Disposed

M.S.Abdul Hakeem, v. State of Kerala

Kerala HC30 Nov 2022WP(C)/24356/2021

Case brief

AI extract

What is this about?

Petitioner challenged an order imposing risk and cost due to alleged delay but which stemmed from site obstruction by residents. The Court held that the petitioner's refusal was due to inability to perform (frustration), not abandonment. It directed the second respondent to reconsider the liability order after a hearing. Financial disputes and factual disputes on feasibility were described as non-

What did the court decide?

Directing the second respondent to reconsider the order imposing liability after an opportunity of hearing to the petitioner and to address issues of impossibility of performance and legal injury.

M.S.Abdul Hakeem, Vs State of Kerala — Contract and Commercial Disputes | Kerala HC (2022)

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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 V.G.ARUN WEDNESDAY, THE 30^TH DAY OF NOVEMBER 2022 / 9TH AGRAHAYANA,

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1944

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WP(C) NO. 24356 OF 2021

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PETITIONER:

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M.S.ABDUL HAKEEM, AGED 35 YEARS PWD CONTRACTOR, QUADRIYA MANZIL, MARA, CHENGALA P.O. KASARAGOD 671 541. BY ADVS. JOMY GEORGE R.PADMARAJ M.J.BENNY DEEPAK MOHAN R.AJITH KUMAR [V.K.EDOM] CHITRA N. DAS RISHAB S.

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RESPONDENTS:

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

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2 SUPERINTENDING ENGINEER, HARBOUR ENGINEERING (NORTH CIRCLE), KOZHIKODE 673 303.

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3 EXECUTIVE ENGINEER, HARBOUR ENGINEERING DIVISION, PUTHIYANIRATHU P.O., ELATHOOR, KOZHIKODE 673 303. 4 ASSISTANT EXECUTIVE ENGINEER, HARBOUR ENGINEERING DEPARTMENT, FISHERY HARBOUR SUB DIVISION, PUTHIYANDAI P.O. KOZHIKODE 673 021. BY GP P S APPU

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION

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ON 06.07.2022, THE COURT ON 30.11.2022 DELIVERED THE

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FOLLOWING:

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W.P.(C) No.24356 of 2021

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JUDGMENT

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Dated this the 30^th day of November, 2022

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The petitioner, an A Class PWD contractor, was awarded the work “Construction of compound wall around the Puthiyappa Fishery Harbour and construction of Locker Rooms”. The selection notice is dated 30.07.2018, the agreement was executed on 14.08.2018 and the site handed over on 22.08.2018. From the initial stages itself, the residents of a nearby colony obstructed the work, claiming that the work site is their playground and construction of compound wall will obstruct their access to the harbour. Despite the hindrance, the petitioner completed 21% of the work by February, 2019. At that stage, the local residents obstructed and threatened the workers and PWD officials. Faced with a potentially

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dangerous situation, the work was stopped. The third respondent informed the second respondent about the situation as per Ext.P3 letter dated 15.03.2019. As the contract period of 10 months expired in the meanwhile, the petitioner sought extension of time of the contract period up to 31.03.2020. By Ext.P6 letter dated 09.08.2019 the fourth respondent also recommended to extend the contract period, without imposing penalty. Accordingly, Ext.P7 order was issued by the second respondent extending the time limit, but only up to 31.12.2019. The petitioner commenced the work immediately thereafter, but the local residents again obstructed. As it became evident that he will not be able to proceed with the work, the petitioner submitted Ext.P8

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representation, requesting to relieve him of the

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contract, without risk and cost. To the

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petitioner's dismay, without even considering his representation and in complete deviation of the

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earlier stand, the third respondent issued Ext.P9 communication blaming the petitioner for the delay in completing the work. Thereupon, the petitioner submitted Ext.P10 representation, requesting to take immediate action to resolve the issues at the site and to revise the estimate. Although, fourth respondent issued Ext.P11 letter to the third respondent stating that the contract period can be extended up to 31.03.2021 by imposing a fine of Rs.50,000/-, by Ext.P13 order the second respondent directed to rearrange the work at the petitioner's risk and cost. The work was accordingly rearranged and Ext.P14 notice issued to the petitioner, demanding an amount of Rs.43,91,444/- towards risk and cost. Thereupon, the petitioner submitted Ext.P16 representation highlighting the reasons for the delay in completing the work and requesting to exempt him from risk and cost. The second respondent having failed to act upon

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Ext.P16 representation, this writ petition is filed seeking the following reliefs;

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“(a) issue a writ of certiorari or any other appropriate writ, order or direction quashing Exhibit P-13 order and P-14 demand notice of the 2^nd respondent.

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(b) issue a writ of mandamus or any other appropriate writ order or direction, directing the respondents to relive the petitioner from the contractual obligations without imposing any penalty.

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(c) to declare that the petitioner has not committed any breach of contract so as to enable the respondents to impose any penalty on the petitioner for noncompletion of the work.

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or in the alternative

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(d) issue a writ of mandamus or any other appropriate writ, order or direction, directing the respondents to quantify the damages if any suffered by the respondents before demanding any amount from the petitioner, after affording an opportunity of hearing to the petitioner.”

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Adv.Jomy George, learned Counsel for the

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petitioner, assailed Exts.P13 order and P15

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notice on the following grounds;

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The respondents themselves have admitted that the delay in completing the construction is not

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attributable to the petitioner. There is no justification in the sudden volte face on the part of the respondents, by putting the entire blame on the petitioner. The obstruction at the site had made further construction impossible and thereby the contract stood frustrated. The respondents committed gross illegality in mulcting the petitioner with risk and cost, terming the disability to continue the work as abandonment. The said approach is against Section 67 of the Contract Act, 1872. This question was considered by the Apex Court in Shripati Lakhu

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Mane v. Maharashtra Water Supply and Sewerage Board [ 2022 (2) KLT 772(SC)] and it was held that, refusal of the contractor to continue to execute the work cannot be termed as abandonment

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of contract unless the reciprocal promises are performed by the other party. In the instant case, the respondents had failed to perform their reciprocal duty of providing hindrance free site. The respondents are not entitled to unilaterally assess the damages, that too, without proving the legal injury sustained. In support of this proposition, reliance is placed on the decisions

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in Joseph v. Executive Engineer, Irrigation Division, Thrissur and others [2014 (2) KHC 143] ,

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State of Kerala v. United Shippers and Dredgers [1982 KLT 738] and Varkey Thomas v. G.Vijayendra

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Kurup and others [2017 (1) KHC 452] . Even otherwise, as the loss sustained by rearranging the work is only Rs.3,77,618.31, there is no justification in demanding an amount of Rs.43,91,944/-.

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Adv.P.S.Appu, the learned Government Pleader, contended that the period of contract

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was initially extended on being convinced that the petitioner had been disabled from executing

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the work due to obstruction at the site. Later, even after the dispute was resolved, but, the petitioner was not willing to continue the work unless the rates are revised. A meeting was hence conducted on 20.03.2020 and the petitioner agreed to restart the work on 23.03.2020. Even though

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lockdown was imposed in the meanwhile, all arrangements for restarting the work, complying with Covid-19 protocol was made. Of the total length of 1530 metres of the compound wall, the obstruction was only over a portion of 200 metres. The adamant stand of the petitioner that he will not continue the work without a revised estimate had resulted in termination and re-arrangement of the contract. It is true that the difference in the amount quoted by the new bidder and the petitioner is Rs.3,77,618.31. Over and above this difference, the petitioner

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is also liable to pay 30% of the balance work amount as per Clause 2116.2.1 of the PWD Manual. Thus, the total amount due from the petitioner comes to is Rs.43,91,444/-. At any rate, this monetary dispute cannot be resolved in a writ petition under Article 226.

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I find substantial merit in the

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petitioner's contention that he was disabled from continuing the work at the initial stages due to obstruction from the local residents. This fact is accepted by the respondents also. The only question is whether the petitioner could have completed the work pursuant to the discussion held on 20.03.2020. While the petitioner contends that it was not feasible to continue the work, the respondents argue that all arrangements for executing the work was done at the site. The above factual dispute cannot be resolved in a writ petition under Article 226. At the same time, I find substantial merit in the

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petitioner's contention that Ext.P13 order and Ext.P14 notice are issued without considering the issues raised in his representations. Before terminating the contract and imposing liability, the second respondent ought to have considered whether the contract was impossible of performance. If so, the petitioner's refusal to continue to execute the work cannot be termed as abandonment and should not result in the petitioner being imposed with liability. The legal position is clearly laid down in Shripati Lakhu Mane (supra) . There is also merit in the contention that before imposing the liability, the question as to whether the respondents had suffered any legal injury ought to be addressed. Even in such a case, there cannot be a unilateral assessment of damages. No such exercise having been undertaken by the second respondent before passing Ext.P13 order, the second respondent is

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bound to take a fresh decision after affording an

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opportunity of hearing to the petitioner.

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The petitioner having filed Ext.P16 seeking reconsideration of Ext.P13, the writ petition is disposed of directing the second respondent to reconsider the decision at Ext.P13, insofar as it imposes liability on the petitioner. The decision shall be taken after affording an opportunity of hearing and by adverting to the discussion in this judgment. Till a decision is taken in the manner directed above, further proceedings based on Ext.P14 shall be kept in abeyance.

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V.G.ARUN JUDGE

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Scl/

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APPENDIX OF WP(C) 24356/2021

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PETITIO Exhibit	NER EXHIB P1	ITS TRUE COPY DATED 30.7 RESPONDENT	OF THE .2018 I TO THE	SELECTION NOTICE SSUED BY THE 2ND PETITIONER.
Exhibit	P2	TRUE COPY 04.09.2018	OF THE OF THE	ORDER DATED 2ND RESPONDENT.
Exhibit	P3	TRUE COPY 15.03.2019 RESPONDENT	OF THE ISSUED TO THE	LETTER DATED BY THE 3RD 2ND RESPONDENT.
Exhibit	P4	TRUE COPY 11.04.2019 RESPONDENT	OF THE ISSUED TO THE	LETTER DATED BY THE 4TH 3RD RESPONDENT.
Exhibit	P5	TRUE COPY 17.07.2019	OF THE ISSUED	LETTER DATED BY THE 4TH
		RESPONDENT	TO THE	3RD RESPONDENT.
Exhibit	P5 (A)	TRUE COPY MEETING DA RESPONDENT	OF THE TED 15. .	MINUTES OF THE 07.2019 OF THE 4TH
Exhibit	P6	TRUE COPY 09.08.2019 RESPONDENT	OF THE ISSUED TO THE	LETTER DATED BY THE 4TH 3RD RESPONDENT.
Exhibit	P7	TRUE COPY 29.11.2019	OF THE OF THE	ORDER DATED 2ND RESPONDENT.
Exhibit	P8	TRUE COPY 31.12.2019 BEFORE THE	OF THE SUBMIT 2ND RE	REPRESENTATION DATED TED BY THE PETITIONER SPONDENT.
Exhibit	P9	TRUE COPY 12.05.2020 RESPONDENT	OF THE ISSUED TO THE	NOTICE DATED BY THE 3RD PETITIONER.
Exhibit	P10	TRUE COPY 25.05.2020 BEFORE THE	OF THE SUBMIT 2ND RE	REPRESENTATION DATED TED BY THE PETITIONER SPONDENT.
Exhibit	P11	TRUE COPY 24.08.2020 RESPONDENT	OF THE ISSUED TO THE	LETTER DATED BY THE 4TH 3RD RESPONDENT.
Exhibit	P12	TRUE COPY 24.12.2020	OF THE ISSUED	NOTICE DATED BY THE 2ND
		RESPONDENT	TO THE	PETITIONER.
Exhibit	P13	TRUE COPY	OF THE	ORDER DATED

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09.02.2021 OF THE 2ND RESPONDENT. Exhibit P14 TRUE COPY OF THE NOTICE DATED 17.09.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P15 TRUE COPY OF THE LETTER DATED 08.10.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P16 TRUE COPY OF THE REPRESENTATION DATED 06.08.2021 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.

M.S.Abdul Hakeem, v. State of Kerala

Case brief

What is this about?

What did the court decide?

M.S.Abdul Hakeem, v. State of Kerala

Case brief

What is this about?

What did the court decide?

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