AI Structured Summary
Not yet generated for this judgment
Judgment
(per Hon’ble Sri Justice Challa Gunaranjan)
The unsuccessful writ petitioner preferred this intra-Court appeal assailing the order, dated 19.08.2025, in W.P.No.10835 of 2017, passed by learned Single Judge, dismissing the writ petition.
The writ petition was filed seeking following relief:
“…. to issue an appropriate writ, order or direction, particularly one in the nature of a Writ of Mandamus declaring Memo. No.DWA/AP/HYD/Snl/A1/201617/10.217, dated 22.08.2016, issued by the 2 Respondent and G.O. Ms. No. 125, dated 29.12.2016, insofar as it affects the petitioner’s rights issued by the 1 Respondent, as illegal, arbitrary unconstitutional and consequently direct the Respondents to desist from acting on the same….”
Facts in brief are as follows:
1st respondent floated tender for earthwork excavation and construction of CM & CD works of HNSS Main Canal from K.M. 230.000 to K.M.245.00 in Anantapur District, with an Estimated Contract Value (“E.C.V.”) of ₹46,83,17,853/- with a completion period of 6 months. Similarly, another tender was floated for earthwork excavation and construction of CM & CD works of HNSS Main Canal from K.M.245 to 260 K.M. in Anantapur District with an E.C.V. of ₹109,89,45,961/- and completion period of 6 months.
The appellant stood highest bidder with 4.65% and 4.45% in excess of E.C.V. i.e., ₹49,00,94,633/- and ₹114,78,49,056/-, respectively, which was accepted and accordingly, Agreement No.06/2015-16 and Agreement No.07/2015-16, even dated 13.08.2015, were executed between 4th respondent and appellant. The terms of tender required tenderers to quote lump sum bids as a specific percentage in excess/less than or rather put forth, at par with E.C.V., which does not depend on piece/component rate of input materials. Though E.C.V. is arrived at based on the aggregate of various components, which included sand, it is only a guiding estimate for the purposes of determining the tender parameters. Thus, appellant quoted lump sum bid which was accepted, and accordingly agreements were concluded.
That being so, first respondent, by memo dated 04.03.2016, prescribed that sand shall be made available free of cost, with effect from 02.03.2016, in pursuance to the revised sand policy. In furtherance thereto, Board of Chief Engineers fixed revised costing for sand for the purposes of SSR, which is to be adopted by computing the estimate for tenders/ECV, relying on such minutes of Board of Chief Engineers, the second respondent issued impugned memo, dated 22.08.2016, for implementing revision of rates of sand with effect from 02.03.2016. The revised rate of sand was fixed as ₹85.13ps. in place of ₹610/- per cubic metre with respect to sand used for concrete and filtering items. Likewise, the rate of sand used for filling was revised to ₹85.13ps. from ₹460/- per cubic metre, and the rate of sand used for mortar, plastering and sand blasting items revised to ₹152.13ps. from ₹677/- per cubic metre. The said memo, in turn, directed that the difference in cost of sand shall be deducted from the bills. Acting on the said instructions, the running bill No.10 of appellant, dated 10.10.2016, pertaining to Agreement No.7/2015-16, when was processed, an amount of ₹28,84,003/- was withheld towards recovery of sand cost from all the bills after 04.03.2016, up to RA Bill No.10. Similarly, even in respect of further R.A. bills, the component of sand cost was withheld from the monies due to the appellant.
While so, 1st respondent, thereafter, issued impugned Government Order in G.O.Ms.No.125, Water Resources (WRG-GRC) Department, dated 29.12.2016, inter alia, directing recovery of the difference in sand cost from the bills of existing agreements concluded as per earlier rates, which continued to be in force after 02.03.2016. The appellant objected to the withholding and recovery of the differential sand cost by letters, dated 17.10.2016 and 21.10.2016, nevertheless, the respondents continued to withhold the same, thus, appellant was constrained to file the writ petition.
In respect of other contracts as well, the differential sand cost was withheld and sought to be recovered from the monies payable to the appellant, therefore, the same was challenged in Writ Petition Nos.10745 and 10779 of 2017. All these writ petitions, along with connected writ petitions, were heard together.
The respondents filed counter-affidavit, in which a preliminary objection was raised on maintainability of writ petitions in view of availability of an alternative remedy by way of arbitration in terms of Clause 24.1 and Clause 24.2 of the contract. Further, the respondents took stand that the E.C.V. was arrived at considering SSR rates of 2014-15 which factored the cost of sand, and thus, arrived at the E.C.V. of ₹49.0094 crores and ₹114.78 crores for both subject works, therefore, now as there is a change in the sand policy and the cost has been revised substantially, the differential cost thus is being adjusted which is in accordance with the terms and conditions of contract. It is also pleaded that the appellant, since is getting sand free of cost except paying for excavation, loading and unloading, cannot enrich by not incurring the cost as originally factored considering the SSR rates of 2014-15, therefore, the recovery was justified.
Before the learned single Judge, appellant as well as other writ petitioners, since represented that the issue involved in the writ petitions is squarely covered by common order, dated 01.05.2023, passed in W.P.No.35079 of 2018 and batch, and thus requested to pass similar order. Considering the same, the writ petitions were accordingly dismissed.
Aggrieved by the same, appellant preferred present appeal and also W.A.Nos.765 and 780 of 2026. Even before hearing the present appeal, W.A.No.780 of 2026 was withdrawn, accordingly, the same was dismissed, by order, dated 28.07.2026. Even today, the appellant withdrew Writ Appeal No.765 of 2026, and the same has been dismissed as withdrawn. Therefore, the present appeal only remains before us for consideration.
Heard Mr.O.Manohar Reddy, learned senior counsel appearing for Mr.M.Siva Kumar, learned counsel for appellant and learned Government Pleader for Irrigation and Command Area Development and learned Government Pleader for Finance and Planning appearing for respondents.
Learned Senior Counsel appearing for appellant contended that any revision of rate on account of revision in the cost of sand in pursuance to impugned memo as well as Government Order would amount to unilateral alteration of terms and conditions of contract, which is impermissible. Learned Senior Counsel, while drawing our attention to Clause 14.6.3 of the notice inviting tender, which deals with price adjustment, would submit that adjustment of rates is permissible only in such of those contracts where the E.C.V. was more than ₹2,00,00,000/-and having completion period of more than 18 months, therefore, as in the present case, the completion period is merely 6 months, the same would not apply. In other words, it is stated that except for aforesaid Clause, there are no other Clauses which contemplate price adjustments, therefore, the respondents are precluded from recovering the differential cost of sand. Further, it is also contended that respondents could not have applied the revision of sand rates to the existing contracts, particularly when there is no such price adjustment clause provided in the agreement, therefore, the impugned action in withholding and recovering the differential cost of sand is ex facie illegal and arbitrary.
Per contra, learned Government Pleaders appearing for respondents, while supporting the impugned order of learned Single Judge, contended that the very writ petition itself is not maintainable on two counts, firstly, that the issues raised emanate from contractual obligation and, secondly, that the contract provided for mechanism of arbitration in case of any disputes among the parties, therefore, appellant cannot maintain the writ petition bypassing such alternative remedy. Further, it is also contended that the appellant cannot selectively pursue the cases, inasmuch as, the very same issue which is subject matter in W.A.Nos.765 and 780 of 2026, since were withdrawn, the issues arising under the common order inter se parties stand confirmed. Further, it is also contended that the common order in W.P.No.35079 of 2018 and batch, since had not been challenged, the same attained finality, therefore, the present appeal has to fail.
We have given our anxious consideration to the submissions made above and also perused the material on record.
The entire controversy boils down to whether the respondents are within their contractual rights to adjust/recover the differential cost of the sand on account of revision of rates of sand in pursuance to the State policy.
At the outset, it is to be noted that appellant filed three writ petitions for the very same relief, though they emanate from different contracts, which were dismissed by learned Single Judge, vide impugned order. Aggrieved by which, appellant preferred W.A.Nos.741, 765 and 780 of 2026, out of which W.A.Nos.765 and 780 of 2026, were withdrawn, barring the present appeal. As the order impugned in the appeal is a common order, which yet again followed another common order passed in W.P.No.35079 of 2018 and batch, dated 01.05.2023, the core issue as to whether respondents were justified in adjusting/recovering the differential cost of sand, qua the appellant, in respect of other contracts attained finality. The appellant, therefore, having accepted the said position in respect of other contracts, now intends to pursue the present appeal by taking a divergent view.
Considering the facts and circumstances, including the aforesaid inconsistent stand of appellant, for whatever reasons, we do not find any ground for interference in exercise of appellate jurisdiction. That apart, the appellant claims the impugned memo as well as Government Order purporting to revise the rate of sand has been applied to the existing contracts, even without there being any specific clause for price adjustment. Clause 14.6.3 of the contract, which has been referred to, would not get attracted, and dehors the same, there is no other clause. As against the said stand, respondents tried to justify their action with reference to other terms and conditions of the contract. Learned Single Judge referred to General Condition No.13.8 of the Agreement to hold that even sand would also be amenable for price adjustment. Therefore, definitely there is serious dispute between the parties, which has to be resolved within the framework of contract. Further, the memo, dated 22.08.2016, followed by G.O.Ms.No.125, dated 29.12.2016, whether at all applies to existing contracts or not, having regard to the terms and conditions of contract, is also one such dispute to be addressed. The redressal mechanism agreed between the parties in terms of Clause 24 of the contract provides appropriate remedy to the appellant. We, therefore, refrain from exercising our jurisdiction to decide these contractual issues. Therefore, in the above facts and circumstances and having regard to our observations, we do not find any infirmity in the impugned order passed by learned Single Judge.
Accordingly, writ appeal is dismissed. No order as to costs.
As a sequel, miscellaneous petitions pending, if any, shall stand closed.