Allowed

A.P.Narayana Pisharady v. the Executive Engineer

Kerala HC8 Dec 2020WP(C)/11797/2020

Case brief

AI extract

What is this about?

Petitioner challenged withholding of 20% contract amount and performance bond alleging arbitrary grounds. Court held respondents bound by contract specs and directed release of dues subject to minor compliance.

What did the court decide?

Respondents directed to release balance 20% amount within one month of compliance with minor works; performance security deposit released subject to defect liability clause.

A.P.Narayana Pisharady Vs the Executive… — 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 MR.JUSTICE N.NAGARESH

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TUESDAY, THE 08TH DAY OF DECEMBER 2020/17TH AGRAHAYANA, 1942

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WP(C).No.11797 OF 2020(Y)

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PETITIONER:

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A.P.NARAYANA PISHARADY, J.P.CONSTRUCTIONS, SWATHY, NARAYANA PISHARADY ROAD, KANATTUKARA, THRISSUR.

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BY ADVS. SRI.B.S.SWATHI KUMAR SMT.ANITHA RAVINDRAN SRI.HARISANKAR N UNNI SMT.P.S.BHAGYA SURABHI

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RESPONDENTS:

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1 THE EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT, BUILDING DIVISION, THRISSUR-680 584

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2 THE ASSISTANT ENGINEER, PUBLIC WORKS DEPARTMENT, SPECIAL BUILDING SECTION, MULAMKUNNATHUKAVU, THRISSUR-680 581

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3 THE PRINCIPAL, GOVERNMENT MEDICAL COLLEGE, THRISSUR-680 584

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R1-3 BY GOVERNMENT PLEADER SMT.K.M.RASHMI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-12-2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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N. NAGARESH, J.

W.P.(C) No.11797 of 2020

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Dated this the 8^th day of December, 2020

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J U D G M E N T

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~ ~ ~ ~ ~ ~ ~ ~ ~

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The petitioner, who is a B Class Contractor, has filed this writ petition seeking to declare that the petitioner is eligible to receive the entire amount sanctioned as per Ext.P5 and withholding of 20% from that amount by the respondents, is highly illegal, arbitrary and without any sanction of law. The petitioner also seeks release of Performance Security Deposit with 18% interest.

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On 29.11.2016, as per Ext.P1, the petitioner entered into a contract with the 1^st respondent for executing the work of Setting up of Incinerator for Waste Treatment facilities in the Government Medical College, Thrissur. The

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accepted tender amount was 49,99,757/-. The petitioner deposited 2,50,000/- as Performance Security Deposit.

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The petitioner completed the work on 27.03.2018. The 2^nd respondent issued Ext.P4 certificate of completion of work on 18.06.2018. By Ext.P5, the Chief Engineer issued Deposit Verification Report for payment of `37,36,978/- to the petitioner. The Chief Engineer ordered that payment may be effected for Ext.P5 bill at Thrissur District Treasury.

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In spite of the repeated requests made by the petitioner, only 80% of the contract amount has been released to the petitioner on the premises that the work of the petitioner has technical defects. Subsequently, the petitioner was orally informed that the height of the Chimney of the incinerator is only 15 metres whereas the Pollution Control Board insists 30 metres, as per the new norms.

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The petitioner states that the work tendered was one stipulating construction of a waste incinerator of 'Thermax' make, 18–100 kg/hr, Model PY 200, having self supported Chimney having 15 metres height. By Ext.P8, the

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Assistant Engineer, PWD, intimated the petitioner that the State Pollution Control Board and Electrical Inspector have pointed out certain defects and the Principal of the Government Medical College has informed that the incinerator will be taken over from Public Works Department only after curing all the defects and obtaining permit from the Pollution Control Board. The withholding of amounts due to the petitioner on those grounds is highly arbitrary and unreasonable, contended the petitioner.

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The learned Government Pleader filed a memo producing supplemental agreement and strongly opposed the contentions of the petitioner. The learned Government Pleader argued that the work awarded to the petitioner would include obtaining necessary licence and permission from Pollution Control Board and all other statutory authorities. The Pollution Control Board has noted that the Chimney of the incinerator should have a minimum height of 30 metres, whereas the Chimney installed by the petitioner has only 15 metres height.

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This is a material defect rendering the incinerator

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unusable. Therefore, the respondents are justified in withholding the last instalment of payment from the petitioner

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as also his Performance Security Deposit. The writ petition filed by the petitioner is without any merit and it is liable to be dismissed, contended the learned Government Pleader. The learned Government Pleader further argued that the issue agitated by the petitioner would fall within the realm of contract and hence this Court, under Article 226 of the Constitution of India, shall not entertain the writ petition.

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Heard Sri. B.S. Swathi Kumar, learned counsel appearing for the petitioner, and Smt. K.M. Rashmi, learned Government Pleader appearing for the respondents.

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The work entrusted to the petitioner as per Ext.P1 main agreement dated 29.11.2016 is “Waste Treatment Facilities in Government Medical College - Setting up of Incinerator”. Item No. 1.21 of Agreement Schedule produced by the Government Pleader describes the Incinerator agreed to be installed, as follows:-

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“od52841/2015-2016: Supplying and fixing of Thermax Make 80-100 kg/hr General Waste Incinerator Model PY 200 v with supply and Installation of MS self supported chimney, having 400 mm top dia, 15 meter height, painted externally with anti-corrosive heat resistant Aluminium paint, connected to the incinerator with suitable ms Ducting including Transportation charge of incinerator to site, Charges for unloading the unit at site, Leading positioning, erection & commissioning minor masonry/welding/fabricating works related to the installation etc. complete.”

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It is evident that the petitioner was required to construct incinerator of specific make and specific description. According to the works description, the Chimney of the incinerator is to have 400 mm. top diameter and 15 m. height only. The petitioner has admittedly installed the incinerator of specified description and the specifications.

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Ext.P7 charge paper passed between the Assistant Engineer, PWD and the Principal, Government Medical College, Thrissur, gives the “works description” as follows:-

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“Newly constructed General waste incinerator of “ Thermax ” make, 80-100 kg/hr. Model 'PY 200' having self supported chimney having 400 mm top diameter, 15 metre height, painted externally with anti-corrosive heat resistant aluminium paint connected to the incinerator with suitable MS ducting

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with accessories such as primary and secondary chambers, eductor, fuel oil tank, control panel, two burners and ash pit including incinerator room constructed with random rubble foundation, brick work and steel grills for superstructure, powder coated sheet roofing over steel truss work is here by handed over to the Principal, Govt. Medical College, Thrissur with keys in duplicate.”

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Ext. P7 would show that the petitioner has delivered the work he was assigned under the agreement.

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The Assistant Executive Engineer, PWD, has issued Ext.P4 certifying that the civil works as per the contract agreement and the supplemental agreements have been completed in all respects on 28.03.2018. Ext.P4 certificate, however, states that the certificate does not absolve the contractor from any of the liabilities for which he is responsible as per terms of the contract.

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By Ext.P5 Deposit Verification Report for payment dated 11.07.2018 issued by the Chief Engineer, the claim for the second and final bill submitted by the petitioner was approved and the payment was directed to be effected at the District Treasury, Thrissur. However, by Ext.P8 letter dated 27.01.2020, the Assistant Engineer, PWD, informed the

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petitioner that the State Pollution Control Board and Electrical Inspector, in their inspections, detected some defects in the work. Ext.P8 letter proceeded to caution the petitioner that only after receiving the consent of the Pollution Control Board, the Principal of Government Medical College would take over the incinerator from the Public Works Department. The petitioner was required to take necessary steps.

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Ext.P1 agreement is between the petitioner on the one part and the Executive Engineer, PWD on the other part. Therefore, any objection raised by the Principal, Government Medical College, cannot be an excuse to deny Contractual dues to the petitioner.

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In the counter affidavit filed by the respondents, in Annexure-R1(a) letter dated 12.03.2018 of the Executive Engineer, the petitioner was required to submit manufacturers certificate, manual, booklet, etc. of the incinerator installed by the petitioner. The Executive Engineer required the petitioner to produce non-pollution

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certificate from the Pollution Control Board also. On 04.01.2020, the Assistant Engineer issued yet another letter Annexure-R1(b), whereby the petitioner was required to provide a body earthing to the incinerator and motors. The reason for requiring the petitioner to provide body earthing is that the scope of electrification work is only up to supply point and lighting.

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By Annexure-R1(c), the Principal of Government Medical College, Thrissur, is seen to have informed the Assistant Engineer that the incinerator does not satisfy the provisions contained in Solid Waste Management Rules, 2016 in respect of stack monitoring and air-pollution. It was further stated that it should be ensured that the temperature in primary and secondary Chambers should be minimum 800°C, 1050°C–50°C.

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In short, the reasons given by the respondents for withholding the amounts due to the petitioner are:-

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Chimney of the installed incinerator is of height 15 meters whereas the Pollution Control Board insists 30 meters height.

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The petitioner has to obtain statutory consent from Pollution Control Board.

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Body earthing is to be provided to incinerator and motor.

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Petitioner has to submit manufacturers certificate, manual, booklet, etc. of incinerator.

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The incinerator has to satisfy the provisions contained in Solid Waste Management Rules, 2016 in respect of stack monitoring and air-pollution.

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It should be ensured that the temperature in primary and secondary Chambers should be minimum 800°C,1050°C– 50°C.

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The question is whether any of the aforesaid reasons can be a justifiable ground for non-payment of final bill of the petitioner.

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The work entrusted to the petitioner is installation of an incinerator in Government Medical College. The agreement executed by the petitioner would show that the petitioner was required to install an incinerator of a specified company/brand with prescribed specifications. The height specification prescribed by the respondents in respect of the Chimney is evidently 15 metres. The petitioner has installed the incinerator satisfying the description in the agreement. This is evident from Ext.P7 Charge Paper.

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There is no dispute that the petitioner has installed the incinerator of the specified company with prescribed specifications. When the fact being so, for the reason that the Pollution Control Board insisted on a Chimney of height 30 m., cannot be a reason to hold that the petitioner is bound to provide a Chimney of 30 m. height, failing which his bills will not be cleared. If the respondents wanted 30 m. height Chimney on the incinerator, they ought to have made it a condition in the contract or a specification in the work. That being not done, the respondents cannot legally impose on the petitioner an additional work or requirement for the sole reason that the Pollution Control Board required so.

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The learned Government Pleader, relying on Circular No.CE/Admn/PLA/22362/2012 dated 01.09.2015 of the Chief Engineer, would contend that as per condition Nos.1, 4 and 6 therein, the petitioner is bound to provide Chimney of 30 m. height, as insisted by the Pollution Control Board. Condition Nos.1, 4 and 6 read as follows:-

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“1. Quality Control for the various items in this project shall be governed by the provisions of PWD Quality Control (QC) Manual approved vide G.O.(Rt) No.1339/2015/PWD dated 10.09.2015 and the PWD Laboratory Manual approved vide G.O.(Rt) No.1346/2015/PWD dated 11.09.2015 and published in the PWD web portal.

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x x x x x x

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x x x x x x

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The bidder whose tender is finally approved is bound to post technical personnel who are well versed with the quality control tests and other guidelines stipulated in the QC Manual.

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x x x x x x

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Primary responsibility for ensuring quality control in each item of work in the project shall be vested with the agency entrusted with the project.”

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I am unable to agree with the argument of the learned Government Pleader. When the respondents have given contract for installation of a machinery, specifying company/brand name and specifications of the model, the respondents cannot expect the contractor to be responsible for the quality of the machinery above the standards if any claimed by the manufacturer. At the most, the respondents can insist quality of civil works attached to the installation from the petitioner. Therefore, the respondents cannot withhold bill amounts of the petitioner for the reason that the

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Chimney of the incinerator is not of the specifications stipulated by the Pollution Control Board.

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When the respondents have required the petitioner to install an incinerator of particular brand/model and specifications (including the specifications as to height of the Chimney), which requirement was not in tune with the Rules and Regulations of the Pollution Control Board, the respondents cannot insist that the petitioner should obtain consent from the Pollution Control Board. That will be asking the petitioner to do the impossible. If the respondents require the petitioner to give more height to the Chimney so as to satisfy the requirements of the Pollution Control Board, that will have to be done after making a supplementary or additional agreement with the petitioner.

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Another reason for non-payment of bill is that the petitioner has not provided body earthing to the incinerator and motors. The counsel for the petitioner would contend that body earthing is an electrical work and is not a part of the agreement. However, the said work being a very small

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work costing hardly `1,000/-, the learned counsel stated that the petitioner is willing to carry out the said work, even though it is not part of the contract. As regards handing over of manufacturer's certificate, manual, booklet, etc. of incinerator, the petitioner agrees to submit those documents.

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The respondents would contend that the incinerator has to satisfy the provisions contained in Solid Waste Management Rules, 2016 in respect of stack monitoring and air-pollution and it is the duty of the petitioner. Here again, when the respondents have required the petitioner to install a specified model/brand of incinerator, and the petitioner has done the work accordingly, the respondents cannot insist that the petitioner should be responsible for compliance of Solid Waste Management Rules.

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The stand of the respondents that the petitioner should ensure that the temperature in primary and secondary Chambers of the incinerator should be minimum 800°C, 1050°C–50°C, is also unsustainable for the same reason.

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The reasons advanced by the respondents to withhold payment due to the petitioner even after completion of the awarded work are therefore unsustainable. As undertaken, the petitioner shall do the body earthing work of the incinerator and motor and hand over the manufacturer's certificate, manual, booklet, etc. of the incinerator to the respondents, if those are not already submitted. Subject to the petitioner complying with the above agreed work, the respondents are directed to release the balance 20% amount withheld from the amount sanctioned as per Ext.P5, to the petitioner within one month of such compliance. The Performance Security Deposit shall also be released to the petitioner subject to the defect liability clause as prescribed by the terms of the contract.

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The writ petition is disposed as above.

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Sd/-

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N. NAGARESH, JUDGE

aks/02.12.2020

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APPENDIX

PETITIONER'S EXHIBITS:

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EXHIBIT	P1 TRUE COPY OF THE AGREEMENT
	NO.65/2016-17/EE(B) TSR DATED 29.11.2016
EXHIBIT	P2 TRUE COPY OF THE MEMO OF WORK TENDERED BETWEEN THE PETITIONER AND 1ST RESPONDENT
EXHIBIT	P3 TRUE COPY OF THE LETTER NO.D3- 779/2015 DATED 11.11.2016 OF THE 1ST RESPONDENT
EXHIBIT	P4 TRUE COPY OF THE CERTIFICATE OF COMPLETION OF WORK DATED 18.6.2018
EXHIBIT	P5 TRUE COPY OF THE DEPOSIT VERIFICATION REPORT FOR PAYMENT NO.FB3-7329/2018 (2) DATED 11.7.2018
EXHIBIT	P6 TRUE COPY OF THE REQUEST FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 26.11.2018
EXHIBIT	P7 TRUE COPY OF THE WORKS DESCRIPTION APPROVED AND HANDED OVER TO THE
	PETITIONER BY THE 2ND RESPONDENT DATED NIL
EXHIBIT	P8 TRUE COPY OF THE LETTER NO.M-12/2016- 17 DATED 27.1.2020 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER
EXHIBIT	P9 TRUE COPY OF THE COVERING LETTER
	NO.D3-779/2015 DATED 29.11.2016 ALONG WITH AGREEMENT SCHEDULE.

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RESPONDENTS' EXHIBITS:

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EXHIBIT R1(A)	A TRUE COPY 12/03/2018.	OF THE LETTER DATED
EXHIBIT R1(B)	A TRUE COPY 04/01/2020 I ELECTRICAL WING	OF THE LETTER DATED SSUED BY AE, PWD .
EXHIBIT R1(C)	A TRUE COPY OF 11.2019.	THE SAID LETTER DATED

A.P.Narayana Pisharady v. the Executive Engineer

Case brief

What is this about?

What did the court decide?

A.P.Narayana Pisharady v. the Executive Engineer

Case brief

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