Charges of favouring Shirke are hypothetical — Jain

Jain goes on to say that he has always been insistingthat the rate payable to M/s Shirke must be as per terms of contract. “However,” he says, “if the contractor is sought to be victimised, as a minister who has to act impartially and in a just manner, I have insisted upon clear understanding of contract terms and not allowed any attempt by any official or agency to create fear in the minds of contractors that wrong interpretation of contract clauses could put them to loss…When the contract term extends up to June 1999, how can the question whether the contractor will complete the work before the due date arise in August 1998?”

Good question. It’s the question we raised in the story. It’s also the point that was argued by two CEOs of MHADA. As Vijay B Shirke, MD of the company points out in his letter to this newspaper, as per the special conditions of the contract, “the rate for awarded work shall be Rs 750 per sq ft of built up area (Rs 750 per sq ft if the construction is completed in all respects within 18 months and Rs 700 per sq ft if it is notcompleted in all respects in 18 months, so in effect the additional Rs 50 per sq ft is an incentive for the timely completion of the project)….” Adds Shirke: “The rate being paid to us right from the beginning of the contract is Rs 750 per sq ft and so the impression that additional Rs 50 per sq ft is being paid to us under instructions from the minister is false and malicious.”

Of course, Jain does not mention that he tried to change contract conditions in his letter of August 4, 1998 to MHADA while instructing it to pay the Rs 750 per sq.ft rate. Instead of the incentive pegged to timely completion of work in all respects, Jain sought to make the incentive applicable even if only 90 per cent work was completed. The then MHADA CEO Swadheen Kshatriya and his successor Subodh Kumar, saw this as preparing the ground to cover M/s Shirke in case work is not fully completed.

Their objection was: If Shirke was completing all work on time, where was the need for Jain’s letter in the first place? And, whatwas urgency for the government order of February 3 to back up the letter? Kshatriya, in fact, had objected to Jain’s letter saying it gave “a totally different clarification” about the applicability of the Rs 750 rate to M/s Shirke.

Of course, Shirke and Jain do not touch upon this crucial aspect or address the central question in this price war’. The thrust of the argument is: if Rs 50 per sq ft is the “incentive for timely completion of work” — as even Shirke admits it is — didn’t paying it from day one amount to assuming that he would complete the work in time? And, to borrow Jain’s own phrase, was that not “premature and hypothetical”?

There was no doubt in the minds of Kumar and Kshatriya that the incentive is due to Shirke if 100 pc of the project is completed in time. Yet, Jain says in his letter to this paper: “If there is a lack of clarity in the meaning of contract terms, it is naturally up to the minister, as the chairman of the (rate fixation) panel, to clarify the meaning ofcontract terms…” Indeed, if contract terms are disputed, there is provision for arbitration by an independent arbitrator — not the Minister.

Curiously, Jain ends the letter to this paper by alluding to “hypothetical allegations” again: “I’m told M/s B G Shirke is going to deliver 4671 tenements by the end of April 1999, two months ahead of schedule and hence the hypothetical allegations, motivated and defamatory aspersion cast on the government and the minister do not hold good.” Meaning if Shirke does deliver the houses before time, he would have deserved to be paid Rs 750 per sq ft anyway. But he still does not address the crucial question that begs the answer: Why the hurry? Why should Shirke be paid the incentive in anticipation of timely completion? Who’s assuming, who’s hypothesing?

Jain and Shirke have objected to the phrase “undue enrichment” used in our report while not denying the existence of the letter by Subodh Kumar putting his objections on record. But the phrase has been used byKumar himself not once but thrice in his letter that became such an explosive issue.