J IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) MONDAY ,THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1396 OF 2025 Between: M/s SATRA Services And Solutions Private Limited, (old name- M/s SATRA Infrastructure Management Services Pvt. Ltd.,), Represented by Uppuluri Machiraju S/o Venkata Ramana, Associated Vice President, R/o 401, Jain Sadguru Images Capital Park, Madhapur, Hitech City, Madhapur, Hyderabad, Telangana State. ...Petitioner AND 1. Union of India, Represented by its Director General (Road Development) and Special Secretary, Ministry of Road, Transport and Highways, Secretariat, New-Delhi. 2. Ministry of Road Transport and Highways (EAP Zone), Represented by its Executive Engineer, Jeevan Bharti Building, MoRTH, Ground Floor, 124, Connaught Place, New Delhi- 110001. 3. Ministry of Road Transport and Highways, Government of India, Represented by its Chief Engineer-cum-Regional Officer, Vijayawada, N.T.R. District, Andhra Pradesh. 4. Roads and Buildings (National Highways), Andhra Pradesh, Represented by its Superintending Engineer, Vijayawada, N.T.R. District, Andhra Pradesh. 5. Ministry of Road Transport and Highways, Represented by its Project Director, Project Implementation Unit, Araku, ZP Colony, Near CBM Church, Araku Valley, Alluri Sitharamara Raju District, Andhra Pradesh. ...Respondents Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an Order or a Direction or a Writ more in the nature of Writ of Mandamus by declaring the action of the 2nd Respondent herein in recommending penalty of 5 percentage over the value of consultancy work Rs.3,04,79,748/-, further debarrment of the Petitioner company for six months for participating in bids pertaining to National Highway works under letter No.MoRTH/ PIU/ ARAKU/ Consultancy/ SATRA/ NH-516E, dt. 13.01.2025 and publishing the same in the websites pertaining to the 2nd Respondent without considering the Arbitration Clause enumerated in the contract under L.S.CR Agreement No.11/ 2016-17, 28.7.2016 as arbitrary, autocratic, illegal, ultravires and against to the principles of natural justice and consequently direct the 2nd Respondent herein not to take coercive action against the Petitioner herein without due process of law. p lA NO: 1 OF 2025 Petition under Section 151 of CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to pass an interim Order by way of Suspension by suspending the letter No.MoRTH /PIU/ ARAKU/Consultancy/ SATRA/ NH-516E, dt.13.01.2025 issued by the 2"'^ Respondent herein pending disposal of the main Writ Petition on the file of this Hon’ble Court. lA NO: 2 OF 2025 Petition under Section 151 of CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to pass an interim Order by way of Direction directing the 2 Respondent herein to remove the name of the Petitioner herein from the debarment list of Consultancies published in the web sites pending disposal of th main Writ Petition on the file of this Hon'ble Court. nd Counsel for the Petitioner: SRI CHANDRA SEKHAR ILAPAKURTI Counsel for the Respondent No.1: SRI JUPUDl V K YAGNADUTT (CENTRAL GOVERNMENT COUNSEL) Counsel for the Respondent Nos.2 to 5: SRI S.S.VARMA (SC FOR NHAI) The Court made the following ORDER: APHC010025782025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) EfflB [3329] ■■ MONDAY .THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1396/2025 Between: Satra Services And Solutions Private Limited ...PETITIONER AND Union Of India and Others ...RESPONDENT(S) Counsel for the Petitioner: 1.CHANDRA SEKHAR ILAPAKURTI Counsel for the Respondent(S): 1. JUPUDI V K YAGNADUTT(CENTRAL GOVERNMENT COUNSEL) The Court made the following: IHE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION No.1396 OF 2025 ORDER:- This writ petition is filed under Article 226 of the Constitution of the India seeking the following reliefs;- “to issue an Order or a Direction or a Writ more in the nature of Writ of Mandamus by declaring the action of the 2"^ Respondent herein in recommending penalty of 5% over the value of consultancy work Rs.3,04,79,748/- further debarrment of the Petitioner company for six months for participating in bids pertaining to National Highway works under letter No. MoRTH/PIU/ARAKU/Consultancy/SA TR/VNH-516E, dt.13.01.2025 and publishing the same in the websites pertaining to the 2"^ Respondent without considering the Arbitration Clause enumerated in the contract under L S CR Agreement No.11/2016-17, 28.7.2016 as arbitrary, autocratic. Illegal, ultravires and against to the principles of natural justice and consequently direct the 2”^ Respondent herein not to take coercive action against the Petitioner herein without due process of law in the interests of justice and pass such other order or orders...” Heard learned counsel for petitioner and learned Standing Counsel for 2. the respondents. 3. The case of the petitioner in brief is that the petitioner is selected successful DPR consultant for the subject project pursuant to the subject tender notice. The petitioner herein entered into an agreement dated 28.07.2016 with the respondents for providing consultancy services for the Project i.e., Management including preparation of Detailed Project Report of selected stretches/ corridors of National Highways/ State Roads (approved in principle for declaration as National Highways) in the state of Andhra Pradesh for up-gradation to Two/Four Lane with as a paved shoulder configurations (i) Paderu- Araku road Section (ii) Srungavarapukota-Vizianagaram on NH 26 road Section. While so, basing on the recommendations of the committee, the respondents issued impugned proceedings dated 13.01.2025 by imposing penalty to the tune of 5% of Contract value of consultancy work and also debarment for 6 months period for participating in bids regarding NH works, against the petitioner (M/s. SATRA Infrastructure Management Services Pvt. Ltd now known as M/s Satra Services and solutions Pvt. Ltd.). He submits that the said impugned proceedings are contrary to the recommendations of the Regional Officer and Project Director. The said recommendation reads as follows: • These deficiencies has been examined as per Clause 7.3.1 “ Penalty for Error/ variation” of Consultancy Agreement and submitted that the overall financial implication due to these deficiencies is less than +/- 15% of the overall project cost of the three packages. Therefore, penalty equivalent to 5% of Contract Price may not be applicable. • However, as per Clause 7.4.1 “Consultant liability towards the client”, the Consultant shall be liable to indemnify the client for any direct loss or damage accrued or likely to accrue due to deficiency in services rendered by him. Further, as per Clause 7.4.2 of Consultancy Agreement and considering these deficiencies as major, the penal action including debarring for certain period may be taken. • It has been proposed that the Consultant may be debarred for a period of 6 months or as decided by the Competent Authority in Ministry as per guidelines issued vide Ministry’s letter dated 06.01.2021. Therefore, the basis for impugned proceedings is the report of the Project 4. Director or Regional Officer, if that is so the final decision/ conclusion of the respondent Nos. 2 and 3 cannot be contravened the findings or recommendations of the project director i.e., 5**^ respondent herein. As such, the impugned proceedings are liable to be interfered. In view of the same, the petitioner is not liable for payment of penalty as 5. directed in the impugned proceedings dated 13.01.2025. He further submits that the petitioner was not provided ample opportunity of hearing while passing the impugned proceedings dated 13.01.2025. On the other hand, learned Standing Counsel for the respondents 6. submits that the petitioner was issued show cause notices on 21.02.2022 and For which, the petitioner also submitted its explanations dated 23.01.2024. 19.03.2022, 08.09.2022 and 20.02.2024 respectively and the petitioner was also provided an opportunity of hearing and final communication was made on 14.11.2024. Finally, the respondents passed a resolution on 12.12.2024 imposing penalty as well as debarring the petitioner from further works of the respondents for the temporary period of six months only. Having regard to the submissions made by the learned counsel for the 7. petitioner and learned counsel for the respondents, this Court is of the considered view that once, the Regional Officer or Project Director reported that the services of the petitioner has not caused loss or damage to an extent of +/- 15% of the total value of the contract, as per the condition 7.3 of the agreement imposing penalty against the petitioner is contrary to the assessment made by the original authority. It is further observed that there is no any other report or assessment as th referred in the impugned proceedings to draw contrary fact to the report of the 5 respondent. As per the report of the 5^^ respondent, which is only report as referred in the impugned proceedings, in clear terms, it opined that the petitioner caused damage/ direct loss to the major extent certainly not at the rate of +/- 15% of the total contract value. Hence, petitioner cannot be penalised under clause 7.3 of the agreement. As such, action under clause 7.4 of the said agreementwas recommended and the same can be allowed to be proceeded. In view of the reasons stated above, this Court is inclined to direct the 8. respondents not to recover penalty as per the impugned proceedings dated 13.01.2025 from the petitioner till the further orders to be passed in alternative proceedings as per Clause 9.2 of agreement. But, they are entitled to impose punishment as per clause 7.4 of the agreement. It is further observed that as per the clause 9.2 of the said agreement, the parties are entitled to initiate appropriate settlement proceedings. For better understanding clause 9.2 of the said agreement is extracted 9. hereunder: Dispute settlement: Any dispute between the parties as to matters arising pursuant to this Contract which cannot be settled amicably within thirty (30) days after receipt by one party of the other party’s request for such amicable settlement may be submitted by either party for settlement in accordance with the provisions specified in the SC. 10. In view of the same, the writ petition is disposed of, directing both the parties to avail alternative proceedings as per clause 9.2 of the agreement. There shall be no order as to costs. Learned counsel for the respondents is directed to inform the orders of this Court in respect of recovery of penalty is concerned. Miscellaneous petitions, if any pending, in this case, shall stand closed. Sd/- M. SRINIVAS ASSISTANT REGISTRAR \ toir^lCER //TRUE COPY// SEC To, General (Road Development) and Special Secretary, Union of of Road, Transport and Highways, Secretariat, New-Delhi. Ministry of Road Transport and Highways (EAR MoRTH, Ground Floor, 124, Connaught 1. The Director India, Ministry 2. The Executive Engineer, Zone), Jeevan Bharti Building Place, New Delhi- 110001. 3. The Chief Engineer-cum-Regional Officer, Ministry of Road Transport and Vijayawada, N.T.R. District, Andhra Highways, Government of India Pradesh. 4, The Superintending Engineer, Roads and Buildings (National Highways), Pradesh, Vijayawada, N.T.R, District, Andhra Pradesh, of Road Transport and Highways, Project ZP Colony, Near CBM Church, Araku Valley, Andhra 5. The Project Director, Ministry Implementation Unit, Araku Alluri Sitharamara Raju District, Andhra Pradesh Sri Chandra Sekhar llapakurti. Advocate [OPUC] Jupudi V K Yagnadutt, Central Government Counsel [OUT] 6. OneCCto 7. OneCCto Sri 8. One CC to Sri S.S.Varma, Standing Counsel for NHAI, [OPUC] 9. Three CD Copies sree HIGH COURT DATED:27/01/2025 ORDER OF ANOTT^!^ WP.No.1396 of 2025 fx 0 5 FEB 2125 . Current Section DISPOSING THE WRIT PETITION WITHOUT COSTS