Allowed

Sherief B.A. v. Government of India

Kerala HC20 Oct 2023WA/1790/2023

Case brief

AI extract

What is this about?

The Division Bench allowed the writ appeal against the order of the Single Judge refusing relief to a contractor regarding performance guarantee conditions. The court directed the authorities to permit execution of the agreement on furnishing a 3% performance guarantee based on a recent Government Order.

What did the court decide?

Allowed the appeal; directed execution of agreement on furnishing 3% performance guarantee; set aside the single judge's order.

Sherief B.A. Vs Government of India — 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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FRIDAY, THE 20^TH DAY OF OCTOBER 2023 / 28TH ASWINA, 1945

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WA NO. 1790 OF 2023

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AGAINST THE ORDER/JUDGMENT WP(C) 22727/2023 OF HIGH COURT

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OF KERALA

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APPELLANT/S:

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SHERIEF B.A. AGED 42 YEARS S/O. ABDUL KUNHI HAJI BERKA, CONTRACTOR, BERKA HOUSE, NELLIKATTA, EDNEER P.O., PADY KASARAGOD DISTRICT., PIN - 671541 BY ADVS. BABU JOSEPH KURUVATHAZHA ARCHANA K.S. MOHAMMED SHAFI.K

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RESPONDENT/S:

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1 GOVERNMENT OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF ROAD TRANSPORT & HIGHWAYS, TRANSPORT BHAWAN, 1, PARLIAMENT STREET, NEW DELHI, PIN - 110001

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2 SUPERINTENDING ENGINEER KERALA WATER AUTHORITY, P.H. CIRCLE KANNUR., PIN - 670012

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BY ADVS. CENTRAL GOVERNMENT COUNSEL(B/O) STANDING COUNSEL(B/O)

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OTHER PRESENT:

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CGC SUVIN R.MENON;SC FOR KWA GEORGIE JOHNNY

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON

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20.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.A.No.1790 of 2023

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JUDGMENT

Dated this the 20^th day of October, 2023

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V.G.Arun, J.

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The appellant is a contractor awarded with work contract by the Kerala Water Authority and issued with Ext.P1 letter of acceptance. Aggrieved by the conditions in Ext.P1, requiring the appellant to deposit Performance Guarantee of

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5% of the contract value and to furnish additional performance guarantee, the writ petition was filed seeking the following reliefs;

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“i. issue a writ of mandamus or any other appropriate writ, order or direction commanding the 2 nd respondent to permit the petitioner to execute the agreement, in pursuance to Ext.P1 letter of acceptance, on furnishing 3% of the contract value towards performance guarantee, and without furnishing the additional performance guarantee, forthwith;

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ii. issue any appropriate writ, order

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W.A.No.1790 of 2023

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or direction declaring that the directions issued by the Government of

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India in Ext.P3 Office Memorandum, exempting the contractor from furnishing additional performance guarantee is valid and binding upon the respondents, until the same is withdrawn or modified by the 1^st respondent, by the issuance of appropriate OM/ direction;

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iii. issue a writ of mandamus or any other appropriate writ, order or direction commanding the 2ndrespondent

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to consider and dispose of Ext.P8 representation, in the light of Ext.P3 OM and Ext.P7 direction, forthwith;”

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The learned Single Judge having refused to grant

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the relief, this writ appeal is filed.

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When the appeal was taken up for

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consideration, learned Counsel for appellant drew attention to Annexure-A5 Government Order (G.O. (P) No.95/2023/FIN dated 07.09.2023) by which the

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Government has extended the relaxation in performance guarantee, ie, reduction of the requirement of Performance Guarantee from 5% to

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W.A.No.1790 of 2023

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3% of the contract value, with effect from 01.04.2023 up to 31.03.2024.

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

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“15. Considering the above aspects, we

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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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W.A.No.1790 of 2023

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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.

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In the result, the writ appeal is allowed in terms of the directions in Writ Appeal No.725 of 2023 and connected cases and also making it clear that, in view of G.O.(P) No.95/2023/FIN dated 07.09.2023, the appellant will be liable to deposit performance guarantee only at the rate of 3%.

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A.J.Desai Chief Justice

V.G.Arun Judge

scl

W.A.No.1790 of 2023

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APPENDIX OF WA 1790/2023

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PETITIONER ANNEXURES Annexure A1 TRUE COPY OF THE E-TENDER NOTICE NO.KWA/PHC/KNR/TENDER/2023-24 DATED 20.4.2023 ISSUED BY THE 2ND RESPONDENT. Annexure A2 TRUE COPY OF THE ORDER OF THIS HON'BLE COURT DATED 13.7.2023 IN W.P.(C) NO.22727/2023. Annexure A3 TRUE OF THE JUDGMENT OF THIS HON'BLE COURT DATED 14.8.2023 IN W.A.NO.725/2023. Annexure A4 TRUE COPY OF THE PROCEEDING NO.COVID19/ROADMAP/JS(H)/2020 (183777) DATED 4.5.2023 ISSUED BY THE 1ST RESPONDENT. Annexure A5 TRUE COPY OF G.O.(P) NO.95/2023/FIN DATED 7.9.2023 ISSUED BY THE GOVERNMENT OF KERALA.

Sherief B.A. v. Government of India

Case brief

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Sherief B.A. v. Government of India

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