Allowed

M/S. Surendra Infrastructure Pvt. Ltd. v. Kerala Water Authority

Kerala HC5 Oct 2023WA/1665/2023

Case brief

AI extract

What is this about?

The Division Bench allowed a writ appeal filed by an infrastructure company aggrieved by a Single Judge order mandating Additional Performance Guarantees. The court set aside the impugned judgment, holding the appellant not liable to execute such a guarantee since its overall quoted rate was lower than the lower bound in the contested terms.

What did the court decide?

The writ appeal was allowed and the impugned judgment of the Single Judge was set aside. The appellant is not liable to execute the Additional Performance Guarantee.

M/S. Surendra Infrastructure Pvt. Ltd. Vs… — Contract and Commercial Disputes | Kerala HC (2023)

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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. A.J.DESAI

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THE HONOURABLE MR.JUSTICE V.G.ARUN

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THURSDAY, THE 5^TH DAY OF OCTOBER 2023 / 13TH ASWINA, 1945

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WA NO. 1665 OF 2023

KERALA

APPELLANT/S:

M/S. SURENDRA INFRASTRUCTURE PVT. LTD AGED 60 YEARS HEAD OFFICE, 9, EZRA STREET, 2ND FLOOR, KOLKATA , REP. BY ITS PROJECT MANAGER, M.K. SHAJI, (MUTTATH KOCHUKUNJU SHAJI), S/O. KOCHUKUNJU, VAISHNAVAM, UMMALATHOOR, KOZHIKODE, PIN - 673008 BY ADVS. GEORGE MATHEW M.D.SASIKUMARAN ELSA DENNY PINDIS SUNIL KUMAR A.G MATHEW K.T. GEORGE K.V. STEPHY K REGI MEDHA B.S.

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RESPONDENT/S:

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1 KERALA WATER AUTHORITY REPRESENTED BY ITS MANAGING DIRECTOR, HEAD OFFICE, JALA BHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695033 2 THE SUPERINTENDING ENGINEER OFFICE OF THE SUPERINTENDING ENGINEER, P.H. CIRCLE, KERALA WATER AUTHORITY, HOSPITAL ROAD, ERNAKULAM, PIN - 682011 BY ADVS. SRI.P.M.JOHNY, SC

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OTHER PRESENT:

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SC FOR KWA GEORGIE JOHNNY

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.A.No.1665 of 2023

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JUDGMENT

Dated this the 05^th day of October, 2023

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V.G.Arun, J.

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This writ appeal is filed, aggrieved by the

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directions in the common judgment dated 19.07.2023 in W.P.(C) No.35311 of 2022 and

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connected cases. The essential facts are as under;

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The appellant is a Private Limited Company registered under the provisions of the Companies Act, represented by its Project Manager and is issued with work order by the Kerala Water Authority, pursuant to its participation in the tender. The letter of acceptance issued to the appellant, prior to the execution of the work contract agreement, mandate the furnishing of Additional Performance Guarantee, if the offer

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made is less than the Tendered Probable Amount of

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W.A.No.1665 of 2023

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Contract. The writ petition was filed challenging the said condition. By the impugned judgment, the

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learned Single Judge disposed of the writ petition with the following directions;

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“1) It is declared that the OM No. F.9/4/2020-PPD dated 12.11.2020 regarding

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the performance guarantee, OM No. F.9/4/2020-PPD dated 12.11.2020 regarding the additional performance guarantee and the other Office Memorandums issued by the Government of India are not binding to the State Government and consequently to the Kerala State Water Authority.

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2) If the contract of any of the petitioners fall within the purview of GO(P) No. 7/2021/FIN dated 07.01.2021 and GO(P) No. 32/2022/FIN dated 15.03.2022, then they are entitled to the benefit of those Government Orders.

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3) If any work in accordance with the agreement executed based on the interim order passed by this Court in any of these cases is completed by any of the contractors, no Additional Performance Guarantee shall be insisted from those contractors. If the work has progressed

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W.A.No.1665 of 2023

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to a level exceeding 80%, the tendering authority is left with the liberty to take a decision as to whether any Additional Performance Guarantee is to be insisted upon, taking into account the efficiency, reputation, men and machinery engaged, and other positive factors of the respective contractors. If the work has exceeded 30% of the total work, then the tendering authority is directed to secure Additional Performance Guarantee proportionate to the balance work.

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4) In all other cases, the contractors/petitioners are directed to furnish an Additional Performance Guarantee to the tendering authority as specified in the tender documents within three weeks from the date of receipt of a copy of this judgment.

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5) In cases where a Performance guarantee is furnished by the contractors in spite of its relaxation up to 31.03.2023, the said amounts can be adjusted against the Additional Performance guarantee required in the circumstances specified above.

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6) If the tenders are invited on the basis of the Percentage Rate Contracts,

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W.A.No.1665 of 2023

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then the contractors are liable to furnish the Additional Performance Guarantee on the basis of (X-10)% of the estimated PAC.

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7) If the tenders are invited on the basis of Items Rates Contract, then the contractors are liable to furnish Additional Performance Guarantee for each item of work on the basis of (X-10)% of the estimated amount for each item of work.

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I make it clear that the directions are issued as above taking into account the peculiar facts, features and circumstances involved in these cases consequent to the interim orders granted; and it shall not be treated as a precedent, except in regard to the writ petitions pending in the above context.”

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Learned Counsel for the appellant submitted that an earlier judgment containing similar directions, rendered in the writ petitions filed by a set of identically placed contractors, was the subject matter of challenge in Writ Appeal No.725 of 2023 and connected cases

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W.A.No.1665 of 2023

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and those writ appeals were allowed by the Division Bench with the following directions;

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“15. Considering the above aspects, we allow these appeals and set aside the judgment passed by the learned Single Judge. It is made clear that the appellants would not be liable to execute the Additional Performance Guarantee, if the over all rate is below 10% of TPAC. However, the appellants would be liable to furnish Additional Performance Guarantee as per the letter dated 10.01.2019, ie, x-10%. Additional Performance Guarantee should be executed for the balance amount of work where the amount of work is above 10-25% of the TPAC.”

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To a specific query put by us, learned Standing Counsel submitted that the Kerala Water Authority has so far not challenged the judgment in Writ Appeal No.725 of 2023 and connected cases. In such circumstances, the instant appeal is liable to be allowed.

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In the result, the writ appeal is allowed and the impugned judgment is set aside.

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W.A.No.1665 of 2023

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It is made clear that the appellant is not

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liable to execute the Additional Performance

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Guarantee, the overall rate quoted by it being

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9.14% above TPAC .

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sd/-

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A.J.Desai Chief Justice

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sd/V.G.Arun Judge

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scl

M/S. Surendra Infrastructure Pvt. Ltd. v. Kerala Water Authority

Case brief

What is this about?

What did the court decide?

M/S. Surendra Infrastructure Pvt. Ltd. v. Kerala Water Authority

Case brief

What is this about?

What did the court decide?

What the court decided

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