Writ petition filed by a contractor seeking direction to accept new bills as additional performance guarantee. Court examined Government Order conditions allowing bill adjustment only at agreement execution stage. Writ dismissed.
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W.P(C).No.17967/2020-U 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE SMT. JUSTICE P.V.ASHA
TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942
WP(C).No.17967 OF 2020(U)
PETITIONER:
M/S.P.K.K.CONSTRUCTIONS(ENGINEERS & CONTRACTORS), KEEZHUPARAMBA POST, AREACODE, MALAPPURAM, REPRESENTED BY ITS MANAGING PARTNER,
P.K. KAMMADKUTTY, AGED 62 YEARS, SON OF LATE MUHAMMED HAJI, KOLATHIKKAL HOUSE, KEEZHUPARAMBU, AREECODE VIA, MALAPPURAM DISTRICT, PIN - 673639.
BY ADV. SRI.K.I.SAGEER
RESPONDENTS:
1 STATE OF KERALA REPRESENTED BY ITS CHIEF SECRETARY, KERALA GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695001.
R1-5 BY GOVERNMENT PLEADER SRI K.V.MANOJ KUMAR
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.11.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P(C).No.17967/2020-U
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P.V.ASHA, J .
W.P(c) No.17967 of 2020-U
Dated this the 17th day of November, 2020
J U D G M E N T
The Writ Petition is filed seeking the following reliefs:
“i. To issue a writ of mandamus or such other writ directing the respondents to accept the 4th and part bill in “NABARD-RIDF-XXI 2015-16 Construction of Thalipparakkadav bridge across Panamaram river in Wayanad District” to the extent of Rs.96,88,000/-, in lieu of the 3rd and part bill now furnished by the petitioner as Additional Performance Guarantee in Ext.P1 work;
ii. To direct the respondents to release payments due and payable under the 3rd and part bill in the project “NABARD-RIDF-XXI 2015-16 Construction of Thalipparakkadav bridge across Panamaram river in Wayanad District;
iii. To direct the respondents to accept pending bills due to the petitioner as Additional Performance Guarantee or part thereof as the case may be, in satisfaction of the terms of Ext.P1;
iv. Grant such other order or direction, as this Hon'ble Court may deem fit and proper in the facts and circumstances.”
The petitioner is a contractor who is awarded the work of KRFB-Alappuzha City
Road Improvement Project Development of Muppalam Junction by the 3rd respondent, for which Ext.P1 letter of acceptance was issued on 13.03.2020. He filed W.P.(C) No.9329/2020 for adjustment of the security amount/additional performance guarantee from pending bill. As per Ext.P2 order dated 23.06.2020 in I.A. No. 1/2020, this Court had permitted to adjust the 3rd and part bill for a sum of Rs.96,88,000/- in respect of another work awarded to him viz. construction of Thalipparakkadav bridge across Panamaram river in Wayanad district under the 4th
W.P(C).No.17967/2020-U
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respondent, towards the additional Performance Guarantee in Ext.P1, making it clear that the adjustment would not absolve the petitioner from the future liability. The petitioner has now filed this Writ Petition pointing out that the 4th and part bill in respect of the very same work under the 4th respondent for a higher amount of Rs.1,38,94,814/- is due to him and funds have been allotted for it by the Central Government. Therefore, he submitted an application before the 4th respondent to substitute the 4th bill in the place of the third bill which this Court had allowed as per Ext.P2 interim order. The said request was rejected as per Ext.P4 letter. This Writ Petition is filed challenging Ext.P4 and stating that in similar cases this Court has allowed substitution of the bills. It is pointed out that in view of the orders passed by the Government on 23.06.2020 and 16.10.2020, the respondents are bound to allow the request of petitioner.
“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:
(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).
W.P(C).No.17967/2020-U
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(ii) This facility will be applicable to the audited and passed contract bills
only.
(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.
(iv) The indemnified amount will not be 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).
(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.”
It is stated that once the bill has already been adjusted towards additional performance guarantee/performance guarantee that amount is transferred to the agreement authority permanently and balance, if any, would be available only after completion of the work and after the defect liability period, that too, after clearing all the dues and liabilities.
W.P(C).No.17967/2020-U
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the issuance of Annexure A on 23.06.2020.
“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:
xxxx xxxx xxxx
(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.
xxxx xxxxx xxxx”
The Government Order does not provide that after execution of the agreement, the said agreement can be revised or modified for the purpose of substitution towards the performance guarantee or additional performance guarantee. It is seen that the Government has only allowed adjustment of bill amount towards the performance guarantee or additional performance guarantee for the new work for which agreement is “to be executed”. It cannot mean that the contractors can ask for substitution or adjustment at any time.
The Writ Petition is dismissed with the above observation.
Sd/- (P.V.ASHA, JUDGE)
rtr/
W.P(C).No.17967/2020-U
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APPENDIX
PETITIONER'S EXHIBITS:
| EXHIBIT P1 | COPY OF LETTER OF ACCEPTANCE NO.SEBRSC/DB2/ALP/2019-20 DATED 13.03.2020 ISSUED BY THE 3RD RESPONDENT. |
|---|---|
| EXHIBIT P2 | COPY OF THE ORDER DATED 23.06.2020 IN IA 1/2020 IN WP(C) 9329/2020 OF HIGH COURT OF KERALA. |
| EXHIBIT P3 | COPY OF THE LETTER NO.AE.BSP/RD/2016/1167 DATED 03.08.2020 ISSUED BY ASSISTANT ENGINEER, PWD BRIDGES SECTION, PADINHARETHARA, WAYANAD. |
| EXHIBIT P4 | COPY OF THE LETTER NO.DO2/SEBRSC/ALP/2019 DATED 17.08.2020 ISSUED BY THE 3RD RESPONDENT. |
| EXHIBIT P5 | COPY OF THE CERTIFICATE 19.08.2020 TOGETHER WITH REQUEST LETTER DATED 17.08.2020 OF THE PETITIONER. |
| EXHIBIT P6 | COPY OF THE JUDGMENT DATED 12.05.2020 IN WP(C) 8769/2020 OF HIGH COURT OF KERALA. |
RESPONDENTS' EXHIBITS
ANNEXURE A TRUE COPY OF THE G.O(Rt) NO.3834/2020/FIN DATED 23.06.2020.
3 issues framed by the court
Whether a contractor can request substitution of bills for performance guarantee after agreement execution under G.O(Rt) No.3834/2020/Fin.
Whetherpending bills can be accepted as performance guarantee under the Government Order conditions.
Whether the Court should direct respondents to accept pending bills instead of the 3rd bill as additional performance guarantee.
2 provisions across 2 enactments
M/S.P.K.K.CONSTRUCTIONS(ENGINEERS & CONTRACTORS)
STATE OF KERALA
THE PRINCIPAL SECRETARY PUBLIC WORKS DEPARTMENT
THE SUPERINTENDING ENGINEER, PWD BRIDGES, SOUTH CIRCLE
THE SUPERINTENDING ENGINEER, OFFICE OF SUPERINTENDENT OFFICE, PWD BRIDGES, NORTH CIRCLE
THE EXECUTIVE ENGINEER, OFFICE OF THE EXECUTIVE ENGINEER, PWD BRIDGES DIVISION
P.V. ASHA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
