Allowed

V.M.Ashraf v. State of Kerala

Kerala HC20 Jan 2021WP(C)/5972/2016

Case brief

AI extract

What is this about?

High Court of Kerala quashed a Superintending Engineer's order terminating a Public Works Department contractor due to delay in revised estimate sanctions, holding the department's indecision caused the non-performance. The court ordered refund of security deposit.

What did the court decide?

Ext.P9 order set aside. Entitlement to refund of Security Deposit and Retention Money. No penalty to be imposed.

V.M.Ashraf Vs State of Kerala — Contract and Commercial Disputes | Kerala HC (2021)

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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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WEDNESDAY,THE 20TH DAY OF JANUARY 2021/30TH POUSHA,1942

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WP(C).No.5972 OF 2016(V)

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PETITIONER:

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V.M.ASHRAF, S/O MAMMU, AGED 54 YEARS, VALIYAPEEDIYEKKAL, MUTHUKURUSSI, PALAKKAD-678 593.

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BY ADV. SRI.JACOB SEBASTIAN

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RESPONDENTS:

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1 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF IRRIGATION, GOVERNMENT SECRETARIAT, TRIVANDRUM-695 001.

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2 THE SUPERINTENDING ENGINEER AND DEPUTY CHIEF ENGINEER, MECHANICAL (IRRIGATION), KAKKANAD, ERNAKULAM-682 030.

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3 THE EXECUTIVE ENGINEER, OFFICE OF THE EXECUTIVE ENGINEER, MECHANICAL DIVISION, IRRIGATION, CIVIL STATION, THATHAMPALLI, ALAPPUZHA-688 013.

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4 THE ASSISTANT ENGINEER, OFFICE OF THE ASSISTANT ENGINEER, DREDGER NUMBER 4, DREDGER SUB DIVISION, CIVIL STATION, KAKKANAD, ERNAKULAM-682 030.

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BY GOVERNMENT PLEADER SMT.DEEPA NARAYANAN

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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J U D G M E N T

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Dated this the 20^th day of January, 2021

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The petitioner, who is a PWD A-Class Contractor,

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has approached this Court seeking to quash Ext.P9 whereby the respondents have terminated the work awarded to the petitioner.

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The petitioner states that he was awarded the work of Fabrication, Painting and Erection of 4 numbers of Stainless Steel Shutters (hereinafter referred to as 'Shutters') and 1 number of Stainless Steel Radial Lock Shutter (hereinafter referred to as 'Lock Shutter') at Pulluveli in Kuthiathode Panchayat, Cherthala Taluk in Alappuzha District. Ext.P1 agreement was executed on 17.10.2012. The agreed work consisted of 25 items. The date for completion of work was 30.04.2014.

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According to the petitioner, there were deviations

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from the original drawings. Accordingly, revised estimates were prepared for works at serial numbers 7, 8, 9 and 25. Those works were carried out. Estimates were not revised in respect of other items of works. The Superintending Engineer issued Ext.P2 order dated 24.07.2014, pointing out that the balance work can be executed only after getting the approval of revised estimate for the Lock Shutter, which is submitted to

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the higher authority for sanction and the Executive Engineer has recommended to extend the time of completion of work up to 30.10.2014 without imposing fine. The Superintending Engineer therefore extended the time of completion of work up to 30.10.2014.

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On the same day, Ext.P3 supplemental agreement was executed. However, the estimates were not revised. According to the petitioner, he could not have carried out the work without revising the estimates. As revision of estimate delayed indefinitely, the petitioner submitted Ext.P4 representation dated 16.01.2015 to the Superintending

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Engineer. The petitioner requested the Superintending Engineer to extend the period of work by six months. The petitioner made an alternate suggestion that he may be excluded from the work of Lock Shutter in which case he can complete the work of erecting four Shutters within three months.

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Without considering Ext.P4 representation, the Assistant Engineer issued Ext.P5 letter dated 16.07.2015 requiring the petitioner to proceed with the work of erection of fabricated Shutters urgently. The Superintending Engineer also issued Ext.P6 letter dated 09.10.2015 informing the petitioner that the petitioner has not completed the work within the stipulated time and the department is constrained to consider termination of the contract.

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The petitioner thereupon submitted Ext.P7 representation dated 27.10.2015. In Ext.P7 representation, the petitioner pointed out that for erection of Shutters, ring bunds have to be constructed and since the revised estimate for the Lock Shutter is not passed, the petitioner cannot carry

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out the work. The petitioner also pointed out that the construction of ring bunds would affect the mobility of nearby residents and therefore ring bunds cannot be constructed and retained there for long period.

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The petitioner informed the Superintending Engineer that he will be able to carry out the work only if revised estimates are passed and that too in accordance with new schedule of rates. The petitioner also made it clear that he can construct ring bunds for erecting Shutters after which bunds will have to be removed after taking measurement. But, the respondents will have to execute supplemental agreements for the remaining works.

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Considering the genuine difficulties faced by the petitioner as a contractor, the Executive Engineer issued Ext.P8 letter to the Superintending Engineer informing that reluctance of the petitioner to recommence the work can be solely attributed to non-sanctioning of revised estimates by the Government. The Executive Engineer stated that it would be wholly arbitrary and unreasonable to require the contractor to

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bear the losses emanating out of indecisiveness or delay on the part of the Department. The Executive Engineer requested that the decision for termination of the petitioners may be re-apprised.

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However, to the surprise and predicament of the petitioner, the Superintending Engineer passed Ext.P9 order on 30.01.2016 stating that the opinion of the Executive Engineer cannot be accepted as it is the responsibility of the petitioner to complete the work of the four Shutters as per the supplemental agreement. The Superintending Engineer stated that there is no variation for this work in the revised estimate submitted for sanction. On these premises, the Superintending Engineer terminated the work awarded to the petitioner at the risk and cost of the petitioner and forfeited security deposit of ₹1,00,000/- made by the petitioner. The petitioner challenges Ext.P9.

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The 2^nd respondent filed a statement and resisted the writ petition. The 2^nd respondent stated that the revised estimate pending with the Government is only for Lock

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Shutters. The erection of the ordinary Shutters can be completed without the sanction of revised estimate since there is no variation in works for the ordinary Shutters in the revised estimate. Payment for construction of the bunds for the ordinary Shutters and Lock Shutter can be made separately on completion of their respective work, since rates are fixed based on approved data.

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The 2^nd respondent denied the averment of the petitioner that unless both ordinary Shutters and Lock Shutter are erected simultaneously, the work would be loss generating since ring bunds would have to be constructed twice. According to the 2^nd respondent, erection of ordinary Shutters and Lock Shutter can be done independently of each other and ring bunds are to be constructed only around the piers of the Shutters and the same can be dismantled after erection of the Shutters. The 2^nd respondent stated that the petitioner is trying to avoid execution of the work after receiving payment of substantial amount from Government. Therefore, termination of the contract at the risk and cost of

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the petitioner is amply justified.

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Heard learned counsel for the petitioner and learned Government pleader appearing for the respondents.

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The question that is to be answered in this writ petition is whether the respondents were justified in terminating the contract given to the petitioner. The specific case of the petitioner is that initially the work was delayed since there were deviations from the original drawings. This fact is not in dispute. The deviation from original drawings and the passage of time, necessitated revised estimates. It is not in dispute that the five works out of the 25 items assigned to the petitioner in respect of which revised estimates were passed, were completed by the petitioner.

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The non-execution of the remaining works is attributable to non-revision of estimates, contends the petitioner. The work is of manufacturing, painting and erecting four stainless steel Shutters and one Lock Shutter. The petitioner has manufactured and painted the Shutters, for which he has received payment also. Erection of Shutters and

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Lock Shutter requires construction of ring bunds.

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The core of the dispute relates to construction of ring bunds. According to the petitioner, he is expected to construct one ring bund for erecting all the five Shutters. After erection of five Shutters, the ring bund is to be dismantled and removed. Construction of Lock Shutter is an item requiring revised estimate. Therefore, work can be started only after estimate for Lock Shutter is revised. The contention of the respondents is that revision of estimate is not required for erecting the four ordinary Shutters and revision is necessary only in respect of the Lock Shutter. Therefore, the petitioner ought to have completed the erection work of ordinary Shutters and non-execution of the said work within time for the reason that rates of Lock Shutter are not revised, is only a ruse.

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The petitioner states that unless the estimate for erection of Lock Shutter is revised, he cannot start the work because the ring bund that has to be constructed should be removed immediately after erection of Shutters. Keeping the

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bund in existence without dismantling will not only weaken the bund but would also invite public protests.

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Per contra, the case of the respondents is that the petitioner can very well construct ring bund while erecting ordinary Shutters and remove them after erection and later as and when revised estimates are approved for Lock Shutter, the petitioner can construct another ring bund and erect Lock Shutter. The petitioner asserts that construction of multiple bunds is not contemplated under the agreement or supplemental agreement and doing so would cause substantial monetary loss to the petitioner. The agreements envisage construction of only one bund for erecting all the five Shutters.

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Serial No.6 of Agreement Schedule annexed to Ext.P1 reads as follows:-

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Sl No	Description of work	Qty	Unit	Rate	Rate in words	Amount
6	Providing a ring bund of size 9m(L)x4m(w)x0.5m (h)-double layer construction with sand filled plastic cement bags close to each peirs of regulator	1	set	56508	Rupees fifty six thousand five hundred	56508

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Sl No	Description of work Qty	Unit	Rate	Rate in words	Amount
	shutters and lock shutters for the fabrication & erection of sill beam and other embedded parts including cost of sand, Cement bags, Earth work, 3HP motor for bailing out water and labour charges.			and eight only

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The description of work shows that it is providing one ring bund of specification made thereunder. Ext.R2(b) is the Revised Agreement Schedule produced by the respondents. Serial No.6 therein reads as follows:-

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Sl No	Description of work	Qty	Unit	Rate	Rate in words	Amount
6	Providing a ring bund of size 9m(L)x4m(w)x0.5m (h)-double layer construction with sand filled plastic cement bags close to each peirs of regulator shutters and lock shutters for the fabrication & erection of sill beam and other embedded parts including cost of sand, Cement bags, Earth work, 3HP motor for bailing out water and labour charges etc. complete.	1	set	56508	Rupees fifty six thousand five hundred and eight only	56508

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Both the Agreement Schedules indicate that the work thereunder is providing one ring bund. In the quantity

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column also, the quantity is shown as 1. Therefore, as long as there is no provision for construction of more than one ring bund in the Agreement, the respondents will not be justified in insisting that the petitioner was expected to construct more than one ring bund for execution of the work.

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There is no dispute that the petitioner has completed works in respect of which revised estimates were passed. Ext.P2 order dated 24.07.2014 of the Superintending Engineer would also show that the balance work can be executed only after getting approval of revised estimate for the Lock Shutter, which is submitted to higher authorities for sanction. In Ext.P8 letter dated 28.01.2016, the Executive Engineer who was in charge of the work has categorically stated that after evaluating the facts and circumstances, it would be inexpedient to terminate the work at the risk and cost of the contractor. The Executive Engineer has specifically stated that the reluctance on the part of the petitioner to recommence the work is solely attributable to non-sanctioning of revised estimate by the Government and it

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would be wholly arbitrary and unreasonable to require the petitioner to bear the losses emanating out of indecisiveness or delay on the part of the Department in sanctioning revised estimate.

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In spite of those facts, the Superintending Engineer terminated the contract observing that opinion of the Executive Engineer cannot be accepted as it was the responsibility of the contractor to complete the work of the four Shutters as per the Supplemental Agreement since there is no variation for this work in the revised estimate submitted for sanction. The Superintending Engineer completely overlooked the fact that the petitioner will have to construct ring bund more than once, if work is carried out as indicated by the Superintending Engineer, and there is no provision in the agreements for constructing more than one ring bund.

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Therefore, it has to be held that the non-execution of the work by the petitioner is attributable solely to the non-sanctioning of revised estimates by the respondents in time. The argument of the respondents that the petitioner has

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to construct multiple ring bunds for construction of five Shutters cannot be accepted going by the terms of Exts.P1 and R2(b) Agreement/Agreement Schedule.

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In the circumstances of the case, the writ petition is allowed. Ext.P9 order of the Superintending Engineer is set aside. The petitioner will be entitled to all consequential benefits, including refund of Security Deposit and Retention Money, if any.

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Sd/-

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N. NAGARESH, JUDGE

aks/20.01.2021

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APPENDIX

PETITIONER'S EXHIBITS:

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EXHIBIT P1	A TRUE COPY OF AGREEMENT NUMBER 5/2012-2013
	DATED 17.10.2012 ENTERED INTO BETWEEN THE
	PETITIONER AND THE 2ND RESPONDENT.

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EXHIBIT P2	A TRUE OF THE	COPY 2ND R	OF THE O ESPONDENT	RDER DATED JULY 24, 2014 .
EXHIBIT P3	A TRUE ENTERED 2ND RES	COPY INTO PONDE	OF THE BETWEEN NT.	SUPPLEMENTAL AGREEMENT THE PETITIONER AND THE
EXHIBIT P4	A TRUE 2015 W RESPOND	COPY RITTEN ENT.	OF THE BY THE	LETTER DATED 16 JANUARY PETITIONER TO THE 2ND
EXHIBIT P5	A TRUE 2015 I PETITIO	COPY SSUED NER.	OF THE BY THE	LETTER DATED JULY 16, 4TH RESPONDENT TO THE
EXHIBIT P6	A TRUE 2015 IS	COPY SUED	OF THE BY THE 2N	LETTER DATED OCTOBER 9, D RESPONDENT.
EXHIBIT P7	A TRUE PETITIO	COPY NER O	OF THE N OCTOBER	REPLY SUBMITTED BY THE 27,2015.
EXHIBIT P8	A TRUE 2016 IS	COPY SUED	OF THE L BY THE 3R	ETTER DATED JANUARY 28, D RESPONDENT.
EXHIBIT P9	A TRUE 2016 IS	COPY SUED	OF THE BY THE 2N	ORDER DATED JANUARY 30, D RESPONDENT.
EXHIBIT P10	A TRUE SUBMITT	COPY ED BY	OF THE THE PE	LETTER DATED 10.2.2016 TITIONER BEFORE THE 2ND

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RESPONDENT.

RESPONDENTS' EXHIBITS

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ANNEXURE R2(a) A TRUE COPY OF THE LETTER NO.D2647/SE/2012 DATED 17.04.2013.

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ANNEXURE R2(b) TRUE COPY OF THE SUPPLEMENTAL AGREEMENT FOR EXTRA WORK.

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ncd

V.M.Ashraf v. State of Kerala

Case brief

What is this about?

What did the court decide?

V.M.Ashraf v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

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