Disposed

State of Kerala v. M/S. Thoppil Contractors (India) Private Limited

Kerala HC9 Sept 2021WA/932/2021

Case brief

AI extract

What is this about?

The High Court of Kerala disposed of a writ appeal regarding an unpaid sum in a public works contract dispute. Instead of detailed adjudication, the court directed the appellants to issue a notice, secure a reply, adjudicate the dispute, and release the withheld amount upon production of a bank guarantee.

What did the court decide?

The court directed the appellants to issue a notice, secure a reply, and adjudicate the dispute within six weeks. The disputed amount must be released from pending bills within a week of the petitione

State of Kerala Vs M/S. Thoppil Contractors… — Contract and Commercial Disputes | Kerala HC (2021)

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W.A.No.932 of 2021

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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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THURSDAY, THE 9^TH DAY OF SEPTEMBER 2021 / 18TH BHADRA, 1943

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WA NO. 932 OF 2021

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AGAINST THE JUDGMENT IN WP(C) 29625/2016 OF HIGH COURT OF KERALA, ERNAKULAM

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APPELLANTS/RESPONDENTS 1 TO 4 IN W.P.(C):

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

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2 THE CHIEF ENGINEER PUBLIC WORKS DEPARTMENT (ROADS AND BRIDGES), PUBLIC OFFICE, THIRUVANANTHAPURAM - 695 033.

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3 THE EXECUTIVE ENGINEER PUBLIC WORKS DEPARTMENT (ROADS DIVISION), P.M.G. JUNCTION, THIRUVANANTHAPURAM - 695 033.

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4 THE SUPERINTENDING ENGINEER PUBLIC WORKS DEPARTMENT, ROADS & BRIDGES (SC), PUBLIC OFFICE, THIRUVANANTHAPURAM - 695 033.

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BY SENIOR GOVERNMENT PLEADERSRI.K.V.MANOJ KUMAR

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RESPONDENTS/PETITIONER & 5TH & 6TH RESPONDENTS IN W.P.(C):

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1 M/S. THOPPIL CONTRACTORS (INDIA) PRIVATE LIMITED REPRESENTED BY NIZAMUDEEN.A., MANAGING DIRECTOR,THOPPIL BUILDINGS, THOLIKUZHI, ADAYAMON P.O., KILIMANOOR, THIRUVANANTHAPURAM-695 001.

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W.A.No.932 of 2021

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2 KERALA STATE CONSTRUCTION CORPORATION LTD.,REPRESENTED BY MANAGING DIRECTOR, VYTTILA, ERNAKULAM – 682 019.

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3 THE REGIONAL MANAGER KERALA STATE CONSTRUCTION CORPORATION LTD., REGIONAL OFFICE, P.W.D. STORE COMPOUND, P.M.G.JUNCTION, THIRUVANANTHAPURAM - 695 033.

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BY ADVS. SRI.RENJITH THAMPAN (SR.) SRI.M.RAJAGOPALAN NAIR SRI.G.BIJU, STANDING COUNSEL SRI.AJITH KRISHNAN

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.A. No.932 of 2021 : 3 :

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JUDGMENT

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Dated this the 9^th day of September, 2021

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SHAJI P.CHALY,J.

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The captioned writ appeal is filed by respondents 1 to 4 in W.P.(C) No.29625 of 2016, challenging the judgment dated 21.5.2020.

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The subject issue relates to an agreement executed by and between the writ petitioner /1^st respondent with the Kerala State Construction Corporation Ltd., Ernakulam - 2^nd respondent, in regard to the work of “35^th National Games – Improvements to Thiruvallam Junction - Pachalloor Vazhamuttom road from ch.0/000 to 2/200 (Part I) Poonkulam Junction Agricultural College Vellayani from Ch 0/000 to 1/200 (Part II) and Agricultural College Internal Road up to stadium at Vellayani (Part III)”, for an amount of Rs.6,21,47,829/-, which is at 0.05% below the estimate rate and less cost of departmental materials. In fact the State Government is carrying out various public works through the Kerala State Construction Corporation Ltd, who is granted the liberty to sub contract, and the issue at hand is one such instance.

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The grievance highlighted by the writ petitioner was that the work was completed to the satisfaction of the appellants and the Kerala State Construction Corporation Ltd. and the entire amount was paid. However, as per Exhibit P2 communication dated 23.7.2016, the Executive Engineer, PWD Roads Division, Thiruvananthapuram addressed the Kerala State Construction Corporation Ltd. informing that an amount of Rs.84,86, 670/- was not recovered from the amounts due to the writ petitioner, on account of the terms and conditions of the contract and the Government Orders as regards the purchase of bitumen by the writ petitioner in regard to the work in question. Accordingly, the Executive Engineer informed the Kerala State Construction Corporation Ltd. that the said amount will be recovered from other pending bills viz., NABARD – Impts to Vithura Peppara road from Km.0/000 to 9/500 CC 6th part and final bill. Consequently, the Kerala State Construction Corporation Ltd. as per Exhibit P3 communication dated 27.7.2016, informed that recovery will be effected as directed by the Executive Engineer since excess payment was made in the subject work due to application of cost index

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W.A. No.932 of 2021 : 5 :

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in rate of materials. It was thus challenging Exhibits P2 and P3, the writ petition was filed.

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The learned Single Judge, after taking into account the rival submissions, has set aside Exhibits P2 and P3 and directed the appellants and the Kerala State Construction Corporation Ltd. to take appropriate steps to see that the amount withheld from the writ petitioner's 6^th part and final bill is released without delay to the Kerala State Construction Corporation Ltd. to effect payment to the writ petitioner, within a period of three months from the date of receipt of a copy of the judgment. The said direction was issued after finding that from perusal of Exhibits P4, and P5 Government Orders and P6 agreement that in case where bitumen is not supplied departmentally, the contractor is entitled to purchase the bitumen from the open market and to reimburse the cost at market price. It was also found that it is apparent from the pleadings placed on record that the bills and invoices produced by the writ petitioner with regard to the market price of bitumen and the expenses had been duly approved and passed. Accordingly, learned Single Judge found that the findings in Exhibit P3

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: 6 :

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communication of Kerala State Construction Corporation Ltd. that the cost index ought to have been deducted in the calculation and that the writ petitioner has drawn the amount in excess is an incorrect statement, and going by the provisions of the Government Orders as well as the terms and conditions of the agreement executed between the parties, the submissions put forth by the writ petitioner appears to be completely justified. Also it was found that without any impartial quantification of amounts in dispute, the direction for recovery of amounts is unjustified and therefore, in case the appellants and the Kerala State Construction Corporation Ltd. have any contention with regard to the drawal of excess amounts by the writ petitioner, such dispute will have to be decided in a manner known to law.

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The basic contention advanced by the appellants is that there is no contractual obligations and privity of contract between the appellants and the writ petitioner; that the issue involved is of serious factual dispute and interpretation of terms of contract, therefore, the writ petition under Article 226 of the Constitution of India is not maintainable as settled by the Apex Court in its various judgements. Other contentions

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are also raised.

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In fact in the writ appeal, appellants have produced hand receipts along with invoices for purchase of bitumen from M/s.Bharat Petroleum Corporation Limited to establish that excess payments were made and that as of right the appellants and the Kerala State Construction Corporation Ltd. are entitled to recover the excess amount paid to the writ petitioner. Even though elaborate arguments were advanced on the basis of the rival contentions, the documents and the additional documents produced by the respective parties, learned Senior Government Pleader Sri.K.V.Manoj Kumar submitted that the appellants would be satisfied, if an opportunity is provided so as to establish the claim of the appellants and the Kerala State Construction Corporation Ltd. within a time frame to be fixed by this Court. Learned Senior Counsel appearing for the writ petitioner Sri.Ranjith Thampan, assisted by Sri.Ajith Krishnan, submitted that the writ petitioner has no objection in the matter being considered by the State Government as well as the Kerala State Construction Corporation Ltd. taking into account the contentions put forth by the writ petitioner, however, the direction

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issued by the learned Single Judge to release the amount recovered as per Exhibits P2 and P3 may not be interfered with. It was also submitted that the writ petitioner is prepared to provide bank guarantee for the entire amount. Learned Senior Government Pleader also submitted that the proposal suggested by the learned counsel for writ petitioner is acceptable to the appellants.

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In that view of the matter, we do not think any detailed deliberation and adjudication of the matter is required as are sought for in the writ appeal. Therefore, the writ appeal is disposed of directing the appellants / the Kerala State Construction Corporation Ltd. to issue a notice explaining the circumstances under which the amount of Rs.84,86,670/- became due to the appellants and the Kerala State Construction Corporation Ltd., secure a reply from the writ petitioner and adjudicate the issue, within a period of six weeks from the date of receipt of a copy of this judgment. It is further directed that the amount of Rs.84,86,670/- recovered from the pending bill of work “NABARD – Impts to Vithura Peppara road from Km.0/000 to 9/500 CC 6th part and final bill” shall be released to the writ petitioner by the appellants/Kerala

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State Construction Corporation Ltd., within a week from the production

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of the bank guarantee for the said amount by the writ petitioner before

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the Kerala State Construction Corporation Ltd. We also make it clear that

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all questions of facts and law raised by the parties in the writ appeal are

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left open to be adjudicated at a later point of time, if the situation warrants.

Sd/-

S. MANIKUMAR,

CHIEF JUSTICE.

Sd/-

SHAJI P. CHALY,

smv

JUDGE.

State of Kerala v. M/S. Thoppil Contractors (India) Private Limited

Case brief

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State of Kerala v. M/S. Thoppil Contractors (India) Private Limited

Case brief

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