Allowed

Pan Pacific Engineering Services (P) Ltd. v. the Kerala Small Industries Development Corporation

Kerala HC7 Jun 2017WP(C)/6376/2017

Case brief

AI extract

What is this about?

The High Court of Kerala allowed this writ petition filed by a contractor seeking release of security deposit. The court held that while the respondent followed general Public Works Department contract terms implying a three-year period, a specific clause in their tender notice limited the retention period to one year for building works. The court directed the respondent to release the deposit for

What did the court decide?

The petition was allowed and the Corporation was directed to release the security deposit forthwith if one year had expired after completion of work.

Pan Pacific Engineering Services (P) Ltd. Vs… — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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WEDNESDAY, THE 7TH DAY OF JUNE 2017/17TH JYAISHTA, 1939

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WP(C).No. 6376 of 2017 (V)

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PETITIONER(S) :

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PAN PACIFIC ENGINEERING SERVICES (P) LTD., MERRA-17 PRIYA MENONPARAMB ROAD, EDAPPALLY P.O, COCHIN 682 024, REPRESENTED BY ITS MANAGING DIRECTOR, M.G.RAMESH.

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BY ADV. SRI.T.RAJESH

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RESPONDENT(S) :

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1. THE KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION CONSTRUCTION DIVISION, HOUSING BOARD BUILDING, SANTHI NAGAR, THIRUVANANTHAPURAM 695 001, REPRESENTED BY ITS MANAGING DIRECTOR.

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2. THE MANAGING DIRECTOR, THE KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION, CONSTRUCTION DIVISION, HOUSING BOARD BUILDING, SANTHINAGAR, THIRUVANANTHAPURAM 695 001.

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3. CHIEF ENGINEER,

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THE KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION, CONSTRUCTION DIVISION, HOUSING BOARD BUILDING, SANTHINAGAR, THIRUVANANTHAPURAM 695 001.

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BY ADV. SRI.M.RAJAGOPALAN NAIR, S.C

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07-06-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Msd.

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WP(C).No. 6376 of 2017 (V)

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APPENDIX

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PETITIONER(S)' EXHIBITS :

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EXT.P1 A TRUE COPY OF THE NOTICE INVITING TENDERS FOR THE SAID WORK DATED 29.12.2014.

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EXT.P2 A TRUE COPY OF THE SELECTION NOTICE DATED 29.01.2015.

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EXT.P3 A TRUE COPY OF THE AGREEMENT KSCDN/3D/14 DATED 05.02.2015 EXECUTED BETWEEN PETITIONER BY 3RD RESPONDENT.

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EXT.P4 A TRUE COPY OF THE REQUEST MADE BY PETITIONER ON 03.10.2016.

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RESPONDENT(S)' EXHIBITS :

NIL

//TRUE COPY//

P.A.TO JUDGE.

Msd.

P.B. SURESH KUMAR, J.

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W.P.(C) No.6376 of 2017

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-----------------------------------------Dated this the 7^th day of June, 2017

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JUDGMENT

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The petitioner is a contractor. They have executed a building work of the first respondent (the SIDCO), in accordance with the terms of Ext.P1 tender notice issued by them. The grievance of the petitioner is that though the work has been executed by them satisfactorily, the security deposit in respect of the work is yet to be released. The petitioner, therefore, seeks appropriate directions in this regard, in this writ petition.

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A statement has been filed on behalf of the SIDCO. The contention taken by the SIDCO in the statement is that the conditions normally imposed by the

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W.P.(C) No.6376 of 2017 -2-

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Public Works Department in Government tenders are followed by the SIDCO and that the condition in Government contracts is to the effect that the security deposit of the work will be released only after a period of three years.

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Heard the learned counsel for the petitioner as also the learned Standing Counsel for the SIDCO.

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The learned Standing Counsel for the SIDCO relied on clauses 22 and 36 of Ext.P1 notice in support of their contention. Clauses 22 and 36 of Ext.P1 tender notice read thus:

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“22. Measurements— Payment of Bill etc. These shall be in accordance with the practices followed in the Kerala State P.W.D. 22.(a) Payment for earth work shall be made based on levels at least at every alternate bill when the total quantity of earth work exceeds 300m³ .

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22(b) When payments are made based on tape measurements suitable deduction for possible variations upto 15% shall be made. The departmental officer who measures the work shall furnish a certificate to the effect that the quantity as per tape measurements will not exceed the quantity as per level.

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22(c) When payments on earth work exceeding 300m³ are made based on tape measurements, the contractor shall give a

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W.P.(C) No.6376 of 2017

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-3-

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declaration in writing to the effect that the agrees for the recovery of over payments if any from the next bill.

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x x x x x x x x

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x x x x x x x x

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All other conditions are the same as current in Kerala P.W.D.”

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Clauses 22 and 36 do not specifically deal with security deposit. It is, however, seen that clause 9 of Ext.P1 tender notice deals specifically with security deposit. The said clause reads thus :

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“9. The earnest money deposit of the unsuccessful tenderers will be refunded as soon as possible after the tenders are disposed off. The security Deposit amount will not be released before the expiry of one year in the case of building, and six months for road and other works after the issue of the certificate final or otherwise completion of work or till final bill has been prepared and passed whichever is later, till then the responsibility for structure rests with the contractor.”

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The extracted clause indicates beyond doubt that the security deposit will be released one year after completion of the work in the case of building works. When there is a specific clause for release of security deposit, I do not

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W.P.(C) No.6376 of 2017 -4-

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think that the SIDCO can withhold security deposit relying on the general clauses contained in the tender notice. The petitioner, in the circumstances, is entitled to succeed.

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The writ petition is, therefore, allowed and the SIDCO is directed to release the security deposit in respect of the work referred to in the writ petition forthwith, if one year has expired after the completion of work.

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Sd/- P.B. SURESH KUMAR JUDGE

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bpr

Pan Pacific Engineering Services (P) Ltd. v. the Kerala Small Industries Development Corporation

Case brief

What is this about?

What did the court decide?

Pan Pacific Engineering Services (P) Ltd. v. the Kerala Small Industries Development Corporation

Case brief

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What did the court decide?

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