur set out the dates of handing over of sites with delay from the contract date and also described the factual status at each site as on the date of the said letter i.e. 3/7/2023. The petitioner filed W.P.(C) No. 3339 of 2023 before this Court seeking issuance of direction to the respondents for grant of price escalation. After receipt of notice by the respondents, respondent No. 3 issued a letter on 26/7/2023 addressed to the petitioner invoking the Bank Guarantees submitted by the petitioner towards mobilization advance. The petitioner responded to the letter on 27/7/2023 explaining the circumstances and seeking deferment of encashment of Bank Guarantees. Respondent No. 3 vide letter dtd. 27/7/2023 communicated to the petitioner with regard to deferment of encashment of the Bank Guarantees subject to certain conditions. Vide letter dtd. 3/8/2023, respondent No. 3 deferred invocation of the Bank Guarantees till 10/8/2023, but threatened to invoke thereof after the said date. The petitioner filed W.P.(C) No. 3807 of 2023 seeking quashment of letters dtd. 26/7/2023, 27/7/2023 and 3/8/2023. On 25/8/2023, the counsel for the respondent-State in W.P.(C) No. 3339 of 2023 informed that the claim of the petitioner had been forwarded to the State Government and the same would be considered within a period of 10 days. Vide order dtd. 8/9/2023, the State Government rejected all claims of the petitioner and other contractors. Vide order dtd. 6/11/2023 passed in W.P.(C) No. 3339 of 2023, the petitioner was granted liberty to challenge the order dtd. 8/9/2023 by filing a separate petition.