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M/s. N.C.C. Limited through authorised signatory Ch. Soma Raju, Hyderabad & Another v/s State of Chhattisgarh through Ministry of WRDA, Water Resources Survey & Barrage Construction, Chhattisgarh & Others

    Writ Petition (C) No. 2833 of 2022
    Decided On, 16 November 2022
    At, High Court of Chhattisgarh
    By, THE HONOURABLE MR. JUSTICE ARVIND SINGH CHANDEL
    For the Petitioners: B.P. Sharma, Hari Agrawal, Advocates. For the Respondents: Rahul Jha, Government Advocate.


Judgment Text
C.A.V. Order

1. By the instant petition the Petitioners have not challenged any order of the Respondents/authorities, but, challenged the inaction on their part in not taking steps consequent to their recommendation regarding release of the amounts of security deposit and fixed deposit receipt.

2. Facts of the case, in short, are that the Petitioner M/s N.C.C. Limited (henceforth 'the Petitioner/Company') was awarded a contract for construction of Saradih Barrage with Vertical Lift Gates for an amount of Rs.399.027 Crores for which a work order was issued. The Petitioner/Company, after being awarded the contract, executed the same and completed the work on 18.7.2019. In this regard, a completion certificate was also issued by Respondent 3/Executive Engineer, Water Resources Survey and Barrage Construction (henceforth 'the Respondent/Executive Engineer') on 19.8.2019 (Annexure P2). The Petitioner/Company also executed the remaining part of the maintenance which was to be carried out after the construction work against which also a completion certificate was issued by the Respondent/Executive Engineer on 6.10.2021 (Annexure P3). Thus, the Petitioner/Company has successfully completed all the works. Therefore, the amounts of security deposit and fixed deposit receipt must be released to the Petitioner/Company, but, the Respondents/authorities have not done so despite repeated efforts of the Petitioner/Company. Hence, this petition.

3. Referring to the completion certificates (Annexure P2 and P3), Learned Counsel appearing for the Petitioners submitted that for completion of the construct work, the completion certificate (Annexure P2) has been issued on 19.8.2019 which shows that the construction work has been completed on 18.7.2019. Further referring to the completion certificate dated 6.10.2021 (Annexure P3), it was submitted that as per the terms and conditions of the contract agreement, the operation and maintenance of the system for 2 years has also been completed by the Petitioner/Company on 18.7.2021. Thus, the Petitioner/Company has completed the entire construction work as well as the operation and maintenance of 2 years, but, despite that, the Respondents/authorities have not refunded/released the amounts of security deposit and fixed deposit receipt.

4. Learned Counsel appearing for the Respondents/State, opposing the arguments raised on behalf of the Petitioners, submitted that though the Petitioner/Company has completed the construction work on 18.7.2019 and also completed the operation and maintenance work relating to the project against which the completion certificate was also issued to the Petitioner/Company, referring to Clause 4.4 of the conditions of the agreement and Clause 4.39 of the said agreement Learned Counsel submitted that the contractor has to continue the maintenance and operation of the project after completion of the project for yet another 2 years, i.e., from 18.7.2021 and the security and other deposits would be refundable only after the Petitioner/Company completes the 2 years operation and maintenance work after completion of the entire project. Further referring to Clauses 4.47.1 and 4.47.2 of the conditions of the agreement, it was submitted that since a dispute existed between the Petitioner/Company and the Respondents/authorities, the efficacious remedy available to the Petitioner/Company is only by way of claiming the settlement under the provisions of arbitration provided in the agreement.

5. I have heard Learned Counsel appearing for the parties and perused the petition and the return and all the documents annexed with them with due care.

6. Undisputedly, the Petitioner/Company has completed the work of construction of Saradih Barrage on 18.7.2019 and a completion certificate in this regard has also been issued vide Annexure P2. It is also not in dispute that the Petitioner/Company has also completed the operation and maintenance work relating to the project and in this regard completion certificate dated 6.10.2021 (Annexure P3) has also been issued in favour of the Petitioner/Company.

7. According to Learned Counsel appearing for the Respondents/State, the Petitioner/Company has completed the entire project work on 18.7.2021 as per the agreement. Therefore, according to Clause 4.39 of the agreement, the Petitioner/Company has to continue the maintenance and operation of the project for further 2 years from 18.7.2021. Thereafter, the security and other deposits would be refundable to the Petitioner/Company.

8. At this juncture, it would be appropriate to reproduce the relevant provisions of the agreement, i.e., Clauses 4.4 and 4.39, which read thus:

"4.4 Ensuring operation and maintenance for 2 years after completion of project.

4.39 Refund of Security Deposit:- The security deposit of the contractor shall not be refunded before the expiry of 24 (twenty four) months after issue of the certificate, final or otherwise, of completion of the Work or else, prior permission, of the Government of Chhattisgarh, Water Resources Department shall be obtained, and in no case it shall be refunded before the successful commissioning trial and running & maintenance of the complete system."

9. From perusal of Clause 4.4 of the agreement, it reveals that the contractor was required to ensure operation and maintenance for 2 years after completion of the project. From perusal of the entire agreement, it also reveals that what is the meaning of completion of the project is not defined anywhere in the agreement nor is defined therein that at which stage and in which terms completion of the project will be considered. From perusal of Clause 4.39 of the agreement, it also reveals that the security deposit of the contractor shall not be refunded before expiry of 24 months after the issue of certificate, final or otherwise, of completion of the work. Meaning thereby, if any certificate, final or otherwise, is issued regarding completion of the work then for 24 months the security deposit of the contractor shall not be refunded. Admittedly, on 19.8.2019 (Annexure P2), a completion certificate regarding completion of the construction work has been issued in favour of the Petitioner/Company by the Respondent/Executive Engineer. As per Clause 4.4 of the agreement, from the date on which the work of construction of the project was completed, i.e., from 18.7.2019 the Petitioner/Company had to carry out the work of operation and maintenance of the project for a period of 2 years. According to the completion certificate dated 6.10.2021 (Annexure P3) issued with regard to the work of operation and maintenance, it reveals that the Petitioner/Company has also completed the operation and maintenance work of the project on 18.7.2021. Thus, it is clear that the Petitioner/Company has com

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pleted the construction work of the project on 18.7.2019 and has also completed the work of operation and maintenance of the project on 18.7.2021 and, therefore, the Petitioner/Company is now entitled to get refund of its security deposit and fixed deposit receipt as contained in Clause 4.39 of the agreement. 10. Resultantly, the instant writ petition is allowed. The Respondents/authorities are directed to refund the entire amount of the security deposit and the fixed deposit receipt to the Petitioner/Company within a period of one month from the receipt of this order, failing which, the Respondents/authorities shall also pay simple interest @ 10% per annum on the amounts of the security deposit and the fixed deposit receipt till making final payment.
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