Allowed

Engineering Project (India) Ltd. v. State of Kerala

Kerala HC16 Mar 2017WP(C)/805/2017

Case brief

AI extract

What is this about?

Petitioner, a government enterprise, filed a writ petition seeking payment of a bill for completed construction work and foreclosure of an expired contract. The court directed payment of the dues and authorized the government to proceed with agreement foreclosure.

What did the court decide?

Directors respondents to pay 20% of outstanding amount by 31.03.2017 and balance in two monthly installments starting 15.04.2017.

Engineering Project (India) Ltd. Vs State of Kerala — Specific Performance | 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 SHAJI P.CHALY

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THURSDAY, THE 16TH DAY OF MARCH 2017/25TH PHALGUNA, 1938

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WP(C).No. 805 of 2017 (A)

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PETITIONER :

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ENGINEERING PROJECT (INDIA) LTD., (A GOVERNMENT OF INDIAN ENTERPRISE), 3D, EC CHAMBERS, 92 GN CHETTY ROAD, T. NAGAR, CHENNAI-600 017, REPRESENTED BY ITS SENIOR MANAGER.

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BY SRI.S.RAMESH BABU,SENIOR ADVOCATE ADV.SRI.P.SHANES METHAR

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.

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2. THE PRINCIPAL SECRETARY, DEPARTMENT OF FISHERIES AND HARBOUR, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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3. THE CHIEF ENGINEER, HARBOUR ENGINEERING DEPARTMENT, KAMALESWARAM, MANACAUD P.O.,

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THIRUVANANTHAPURAM-695 009.

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4. THE SUPERINTENDING ENGINEER, HARBOUR ENGINEERING DEPARTMENT, CENTRAL CIRCLE, ERNAKULAM-682 018.

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5. THE EXECUTIVE ENGINEER, OFFICE OF THE EXECUTIVE ENGINEER, HARBOUR ENGINEERING DEPARTMENT, MUNICIPAL SATHRAM BUILDING, OPP. DISTRICT COURT, ALAPPUZHA-688 001.

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R1 TO R5 BY GOVERNMENT PLEADER SRI.S.KANNAN

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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sts

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WP(C).No. 805 of 2017 (A)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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P1 TRUE COPY OF THE LETTER OF ACCEPTANCE NO. D3-4812/12/HECC DATED 23/11/2013 ISSUED BY THE 4TH RESPONDENT

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P2 TRUE COPY OF THE CONTRACT AGREEMENT NO. 64/2013-14/HECC DATED 12/12/2013

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P3 TRUE COPY OF THE EXTENDED BANK GUARANTEE NO. LG NO. 408/IOB/LGI/101/2013 DATED 28/07/2016

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P4 TRUE COPY OF THE MINUTES OF THE MEETING HELD AT THE OFFICE OF THE ASSISTANT EXECUTIVE ENGINEER, HARBOUR ENGINEERING SUB DIVISION, ARTHUNGAL DATED 31/10/2015

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P5 TRUE COPY OF THE LETTER NO. D1-3257/13/EE/H.E.R.D.N (A) DATED 18/09/2015 ISSUED BY THE 5TH RESPONDENT

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P6(A) TRUE COPY OF THE LETTER DATE 30/11/2015 ADDRESSED TO THE 2ND RESPONDENT

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P6(B) TRUE COPY OF THE LETTER DATED 05/01/2016 ADDRESSED TO THE 4TH RESPONDENT

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P6(C) TRUE COPY OF THE LETTER DATED 31/05/2016 ADDRESSED TO THE 2ND RESPONDENT

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P6(D) TRUE COPY OF THE LETTER DATED 24/06/2016 ADDRESSED TO THE 4TH RESPONDENT

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P7 TRUE COPY OF THE APPROVED CC XII AND PART BILL NO. A1-3065/15/EE/HEDD (A) FOR AN AMOUNT OF RS.98,57,165/-

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P8 TRUE COPY OF THE LETTER NO. D3/249/2013/CE DATED 27/07/2016 OF THE 3RD RESPONDENT ADDRESSED TO THE 2ND RESPONDENT

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P9 TRUE COPY OF THE LETTER NO. D3/249/2013/CE DATED 23/11/2016 OF THE 3RD RESPONDENT ADDRESSED TO THE 2ND RESPONDENT

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P10 TRUE COPY OF THE LETTER NO. D3-4812/12/HECC DATED 19/10/2016 ISSUED BY THE 4TH RESPONDENT

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RESPONDENT(S)' EXHIBITS

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R4(A) TRUE COPY OF THE RELEVANT EXTRACT OF CONDITIONS OF CONTRACT .

/TRUE COPY/

P.S.TO JUDGE

sts

SHAJI P. CHALY, J.

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W.P.(C). No.805 of 2017

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----------------------------------------------Dated this the 16^th day of March, 2017

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JUDGMENT

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Petitioner is a Government of India Enterprise, which is

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engaged in construction activities. Petitioner was awarded with Ext.P1 work of construction of Fishing Harbour at Arthungal - 2^nd stage construction of breakwater, Wharf, Auction Hall and Hygienic arrangements, covered fish loading area, approach road, Internal road, parking area etc. for a total contract value of Rs.44,22,89,254/-. The time for completion of the work was 30 months from 16.12.2013. According to the petitioner, from the inception onwards, petitioner could not proceed with the work intermittently, on instructions from respondents 3 and 4. IIT Chennai was entrusted to conduct study and suggest remedial measures and the work commenced on their recommendations but the petitioner was directed to stop the work from 25.11.2015, since there is no work in the site. An amount of Rs.1,02,04,246/- is due from the respondents for the work already done. Respondents have approved the bill, sanctioned

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W.P.(C). No.805 of 2017

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the amount and the same is now deposited in the account of the 5^th respondent. However, respondents are not releasing Ext.P7 bill amount to the petitioner stating that, unless the petitioner apply for extension of time of completion of the work, the amount will not be released. It is also contended that, respondents have admitted that it is not feasible to carry on with Ext.P2 work. That apart it is submitted, mere perusal of Exts.P8 to P10 will establish the said fact. It is thus seeking appropriate direction to release Ext.P7 bill and for further direction to foreclose Ext.P2 on the basis of recommendations contained in Exts.P8 to P10, this writ petition is filed.

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Respondents 3 and 4 filed a counter affidavit refuting the allegations and claims and demands raised by the petitioner. Apart from other contentions, it is stated that, as per the terms and conditions of the contract, petitioner had to furnish a performance guarantee to the tune of Rs.5,45,14,200/-. Ext.P2 agreement was executed by the petitioner to complete the work within a period of 30 months, on 12.12.2013. Accordingly, site for the work was handed over to the petitioner on 16.12.2013. As such, the work could have been completed on or before

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W.P.(C). No.805 of 2017

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15.06.2016. The period of completion stipulated in Ext.P2 agreement expired on 16.6.2016. Due to the excessive settlement of slushy sea bed, the quantity of construction materials were considerably increased beyond that of agreement quantity and the work was stopped on 25.11.2015. Petitioner thereby requested either to resume work or to close the agreement. It is submitted further, the request of the petitioner for foreclosure of the works was forwarded to the Government and the same is pending consideration. The amount allotted in favour of the said work with respect to CC-XII and part bill could not be released to the petitioner since there is no valid agreement existing as of now. Petitioner was directed to submit an application for extension of time for completion of the work by executing a supplemental agreement, nevertheless petitioner has not chosen to execute the supplemental agreement pertaining to the work. It is also submitted that, there was no work from 14.5.2014 to 1.9.2014 due to the protest of the local people as there was sea erosion near to the site.

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The said issue was settled after convening a meeting under the District Administration and the work could only be resumed

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W.P.(C). No.805 of 2017

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on 1.9.2014. But it was again stopped on 25.10.2014 due to the sinkage of the breakwater. After sorting out the said issue, the work was resumed on 13.10.2015, after getting expert opinion from IIT, Chennai. Sinkage of the breakwater was again noticed on 13.11.2015 and the matter was again reported to the Chief Technical Examiner. The Chief Technical Examiner instructed to resume the work only after getting sanction from the Government for the revised estimate for the excess quantity, due to sinkage. Petitioner had then requested for revision of rates for the excess quantities, but it was not admissible as per the terms of the mutually agreed terms of the contract. That apart it is stated, in the conditions of the contract it is clearly specified that, the quantities given in the schedule may widely varies and hence the contractor is bound to execute the excess quantities at the agreed rates as per clause 3 of special conditions of contract, which is mutually signed by the petitioner and the 4^th respondent, evident from Ext.R4(a). That apart it is contended that, in spite of the earnest efforts of the respondents, petitioner has not cared to enter into a supplemental agreement, which prevents the respondents from making the payment as per

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W.P.(C). No.805 of 2017

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Ext.P7.

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Heard learned counsel for the petitioner, learned Government Pleader and perused the documents on record and the pleadings put forth by the respective parties.

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The sole question to be considered is whether the petitioner is entitled for release of the bill as per Ext.P7. Execution of the agreement, consequential work carried out by the petitioner to a certain extent and Ext.P7 bill raised by the authority are all admitted facts. The sole objection raised by the respondents is that, since the agreement period is over on 15.6.2016, the amount could not be paid since the petitioner refused to enter into a supplemental agreement to execute the balance work. It is also contended by the learned Government Pleader that, since there is a term in the contract that, petitioner is bound to do any excess work, petitioner was duty bound to enter into a supplementary agreement as and when requested by the respondents.

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Taking note of the respective submissions made across the Bar, it is categoric and clear that, the work was delayed

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W.P.(C). No.805 of 2017

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not due to the fault on the part of the petitioner and the same was delayed due to the natural phenomenon and consequences arose thereto. The respondents are not having a different case than that is raised by the petitioner in the writ petition. Since the petitioner is not responsible for the delay in completing the work, petitioner has sought the State Government to foreclose the agreement. It was thereupon that, Ext.P9 recommendation was made by the Chief Engineer

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as per communication dated 23.11.2016 issued to the Principal Secretary of the 1^st respondent and a finality is not attained to the same also. It is also interesting to note that, the work of the petitioner was never terminated, which thus means, there was no manner of delay or laches on the part of the petitioner to complete the work in terms of the agreement conditions.

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Reckoning all these facts and circumstances, I do not find any reason for the respondents to withhold Ext.P7 part bill. In that view of the matter, there will be a direction to the respondents to pay the amounts due to the petitioner as per

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W.P.(C). No.805 of 2017

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Ext.P7, as provided hereunder:

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20% of the amount outstanding shall be paid on or before 31.3.2017 and the balance shall be paid in two equated monthly installments starting from 15.4.2017 and on the corresponding day of the succeeding month.

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I also make it clear that, the State Government will be at liberty to finalise the proceedings as per Ext.P2 request made by the petitioner to foreclose the contract, and recommended as per Ext.P9 by the Chief Engineer and in that process the 1^st respondent will be at liberty to deliberate on the issue with respect to the execution of supplementary agreement for the balance work to be carried out. A notice shall be issued to the petitioner, and attain finality within two months from the payment of the amounts due, as directed above.

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Writ petition is disposed of accordingly.

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smv Sd/20.3.2017 SHAJI P. CHALY JUDGE

Engineering Project (India) Ltd. v. State of Kerala

Case brief

What is this about?

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Engineering Project (India) Ltd. v. State of Kerala

Case brief

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