Partly allowed

George M.Philip v. State of Kerala

Kerala HC9 Nov 2020WA/1453/2020

Case brief

AI extract

What is this about?

The High Court disposed of a writ appeal challenging an interim order requiring a contractor to furnish a bank guarantee to stay the termination of his public works contract. The Court modified the order, reducing the required sum from Rs.25 lakhs to Rs.15 lakhs.

What did the court decide?

The interim order was modified to require the appellant to furnish a bank guarantee of Rs.15 lakhs instead of Rs.25 lakhs within ten days from the date of the judgment.

George M.Philip Vs State of Kerala — Contract and Commercial Disputes | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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MONDAY, THE 09TH DAY OF NOVEMBER 2020 / 18TH KARTHIKA, 1942

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W.A.No.1453 OF 2020

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AGAINST THE ORDER IN WP(C)21913/2020(L) OF HIGH COURT OF KERALA dated 16.10.2020

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APPELLANT/PETITIONER:

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GEORGE M.PHILIP, AGED 60 YEARS S/O.M.P. PHILIPOSE, CONTRACTOR, MUTTUMTHARAPADICKAL HOUSE, PARAMPUZHA P.O. KOTTAYAM 4.

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BY ADVS. SRI.BABU JOSEPH KURUVATHAZHA SMT.K.S.ARCHANA

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RESPONDENTS/RESPONDENTS:

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1 STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF PUBLIC WORKS, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001.

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2 CHIEF ENGINEER, PUBLIC WORKS DEPARTMENT (ROADS AND BRIDGES), PUBLIC OFFICES, MUSEUM P.O. THIRUVANANTHAPURAM 695 033.

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3 SUPERINTENDING ENGINEER, PUBLIC WORKS DEPARTMENT (ROADS AND BRIDGES), SOUTH CIRCLE, PUBLIC OFFICES, MUSEUM P.O. THIRUVANANTHAPURAM 695 033.

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4 EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT (ROADS DIVISION), ALAPPUZHA 688 001.

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SRI.K.V.MANOJ KUMAR, SR. G.P. FOR RESPONDENTS

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09.11.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.A.No.1453 OF 2020

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JUDGMENT

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Dated this the 9^th day of November 2020

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S.MANIKUMAR, C.J.

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Instant writ appeal is filed by the appellant, a contractor, challenging an interim order dated 16.10.2020 in W.P.(C)No.21913 of 2020 and 20516 of 2020, by which a learned Single Judge directed the appellant to furnish the bank guarantee worth Rs.25 lakhs.

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Short facts leading to the filing of this writ appeal are as follows: The appellant was awarded with a contract work for effecting improvements to the road from Vattappayithara Temple to Thuruthichira Road and for the construction of single cell box culvert at Ward No.8 of Ambalappuzha North Panchayat by the third respondent/the Superintending Engineer, PWD (Roads and Bridges), Thiruvananthapuram.

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According to the appellant, during the course of execution of the said work, appellant submitted Ext.P3 representation before the respondents 2 and 3/Chief Engineer and Superintending Engineer respectively to supply bitumen departmentally, and in pursuance to Ext.P4 judgment dated 17.6.19 in W.P. (C)No.16359/20, the second respondent issued Ext.P5 order, declining the said request of the appellant.

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Later, the third respondent issued Ext.P6, directing the appellant to complete the balance work. Immediately on receipt of Ext.P6, appellant submitted Ext.P7 to the third respondent, extending his willingness to complete the balance work. Ext.P7 was sent through registered post. However, without even referring to Ext.P7, the 3^rd respondent issued Ext.P8 order, terminating the

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W.A.No.1453 OF 2020

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balance work at the risk and cost of the appellant. Thereafter the appellant submitted Ext.P9 representation before the 3^rd respondent and Ext.P9(a) representation before the 2^nd respondent, requesting to permit the appellant to complete the balance work.

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In the above circumstances, appellant has approached this court with W.P.(C)No.21913 of 2020 with a prayer to direct the respondents to permit him to complete the balance work. However, in the meanwhile third respondent issued Ext.P10 re-tender notification for awarding the balance work involved in Ext.P8 order. As per the order dated 16.10.2020 the learned Single Judge directed the appellant to furnish bank guarantee for Rs.25 lakhs, as a pre condition for staying the operation of Ext.P10, without examining the contention of the appellant that the Ext.P8 order was issued, in violation of the principles of natural justice, without even referring to Ext.P7. Hence the appeal.

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Apart from reiterating the above and assailing the correctness of the interim order, Mr.Babu Joseph Kuruvathazha, learned counsel for the appellant submitted that for the remaining work, to construct culvert, as per the agreement, respondents have to provide bitumen concrete. Culvert to be constructed is under the control of the Central Government. For the purpose of constructing a culvert in the national canal, it is necessary to get the necessary permission from the Central Government. But according to the appellant, no permission has been obtained by the respondents from the Central Government. Therefore, the only remaining work to be executed by the appellant is bituminous work worth about Rs.20 lakhs. It is relevant to be noted that an amount of Rs.8.5 lakhs is due to the appellant from the respondents, in connection with the work satisfactorily executed by him.

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W.A.No.1453 OF 2020

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Heard Sri.K.V.Manoj Kumar, Senior Government Pleader appearing for the respondents.

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Interim order in W.P.(C)No.21913/2020 dated 16.10.2020, impugned in this appeal reads thus:

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“The learned counsel for the petitioner submits that petitioner would complete the work within a period of one month. Therefore there shall be a direction to the respondents to permit the petitioner to restart and complete the work within a period of one month from today, provided that petitioner would furnish a Bank Guarantee for a sum of Rs.25,00,000/- (Rupees Twenty Five Lakhs only), before the competent among respondents 3 and 4 within a period of one week. Therefore further proceedings based on Ext.P10 in W.P.(C)No.21913/2020 shall be kept in abeayance to the extent it relates to Sl.No.134, for a period of one month.

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Post on 05.11.2020.”

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Ext.P5, dated 16.7.2019, is the proceedings of the Chief Engineer, PWD, (Roads and Administration), Thiruvananthapuram, rejecting the supply of bitumin by the department, which reads as under:

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PROCEEDINGS OF THE CHIEF ENGINEER, PWD, ROADS & ADMINISTRATION, THIRUVANANTHAPURAM

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(Present: Darlene Carmelita D'cruz)

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Sub: MLA ADS 14-15 of Improvements to road from Vattapayithara temple to Thurthichira road and 4.00 X4.00 single cell box culvert in Ambalapuzha North Panchayath ward No.8 ch.0/000 to 1/000.

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Read: 1. Judgment in WP(C) No.16359 of 2019 dated 17-6-2019.

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Lr. No. F2/2006/2013 dated: 15.07.2019 of the Superintending Engineer, PWD Roads South Circle, Thiruvananthapurarn.

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Minutes of the hearing conducted by Chief Engineer on 10.07.2019.

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W.A.No.1453 OF 2020

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Order No CE/Roads/ALP/8126/2019 dated: 16.07.2019

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WP(C) No. 16359/2019 was filed by the contractor Sri.George M Philip praying to supply the necessary quantity of bitumen, emulsion and bitumen for enabling the petitioner to execute the bituminous works for the work "MLA ADS 2014-15 of improvements to road from Vattapayithara temple to Thurthichira road and 4.00 X4.00 single cell box culvert in-Ambalapuzha North Panchayath ward No.8 ch.0/000 to 1/000". As per judgment dated, 17/06/2019 the Hon. High Court has directed to the second respondent to finalise Ext. P7 in accordance with law, and attain finality at the earliest and, at any rate, within a month from the date of receipt of a copy of the judgment. Based on the directions in the judgment a hearing was conducted by the Chief Engineer, PWD, Roads on 10/07/2019. At the time of hearing the petitioner has requested to supply bitumen required for the above work considering his quoted value of work that is Rs.86.85,458/-.

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The Administrative Sanction was issued for the above work as per GO(Rt)No.1830/ 2015/LSGD dated, 19/06/2015 for Rs.110 lakhs. Technical Sanction was issued by Chief Engineer, Roads and Bridges as per order no.234/CE/R/2015-16/234 dated, 29/02/2016 for Rs. 110 lakhs. The tender of Sri. George.M.Philip, the petitioner was accepted at his quoted rate of Rs.86,85,458/- 16.01% below estimate rate based on DSR 2014 less cost of departmental materials. Agreement was executed by the contractor as per Agreement No.213/SESC, 16-17 dated, 15.12.2016, time of completion of the work was 6 months which was upto 20.6.2017. Revised estimate for the work was approved for Rs.1,09,95,111/- as per letter No.CE/R&B/ALP/14246/15 dated, 18/7/2017 of Chief Engineer, PWD Roads and Bridges. Time of Completion of the work was extended twice that is upto 31.3.2019 by imposing fine.

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As per the agreement conditions and as per GO(P)No.03/15/Finance dated, 5/01/2015 it was ordered that departmental bitumen supply will be restrict for emergency works only. The above GO has been modified as per GO(P)375/15/Fin dated 24/08/2015 and ordered that “the restriction imposed in the department supply to bitumen in respect of all departmental works upto the limit of Rs.100 lakhs shall be dispensed with. In addition to the above clause 2104 of Revised PWD Manual states that “No departmental materials shall be issued to the contractor from the department. Bitumen required for the work shall be issued from the department for works costing upto TS powers of the Superintending Engineer. The TS power of Superintending Engineer is 100 lakhs. In this case the cost of work is Rs.110 lakhs which is more than the TS powers of Superintending Engineer. As per the above orders, departmental supply of bitumen cannot be granted. Therefore the request (Ext.P7) of the petitioner to supply departmental bitumen for his work cannot be accepted.

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Thus the judgment of the Hon.High Court is complied.

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Sd/-

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CHIEF ENGINEER

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W.A.No.1453 OF 2020

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From the above, it could be seen that the work has to be completed by 20.6.2017. Time for completion of the work was extended twice upto 31.3.2019 by imposing fine. Request for supply of bitumin by the department has been rejected, citing reasons. Thereafter, by Ext.P6 letter dated 19.8.2020, of the Superintending Engineer, PWD, Thiruvananthapuram, the appellant has been requested to complete the balance work within 15 days, failing which the department would take necessary action. Translated version of Ext.P6 letter dated 19.8.2020, reads thus:

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Office of the Superintending Engineer, Public Works Department, Roads South Circle, Thiruvananthapuram-33. Phone No.0471-232124-Fax 0471-2329279 [email protected]. Date: 19.08.2020

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No.DD4-3469/2015

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From

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Superintending Engineer

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Mr. George M. Philip Muttumtharapadickal Parampuzha P.O. Kottayam.

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Sir,

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Sub:- MLA-ADS-14-15 of Improvements to Road from Vattapayithara Temple to Thuruthichira road and 4.00x4.00 single cell box culvert in Ambalapuzha North Panchayath ward No.8 ch.0/000 to 1/000

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Ref:- (1) Agreement No.213/SESC/2016-17 dated 15.12.2016.

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(2) Letters dated 19.12.2019, 12.02.2020 and 28.05.2020, bearing No.AB9-3945/2014 issued by the Executive Engineer, Roads Division, Alappuzha.

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The time of completion of the work referred above, was over on 20.6.2017. The said time was extended up to 31.3.2019, on the basis of

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W.A.No.1453 OF 2020

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your request. However, it was informed by the Executive Engineer, Roads Division, Alappuzha, as per the 2nd referred letters that you have executed only 50% of the work. Though on several occasions, you were telephonically as well as through letters directed to complete the work, no action was taken on your part.

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In the above circumstances, you are hereby directed to arrange necessary proceeding, within 15 days, for completing the balance work, failing which department shall be taking necessary action, as per the terms and conditions of the agreement. Apart from that, the said work shall be rearranged, at your risk and cost. You have to treat this letter as final notice and you would not be issued with any other notice, in the above regard.

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Yours faithfully, Sd/Superintending Engineer

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Thereafter, the appellant has sent Ext.P7 letter dated 3.9.2020 to the

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Superintending Engineer, R&B South Circle, Thiruvananthapuram, translated version of which reads thus:

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GEORGE M PHILIP Phone : 04812577788 PWD Contractor Mobile: 9446465788 Muttumtharapadickal 944766411 Parampuzha P O Email: Kottayam 686 004 [email protected]

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The Superintending Engineer, R&B South Circle Thiruvananthapuram.

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Sub: Reply to the Letter No.DB4-5469/ 2015 — MLA ADS 14 - 15, Improvement to road from Vattappayithara temple to Thuruthichira road 4x4 single culvert in Ambalapuzha Panchayat Ward No.8 Ch.. 0021 /002.

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W.A.No.1453 OF 2020

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Sir,

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The reason for delaying the execution of the above work was the chain of death occurred at my home. My mother, wife and father died. Apart from that, I was facing severe financial crises. However, with the utmost desire to complete the work, I had executed the wet mix work for 400 M. I had also arranged the wet mix for executing the balance 600 M, at the site. But my application seeking experience certificate, for the renewal of my license, was not issued from the Divisional Office, Alappuzha. Because of the non-issuance of the said certificate by the Executive Engineer, I could not renew the license. If my license is renewed, I shall be completing the work, forthwith. Therefore it is, humbly prayed that your goodself shall be pleased to take favourable decision, for enabling me to complete the work.

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Yours faithfully,

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Sd/George M Philip

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Vide Ext.P8 dated 8.9.2020, the work awarded to the appellant has been terminated at his risk and cost with immediate effect as per the agreement conditions. Also, 30% amount of the balance work has to be recovered from the contractor as per PWD Manual Cl.2116.2.1. Ext.P8 dated 8.9.2020, order of the Superintending Engineer, Thiruvananthapuram, reads thus:

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PROCEEDINGS OF THE SUPERINTNDING ENGINEER, PWD ROADS, SOUTH CIRCLE THIRUVANANTHAPURAM

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(PRESENT: GEETHA.P.L.)

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Sub: MLA-ADS-14-15 Improvements to Road from Vattapayithara Temple to Thuruthichira road and 4.00 x 4.00 single cell box culvert in Ambalapuzha North Panchayath ward No.8 Ch.0/000 to 1/000

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Ref: -1) AS No.G.0.(Rt) No:1830/2015/LSGD. dated.19.06.2015 for Rs.110 lakhs 2. TS NO:234/CE/R/2015-16/234.dated.29.02.2016 for Rs.110 lakhs

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This office Selection Notice dated.30.:09.2016

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This office Agreement No.213/SESC/2016-17 dated.15.12.2016

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Final Notice from this office dated.19.08.2020

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Letter from Executive Engineer, Roads Division, Alappuzha dated 07.09.2020 ORDER No. DB 4/3469/2015 DATED 08.09.2020

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W.A.No.1453 OF 2020

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Administrative Sanction for this work was accorded vide reference Ist cited for Rs.110/- lakhs and Technical Sanction accorded vide reference 2^nd cited for Rs.110 lakhs. The work was tendered vide tender No.PSQ-19/SESC/2016-17 (Re-tender) from this office and awarded to the contractor Sri.George.M.Philip, Alen Construction, Muttumthara Padickal, Perampuzha.P.O., Kottayam District at 16.01% below estimate rate. The selection Notice was issued from this office vide reference 3^rd cited and agreement executed vide reference 4^th cited by fixing the time of completion as 6(six) months. But the contractor couldn't complete the work within the actual time of completion and hence extension was granted upto 31.12.2017 imposing fine of Rs.50,000/- and further extended upto 31/03/20I9 by imposing fine of Rs.1,00,000/-.

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Vide reference 5^th cited, final notice was issued to the contractor on 19.08.2020. Vide reference 6^th cited the Executive Engineer, Roads Division, Alappuzha has reported that the Contractor couldn't complete the work within the extended period of time. The over all progress is only 50% as reported by Executive Engineer. Also the contractor has not taken any steps to resume and complete the work till date. The Executive Engineer has requested to take necessary action to terminate the contractor from the agreement and to rearrange the work at his risk and cost.

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Hence it is hereby ordered that the subject work awarded to Sri.George.M.Philip. Alen Construction, Muttumthara Padickal, Perampuzha.P.O., Kottayam District is hereby terminated at his risk and cost with immediate effect as per agreement conditions. Also, 30% amount of balance work shall be recovered from the contractor as per PWD Mannual CI.2116.2.1.

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SUPERINTENDING ENGINEER

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Sri.George.M.Philip Alen Construction Muttamthara Padickal Perampuzha.P.O. Kottayam

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Thereafter, the appellant has sent Ext.P9, dated 18.9.2020, communication to the Superintending Engineer, PWD (Roads & Bridges),

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W.A.No.1453 OF 2020

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Thiruvananthapuram, requesting to revoke the termination order. Letter dated

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18.9.2020, Ext.P9 reads thus:

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From George M Philip Contractor, Muttumtharapadickal House, Parampuzha P O, Kottayam-4.

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To The Superintending Engineer, PWD. (Roads & Bridges), South Circle, Public Offices, Museum P.O., Thiruvananthapuram-695 033.

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Sir,

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Sub:- Request for revoking the order of termination, for enabling me to complete the balance work.

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Ref:- 1. Agreement No.213/SESC/2016-17 dated 15.12.2016 executed with your good self.

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My representation dated 27.5.2019 submitted before your goodself, requesting to supply the bitumen departmentally. 3. Judgment of the Hon'ble High Court of Kerala dated 17.6.2019 in W.P.(C)No.16359/2019.

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The Order No.CE/Roads/ALP/818126/2019 dated 16.7.2019 issued by the Chief Engineer, in pursuance to the 3^rd referred judgment.

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The Letter No. D84-3469/2015 dated 19.8.2020 issued by your good self.

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The Reply dated 3.9.2020 submitted by me, immediately upon receipt of the 5th referred letter of your goodself, through registered post.

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The Order No.DB 4/3469/2015 dated 8.9.2020 issued by your goodself.

¶118

On executing the 1st referred agreement, the contract work for effecting improvements to the road from Vattappayithara Temple to Thuruthichira Road at Ch.0/000 to 1/000 and for the construction of single cell box culvert of 4 m x 4 m (2 nos.), at Ward No.8 of Ambalappuzha North Panchayat, was awarded to me at the rate of 16.1% below the estimate PAC of Rs.1,02,47,942/- that is at the rate of Rs.85,98,024/-.

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Since the agreed PAC of the said work was below Rs.1 crore, I submitted the 2nd referred representation before your goodself, requesting to supply the bitumen departmentally.

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Later, my 2nd referred representation was considered by the Chief Engineer, in pursuance to the 3rd referred judgment of the

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W.A.No.1453 OF 2020

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Hon'ble High Court of Kerala and as per the 4th referred order, the Respected Chief Engineer rejected my request for the supply of bitumen, departmentally.

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Later, your goodself issued the 5th referred letter, directing me to complete the balance work involved in the 1^st referred agreement, at the earliest, and to complete the work within 15 days.

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Immediately upon getting the 5^th referred letter of your goodself, I submitted the 6th referred reply, extending my willingness to complete the work. In the 6^th referred reply, I have explained the reasons for the delay in completing the work such as (1) my wife died on 23.2.2019 (2) my father died on 14.4.2019, after prolonged treatment and I was in mental stress, to get involved in any activity.

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The 6^th referred letter was sent through registered post with acknowledgement due and it was duly received by your goodself.

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However, it was without even referring to the 6th referred reply submitted by me, that the 7th referred order was issued by your goodself, terminating the balance work involved in the 1st referred agreement, at my risk and cost.

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As on now, I am very stable both mentally and physically. I have sufficient financial resources, to complete the balance work involved in the 1st referred agreement, within 1 month from the current weather condition of raining is over.

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Unless otherwise your goodself is pleased to revoke the last referred order, terminating the work at my risk and cost, I shall be subjected to very severe hardships, prejudice and injustice. I am ready to complete the balance work within 1 month from the date of revoking the last referred order of your goodself. In order to establish my worthiness in the above assurance, I am even ready to furnish the security as may he fixed by your goodself and your goodself may be pleased to fix a schedule for completing the balance work involved in the agreement.

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Hence, I humbly pray that your esteemed authority may be pleased to revoke the last referred order, for enabling me to complete the balance work involved in the 1st referred agreement within 1 month.

Thanking You,

Yours faithfully,

Kottayam 18-09-2020

George M. Philip

Though the learned counsel for the appellant, cited death of his near relatives as one of the causes for not completing the work, perusal of the

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W.A.No.1453 OF 2020

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material on record shows that the contract agreement was entered into between the parties on 15.12.2016. Work ought to have been completed on 20.6.2017. Time for completion of the work was six months. Extension of time was granted upto 31.12.2017 by imposing a fine of Rs.50,000/- and further extension of time was granted upto 31.3.2019 imposing a fine of Rs.1,00,000/-. Needless to state that fine would be imposed only if the reasons assigned for non completion of work offered by the contractor are not genuine and bonafide. Work which ought to have been completed by 20.6.2017, has been dragged on and delayed. Death in the family of the appellant was on 23.2.2019 and 14.4.2019. Issue as to whether the Superintending Engineer (R&B), Thiruvananthapuram has not considered Ext.P7, dated 3.9.2020, before terminating the contract vide Ext.P8 proceedings, is a matter to be considered by the writ court and while considering the correctness of the interim order, we cannot delve into the same.

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At this juncture, what is required to be considered is whether the interim order is necessitated, on the pleadings and material on record. As stated supra, while terminating the contract vide Ext.P8 dated 8.9.2020, it is also recorded that 30% of the amount of balance work has to be recovered from the appellant as per the PWD Manual Clause 2116.2.1, when the prayer to set aside Ext.P8 dated 8.9.2020 has been made, considering the material on record writ court has directed the appellant to furnish a bank guarantee as stated supra.

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Mr.Babu Joseph Kuruvathazha, learned counsel for the appellant also submitted that within a period of three weeks from today the entire balance work will be completed. Though the learned counsel for the appellant made submissions on various contentions raised in the writ appeal and also expressed

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difficulty in raising the amount for furnishing the bank guarantee of Rs.25 lakhs before the competent authority among respondents 3 and 4, within a period of one week from the date of passing of the interim order in W.P.(C)No.21913 of 2020 dated 16^th October 2020, we are not inclined to interefere with the interim order, except to reduce the bank guarantee for a sum of Rs.15 lakhs to be submitted to the respondents 3 and 4 within a period of ten days from today.

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Placing on record the above submission, we modify the interim order dated 16^th October 2020 in W.P.(C)No.21913 of 2020 as indicated above.

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Writ appeal is disposed of accordingly.

SD/S.MANIKUMAR

CHIEF JUSTICE

SD/-

SHAJI P. CHALY JUDGE

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jes

George M.Philip v. State of Kerala

Case brief

What is this about?

What did the court decide?

George M.Philip v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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