Allowed

M/S. Marymatha Construction Company v. State of Kerala

Kerala HC11 Jul 2018WA/1138/2018

Case brief

AI extract

What is this about?

A Division Bench allowed a writ appeal, directing the State to permit the appellant to complete nearly 50% of its medical college hospital construction project using an existing bank guarantee instead of a treasury deposit. The court granted this relief based on factual similarity with a prior judgment but clarified it does not set a precedent for future contracts.

What did the court decide?

Direction to allow the appellant to complete the work on the basis of the bank guarantee already furnished.

M/S. Marymatha Construction Company Vs State… — Public Procurement and Tenders | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE ACTING CHIEF JUSTICE MR.HRISHIKESH ROY

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THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

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WEDNESDAY, THE 11TH DAY OF JULY 2018 / 20TH ASHADHA, 1940

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W.A.No. 1138 of 2018 IN WPC. 40495/2017

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AGAINST THE JUDGMENT IN WP(C) 40495/2017 of HIGH COURT OF KERALA, DATED 29-01-2018

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APPELLANT/PETITIONER:

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M/S. MARYMATHA CONSTRUCTION COMPANY, MARYMATHA SQUARE, ARAKKUZHA ROAD, MUVATTUPUZHA, ERNAKULAM 686 661 REP. BY ITS PARTNER SABUCHERIAN.

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BY ADVS.SRI.S.RAMESH BABU (SR.) SRI.P.SHANES METHAR

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RESPONDENTS:

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STATE OF KERALA,

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REP. BY CHIEF SECRETARY TO GOVERNMENT,

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GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001

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THE SECRETARY,

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PUBLIC WORKS DEPARTMENT,

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GOVERNMENT SECRETARIAT,

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THIRUVANANTHAPURAM - 695 001

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THE SUPERINTENDING ENGINEER, PWD BUILDING, NORTH CIRCLE, PWD COMPLEX, OPP. HEAD POST OFFICE, MANANCHIRA, KOZHIKODE.

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R BY GOVERNMENT PLEADER SRI.ARAVINDKUMAR BABU

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 11-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.A.No. 1138 of 2018

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APPENDIX

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PETITIONER'S ANNEXURES:

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ANNEXURE A1: TRUE COPY OF THE JUDGMENT DATED 31.1.2018 IN W.A.NO.2378/2017.

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// TRUE COPY //

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P.A. TO JUDGE

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Hrishikesh Roy, Ag. CJ. &

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A.K.Jayasankaran Nambiar, J.

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=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= W.A.No.1138 of 2018

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=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= Dated this the 11^th day of July, 2018

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JUDGMENT

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A.K.Jayasankaran Nambiar, J.

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The petitioner in W.P.(C) No.40495 of 2017 is the appellant before us. The writ petition was filed seeking a direction to the third respondent to accept a bank guarantee, in lieu of a treasury deposit, towards 50% of the performance guarantee amounts that were required to be paid in connection with the work awarded to the appellant herein. Following an earlier judgment of this court in Joseph Velupuzhakkal v. State of Kerala and Others (2017 (5) KHC 406), the learned single Judge held that, providing a bank guarantee for the 50% amount would suffice, in lieu of the requirement of providing a treasury deposit for a like amount, for satisfying the condition in the contract with regard to the performance guarantee. The appellant herein had sought the benefit in his case based on the security of Running Account Bills that he had offered in connection with the project and the Single Judge, while granting him the benefit, made it clear that while the respondent was directed to accept the bank guarantee for 50% of the amount, in lieu of the treasury deposit and by way of performance guarantee, if the State Government succeeded in the writ appeal preferred against the judgment in Joseph Velupuzhakkal v. State of Kerala and Others

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W.A.No.1138 of 2018

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(supra), the writ petitioner would be obliged to provide the treasury fixed deposit before the respondent.

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In the writ appeal, the appellant's contention is essentially that, while the writ appeal, preferred by the State against the judgment of the learned single Judge referred above, culminated in Annexure-A1 judgment of this court dated 31.1.2018 in W.A.No.2378 of 2017 whereby a Division Bench of this court found that the condition in the contract which insisted on the tenderer furnishing 50% of the performance guarantee by treasury fixed deposit was a mandatory one, that had to be complied with by all tenderers, it went on to find that, in the peculiar factual situation in that case, where the contractor had furnished a bank guarantee and also completed a part of the work, the contractor should be allowed to complete the work on the basis of the bank guarantee already furnished by him. It is the case of the appellant herein that, in as much as he was also granted the benefit of the judgment of the learned single Judge in Joseph Velupuzhakkal v. State of Kerala and Others (supra), while accepting the legal proposition with regard to the necessity of a tenderer furnishing treasury fixed deposit towards his obligation for furnishing 50% of the performance guarantee, he could also be granted the benefit of Annexure-A1 judgment to the extent of permitting him to continue the work on the basis of the bank guarantee already furnished by him. It is his submission that almost 50% of the work towards construction of the Medical College

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W.A.No.1138 of 2018

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Hospital at Palakkad has been completed.

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We have heard the learned Senior Counsel Sri.S.Ramesh Babu duly assisted by Adv.P.Shanes Methar, for the appellant and the learned Senior Government Pleader Sri.Aravinda Kumar Babu for the respondents.

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On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, and finding that the appellant herein is similarly placed as the respondent contractor in Annexure-A1 judgment of this Court, which reversed the decision of the learned single Judge in Joseph Velupuzhakkal v. State of Kerala and Others (supra), we are of the view that the ends of justice would require that the appellant herein also be extended the same benefit as was extended to the contractor in Annexure-A1 judgment. We take note of the fact that, just as in the case of the contractor in Annexure-A1 judgment, the appellant herein also has completed almost 50% of the work and, on the peculiar factual circumstances of this case, being similar to that of the contractor in Annexure-A1 judgment, the appellant herein should be allowed to complete the work on the basis of the bank guarantee already furnished. Before parting with this case, we might indicate that the aforesaid relief granted to the appellant is after taking note of the peculiar factual situation in the instant case as also the similarity in the circumstances of the appellant herein with the contractor in

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W.A.No.1138 of 2018

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Annexure-A1 judgment and hence, the decision is not to be treated as a precedent in future contracts entered into by the Government, where contractors are under a similar

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obligation to furnish 50% of the performance guarantee through treasury fixed deposits.

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The writ appeal is disposed as above.

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Sd/-

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Hrishikesh Roy, Acting Chief Justice

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Sd/-

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A.K.Jayasankaran Nambiar,

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Judge

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vpv

M/S. Marymatha Construction Company v. State of Kerala

Case brief

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M/S. Marymatha Construction Company v. State of Kerala

Case brief

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