Allowed

V.Subbiah v. Kerala Water Authority

Kerala HC25 Jul 2022WP(C)/7349/2022

Case brief

AI extract

What is this about?

In a writ petition, the High Court of Kerala directed the Kerala Water Authority to refund security deposits, performance guarantees, and retention amounts paid by a contractor after satisfactory work completion. The Court dismissed the Authority's demand for a bank guarantee, relying on prior precedents.

What did the court decide?

Directing the respondents to refund the deposits, security amounts, and guarantees within two months against a simple bond.

V.Subbiah Vs Kerala Water Authority — 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

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MONDAY, THE 25^TH DAY OF JULY 2022 / 3RD SRAVANA, 1944 WP(C) NO. 7349 OF 2022

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PETITIONER:

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V.SUBBIAH

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AGED 59 YEARS S/O. VELUSAMI, NO. 14/1, 2ND MAIN ROAD, VENGEESWARAR NAGAR, VADAPALANI, CHENNAI - 600 026.

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BY ADVS. JOBY JACOB PULICKEKUDY ANIL GEORGE DAJISH JOHN HARIKRISHNAN P. POOJA SEBASTIAN

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RESPONDENTS:

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1 KERALA WATER AUTHORITY REPRESENTED BY THE MANAGING DIRECTOR, JALABHAVAN, THIRUVANANTHAPURAM - 695 033.

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2 THE SUPERINTENDING ENGINEER PH CIRCLE, KERALA WATR AUTHORITY, KOLLAM - 691 001.

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3 THE EXECUTIVE ENGINEER OFFICE OF THE EXECUTIVE ENGINEER, PROJECT DIVISION, KERALA WATER AUTHORITY, KOLLAM - 691 001.

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4 THE FINANCE MANAGER & CHIEF ACCOUNTS OFFICER KERALA WATER AUTHORITY, JALABHAVAN, THIRUVANANTHAPURAM - 695 033.

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5 STATE OF KERALA REPRESENTED BY ITS SECRETARY, FINANCE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001.

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BY ADVS. AMMINIKUTTY K., GOVERNMENT PLEADER P.M.JOHNY, STANDING COUNSEL FOR WATER AUTHORITY

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO.7349 OF 2022

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JUDGMENT

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Dated this the 25^th day of July, 2022

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The petitioner had executed certain works for the

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Kerala Water Authority (KWA). The petitioner claims to have completed the works to the satisfaction of the respondents.

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The grievance of the petitioner is that, even after completing the work satisfactorily, Rs.1,00,000/furnished as Earnest Money Deposit, additional Performance Guarantee of Rs.1,00,000/- and Security Deposit of Rs.9,66,000/- are not being refunded. The further grievance is regarding retention of 5% towards trial run and commissioning expenses and 1% towards maintenance guarantee amount. Petitioner has submitted Ext.P3 representation, requesting to refund the amounts immediately. This writ petition is filed seeking the following reliefs;

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“i. Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondents to release security deposits, retention amount, maintenance guarantee amount and trial run expenses.

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WP(C) NO.7349 OF 2022

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ii. Issue a writ of mandamus or any other appropriate writ, order or direction directing the respondents to release the bank guarantee submitted by the petitioner and also the fixed deposit and treasury bank saving deposit.”

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Learned Counsel for the petitioner submitted that, as the work was completed satisfactorily, the respondents have no right to withhold the amounts deposited at the time of executing the agreement or to retain amounts towards trial run expenses.

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Learned Standing Counsel for the KWA referred to Clause No.8.16.1(c) of the Notice Inviting Tender and submitted that, if the work gets delayed for reasons which are not attributable to the contractor, the amounts deposited will be released on Bank Guarantee. It is hence contended that, even if the amounts are to be released, that can only be on the security of Bank Guarantee.

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Learned Counsel for the petitioner made available the judgments rendered by this Court under similar circumstances. A perusal of the judgments in W.P.(C).Nos.23599 of 2020 and 30040 of 2015 shows

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WP(C) NO.7349 OF 2022

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that under identical circumstances, this Court had directed release of the amounts, based on simple bonds.

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I am in respectful agreement with the judgments mentioned above. The KWA itself having certified that the petitioner had completed the works to its satisfaction, there is no justifiable reason for insisting on Bank Guarantee for release of the security amount deposited by the petitioner.

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In the result, the writ petition is allowed. The respondents are directed to refund the deposits made by the petitioner while executing the agreement, within two months of receipt of a copy of this judgment, on the strength of simple bond executed by the petitioner.

Sd/-

V.G.ARUN

JUDGE

NB/25-7

WP(C) NO.7349 OF 2022

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APPENDIX OF WP(C) 7349/2022

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PETITIONER’S EXHIBITS

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EXHIBIT P1 TRUE PHOTOCOPY OF THE AGREEMENT DATED 10.01.2019 BETWEEN THE PETITIONER AND THE 2ND RESPONDENT. EXHIBIT P2 TRUE PHOTOCOPY OF WORK COMPLETION/COMMISSIONING CERTIFICATE ISSUED BY THE 3RD RESPONDENT. EXHIBIT P3 TRUE COPY OF THE LETTER GIVEN BY THE PETITIONER DATED 06.1.2022 TO THE 2ND RESPONDENT.

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RESPONDENTS' EXHIBITS: NIL

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TRUE COPY

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P.A. TO JUDGE

V.Subbiah v. Kerala Water Authority

Case brief

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V.Subbiah v. Kerala Water Authority

Case brief

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