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TMI Blog2011 (4) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... , to make payment for the contract work which it had executed pursuant to the aforesaid Tender. 2. During the hearing of the writ petition several issues were identified regarding the Petitioners' right to force the Company to execute the additional work of constructing the Viaduct which was neither within the scope of the work nor within the schedule of work comprised in Tender No.76 of 06-07. A connected issue was also identified as to whether in a Risk and Cost Tender, the nature of work provided for in the Tender could be altered and whether such action would be in violation of Articles 14 and 19(1)(g) of the Constitution of India, besides being against the principles of natural justice and contrary to the clauses in the General Conditions of Contract included in the Tender document. 3. It appears that on 12th December, 2006, the East Central Railways (ECR) invited Risk and Cost Tender No.76 of 06-07 for the work of construction of a Rail Over-Bridge at Bailey Road over the proposed Railway Alignment over the Ganga Bridge at Patna for an approximate cost of 15.42 crores. The Tender documents provided that the contract work was to be completed within 15 months from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. and Arvind Techno Engineers Pvt. Ltd. quoted the rate for execution of the works as 34,11,16,279.39p. and 35,89,93,215.66p. respectively, for the additional work only. 5. While the Tender process for the extended contract on the Viaduct was going on, keeping in view their long relationship, the Respondent Company wrote to the Petitioner No.6 on 12th April, 2008, agreeing to execute the varied contract at the same rate, terms and conditions of the contract agreement, but on condition that the price increase, due to the Price Variation Clause, would be payable to the company. It was also indicated that the Company would have no claim for reduction in quantity by more than 25% in the agreement. 6. In the meantime, the Respondent Company, vide its letter dated 27th April, 2008, submitted the revised work programme for the left-over work. The same was accepted and the time for the execution of the left-over work was extended till 31st December, 2008. 7. In response to the letter written on behalf of the Respondent Company on 12th April, 2008, the Petitioners called upon the Respondent Company by its letter dated 15th June, 2008, to execute the varied quantity of work. 8. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its judgment and order dated 29th July, 2009, upheld the judgment of the learned Single Judge and dismissed the Appeal. It is against the said order of the Division Bench dismissing the appeal filed by the Petitioners that the present Special Leave Petition has been filed. 13. The same submissions, as had been advanced before the High Court, were also advanced before us by the learned Additional Solicitor General, Ms. Indira Jaising. She urged that the contract of the Respondent Company had been rightly terminated in accordance with clause 62 of the General Conditions of Contract upon the Respondent's refusal to comply with the forty eight hours' notice served on it. The learned ASG submitted that since under the terms of the Agreement entered into between the parties, the Petitioners were entitled to vary or alter the nature of the work for which the contract was given, the Respondent Company was under a contractual obligation to complete the work, including the varied work under the contract. 14. The learned ASG submitted that the Petitioners had no intention of compelling the Respondent Company from completing the work. On the other hand, it was the Respondent Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be quashed by the Writ Court to resurrect the contract which had already been terminated and the only recourse available to the Respondent Company was to have the matter decided in arbitration. 17. Appearing for the Respondent-Company, Mr. Soumya Chakraborty, learned Advocate, submitted that from the facts as revealed during the hearing of the Writ Petition and the Letters Patent Appeal, it would be apparent that the initial contract signed between the parties on 27.12.2006 was ultimately abandoned. Mr. Chakraborty submitted that on account of an alteration in the design of the Rail Over-Bridge, which included a completely new work project, a fresh Tender had to be floated since the new work could not be treated to be part of the initial contract. Having regard to the estimated cost of the variation involved, the Petitioners did not receive adequate response to the said Tender. On the other hand, two Tenderers submitted their offers at a much higher rate than was fixed as the estimated cost of the work which had been added to the existing work on account of the alteration in the design of the Rail Over-Bridge. Noting the problem that the Petitioners were faced with, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of compulsion and there could be contingencies in which the High Court exercised its jurisdiction inspite of availability of an alternative remedy. Mr. Chakraborty also referred to and relied on the decision of this Court in Modern Steel Industries vs. State of U.P. and others [(2001) 10 SCC 491], wherein on the same point this Court had held that the High Court ought not to have dismissed the writ petition requiring the Appellant therein to take recourse to arbitration proceedings, particularly when the vires of a statutory provision was not in issue. 20. Reference was also made to the decision of this Court in Whirlpool Corporation vs. Registrar of Trade Marks [(1998) 8 SCC 1]; National Sample Survey Organisation and Another vs. Champa Properties Limited and Another [(2009) 14 SCC 451] and Hindustan Petroleum Corporation Limited and Others vs. Super Highway Services and Another [(2010)3 SCC 321], where similar views had been expressed. 21. Mr. Chakraborty submitted that while enacting the Arbitration and Conciliation Act, 1996, the Legislature had intended that arbitration being the choice of a private Judge agreed upon by the parties themselves to settle their disputes, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange was that the Tender which was of 19 crores stood increased to 36 crores on account of the additional work which was to be undertaken as a result of the modified design. In fact, the Railways themselves decided to float a fresh Tender for the additional work at an estimated cost of 24.50 crores separately. As a result, the work relating to construction of the Rail Over-Bridge now consisted of two parts, one of which the Respondent Company was executing and the other to be executed by a different contractor. However, as mentioned hereinbefore, there was hardly any response to the Tender floated. Seeing that the quantum of work under Tender No.76 of 06-07 stood reduced, the Respondent Company wrote to the Petitioners on 12th April, 2008, agreeing to undertake the varied work at the same rate and on the same terms and conditions, subject to the Price Variation Clause. The problem appears to have begun at this stage when, on the basis of the said letter dated 12th April, 2008, the Petitioners directed the Respondent Company to continue with the unfinished portion of the plan. 23. Admittedly, the work which had to be completed within 15 months from the date of issuance of the let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment and the termination of the contract in relation to Tender No.76 of 06-07 on the basis of said supposition was unjustified and was rightly set aside by the learned Single Judge of the High Court, which order was affirmed by the Division Bench. 26. The submissions made on behalf of the Petitioners that in terms of Clause 23(2) of the Agreement, the Petitioners were entitled to alter and increase/decrease the scope of the work is not attracted to the facts of this case where the entire design of the Rail Over-Bridge was altered, converting the same into a completely new project. It was not merely a case of increase or decrease in the scope of the work of the original work schedule covered under Tender No.76 of 06-07, but a case of substantial alteration of the plan itself. 27. Apart from the above, even on the question of maintainability of the writ petition on account of the Arbitration Clause included in the agreement between the parties, it is now well-established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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