Full affidavit of builders association This is to inform you that W.P.No.7142 and 7147 of 2020 filed by Builders Association of India challenging G.O.Ms.No.4 dated 14.02.2020, whereby the Pondicherry Schedule of Rates 2018 – 2019 (Revised) were brought into force by reducing the rates at flat percentage rates came up for admission before today before Hon’ble Justice Mr.K.Ravichandra Babu and the Hon’ble Judge hearing the contentions that this rate is the fourth revision in a year and the reduction of rates will not even cover the basic material cost and if the rates are implemented the same would lead to execution of work by sub standard materials was pleased to grant interim order directing the Respondets to process the Tender notifications and but not to finalise the same. W.P No. 7142 of 2020 Builders association of India Vs The secretary to government Public Works Department Pudhuchery & 5 others W.P No .7147 of 2020 R.Ramaraja Vs The secretary to government Public works department Pudhchery & 5others

IN THE HIGH COURT OF JUDICATURE AT MADRAS
(SPECIAL ORIGINAL JURISDICTION)
W.P.No. OF 2020

Builders Association of India,
Puducherry Centre,
Represented by its Secretary,
No.9, First Cross, Sree Kumaran Nagar,
Mudaliarpet,
Pondicherry – 605 004. … Petitioner.
-Versus-

  1. The Secretary to Government (Works),
    Government of Puducherry,
    Public Works Department,
    Puducherry.
  2. The Chief Engineer,
    Public Works Department,
    Puducherry.
  3. The Executive Engineer,
    National Highways Division,
    Public Works Department,
    Puducherry.
  4. The Executive Engineer,
    Buildings & Road (Central) Division,
    Public Works Department,
    Puducherry.
  5. The Executive Engineer,
    Irrigation Division,
    Public Works Department,
    Puducherry.
  6. The Executive Engineer,
    Building and Roads (North) Division,
    Public Works Department,
    Puducherry. … Respondents.

AFFIDAVIT FILED BY THE PETITIONER

I, T.Kannappan, S/o.K.Thanakodi, aged about 49 years, residing at No.16, Pillaiyar Koil Street, Muthailpet, Puducherry – 605 003 has now temporarily came down to Chennai do hereby solemnly affirm and sincerely state as follows:

  1. I submit that I am officiating as the Secretary to the Builders Association of India, Puducherry Centre and as such I am well acquainted with the facts of the case from records.
  2. I submit that Builders’ Association of India (hereinafter referred as BAI) is the only all India apex representative body of civil engineering construction companies. BAI was founded in 1941 under the guidance and blessings of Brig. C.V.S. Jackson of Military Engineering Services, ‘Poona’, now known as ‘Pune’, who suggested that builders working under his command, form a body for finding solutions to various problems. I submit that over 74 years, BAI’s membership has grown from 250 members spread over 3 Centres, to more than 15,000 direct members spread over about 148 plus Centres across the length and breadth of the country. Various regional associations affiliated to BAI, add another 1,00,000 indirect members.
  3. I submit that in the Puducherry Centre of BAI there are 150 members and been carrying out various construction activities under the Government and private contracts as well. The list of members of the Petitioner Association is annexed in the typed set of papers filed in support of the Writ Petition.
  4. I submit that in order to regulate the construction activities in the under Government as well as Private contracts and to maintain a uniform rates, the Government of Puducherry had been issuing Schedule of Rates incorporating the basic rates for labour and materials for building works, road works, water supply & sewerage works, irrigation works, bridges and culvert works. I submit that the said Schedule of rates issued by the Government is used by various Departments, Institutions of the Government Departments, Public Sector Undertakings, Private Sector Organizations, Builders, Contractors and Architects.
  5. I submit that in Puducherry which comprises of four regions, the Schedule of rates was first formed and published in the year 1998 – 99 and thereafter been revised from time to time and the latest schedule of rates was published in Puducherry Schedule Rates 2018 – 19 (Revised) for all four regions vide G.O.Ms.No.4 Chief Secretariat (Public Works) Puducherry dated 14.02.2020. The rates mentioned in the Schedule of Rates are taken as the basis for calling up of tender notifications by the Government and other contracts in the Puducherry Region.
  6. I submit that the Schedule of Rates are formulated and published by adopting the analysis and specifications based on the Central Public Works Department (CPWD) issued from time to time. I submit that following the CPWD analysis, Government published the Schedule of Rates 2013 -2014 with effect from 01.10.2013 and the said rates were revised as Puducherry Schedule of Rates 2013 – 2014 (Revised) and implemented with effect from 01.10.2013. The said rates were prevailing till 2018, and in the year 2018 the Schedule of Rates 2018 – 19 was published and implemented from 31.12.2018.
  7. I submit that Government by G.O.Ms.No.88 Chief Secretariat (Public Works) Puducherry dated 08.08.2019 implemented the CPWD Delhi Schedule of Rates (DSR) 2018 for Civil and (Electrical & Mechanical) Works. It is pertinent to mention that CPWD Delhi Schedule of Rates (DSR) 2018 for Civil and (Electrical & Mechanical) Works were 40% more than the Puducherry Schedule of Rates 2018 – 19 and the same were imposed by the Government without any basis. I submit that subsequently the Government issued a circular dated 25.11.2019 to prepare estimate for Civil works, adopting Puducherry Schedule of Rates 2013 – 14 (Revised) with adding 9.2% difference in GST.
  8. I submit that while the Builders/ Contractors were already left to commotion for the reason of implementation of four different schedule of rates one after another and made them to run from pillar to post in understanding the nature of rates followed by the Government, the Government vide G.O.Ms.No.4 Chief Secretariat (Public Works) Puducherry dated 14.02.2020 published the Puducherry Schedule Rates 2018 – 19 (Revised) for all four regions.
  9. I submit on verification of the Puducherry Schedule Rates 2018 – 19 (Revised) it has been claimed that the Schedule of Rates have been upgraded to the Central Public Works Department Specification (hereinafter referred as CPWD) and based on the current market rates for materials and labour and the finished rates in the schedule were arrived by adopting the CPWD analysis of rates 2016.
  10. I submit that the while issuing the Puducherry Schedule of Rates, to the shock and surprise of all the builders and contractors, the 1st Respondent had reduced the rates at flat percentage rates without any basis and had published the finalized rate for the specifications after reducing the rates at flat percentage rates. I submit that the Association and its members are severally prejudiced by the unilateral reduction of rate at flat rates since the same severally affects their entire livelihood.
  11. I submit that vide G.O.Ms.No.4, Chief Secretariat (Public Works) Puducherry dated 14.02.2020, the 1st Respondent herein has ordered for the reduction of the rate as following:
    Sl.No. Items of Work Percentage to be reduced from PSR 2018 – 19
  12. Building Works 10% flat rate from PSR 2018 -19 for Puducherry, Karaikal, Mahe & Yanam Regions
  13. Road Works 25% flat rate from PSR 2018 -19 for Puducherry & Karaikal regions

10% flat rate from PSR 2018 -19 for Mahe & Yanam Regions

  1. Bridge Works 10% flat rate from PSR 2018 -19 for Puducherry, Karaikal, Mahe & Yanam Regions
  2. Irrigation Works 10% flat rate from PSR 2018 -19 for Puducherry, Karaikal, Mahe & Yanam Regions
  3. Water Supply Works 10% flat rate from PSR 2018 -19 for Puducherry, Karaikal, Mahe & Yanam Regions
  4. I submit that such reduction on flat percentage basis for different works is without any basis and the 1st Respondent while passing such order of reduction has not adduced any reasons for such reduction of rates. I submit that it is significant to point out that the Respondents call for tenders by following the Schedule of Rates and the reduction at flat percentage rates was uncalled for, illegal and unjust.
  5. I submit that as stated above, the Puducherry Schedule of Rates was finalized considering the CPWD Rate Analysis of Rates since the CPWD works manual forms the basis for formulation of such Schedule of Rates. I submit that neither the CPWD Works Manual 2014 nor CPWD Works Manual 2019 provides for levy of reduction of rates that to at flat percentage rates. I submit that levy of reduction of rates at flat percentages are entirely new concept which has been introduced by the 1st Respondent without any statute and without any proper reasoning.
  6. I submit that in the event the reduction is imposed on the builders / contractors who are following the schedule of rates, would be forced to severe loss since in certain construction activities as the finalized rates after reduction at flat percentage rates, will not even cover the material cost. I further submit that the order of reduction is unilateral and without providing any opportunity to the stake holders since by the implementation of the same have severe financial implications on the builders/contractors.
  7. I submit that since the reduction of rate at flat percentage has direct financial implications and as the same was passed without following the principles of natural justice, a representation was submitted on behalf of the Association on 20.02.2020 placing the difficulties faced by the builders/ contractors in the implementation of
    the reduction of rates. I submit that the representation was submitted to the 2nd Respondent in person and a suitable explanation was expected from the Government as to why the reduction of rates is sought to be imposed upon the Builders/ Contractors.
  8. I submit that by the representation dated 20.02.2020 it was brought to the notice of the 1st and 2nd Respondent that the Cost Index released by the 2nd Respondent the constant increase in rates of Materials and Labour, whereas a reduction at flat percentage is imposed on the Builders/ Contractors, would cause severe loss and damage.
  9. I submit that instead of considering the representation dated 20.02.2020 in the right perspective, the 2nd Respondent herein by letter dated 06.03.2020 as reply to the representation without adverting to the issue raised in the representation dated 20.02.2020. I submit that by the reply dated 06.03.2020 it was claimed by the 2nd Respondent that the Petitioner Association and its members participated in the PSR Standing Committee meeting convened on 16.10.2018 and the committee finalized the rates following the CPWD analysis and as such the present claim made by the Petitioner Association is illegal.
  10. I submit that the reply is liable to be rejected for misleading facts and for not providing any reasoning for the imposition of reduction of rates at flat percentage basis. I submit that it is true that the Petitioner Association and its members participated in the PSR Standing Committee meeting held on 16.10.2018 for finalizing the rates following CPWD analysis. I submit that in pursuance of the meeting held on 16.10.2018, Government had published the Puducherry Schedule of Rates 2018 – 2019 with effect from 31.12.2018 and the present claim is with regard to the reduction of rates at flat percentage and in the process of implementation the stake holders have not been considered at all. The said objection has not been answered by the 2nd Respondent. I submit that on receipt of the said reply dated 06.03.2020, another representation was submitted by the Petitioner Association on 10.03.2020 and the same has not been considered till date.
  11. I submit that in any case, reduction at flat percentage is per se illegal and liable to be quashed. I submit that the reduction at flat percentage would have a severe financial implication and would force builders/contracts to face severe loss and damage and at the foremost the larger public will also be affected.
  12. I submit that having left with no other efficacious alternative remedy the present Writ Petition has petition under Article 226 of Constitution of India among the following other
    GROUNDS
    (a) The order of the 1ST Respondent is illegal and as against the due process of law and violates Article 19(g) and Article 21 of the Constitution of India.

(b) That the order of the 1st Respondent is arbitrary and discriminatory and violative of the principles and cannons of natural justice.

(c) That the order of the 1st Respondent is malafide and the Builders/Contractors are subjected to serve loss due to the action of the 1st Respondent which is against equity, conscience and logics.

(d) That the orders passed by the 1st Respondent without following the principals of natural justice as no notice was issued prior to the passing of the order.

(e) That the 1st Respondent ought to called for public hearing from the stake holders since the order had financial implications.

(f) That the order of 1st Respondent neither has any statutory basis nor has any reasoning been provided by the 1st Respondent in such imposition of the reduction of rates at flat percentage.
(g) That as per the Schedule of Rates, rates for each work is provided by the 1st Respondent and builders/ contractors may quote the same rate or in certain circumstances they may even quote lessor or higher rates depending upon the nature of work, materials and labours required in such case a flat reduction from the material cost is illegal since the same would force the Builders/ Contractors to bear the loss and they would be severely prejudiced.

(h) That the construction materials in Puducherry are being brought from the State of Tamil Nadu and the rates are dependent upon the market rates in the State of Tamil Nadu and as such reduction at flat percentage basis would force them to face loss in procuring the materials, transportation cost etc,.

(i) That the Puducherry Schedule of Rates was finalized considering the CPWD Rate Analysis of Rates and neither in the CPWD Works Manual 2014 nor CPWD Works Manual 2019 provides for levy of reduction of rates that to at flat percentage rates and as such the order passed by the 1st Respondent is without any basis and liable to be quashed.

(j) That the order of reduction of the rates at flat percentage would force the builders/ contractors to face severe loss since the after reduction from the material cost the finalized rates would not even cover the actual material cost.

(k) The inaction of the 1st and 2nd Respondent in considering the objections of the Petitioner is illegal and as against the due process of law and violates Article 19(g) and Article 21 of the Constitution of India.

(l) That the 1st Respondent ought to have followed due process of law and ought to pass any order only after providing sufficient opportunity of hearing the stake holders prior to such imposition of reduction of rates.

(m) That as the finalized rates after reduction at flat percentage rates, does not cover the material cost it would lead to execution of works with sub standard materials and the quality of such works will be questionable and the public at large who are the beneficiaries of such works will be made to suffer.

  1. I submit that as stated above the order is per se illegal and without any basis and if the G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 issued by the 1st Respondent is not stayed then the same would result to severe prejudice to the rights of the members of the Petitioner Association since the implementation of the same would have severe financial loss to the members of the Petitioner Association and would certainly affect the construction activities and the public at large who are the beneficiaries of such projects of the Government will be affected.
  2. I submit that while the issue of implementation of G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 issued by the 1st Respondent and it implications are being taken up at various levels by the Petitioner Association, the following tenders have been issued by the 3rd to 6th Respondents
    S.
    No. Division Tender Specification Date of opening
  3. National Highways Division Tender Notification No.2158/PW/NH/DB/JE.1/F.No.2141/2019-2020 dated 05.03.2020 26.03.2020
  4. Buildings & Road (Central) Division Tender Notification No.4566/PW/EE/BRC/DB/DR/2020 dated 05.03.2020 27.03.2020
  5. Irrigation Division E-Tender Notification No.5248/PW/EEI/ID/JE(P) – 33/2019 – 2020 dated 04.03.2020 19.03.2020
  6. Buildings & Road (North) Division E-Tender Notification No.1166/PW/BRN/DB/D3/1-39/2019-20 dated 05.03.2020 25.03.2020

I submit that if the above tenders were implemented then the Respondents would be successful in their attempts to impose the order of reduction of rate at flat percentage, which is otherwise not entitled to be enforced as the same is without any statutory authority. Hence, it is just and necessary to restrain Respondents from processing the tender notification and opening the tenders as scheduled and if the Respondents are not restrained from processing the respective tender notifications the same would severely hamper the endeavor of the Petitioner Association.

  1. I further submit that the Petitioner Association is not against the implementation of the welfare schemes to the public at large but in the guise of the same the Respondents should not be permitted to the impose an order which is without any basis and the implementation of the same would certainly affect the public at large as well since the order of the 1st Respondent is against the law and public policy.
  2. I submit that the original copy of the G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 including the Schedule of Rates 2018 – 2019 (Revised) was not served upon the Association and hence a copy of the same is produced before this Hon’ble Court. I submit that if the production of the original copy is not dispensed with the same would lead to severe prejudice to the rights of the members of the Association.
  3. I submit that Association has not filed any other Writ Petition seeking similar relief and no Writ Petition is pending as on date.
    Under the above circumstances it is humbly prayed that this Hon’ble Court may be pleased to dispense with the production of the original copy of the Puducherry Schedule of Rates 2018- 2019 (Revised) for all the four regions published vide G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 issued by the 1st Respondent and thus render justice.

Under the above circumstances it is humbly prayed that this Hon’ble Court may be pleased pass an interim order of stay of operation of the Puducherry Schedule of Rates 2018- 2019 (Revised) for all the four regions published vide G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 issued by the 1st Respondent pending disposal of the Writ Petition and thus render justice.

Under the above circumstances it is humbly prayed that this Hon’ble Court may please pass an order of interim injunction restraining the Respondents its men, agents and subordinates from processing and awarding any tenders by implementing the Puducherry Schedule of Rates 2018- 2019 (Revised) for all the four regions published vide G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 pending disposal of the Writ Petition and thus render justice.

Under the above circumstances it is humbly prayed that this Hon’ble Court may be pleased to issue an order or direction or Writ in the nature of Writ of Certiorari calling for the records pertaining to the issuance of the Puducherry Schedule of Rates 2018- 2019 (Revised) for all the four regions published vide G.O.Ms.No.4 Chief Secretariat (Public Works), Puducherry dated 14.02.2020 on the file of the 1st Respondent and quash the same as illegal, arbitrary and without any basis and pass such further order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case and thus render justice.

Solemnly affirmed at Chennai } BEFORE ME
this the day of March, 2020 }
and signed his name in my presence } ADVOCATE: CHENNAI

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