Allowed

M. J. Joy and Company v. Chief Engineer (Nw)

Kerala HC14 Feb 2024WP(C)/15384/2022

Case brief

AI extract

What is this about?

In a writ petition, the High Court of Kerala allowed the petition and directed the respondents to consider an escalation bill (Ext.P9) submitted by the petitioner contractor for additional wages, respecting the contractual terms and requiring the respondent to produce evidence if rejecting the claim.

What did the court decide?

Directing the respondents to consider the escalation bill (Ext.P9) and hear the petitioner after affording a nodal opportunity of being heard and producing relevant documents, and to dispose as such w

M. J. Joy and Company Vs Chief Engineer (Nw) — Contract and Commercial Disputes | Kerala HC (2024)

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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 DEVAN RAMACHANDRAN

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WEDNESDAY, THE 14^TH DAY OF FEBRUARY 2024 / 25TH MAGHA, 1945 WP(C) NO. 15384 OF 2022

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PETITIONER:

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M. J. JOY AND COMPANY DOOR NO. XXVII/ 1580, KOYITHARA ROAD, P ANAMPILLY NAGAR, COCHIN, PIN – 682036 REPRESENTED BY ITS MANAGING PARTNER M. J. JOY BY ADVS. DEEPU THANKAN UMMUL FIDA LAKSHMI SREEDHAR R.RAJANANDINI MENON SHAHNAS K.P

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RESPONDENTS:

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1 CHIEF ENGINEER (NW) MILITARY ENGINEER SERVICE, NAVAL BASE P.O., KOCHI, PIN - 682004 2 GARRISON ENGINEER (P) [CORRECTED] MILITARY ENGINEER SERVICE, NAVAL BASE P.O., KOCHI, PIN - 682004 (CORRECTED) [DESCRIPTION OF R2 IS CORRECTED AS GARRISON ENGINEER (NAVAL SERVICES) AS PER ORDER DATED 08.06.2022 IN I.A.1/2022 IN WP(C)15384/2022.] BY ADV. SRI.A.K.HARIDAS, CGC

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C).No. 15384 of 2022

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JUDGMENT

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The petitioner is stated to be a company and registered as a “B class” contractor, under the Military Engineer Services. They say that, even though they are entitled to certain benefits under the contract they have entered into with the respondents, particularly under clause 63 thereof, qua the wages they have paid to their employees, the same has been disregarded by the respondents, without adverting to the obligation cast upon them under the contractual terms. They say that they have already preferred Ext.P9, which contains the details of the actual wages paid by them to their employees, as also the escalation that they had to suffer; but that this has been refused to be considered, for no reason that can be validly justified. They thus pray that the respondents be directed to consider Ext.P9 escalation bill and accede to it as per condition No.63 of the General Conditions of Contract, under which, his client had completed the work of construction of the “Type II Quarters”, within a time frame to be fixed by this Court.

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In response to the afore submission of Sri.Deepu Thankan – learned counsel for the petitioner, Sri.A.K.Haridas - learned standing counsel for respondents 1 and 2, pointed out

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W.P.(C).No. 15384 of 2022

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that, any claim by the petitioner, as impelled in Ext.P9, will be tenable only if they are able to establish, through cogent evidence, that the sums in question was actually paid. He submitted that, however, even though the rate of wages has not increased beyond 10% in the market, the petitioner has impelled a very exaggerated figure in Ext.P9; and therefore, that the respondents have not considered the same, particularly because it is not supported by any cogent or germane evidence or materials. He concluded his submissions saying that, in any event, this writ petition is not maintainable because, if the petitioner has any grievance regarding the terms of the contract, it is for him to invoke condition No.70 of the General Conditions of Contract and seek that an Arbitrator be appointed. He thus prayed that this writ petition be dismissed.

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When I evaluate and consider the afore rival positions, it is rendered without doubt that, as far as the respondents are concerned, they say that they cannot consider Ext.P9 because a contractor is entitled to be granted benefits under an escalation bill, only if it is able to establish that the wages to its employees were actually paid and evidence for the same is produced. They also say that, as per common knowledge, the rates of wages in Kerala have not increased beyond 10% and therefore, that what

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W.P.(C).No. 15384 of 2022

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is stated in Ext.P9 is not tenable.

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4. However, it must be borne in mind that, even going by the conceded position of the respondents, if the petitioner is able to support their bill through evidence and materials, to show actual payment to their employees, factoring in the actual escalation of labour costs, they may have to accede to it, subject to every other requirement in the contractual realm being satisfied and complied with.

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5. In the case at hand, it is evident from the pleadings on record that the respondents have even refused to consider Ext.P9, saying that the petitioner has not supported it with cogent evidence; and further that they have reliable information that the escalation in wages in Kerala is not more than 10%.

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6. I am afraid that the afore stand of the respondents cannot find favour of this Court because, even for the petitioner to invoke their remedy of Arbitration, there should be a dispute, which can arise only if the petitioner's claims are considered and are rejected for valid reasons.

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7. As far as this particular case is concerned, there is no rejection of the petitioner's claim as of now, and Ext.P9 remains unconsidered.

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8. The afore is also crucial for the reason that, if the

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petitioner is able to establish that they have actually paid the wages mentioned in Ext.P9 to their employees; and that it is justified by the escalation in the market rate of labour, then one wonders how the respondents can say that they will not even consider it – whether they accede to it, or otherwise.

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9. In the afore perspective, I have no doubt that this Court is enjoined to come to the aid of the petitioner, to the limited extent of directing the respondents to consider Ext.P9, after affording them the necessary opportunity of being heard, and of producing relevant documents in support of their claims therein.

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Resultantly, this writ petition is allowed, with a consequential direction to the competent among respondents to take up Ext.P9 and hear the petitioner, after affording them necessary opportunity of producing all evidence and materials in support of their assertions in Ext.P9; and then dispose of the same, through an appropriate order, as expeditiously as is possible, but not later than three months from the date of receipt of a copy of this judgment.

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I, however, clarify that, I have not entered into the merits of the rival contentions, or the disputations, between the parties and that they are all left open, if it requires to be impelled by the petitioner in future; and further that the issues relating to

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the question whether the petitioner must invoke Arbitration in such event, is also left undecided.

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If, however, through the afore exercise, the respondents

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are to find in favour of the petitioner qua the amounts mentioned in Ext.P9 – either fully or in part – the same shall be disbursed to them, within a period of two months thereafter.

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Sd/DEVAN RAMACHANDRAN JUDGE

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stu/anm

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W.P.(C).No. 15384 of 2022

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APPENDIX OF WP(C) 15384/2022

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PETITIO	NER EXHIB	ITS
Exhibit	P-1	TRUE COPY OF THE EXTRACT OF THE NOTICE INVITING TENDER WITH RESPECT TO THE TENDER FOR PROVISION 32 TYPES II QUARTERS AGAINST DEFICIENCY AT NAD ALUVA DATED 12/04/2018 ISSUED BY THE FIRST RESPONDENT
Exhibit	P-2	TRUE COPY OF THE LETTER ACCEPTING THE TENDER OF THE PETITIONER ISSUED BY THE FIRST RESPONDENT DATED 18/01/2019
Exhibit	P-3	TRUE COPY OF THE WORK ORDER ISSUED BY THE SECOND RESPONDENT DATED 31/01/2019
Exhibit	P-4	TRUE COPY OF THE GENERAL CONDITIONS OF CONTRACTS (IAFW 2249) FOR LUMP SUM CONTRACTS
Exhibit	P-5	TRUE COPY OF THE RELEVANT PAGE OF THE CONTRACT
Exhibit	P-6	TRUE COPY OF THE KERALA EXTRAORDINARY GAZETTE NOTIFICATION DATED 20/08/2019
Exhibit	P-7	TRUE COPY OF THE COMPLETION CERTIFICATE DATED 09/09/2020 ISSUED FOR THE PHASE I
Exhibit	P-8	TRUE COPY OF THE COMPLETION CERTIFICATE DATED 03/09/2021 ISSUED FOR THE PHASE II
Exhibit	P-9	TRUE COPY OF THE SEPARATE WORKING OUT DETAILS OF THE WAGES ESCALATION SUBMITTED UNDER CONDITION 63 OF THE GENERAL CONDITION OF CONTRACT FOR THE PERIOD FROM 01/09/2019 TO 30/06/2021
Exhibit	P-10	TRUE COPY OF THE COVERING LETTER DATED 15/09/2021
Exhibit	P-11	TRUE COPY OF THE INTERIM ORDER OF THIS HON'BLE COURT IN W.P.(C) NO. 4112/2021 DATED 26/03/2021
Exhibit	P-12	TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO. 14513/2022 DATED 26/04/2022
Exhibit	P13	A TRUE COPY OF THE JUDGMENT DATED 04/01/2023 IN WPC NO. 14513/2022.
Exhibit	P14	A TRUE COPY OF THE JUDGMENT DATED 04/07/2023 IN WPC NO. 1501/2023

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W.P.(C).No. 15384 of 2022

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RESPONDENTS' EXHIBITS Exhibit R1(A) THE TRUE COPY OF G.O.NO.E1/181/2018LBRD DATE4D 21.10.2018

M. J. Joy and Company v. Chief Engineer (Nw)

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M. J. Joy and Company v. Chief Engineer (Nw)

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