Merely Because Construction Of Houses Is For Slum Dwellers, Tenderer Cannot Take It For Granted: Karnataka HC Refuses Extension Of Time For Completing Project

The Karnataka High Court has dismissed a plea filed by a construction company questioning the order of the Karnataka Slum Development Board, refusing to grant an extension for completing the contract entered by it with the company for the construction of dwelling houses for slum dwellers.

A single judge bench of Justice M Nagaprasanna dismissed the plea filed by Aishwaryagiri Constructions Pvt Ltd and directed the Board to issue an appropriate work order and get the houses of poor slum dwellers completed within the decided time frame and not put the lives of those slum dwellers in jeopardy, as by now they have suffered enough.

The Board entered into a contract with the company on 05-03-2016. It was submitted that the petitioner emerged as the successful bidder for the construction of rehabilitation of dwelling houses for the slum dwellers floated by the Board, and work orders were issued to the petitioner on 05-03-2016 and 23-08-2017.

It was submitted that the petitioner did not complete the project as was necessary under the contract which led the Board on 07-03-2018 to grant an extension for 654 days. Even then, it was argued that the petitioner did not complete the project and another extension was granted on 13-07-2020 for one year. Seeing no progress, on 27-07-2021 the contract awarded to the petitioner was terminated.

The company then approached the High Court which directed the board to consider its representation for a grant of six months to complete the entire award of work.

The company argued that it was the Board that did not allot the sites for construction well in time. If complete allotment had been done, there would have been no impediment for the petitioner to complete the work, it was submitted.

Further, it was argued that the same work was now sought to be executed at two times the price that the petitioner would complete it. Therefore, it was argued that it is a loss to the exchequer of the Board, as the petitioner is ready and willing to complete it within a time frame stipulated by this Court.

The Board contended that the petitioner had been dodging the construction, and an extension has been given not once but twice. Even after the third extension, the petitioner has not been able to fulfil the conditions of the contract and no indulgence can be shown to the petitioner which has faltered on construction, the Board stated.

Upon hearing the parties, the court said “Termination order dated 27-07-2021 has become final, as the co-ordinate Bench did not set aside the order of termination. It only directed consideration of the representations. Therefore, as of today, the order of termination passed against the petitioner in all contracts has become final, as the petitioner even in the subject petition does not challenge the said order of termination. What is challenged is only rejection of the representations.”

Further, it observed that three tenders had been issued for the same work that the petitioner had left mid-way, and the petitioner was completely aware of the same and did not challenge the subsequent tender notifications but wanted a direction for the completion of work that was already notified by way of separate tenders. 

Court noted that these two circumstances would be enough to deny any relief to the petitioner much less, the relief of completion of work.

Referring to the photographs produced by the Board of the situation of the ongoing work, the court said: “Merely because the petitioner has constructed 60% or even 70% of houses, that would not enure to its benefit for a direction of extension to be granted to the petitioner.”

“Merely because it is construction of houses for slum dwellers, a contractor or a tenderer cannot take it for granted. It is these slum dwellers who need the houses to reside, as the condition of living of slum dwellers is to be improved on a war footing. It is in that avowed objective that the Board directed rehabilitation by reconstruction of slums by building houses in those areas. 10 years have passed by but construction of houses is not completed. The petitioner ought not to have dodged the completion even though extension was granted twice. The petitioner is an unwilling horse, though taken to a lake bed, is not ready to drink water. I use this metaphor to drive home that the petitioner, despite being granted time, time and again, has not completed the work," it concluded.

Accordingly, it rejected the petition.

Appearance: Senior Advocate D.R. Ravishankar for Advocate Saravana S

Advocate General K Shashikiran Shetty for Respondents.

Citation No: 2024 LiveLaw (Kar) 46

Case Title: Aishwaryagiri Constructions PVT Ltd AND State of Karnataka & Others

Case No: Writ Petition No 23054 OF 2022

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