Disposed

T.Asokan v. State of Kerala

Kerala HC17 Jul 2024WP(C)/22770/2016

Case brief

AI extract

What is this about?

PWD contractor sought quashing of a Government order rejecting his claim for revision of contract rates for a bridge construction completed under adverse site conditions. The court set aside the rejection order, noting the Chief Engineer's recommendation was not considered, and directed fresh assessment with hearing within three months.

What did the court decide?

Ext.P20 quashed; Government directed to re-assess and pass appropriate orders after hearing petitioner, within three months.

T.Asokan Vs State of Kerala — 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 P.M.MANOJ

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WEDNESDAY, THE 17^TH DAY OF JULY 2024 / 26TH ASHADHA, 1946

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WP(C) NO. 22770 OF 2016

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PETITIONER:

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T.ASOKAN, AGED 59 YEARS S/O. KUNJIKANDAN,PATTALIL HOUSE, CHELAVOOR PO. CALICUT

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BY ADVS.SRI.K.MOHANAKANNAN

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SMT.A.R.PRAVITHA

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RESPONDENTS:

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1 STATE OF KERALA REPRESENTED BY CHIEF SECRETARY TO GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001

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2 THE PRINCIPAL SECRETARY TO GOVERNMENT PUBLIC WORKS (D) DEPARTMENT, THIRUVANANTHAPURAM-695001

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3 THE PRINCIPAL SECRETARY TO GOVERNMENT (FINANCE),GOVERNMENT OF KERALA,SECRETARIAT, THIRUVANANTHAPURAM-695001

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4 THE CHIEF ENGINEER, BOAD & BRIDGES DIVISION,PUBLIC WORKS DEPARTMENT, THIRUVANANTHAPURAM=695001

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5 THE SUPERINTENDENTING ENGINEER,ROADS AND BRIDGES DIVISION, NORTHERN CIRCLE, KOZHIKODE-678001

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6 THE EXECUTIVE ENGINEER, ROAD & BRIDGES DIVISION PUBLIC WORKS DEPARTMENT MANJERI,MALAPPURAM DISTRICT -676122 BY ADV GOVERNMENT PLEADER V.VENUGOPAL

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.22770 of 2016

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P.M.MANOJ, J.

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W.P.(C).No. 22770 of 2016

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Dated this the 17^th day of July 2024

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JUDGMENT

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Being aggrieved by Ext.P20, the petitioner preferred this writ petition seeking the following reliefs;

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i) Issue a writ of certiorari or any other appropriate writ order or directions calling for the records leading to Ext.P20 and quash the same;

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ii) Issue a Writ of mandamus or any other appropriate writ

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or order or direction directing the Government to constitute a Committee for deciding the claim made by the petitioner and as pointed out in Ext.P7 and direct to Committee so constituted to decide the issue after giving ample opportunity to the petitioner to adduce evidence and prove his case within a time frame to be fixed

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by this Hon’ble Court.

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The petitioner is a PWD contractor. He was entrusted

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with the work of construction of a Bridge at Kadalundi Kadavu

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W.P.(C) No.22770 of 2016

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across Kadalundi River in Tirur-Kadalundi-Chaliyar road in the year 1994. Initially, the tender was confirmed in favour of one Sri.P.K.Abdul Khader Haji, Kasargod at 99% above the estimated rate. However, he hesitated to take out the work at the rate approved by the Government.

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In the aforementioned circumstances, work was retendered on 3/5/1996. The petitioner being the lowest tenderer at 90% above the estimated rate, tender was approved by the Tender Committee and selection notice was issued to him on 27/1/1998. After receiving the selection notice, the petitioner issued letter to the Superintending Engineer on 25/3/1998 on the delay in approving the tender and the issuance of selection notice. It is further stated that he had decided to execute the agreement realising all aspects of the agreement so executed on 25/3/1998 as per Ext.P1. Later the work was completed on 31/12/2007. On completion of the work, the petitioner approached the 4^th respondent for rate revision as per Ext.P7.

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W.P.(C) No.22770 of 2016

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The 4^th respondent vide letter No. NBC/71/2005 dated 6/6/2007 informed the Government the peculiar circumstances in which the petitioner carried out the work, which needs to reconsideration of the rate fixed and hence, requires the revision of the rate fixed. However, ignoring that, vide Ext.P10 order, the Government rejected the petitioner's request. The Ext.P8 recommendation of the Chief Engineer was declined by the Government as per Ext.P9.

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Being aggrieved by that, the petitioner approached this Hon’ble Court by filing W.P(C) No.30158/2008. That writ petition was allowed as per Ext.P16 judgment dated 23/9/2015 whereby Ext.P9 order was quashed and directed the first respondent in that writ petition to refer the matter to a Arbitration Committee within a period of one month from the date of of the judgment in order to take a appropriate decision after affording an opportunity of being heard to the petitioner.

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W.P.(C) No.22770 of 2016

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Being aggrieved by the same, the respondents preferred Review Petition. While disposing of the Review Petition, direction to the extent of constitution of Arbitration Committee was modified and left it open to be decided by the Government in accordance with law, after affording an opportunity of being heard to the petitioner, within the stipulated time. In the light of the said direction, the petitioner once again approached the Government as per Ext.P18. However, that was rejected by Ext.P20 order which is impugned in this writ petition.

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The reason assigned for rejection is that as per the agreement signed by the petitioner, there is no arbitration clause and there is no Arbitration Committee in the Department as well.

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The contractor executed Supplemental agreements from time to time for the changed items. He did not express unwillingness for doing the work in the changed manner and at the rate approved. It was for the contractor to back up from the contract for the reason of change in the design of the work. He

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proceeded to work on executing supplemental agreements on workable terms to him. Though there was a shortage of materials, the petitioner was allowed to purchase the materials from the open market and the amount expended was reimbursed to him. Thereafter, on completion of the work, he seeks for revision of the rate, which is against the agreed terms. Hence, being aggrieved, the petitioner seeks to set aside Ext.P20.

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In response to that, a counter affidavit has been filed by respondents 1 and 2. Paragraphs 7,8 and 13 of the counter

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affidavit reads as follows;

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“7. Therefore the petitioner was heard and claim of the petitioner for revision of rates was rejected as per G.O.(Rt) No.977/2016/PWD dated 16/06/2016 considering the facts that the petitioner executed supplemental agreements from time to time for the changed items without any objection. He did not express his unwillingness for doing the work in the changed manner and at the rate approved at any point of time. The petitioner did not move back from the contract for the reason of change in the design of the work. But he accepted such changes as it is evident from the supplemental agreements executed by the petitioner. This also shows that the petitioner was accepting the rise suggested by the department.

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Apart from this as per the agreement conditions, the cement and steel required for the work were supplied from the departmental store. Since there was no stock of cement and steel in the departmental store, the petitioner was allowed to purchase those items from the open market which was reimbursed at the prevailing market rate. The petitioner is not justified in claiming the enhanced rate against the agreement conditions . As per the conditions in the agreement, rates once agreed will not be altered under any circumstances.

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The petitioner's request for rate revision by placing the request before Arbitration Committee cannot be considered because as per the agreement signed by the petitioner there is no “Arbitration Clause”. The contractor executed Supplemental agreements from time to time for the changed manner and at the rate approved. The contractor could have very well backed out from the contract for the reason of change in the design of the work. But he continued to execute the Supplemental Agreements which shows that the rates were workable to him. Apart from this, as per the agreement conditions, the cement and steel required for the work were to be supplied from the department store. As there was no stock of cement and steel in the Department Store, the contractor was allowed to purchase the same from open market and he was reimbursed the cost of cement and steel at the market rate. After completing the work, making claim for enhanced rate is against agreement conditions. As per agreement conditions, rates once agreed will not be altered under any circumstances. In view of the fact stated above the claim put forth by the petitioner for revision of rate can't be considered and the same is rejected. The directions in judgment

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W.P.(C) No.22770 of 2016

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of Hon'ble High Court in RP No.1111/15 in WP(C)30158/08 are thus complied with.

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This is the stand taken by the first and second respondents in the counter affidavit justifying the rejection of Ext.P18.

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Heard the learned Counsel for the petitioner Adv.Sri.Navaneeth D.Pai and the learned Senior Government Pleader for the respondents.

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On going by the records, it appears that on completing the work, the petitioner has to face many unfavourable situation, which is highlighted in Ext.P8 letter by the Chief Engineer to the Government which reads as follows;

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“ As the investigation work was carried out before 1984, many aspects therein have been changed considerably during the execution in 1998. The long term changes at the river bed and nature of sea shore in the sea mouth are occurred. These should be on heavy grabbing waves especially the sea having violent in tidal season. The bit of lands will form here and there in sea mouth and the nature is suddenly changed. Due to the site condition during execution the change of specification in the original work, the additional work relating to changes of design and

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W.P.(C) No.22770 of 2016

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extra work which is essential required. In the proper execution of work are mentioned at there a revised estimate prepared for submitted by Government and sanctioned for Rs.1029.00 lakhs in 1997 schedule of rate vide G.O.(Rt) No.333/04/PWD dated 24/3/2004. There is delay in giving reimbursement of cost for the departmental materials to the contractor during this period. Hence, the work could not be completed during the period of revised schedule of rates in 1996 and 1999. The total cost of work as per this revision comes to Rs.15,05,62,144/- against the cost of work Rs.9,50,00,000/- based on 1992 schedule of rates, which is 58.50% excess over the cost of work in 1992 schedule of rates excluding agreed tender excess. “

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These recommendations are not considered by the Government while passing Ext. P9 order declining to grant the revision for escalation. In these circumstances, the petitioner approached this Court and this Court by Ext.P16 judgment directed the Government to reconsider the entire issue on appointing an Arbitration Committee to assess the situation. However, as there is no Arbitration Committee and there is no arbitration clause in the agreement, the Government preferred a review, that was allowed and directed the Government to

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reconsider the claim raised by the petitioner in Ext . P19. However, Ext.P20 was issued on considering Ext.P18. In that context, the recommendation as per Ext.P8 was not at all considered by the Government. There was no proper assessment of the adverse situation, which was faced by the petitioner while completing the work as per Ext.P1 agreement.

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In the above circumstances, this Court deem it appropriate to set aside Ext.P20 and direct the Government to re-assess the situation and pass appropriate orders after affording an opportunity of being heard to the petitioner, within a period of three months from the date of receipt of a copy of this judgment.

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The writ petition is disposed of as above.

Sd/-

P.M.MANOJ Judge

dpk

W.P.(C) No.22770 of 2016

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APPENDIX OF WP(C) 22770/2016

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PETITIONER’S ANNEXURES :

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P1:	TRUE COPY OF THE AGREEMENT WITH ANNEXURES EXECUTED BY THE PETITIONER WITH THE RESPONDENT DATED 25-3- 1998
P2:	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DATED 30.9.99
P3:	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DT. 23-11-2000
P4:	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DT. 29-3-2001
P5:	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DT.30- 8-2001
P6:	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DT.29- 6-2002
P6(A):	TRUE COPY OF THE SUPPLEMENTAL AGREEMENT SLIP DT.27- 2-2008
P7:	TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ON 9-1-2006
P8:	TRUE COPY OF THE REPORT OF THE 4TH RESPONDENT AS PER HIS REPORT REFERENCE NO.NBC/71/2005 DT.6-6-2007 ISSUED BY THE 2ND RESPONDENT
P9:	TRUE COPY OF THE LETTER NO.DCI-2015/E1/07/POWD DT.5-11-07 ISSUE DBY THE 2ND RESPONDENT
P10:	TRUE COPY OF THE LETTER ISSUED BY THE 4TH
	RESPONDENT TO THE 5TH RESPONDETN VIDE NO.DCI-
	5848/92 DT. 21.4.2008 WITH COMPLETION CERTIFICATE

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W.P.(C) No.22770 of 2016

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P11:	TRUE COPY OF THE 19.3.1996	GO(RT)NO. 666/96/PWD&T DT.
P12:	TRUE COPY OF THE 2000	GO(RT) NO.416/2000/PWD DT. 22-4-
P13:	TRUE COPY OF THE 2001	GO(RT)NO.30-4/2001/PWD DT. 17-3-
P14:	TRUE COPY OF THE GO(MS) NO.19/2007	ORDER ISSUED BY THE 2ND RESPONDENT /PWD DT. 16-3-2007
P15:	TRUE COPY OF THE MALAYALA MANORAMA	NEWS ITEM PUBLISHED IN THE DAILY DATED 10-9-2008
P16:	TRUE COPY OF THE NO.30158/2009 DT.	JUDGMENT IN WRIT PETITION 23-9-2015
P17:	TRUE COPY OF THE 11-2015	JUDGMENT IN RP 1111/2015 DATED 23-
P18:	TRUE COPY OF THE PETITIONER BEFORE	ARGUMENT NOTE SUBMITTED BY THE THE GOVERNMENT
P19:	TRUE COPY OF THE	REPRESENTATION DATED 3-6-2016
P20:	TRUE COPY OF THE	GO(RT) 977/2016/PWD DT. 166.2016

T.Asokan v. State of Kerala

Case brief

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T.Asokan v. State of Kerala

Case brief

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