REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (C) No.18914 of 2010

Union of India & Ors. … Petitioners  

Vs.

Tantia Construction Pvt. Ltd.  … Respondent

J U D G M E N T

ALTAMAS KABIR, J.

1. The sole Respondent, M/s. Tantia Construction  

Pvt. Ltd., filed writ petition, being CWJC No.14055  

of  2008,  against  the  Petitioners  herein,  inter  

alia, for the issuance of a writ in the nature of

Certiorari for quashing the order dated 18th August,  

2008,  passed  by  the  Deputy  Chief  Engineer  

(Construction),  Ganga  Rail  Bridge,  East  Central  

Railway,  Dighaghat,  Patna,  calling  upon  the  

Respondent Company to execute the enlarged/extended  

quantity of the contract work pursuant to Tender  

No.76 of 06-07.  Further relief has been prayed for  

by the Respondent Company for a writ in the nature  

of Mandamus directing the Petitioners herein to let  

it complete the reduced quantity of work relating  

to  the  construction  of  the  Rail  Over-Bridge  at  

Bailey Road, which did not include the additional  

work  in  respect  of  the  extended  portion  of  the  

Viaduct and to close the contract and, thereafter,  

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  

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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  

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work was to be completed within 15 months from the  

date of issuance of the letter of acceptance.  Upon  

the tenders being opened on 27th December, 2006, the  

contract was awarded to the Respondent Company and  

a letter of acceptance was issued to the Respondent  

Company on 12th/13th February, 2007.  The contract  

work was accepted at a cost of  19,11,02,221.84p.  

and  an  agreement  was  thereafter  entered  into  

between  the  East  Central  Railways  and  the  

Respondent Company in respect of the contract work,  

whereby a Rail Over-Bridge was to be constructed  

with two abutments on both sides and three piers in  

between.   The  work  also  included  500  meters  of  

approach road with Reinforced Earth Retaining Walls  

to a maximum height of 15 meters on both sides of  

the Rail Over-Bridge.

 4. On  account  of  some  of  the  procedural  work,  

including the change of the span of the bridge,  

change  in  the  design  of  the  pier  cap,  the  

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requirement of shifting obstacles like a temple,  

police station, electrical pole, etc. and also due  

to heavy rains, the construction of the wall was  

delayed.  The delay in preparation of the designs  

and  drawings  which  involved  the  work  of  a  

specialized agency also contributed to the delay.  

On account of changes in the design whereby the  

Viaduct had to be extended involving an additional  

cost  of  36.11  crores,  the  Petitioner  No.6  

requested  the  Respondent  Company  to  convey  its  

consent  for  execution  of  the  complete  work,  

including the revised work.  By its letter dated  

13th February, 2008, the Respondent Company wrote  

back to the Petitioner No.6 that they did not want  

to take up the construction of the extended Viaduct  

which was not covered in the Agreement dated 30th  

April,  2007.   The  Respondent  Company  refused  to  

give  their  consent  for  the  execution  of  the  

complete work at the revised cost of 36.11 crores.  

On  such  refusal  the  Railways  floated  a  separate  

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Tender No.189 of 2008 for the additional work of  

the extended portion of the Viaduct for the Road  

Over-Bridge at Bailey Road.  The approximate cost  

earmarked for the said work was 24.50 crores. As  

there was not much response to the said Tender, the  

date for submission of the Tender was extended from  

9.4.2008 till 23.5.2008 and the assessed cost of  

work  was  revised  and  re-assessed  at   

26,35,96,878.63p.  Corrigendums  were  issued  from  

time to time in connection with the said Tender for  

the  additional  work  and  ultimately  two  firms,  

namely,  Allied  Infrastructures  and  Projects  Pvt.  

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  

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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.   

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8. In response to the said letter dated 15th June,  

2008,  the  Respondent  Company  wrote  back  to  the  

Railways on 1st July, 2008, stating that they had  

given  their  consent  to  execute  only  the  reduced  

quantity of work, the cost of which worked out to  

12,37,49,888/-.  However, the Railways once again  

asked the Respondent Company by its letter dated  

18th August, 2008, to carry out the complete work,  

including the additional work of the Viaduct, at an  

approximate cost of 36.11 crores.

9. Aggrieved by the stand taken by the Railways,  

the Respondent Company filed a Writ Petition, being  

CWJC No.14055 of 2008, before the Patna High Court,  

challenging  the  directions  given  by  the  Railway  

Authorities  for  completion  of  the  entire  work,  

including the extended work.  It was the contention  

of the Respondent Company that having failed to get  

any suitable response to the fresh Tender floated  

in respect of the additional work, it was not open  

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to the Petitioners to compel it to complete the  

same at an arbitrarily low price, particularly when  

the additional work was not part of the original  

Tender.  

10. The learned Single Judge accepted the case made  

out by the Respondent Company, holding that there  

was no breach of the agreement entered into between  

the Petitioners and the Respondent Company, since  

it was the Petitioners themselves who had altered  

the agreement by separately tendering the extended  

work.  The  learned  Single  Judge  observed  that  

consequently the entire work could not be thrust  

upon the Respondent Company and the Railways was  

free to get the Viaduct constructed separately by  

any  other  contractor,  as  it  had  contemplated  

earlier. The learned Single Judge further observed  

that since the Respondent Company was ready to do  

the  balance  work  from  the  left-over  tender,  the  

rescinding of the entire work by the Railways and  

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to re-tender the entire block could not certainly  

be at the risk and cost of the Respondent Company.  

The  learned  Single  Judge  also  observed  that  the  

Respondent Company could not be saddled with the  

cost  of  work  which  it  had  never  undertaken  to  

execute.  

11. On such findings, the Writ Petition was allowed  

and the Railways was advised to expeditiously clear  

the payments of the Respondent Company in respect  

of the work already completed by it.   

12. The matter was taken in appeal to the Division  

Bench by the Petitioners herein in LPA No.603 of  

2009.  The Division Bench 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.

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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 Company’s obligation to  

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complete the work under the contract. It was the  

Respondent Company which had, by its letter dated  

12th April, 2008, agreed to do the varied work at  

the same rate, terms and conditions, subject to the  

applicability of the Price Variation Clause. It was  

only thereafter that by his letter dated 15th June,  

2008,  the  Petitioner  No.6  asked  the  Respondent  

Company to execute the varied quantities of work on  

the Rail Over-Bridge at the same rate and on the  

same  terms  and  conditions.  It  was  upon  the  

Respondent Company’s failure to do so that notice  

was given to it under clause 62 of the General  

Conditions  of  Contract  on  10th October,  2008,  

indicating that after the expiry of the notice, the  

contract would stand rescinded and the work under  

the contract would be carried out at the risk and  

cost and consequences of the Respondent Company.  

The said notice was followed by a letter dated 17th  

October, 2008 sent to the Respondent Company by the  

Petitioners rescinding the contract and informing  

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the company that the work under the contract would  

be carried out at the company’s risk and cost.

15. It  was  also  submitted  that  the  agreement  

between  the  parties  provided  for  arbitration  in  

respect of all disputes and differences of any kind  

arising out of or in connection with the contract  

whether during the progress of work or after its  

completion  and  whether  before  or  after  the  

termination of the contract. It was urged that in  

view of the said arbitration clause, the Writ Court  

was not competent to decide the issue involved in  

the dispute which had been raised by the Respondent  

Company.

16. It was lastly contended that the scope of the  

work did not change, despite the variation of the  

design and planning.  It was submitted that it was  

only a case where the quantity of the work was  

decreased in one sense, but increased in another,  

and the costs involved on account of such variation  

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was  worked  out  and  a  fresh  figure  was  computed  

which the Respondent Company  was bound to accept  

under the terms of the contract.  It was submitted  

that the same would be evident from Clause 23.2  

relating  to  the  quotation  of  rates  whereby  the  

Railway Administration reserved the right to modify  

any or all the schedules, either to increase or to  

decrease the scope of the work.  It was submitted  

that the termination of the contract on account of  

violation of the terms thereof 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  

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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, with regard to the completion of  

the  Rail  Over-Bridge,  the  Respondent  Company,  

keeping  in  mind  its  long  association  with  the  

Railways, offered to complete the varied work at  

the same rates and conditions of contract, subject  

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to the applicability of the Price Variation Clause.  

Mr. Chakraborty submitted that by its letter dated  

12th April,  2008,  the  Respondent  Company  had  

referred  to  the  variation  of  the  work  by  the  

agreement entered into between the Railways and the  

Respondent Company on account of the alteration of  

the  original  design.   Mr.  Chakraborty  submitted  

that  it  had  never  been  the  Respondent  Company’s  

intention to execute the entire work, including the  

variation  on  account  of  the  alteration  of  the  

design,  at  the  same  rates  and  the  terms  and  

conditions and that such offer was confined only in  

respect  of  the  balance  work  left  over  from  the  

contract  executed  on  27th December,  2006.  Mr.  

Chakraborty  submitted  that  the  same  would  be  

evident from the fact that in the letter of 12th  

April, 2008, it had also been indicated that the  

Respondent  Company  would  have  no  claim  for  

reduction  in  quantity  by  more  than  25%  in  the  

agreement.  Mr.  Chakraborty  submitted  that  the  

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Petitioners had clearly misunderstood the scope and  

intent of the letter dated 12th April, 2008, written  

on  behalf  of  the  Respondent  Company  and  had  

interpreted the same to mean that its offer also  

covered the extended work on account of the change  

in the design of the Rail Over-Bridge.   

18. It  was  also  contended  that  since  the  

Petitioners had illegally terminated the contract  

with  the  Respondent  Company,  the  Writ  Court  had  

stepped in to correct such injustice.  In fact, Mr.  

Chakraborty also submitted that the objection taken  

on behalf of the Petitioners that the relief of the  

Respondent Company lay in arbitration proceedings  

and not by way of a Writ Petition was devoid of  

substance on account of the various decisions of  

this Court holding that an alternate remedy did not  

place any fetters on the powers of the High Court  

under Article 226 of the Constitution.

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19. In  support  of  his  aforesaid  submissions  Mr.  

Chakraborty  firstly  relied   and  referred  to  the  

decision  of  this  Court  in  Harbanslal  Sahnia vs.  

Indian  Oil  Corporation  Ltd. [(2003)  2  SCC  107],  

wherein  this  Court  observed  that  the  Rule  of  

exclusion of writ jurisdiction by  availability of  

an alternative remedy, was a rule of discretion and  

not  one  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.   

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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  

should  be  minimum  interference  by  the  regular  

Courts in such proceedings.  In this regard, Mr.  

Chakraborty referred to Section 5 of the aforesaid  

Act which indicates that notwithstanding  anything  

contained in any other law for the time being in  

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force,  in matters governed by Part I, no judicial  

authority shall intervene except where so provided  

in the said Part. Mr. Chakraborty urged that upon  

revival a contract can at best be modulated to any  

change in circumstances but the termination of the  

contract  with  the  Respondent  Company  was  not  

warranted,  since  the  decision  to  terminate  the  

contract was based on an erroneous interpretation  

of  the  contents  of  the  letter  dated  12th April,  

2008, written on behalf of the Respondent Company  

and the termination had, therefore, been rightly  

quashed by the High Court.

22. The facts disclosed reveal that on the basis of  

the  Tender  floated  by  the  Petitioners  for  

construction of a Rail Over-Bridge at Bailey Road  

over the proposed Railway Alignment over the Ganga  

Bridge,  Patna,  the  Respondent  Company  had  been  

awarded the contract at an approximate cost of   

15.42  crores  and  it  was  stipulated  that  the  

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contract was to be completed within 15 months from  

the date of issuance of the letter of acceptance.  

Admittedly, on the contract being awarded to the  

Respondent Company, the letter of acceptance was  

issued on 12th/13th February, 2007, and an agreement  

was  thereafter  entered  into  between  the  East  

Central  Railways  and  the  Respondent  Company  in  

respect  of  the  contract  work.   Admittedly,  on  

account of the procedural delays, the work could  

not be completed within the stipulated period of 15  

months from the date of issuance of the letter of  

acceptance.  The  procedural  delay  was  mainly  on  

account of the fact that the work on the approach  

road could commence only after the design, which  

was  to  be  initially  prepared  by  the  Respondent  

Company,  was  approved  by  the  Railways.  The  

Respondent  Company  appointed  the  Central  Road  

Research Institute, Delhi, as its consultant for  

designing the plan for execution.  During the above  

process,  it  was  found  that  each  earth  filled  

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approach road could not be raised above 7 meters  

and, as a result, the remaining 8 meters was to be  

made of complete cement casting known as a Viaduct.  

The Railways got the matter examined by its own  

associate,  RITES,  and,  thereafter,  approved  the  

plan. The consequence of the said change 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  

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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  

letter of acceptance, could not be completed within  

the  said  period  and,  on  the  other  hand,  a  new  

element was introduced into the design of the Rail  

Over-Bridge.   It is the case of the Respondent  

Company  that  any  item  of  work  directed  to  be  

performed  could  not  be  covered  by  the  original  

contract  dated  12th/13th February,  2007,  and  

realizing the same, the Railways themselves floated  

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a fresh Tender No.189 of 2008 for the additional  

work of the extended portion of the Viaduct.   

24. We are of the view that the letter dated 12th  

April, 2008, did not cover the extended work on  

account of the alteration of the design and was  

confined to the work originally contracted for.  We  

cannot  lose  sight  of  the  fact  that  while  the  

initial  cost  of  the  Tender  was  accepted  for   

19,11,01,221.84p., the costs for the extended work  

only was assessed at  24.50 crores and that two  

offers  were  received,  which  were  for   

34,11,16,279.39p.  and  35,89,93,215.66p.  

respectively.  This was only with regard to the  

extended portion of the work on account of change  

in design. The Respondent Company was expected to  

complete the entire work which comprised both the  

work  covered  under  the  initial  Tender  and  the  

extended  work  covered  by  the  second  Tender.  The  

Respondent  had  all  along  expressed  its  

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unwillingness to take up the extended work and for  

whatever reason, it agreed to complete the balance  

work of the initial contract at the same rates as  

quoted earlier, despite the fact that a long time  

had elapsed between the awarding of the contract  

and the actual execution thereof.    

25. In  our  view,  the  Respondent  Company  has  

satisfactorily  explained  their  position  regarding  

their offer being confined only to the balance work  

of  the  original  Tender  and  not  to  the  extended  

work.  The delay occasioned in starting the work  

was not on account of any fault or lapses on the  

part of the Respondent Company, but on account of  

the fact that the project design of the work to be  

undertaken could not be completed and ultimately  

involved  change  in  the  design  itself.  The  

Respondent  Company  appears  to  have  agreed  to  

complete the varied work of Tender No.76 of 06-07  

which variation had been occasioned on account of  

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the change in the design as against the entire work  

covering  both  the  first  and  second  Tenders.  To  

proceed on the basis that the Respondent Company  

was willing to undertake the entire work at the old  

rates was an error of 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  

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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 not be maintainable.  The various decisions  

cited  by  Mr.  Chakraborty  would  clearly  indicate  

that the constitutional powers vested in the High  

Court or the Supreme Court cannot be fettered by  

any  alternative  remedy  available  to  the  

authorities.  Injustice, whenever and wherever it  

takes place, has to be struck down as an anathema  

to  the  rule  of  law  and  the  provisions  of  the  

Constitution.   We  endorse  the  view  of  the  High  

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Court that notwithstanding the provisions relating  

to  the  Arbitration  Clause  contained  in  the  

agreement,  the  High  Court  was  fully  within  its  

competence  to  entertain  and  dispose  of  the  Writ  

Petition filed on behalf of the Respondent Company.  

28. We, therefore, see no reason to interfere with  

the  views  expressed  by  the  High  Court  on  the  

maintainability of the Writ Petition and also on  

its  merits.   The  Special  Leave  Petition  is,  

accordingly, dismissed, but without any order as to  

costs.  

…………………………………………J. (ALTAMAS KABIR)

…………………………………………J. (CYRIAC JOSEPH)

New Delhi Dated: 18.04.2011

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