M/S.Sri Satya Sai Constructions vs. The State Of Andhra Pradesh

Held

The Court held that the alteration of the lead distances in the M-Books and working estimates by the respondents without the petitioner's concurrence was illegal and arbitrary. The Court found that the M-Books were duly made after verifying waybills and that Clause 41 of the contract governed these recordings, prohibiting alterations without the petitioner's concurrence. The Court noted that the availability of granite from local vendors in Visakhapatnam is different from procuring directly from quarries, and procurement rates would vary significantly. The Court found no record establishing that the petitioner procured granite from local vendors, and the petitioner's claim of procurement from far-off places was supported by E-way bills. The Court also observed that the circumstances leading to the then Chief Engineer's arrest likely made the department hostile towards the petitioner, causing them undue trouble. Therefore, the Court directed the respondents to forthwith rectify the alterations made in the M-Books and working estimates and clear the petitioner's bills expeditiously, preferably within six weeks.

Facts

The petitioner, M/s. Sri Satya Sai Constructions, is challenging the actions of respondents 4 and 5 (Chief Engineer and Superintendent Engineer, Tribal Welfare Department) in altering the granite leads (in kilometers) for high-polished granite slabs used in the construction of seven Ekalavya Model Residential Schools. The petitioner alleges that sanctioned estimates were illegally altered after working estimates were submitted. The petitioner claims to have incurred additional costs due to deviations, escalations, and GST, which were approved but are awaiting administrative sanction. The petitioner filed final bills in 2023 and faced illegal demands from the then Chief Engineer, leading to the engineer's arrest by the Anti-Corruption Bureau on August 7, 2025, for accepting a bribe of ₹25,00,000/-. The petitioner discovered alterations in the M-Books and working estimates after the engineer's arrest, without their countersignature, violating Clause 41 of the agreement.

Key Issues

1. Whether the alteration of granite lead distances in the M-Books and working estimates by respondents 4 and 5, without the petitioner's concurrence, is arbitrary, illegal, and violative of the agreement (Clause 41) and the Constitution of India (Articles 14, 19, and 21)? Petitioner's arguments: The petitioner contends that the alterations in the M-Books and working estimates for granite leads were made without their knowledge or countersignature, violating Clause 41 of the agreement, which mandates recording in the presence of the petitioner or their authorized representative and requires any alteration to be countersigned. The petitioner argues that the respondents exhibited a vindictive approach due to the petitioner's role in the arrest of the then Chief Engineer. The petitioner also submitted E-way bills showing procurement from distances of 686 KMs, contradicting the respondents' claim of procurement from local vendors in Visakhapatnam (140-250 KMs). Respondents' arguments: The respondents, through the counter filed by the 4th respondent, claim the petitioner exceeded the agreed quantity, impacting the exchequer. They state that Executive Engineers certified Visakhapatnam as the nearest source (140-250 km) for granite slabs, and this was used to rectify working estimates. They also allege that a supplementary item, Sapphire Blue Granite, was used without competent authority approval, causing a burden, and that the petitioner claimed procurement from distant quarries (400-600 km) despite it being available locally. The respondents deny any vindictive approach.