Dismissed

Thajudeen a. v. State of Kerala

Kerala HC1 Dec 2020WP(C)/12794/2020

Case brief

AI extract

What is this about?

Petitioner, a PWD contractor, sought direction to substitute bills already pledged as performance guarantee for two works with pending bills from another work to meet financial commitments. The court held that under the relevant Government Order, bill adjustment is permissible only at the stage of agreement execution.

What did the court decide?

Direction to respondents to sanction and disburse the sum of Rs.2,81,58,940/- by adjusting pending bills was denied.

Thajudeen a. Vs State of Kerala — Property and Title | 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 SMT. JUSTICE P.V.ASHA

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TUESDAY, THE 01ST DAY OF DECEMBER 2020 / 10TH AGRAHAYANA, 1942 WP(C).No.12794 OF 2020(Y)

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PETITIONER:

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THAJUDEEN A., PWD CONTRACTOR, THOPPIL VEEDU, THOLIKKUZHI, ADAYAMON P.O., KILIMANOOR, THIRUVANANTHAPURAM - 695 614.

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BY ADV. SHRI.AJITH KRISHNAN

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RESPONDENTS:

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

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2 THE PROJECT DIRECTOR, PROJECT MANAGEMENT UNIT, KERALA ROAD FUND BOARD, SREEBALA BUILDINGS T.C./339, 5TH FLOOR, KESTON ROAD, NANTHENCODE, KOWDIAR P.O., THIRUVANANTHAPURAM - 695 003. 3 THE CHEIF ENGINEER, PWD ROADS AND BRIDGES, THIRUVANANTHAPURAM - 33. 4 THE SUPERINTENDING ENGINEER, PWD ROADS, SOUTH CIRCLE, THIRUVANANTHAPURAM - 695 033. 5 EXEUCTIVE ENGINEER, PWD ROADS DIVISION, THIRUVANANTHAPURAM - 695 033. BY ADVS. SRI.K.V.MANOJ KUMAR, SENIOR GOVT. PLEADER

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SRI.R.RAJASEKHARAN NAIR, SC, KRFB

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.12794 OF 2020(Y)

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JUDGMENT

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The petitioner who is an 'A' class

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contractor, has filed this writ petition for a direction to the respondents to substitute the bill which he had given towards performance guarantee and additional performance guarantee by another bill for the works covered by Exts.P1 and P2 judgments.

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2. The two works awarded to the

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petitioner, which were the subject matter of this case are “improvements to CherunniyoorOttoor-Menamboor -Kilimanoor with DBM and BC and allied works in Thiruvananthapuram District” and “improvements to Hill Highway Kallikkadu to Parassala Second Phase Kallikkadu-Vazhichal-Amboori-Kudappanamoodu CH 0/000 to 15/715 in Thiruvananthapuram (Part TS2 From Kallikkadu to Vazhichal)”. Petitioner had requested that the amount due to him in a pending bill towards another work carried out

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WP(C).No.12794 OF 2020(Y)

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by him i.e., “Budget work 2017-18 Improvement to Kilimanoor Adayamon Tholikkuzhi -Ananthanmukku Mottakkuzhy road KM 0/000 to 5/000”, be adjusted towards the performance guarantee and additional performance guarantee. He thereafter filed W.P.(C) No. 5747/2020 and this Court had as per Ext.P1 judgment dated 03.03.2020 directed adjustment of a sum of Rs.1,28,65,140/- from the pending bill towards performance guarantee and additional

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performance guarantee.

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3. Similarly in respect of the 2^nd work, petitioner requested to adjust the amount from a pending bill and filed W.P.(C) No.1158/2020 and as per Ext.P2 judgment, this Court directed adjustment of a sum of Rs.1,52,93,800/- from the pending bill towards performance guarantee and additional performance guarantee for the 2^nd work.

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4. It is stated that a sum of

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WP(C).No.12794 OF 2020(Y)

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Rs.2,81,58,940/- is due to the petitioner towards Ext.P3 part bill for the work of the “Budget work 2017-18 Improvement to Kilimanoor Adayamon Tholikkuzhi-Ananthanmukku Mottakkuzhy road KM 0/000 to 5/000”. It is stated that though the amount towards Ext.P3 bill has became payable, the respondents are not paying it to him since it is pledged with the respondents towards the performance guarantee and additional performance guarantee of the 2 works, permitted in Exts.P1 and P2 judgments. Petitioner submits that he requires the said amount for his financial commitments. Pointing out that Ext.P4 - the 3^rd part bill of his another work viz. “Budget work 2017-18 Improvement to Kilimanoor Adayamon Tholikkuzhi -Ananthanmukku Mottakkuzhy road KM 0/000 to 5/000”, for a sum of Rs.3,13,62,900/- is pending before the 5^th respondent for payment, petitioner submitted Ext.P5 representation

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WP(C).No.12794 OF 2020(Y)

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before the 2^nd respondent requesting to adjust the amount covered by Ext.P4 bill towards performance guarantee and additional

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performance guarantee in substitution of the bill pledged in terms of Exts.P1 and P2 judgments. Stating that this Court has in Ext.P6 judgment in W.P.(C) No.1294/2020 allowed such substitution, petitioner has filed this

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writ petition seeking a direction to respondents to sanction and disburse the sum of Rs.2,81,58,940/- under Ext.P3 - the first part bill pledged for the two works. The petitioner also relies on the judgments Ext.P8 in W.P.(C) No.27208/2019 as well as Ext.P9 judgment in

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W.P.(C) No.5747/2020 in support of his claim

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for substitution of the bills towards performance guarantee and additional

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performance guarantee.

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5. The learned Government Pleader has filed a statement, according to which the

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WP(C).No.12794 OF 2020(Y)

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petitioner has executed the agreement in respect of the 1^st work on 25.06.2018 and for the 2^nd work on 10.02.2020. According to the respondents, adjustment is not possible after the agreement is executed. It is also stated that the agreement authority in the present case is different and once the performance guarantee/additional performance guarantee is submitted by way of bills, the amount covered by the bill will go to the agreement authority and it would be at its disposal. So it is stated that the agreement authority in respect of the bills covered by the judgments Exts.P1 and P2, in one case it is Kerala Road Fund Board and in another it is Public Works Department through its officers. It is stated that they cannot transfer the bill as the amount maintained by them are different and distinct. In support of the said contention, the learned Government Pleader relies on clause

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WP(C).No.12794 OF 2020(Y)

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7.3 of the Standard Bill Document, according to which after the submission of performance guarantee and its acceptance, the Bid Security will be refunded to the successful Bidder. It is stated that the amount paid towards performance guarantee/ additional performance guarantee is liable to be released only after 28 days from date of completion of Defect Liability Period. It is also stated that substitution of performance guarantee/additional performance guarantee will defeat the purpose of submission of additional performance guarantee.

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6. Along with the reply affidavit, petitioner has produced Ext.P7 Government Order issued on 23.06.2020, claiming that the said order provides for substitution of the bills.

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7. I heard Sri.Ajith Krishnan, the learned

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Counsel for the petitioner and

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Sri.K.V.Manojkumar, the learned Senior

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WP(C).No.12794 OF 2020(Y)

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Government Pleader.

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8. The contention of the petitioner is that since this Court has in several judgments permitted substitution of bills, the writ petition has to be allowed. From those judgments it is seen that the respondents had not raised any objection. On the other hand in this case the respondents have raised serious objections and filed statement pointing out the same. Apart from that Government has also issued Ext.P7 order on 23.06.2020 which provides for the conditions under which the bills can be accepted towards performance guarantee and additional performance guarantee.

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As rightly pointed out by the learned Government Pleader, Ext.P7 order, permits adjustment of the bills towards additional performance guarantee/ performance guarantee, only at the stage of execution of agreement. Once the agreement is executed, there cannot be

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WP(C).No.12794 OF 2020(Y)

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any further substitution of any bills. Para.3

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of Ext.P7 order reads as follows:

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“3. The amounts under the audited and passed bills of contractors will be accepted as Performance Guarantee/ Additional Performance Guarantee for new contracts being awarded subject to the following conditions:

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(i) This facility will be available only for the bills processed for payments in the EMILI application by the Works Departments (i.e. Public Works Department, Irrigation Department, Harbour Engineering Department etc).

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(ii) This facility will be applicable to the audited and passed contract bills only.

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(iii) The indemnified amount for Guarantee of a work shall be transferred permanently to the disposal of the officer, who is the agreement authority for the new work in which agreement is to be executed and the balance amount after deducting the statutory recoveries and other liabilities, if any, will be paid to the contractor when the work bill is cleared.

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(iv) The indemnified amount will not be

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WP(C).No.12794 OF 2020(Y)

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considered for discounting under the Bill Discounting Scheme (BDS) (i.e. The contractor can opt BDS for the balance payment after deducting the indemnified amount as Performance Guarantee/ Additional Performance Guarantee).

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(v) Work bill amount will be accepted as Guarantee for new works being awarded only on the basis of indemnity certificate issued online in EMLI application.”

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(emphasis supplied)

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9. Under Ext.P7 only the audited and passed bills of contractors could be accepted towards performance guarantee/ additional performance guarantee, that too for new contracts being awarded subject to the conditions fixed therein. The said Government Order does not provide for substitution of bills. It is clear that bills can be accepted towards performance guarantee/ additional performance guarantee only before execution of the agreement.

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10. I have already considered a similar

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WP(C).No.12794 OF 2020(Y)

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issue regarding substitution of bills in the

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judgment dated 17.11.2020 in W.P.(C)

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No.17967/2020 , where it was held that substitution would not be permissible once the agreement is already executed. In the present case, the date of execution of agreement was in the year 2018 and February 2020.

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Therefore going by the aforesaid judgment, the request made by the petitioner cannot be granted.

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Accordingly, the writ petition is

dismissed. Sd/-

P.V.ASHA JUDGE

WP(C).No.12794 OF 2020(Y)

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APPENDIX

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PETITIONER'S EXHIBITS:

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EXHIBIT P1	TRUE COPY OF THE JUDGMENT DATED 3/3/2020 IN W.P.(C) NO.5747/2020.
EXHIBIT P2	TRUE COPY OF THE JUDGMENT DATED 24/1/2020 IN W.P.(C) NO.1158/2020.
EXHIBIT P3	TRUE COPY OF THE RELEVANT PAGES OF RUNNING ACCOUNT BILL DATED 25/11/2019 ISSUED BY THE 5TH RESPONDENT.
EXHIBIT P4	TRUE COPY OF THE RELEVANT PAGES OF THE RUNNING ACCOUNT BILL SUBMITTED BY THE PETITIONER BEFORE THE 5TH RESPONDENT FOR PAYMENT DUE TO THE WORK.
EXHIBIT P5	TRUE COPY OF THE REPRESENTATION DATED 18/6/2020 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.
EXHIBIT P6	TRUE COPY OF THE JUDGMENT DATED 30/1/2020 IN W.P.(C) NO.1294/2020.
EXHIBIT P7	TRUE COPY OF THE GOVT. ORDER G.O.(RT) NO.3834/2020/FIN. DATED 23/06/2020 ISSUED BY THE GOVERNMENT.
EXHIBIT P8	TRUE COPY OF THE JUDGMENT DATED 22/11/2019 IN W.P.(C) NO.27208/2019.
EXHIBIT P9	TRUE COPY OF THE JUDGMENT DATED 03/03/2020 IN W.P.(C) NO.5747/2020.
RESPONDENTS'	ANNEXURE:
ANNEXURE A	A TRUE COPY OF THE RELEVANT PAGE OF CLAUSE 7.3.

Thajudeen a. v. State of Kerala

Case brief

What is this about?

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Thajudeen a. v. State of Kerala

Case brief

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