Kerala High Court
T.P. Paulose vs The State Of Kerala on 12 April, 2024
"C.R."
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
FRIDAY, THE 12TH DAY OF APRIL 2024 / 23RD CHAITHRA, 1946
WP(C) NO. 8789 OF 2018
PETITIONER/S:
1 T.P. PAULOSE "DIED, LRS IMPLEADED"
AGED 72 YEARS
THELAPPILLY HOUSE, PULIYANAM P.O, ANGAMALY,
ERNAKULAM DISTRICT - 683 572.
2 ADDL.P2. ANIAMMA PAULOSE
AGED 56 YEARS, WIFE OF DECEASED T.P.PAULOSE,
RESIDING AT THELAPPILLY HOUSE, PULIYANAM P.O.,
ANGAMALY, ERNAKULAM DISTRICT - 683 572.
3 ADDL.P3. ELDHO PAUL
AGED 44 YEARS, SON OF DECEASED T.P.PAULOSE,
RESIDING AT THELAPPILLY HOUSE, PULIYANAM P.O.,
ANGAMALY, ERNAKULAM DISTRICT - 683 572.
4 ADDL.P4. SUNI JAMES
AGED 50 YEARS, DAUGHTER OF DECEASED T.P.PAULOSE,
RESIDING AT MARACHERY PUTHENPURA, MARAMANGALAM,
KUTHUKUZHY P.O., KUTHUKUZHY, ERNAKULAM DISTRICT -
686 691.
[ADDITIONAL PETITIONER NOS.P2 TO P4 ARE IMPLEADED AS PER
ORDER DATED 11.07.2022 IN I.A.1/2022 IN WP(C)8789/2018]
BY ADVS.
SRI.JACOB P.ALEX
SRI.RANJITH VARGHESE
SRI.RAHUL VARGHESE
SANTHA VARGHESE
RESPONDENT/S:
1 THE STATE OF KERALA
REPRESENTED BY THE SECRETARY TO GOVERNMENT, PWD
(IRRIGATION DEPARTMENT), GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM.
WP(C) 8789/2018
2
2 THE EXECUTIVE ENGINEER
PWD BUILDINGS DIVISION, ERNAKULAM, EDAPPALLY,
KOCHI - 682 024.
3 THE ASSISTANT EXECUTIVE ENGINEER
BUILDINGS SUB DIVISION, MUVATTUPUZHA - 686 673.
4 THE DISTRICT COLLECTOR
COLLECTORATE, KAKKANAD, ERNAKULAM - 682 030.
BY ADV GOVERNMENT PLEADER
OTHER PRESENT:
SRI.BIMAL.K.NATH,,SR.G.P.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 11.04.2024, THE COURT ON 12.04.2024 DELIVERED
THE FOLLOWING
WP(C) 8789/2018
3
"C.R"
J U D G M E N T
Two intriguing questions arise for consideration in this writ petition. Can the respondents initiate revenue recovery measures for alleged damages caused on account of re-tendering of the work awarded to one Late T.P Paulose? Secondly, even if it is held so, can the legal heirs of the Late T.P.Paulose be held liable to the alleged damages caused to State exchequer.
2. Sri.T.P.Paulose, a contractor, was the successful tenderer in terms of Ext.P1 notice inviting tenders for providing rain shade to the court complex at Muvattupuzha. Ext.P1 is dated 7.10.2016. Sri.T.P.Paulose on 20.10.2016 addressed to the 2nd respondent requesting to relieve him from the obligation to complete the work, which was awarded to him. Despite this notice, the 2 nd respondent proceeded to select late Sri.T.P.Poulose as lowest tenderer pursuant to Ext.P1 notice on 28.10.2016. As per Ext.P4 dated WP(C) 8789/2018 4 14.12.2016, late Sri.T.P.Paulose was put on notice that his failure to execute agreement will entail further consequences and proceedings against him. Thereafter, on 30.1.2017, the attempt of the 2nd respondent to persuade the second lowest bidder to complete the work failed, and therefore, proceedings for recovery against Sri.T.P.Paulose was recommended. It is pursuant to this order that Ext.P6 was issued to late Sri.T.P.Paulose stating that an amount of Rs.6,01,929.74 was the loss caused to the Department consequent to the re-tendering of the work. In response to Ext.P6, late Sri.T.P.Paulose addressed to the 2nd respondent on 29.7.2017 vide Ext.P7 stating that he is not liable under any circumstances for the loss that was caused. It is pertinent to note that Ext.P6 was dated 8.6.2017 and by Ext.P8, the said request was turned down and the 2nd respondent decided to proceed with recovery measures against late Sri.T.P.Paulose. By order dated 11.7.2022 in I.A.No.1/2022, his legal heirs were impleaded as WP(C) 8789/2018 5 additional petitioners 2 to 4, who are prosecuting the present writ petition.
3. A counter affidavit has been filed on behalf of the 2nd respondent in which it is contended that as per notice inviting tender for the works, every bidder is expected before quoting his rate to inspect the site of the proposed works. It is also stated that the rates quoted shall be inclusive ones, covering all the operations contemplated in the specifications and tender schedules and all incidental works necessary for such operations such as shoring bailing out work, scaffolding etc. Therefore, it is contended that since late T.P.Paulose carried out joint inspection with officers of the respondent and found that various items involved in the work were not provided in the price schedule and that the petitioner had not inspected the site before quoting the tender. It is further averred that if the contractor does not come forward to execute the original agreement after the work is awarded, the selection notice issued WP(C) 8789/2018 6 in his favour gets cancelled and, hence, a breach is committed by him.
4. Controverting to the averments contained in the counter affidavit, late Sri.T.P.Paulose had filed a reply affidavit, in which it is stated that re-tendering of the work at his risk and cost was belatedly issued on 12.10.2017 as per Ext.R2(a). It is also pointed out that under Ext.R2(a) report, the 3rd respondent has submitted to the 2nd respondent that the agreement to re-cast the estimate with all required items was done since the drawings were not provided with the tender. The assertion that the cement concrete works under Ext.P1 price schedule needs to be carried out in case rain water falls on the varanda floor etc. is denied. The re-tendering work, according to Sri.T.P.Paulose, has been done without following the procedure laid down under Ext.P10 Government Order.
5. I have heard Sri.Ranjith Varghese, learned counsel appearing for the petitioner and WP(C) 8789/2018 7 the learned Senior Government Pleader on behalf of the respondents.
6. Learned counsel for the petitioner submits that damages for breach of contract with the Government could be recovered only after assessing the damages arising out of the breach. He further contends that unless the said damages are liquidated and found in an appropriate civil proceeding, there cannot be any attempt to recover the alleged loss caused due to re-tendering of the work. He relies on the decision of this Court in Build Tech. India v. State of Kerala and Others [2000 (2) KLJ 142]. He further relies on the decisions of the Hon'ble Supreme Court in Tulsi Narayan Garg v. M.P.Road Development Authority [2019 SCC OnLine SC 1158]; State of Karnataka v. Shree Rameshwara Rice Mills [(1987) 2 SCC 160] and J.G.Engineers Pvt. Ltd. v. Union of India and Another [(2011) 5 SCC 758].
7. On the other hand, learned Senior Government Pleader takes me to Ext.R2(a) letter in which it is specifically stated by the Assistant WP(C) 8789/2018 8 Executive Engineer that it is because of the refusal of late Sri.T.P.Paulose that the work had to be re-tendered. He also refers to the averments in paragraph Nos.4 and 6 of the counter affidavit to assert that the proceedings initiated for recovery of damages on account of re-tendering of the work was proper. Therefore, he prays for the dismissal of the writ petition.
8. I have considered the rival submissions raised across the bar.
9. Insofar as the first question is concerned, it is explicitly clear that there was no agreement executed between late Sri.T.P.Paulose and the respondents. It is also evident from the records that at the first possible instance, Sri.T.P.Paulose had intimated to the tendering authority his inability to execute the agreement for various reasons. This apparently was ignored while the selection order was issued on 28.10.2016. Thus, there is a unilateral decision on the part of the respondents to award the work WP(C) 8789/2018 9 to late Sri.T.P.Paulose, despite his reluctance to proceed further in this matter.
10. The issue as to whether a claim for either liquidated damages or unliquidated damages could be raised in terms of the provisions contained under the Kerala Revenue Recovery Act, 1963, came up for consideration before this court in Ponnappan K.A. Vs D.F.O., Chalakudy and others [1984 KHC 442] and in Govindankutty v. State of Kerala [2016 (4) KLT 929]. It was held that unless the damages are quantified in a civil proceedings, the provisions of Kerala Revenue Recovery Act cannot be invoked. In the light of the aforesaid principles, I am inclined to take a view that the additional petitioners are justified in contending that the attempt made by the 2 nd respondent to recover the differential amount between the lowest tenderer - the amount quoted by late Sri.T.P.Paulose and the amount for which the retender was made - cannot be sustained.
11. Insofar as the second question raised in the present writ petition is concerned, WP(C) 8789/2018 10 admittedly, there was no agreement between late Sri.T.P.Paulose and the respondents by which the terms and conditions were settled between the parties. Even one was to assume that there was such contract and the mere application for the bid and its consequential acceptance would result into a contract between the parties, still the question would be whether the legal heirs are liable for the loss allegedly caused due to the respondents. Therefore, while answering the second question, this Court would have to decide whether there is a concluded contract or not, and even if there is none, whether the additional petitioners are liable to the claim for damages.
12. It is pertinent to note that the parties are at variance as to whether there was concluded contract or not between late Sri.T.P.Paulose and the respondents. The argument of the State is that the mere fact that Late T.P Poulose had applied for tender pursuant to the notice inviting e- tender and further that he was selected as lowest WP(C) 8789/2018 11 tenderer itself is sufficient to conclude that there is a concluded contract.
13. Before answering the question on the liability of the legal heirs for damages claimed by the State, the question as to whether there is a concluded contract or not is required to be decided. It is not possible to assume or conclude that due to mere fact that an application was filed/submitted by Sri.T.P.Paulose pursuant to Ext.P1 notice and the consequential acceptance and selection of Sri.T.P.Paulose as the lowest tenderer will not ipso facto lead to a conclusion that there was a concluded contract between the parties. This is especially so, when late Sri.T.P.Paulose had given a request to withdraw from the tender immediately on coming to know that he will not be able to perform his part of the contract. Despite this letter, it appears that the 2nd respondent had proceeded to select late Sri.T.P.Paulose as the lowest tenderer. Can such a unilateral decision on the part of the 2nd respondent be sufficient to fasten the liabilities WP(C) 8789/2018 12 on late Sri.T.P.Paulose, so as to make his legal heirs liable?.
14. The learned counsel for the petitioner Sri.Ranjith Varghese further submitted that there is no concluded contract between late Sri.T.P.Paulose and the respondents. The learned counsel for the petitioner, further submits that the stand of the respondents as reflected from the counter affidavit, especially paragraph 8, that the moment late T.P.Paulose submitted his application pursuant to the tender notice, that itself is sufficient to warrant initiation of further steps by the respondents to recover the loss, if any, caused by recovering the same as arrears of land revenue, cannot for a moment be sustained. He further relies on a Constitution Bench decision of the Hon'ble Supreme Court in K.P.Chaudhari v. State of Madhyapradesh & Others [1966 SCC Online 21] to drive home his point. On a close reading of the aforesaid judgment, especially paragraph No.10, shows that the Hon'ble Apex Court had occasion to consider the issue as WP(C) 8789/2018 13 to whether in the absence of a concluded contract between the contractor and the Government in terms of Article 299(1) of the Constitution of India, whether there can be any liability cast upon the contractor?. The question as to whether there could be an implied contract between the parties based on the application submitted for participation in tender process, was also considered. Ultimately, the Hon'ble Apex Court went on to hold that "in view of the mandatory terms of Article 299(1) of the Constitution of India, no implied contract could be spelled out between the Government and the appellant at the stage of bidding, for, Article 299 in effect rules out all implied contracts between the Government and another person."
15. In view of the categoric finding, this Court finds that on facts of the present case, there was no concluded contract and therefore, this Court has no hesitation in its mind to reject the contention of the respondents that there was a contract between late T.P.Paulose enabling them to WP(C) 8789/2018 14 proceed against his legal heirs. It may be noticed that these incidental issues came up for consideration before this Court only because of the death of Sri.T.P.Paulose during the pendency of the present writ petition and the legal heirs were permitted to implead as additional petitioners and prosecute this writ petition. Hence precisely, the second issue was framed and decided by this court.
16. Another argument raised by the learned Senior Government pleader appearing for the State is that the fact that late T.P Paulose applied for tender and that he was selected itself is sufficient to make him liable for the damages and hence the State is entitled to recover it from the legal heirs. This issue regarding the enforcement of contract on legal representatives becomes rather incidental since this court has already found that there is no concluded contract between the parties. However, since the State insists that it is entitled to recover the damages on account of re-tendering of work from the legal WP(C) 8789/2018 15 representatives of the deceased Late T.P. Paulose, this issue also requires to be considered.
17. Law relating to performance of a contract and the liabilities of legal heirs is stated under Section 37 of the Indian Contract Act, 1872. The effect of death of a person and his liabilities is governed by Section 306 of the Indian Succession Act, 1925.
18. Section 306 of the Indian Succession Act, 1925 reads as under
"All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease survive and against his executors or administrators, except causes of action for defamation, assault, as defined in the Indian Penal Code or other personal injuries not causing the death of the party: and except also cases where, after the death of the party, the relief sought could not be enjoyed or granting it would be nugatory."
19. Though the aforesaid provision speaks only of executors and administrators, the same WP(C) 8789/2018 16 principles must necessarily prevail in the case of other legal representatives also. This proposition is affirmed by the Hon'ble Supreme Court in M. Veerappa Vs Evelyn Sequeria [AIR 1988 SC 506]. Therefore, the section applies to devolution of rights and liabilities in contract and proceedings relating to contact.
20. A further question would also have to be necessarily answered by this Court. If the law is as aforesaid, then the question to be considered is whether there is a vested right of action for the breach of contract. If the answer is in affirmative, then the death of either party has no effect upon it, whether or not it arose from a contract of personal nature (see Halsbury's Law of England, fourth Edn, Vol.9 Page 615).
21. On a further analysis of facts at hand, it is seen that parties did not choose their bargain to be reduced in writing. Although the law relating to enforcement of contracts on legal representative being succinctly stated above, the prime consideration should be that the obligation WP(C) 8789/2018 17 arises only on execution of a contract. In Pollock and Mulla On Indian Contract Twelfth Edition Page 947, the learned Author has opined, that there can be no obligation without a contract. More or less similar issue came up for consideration before the Apex Court in Bombay HSG Board V Karbhase Nairk and Co [AIR 1975 SC 763], wherein the Apex Court was called upon to decide on a certificate for appeal on a decision of Division Bench of Bombay High Court, whether without a concluded contract, a contractor was bound to be paid at the rates quoted by him in notice for damages. Answering the question, the Apex Court held that mere fact that Engineer-in-charge did not exercise his power to cancel the order would not mean a contract is concluded on contractor's term. The Apex Court went on to negative the claim of the contractor.
22. Be that as it may, it will also be appropriate to consider whether under a contract which basically involves personal skills of the contractor, whether the legal representatives would be liable to perform the contract?. WP(C) 8789/2018 18 Governing provision under the Indian Contract Act is Section 40 of the Indian Contract Act, 1872 which reads as under:
"40. If it appears from the nature of the case that it was the intention of the parties to any contract that any promise in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it".
Reading of the aforesaid Section gives answer to the question posed before this court in the following manner:
A) Necessarily there should be a contract between the parties;
B) Liability of the representative should be provided in the contract itself.
23. It may be apposite to note that a contract for designing a building by an architect is held to be a personal contract and which could not be enforceable against his legal representative. {See Morsel Cleaners Ltd Vs Hicks [(1966) 2 Lloyd's Rep 338]}. Based on the above, WP(C) 8789/2018 19 this Court is inclined to take a view that in the present case, no liability could be fastened on the legal heirs.
24. In Vinayak Purshottam Dube (D) v. Jayashree Padamkar Bhat & Others [2024 SCC Online 212], the Hon'ble Supreme Court was called upon to decide whether a contract executed in a personal capacity would bind the legal heirs or not? While answering the question in affirmative, the Apex Court held as under:
"21. Thus, a contract can be performed vicariously by the legal representatives of the promisor depending upon the subject matter of the contract and the nature of performance that was stipulated thereto. But a contract involving exercise of individual's skills or expertise of the promisor or which depends upon his/her personal qualification or competency, the promisor has to perform the contract by himself and not by his/her representatives. A contract of service is also personal to the promisor. This is because when a person contracts with another to work or to perform service, it is on the basis of the individual's skills, competency or other qualifications of the promisor and in WP(C) 8789/2018 20 circumstances such as the death of the promisor he is discharged from the contract."
25. In the aforesaid decision also the principles as expounded by this Court is affirmed by the Hon'ble Supreme Court of India. Added to the above, the Apex Court went on to hold, even in a case of concluded contract which involving personal skill, the legal representatives are not liable. Therefore, it must be necessarily held that the legal representatives are not liable to the claim for damages by the State.
26. In the result, this Court finds that the additional petitioners 2 to 4 are entitled to succeed. It is declared that they are not liable to answer the claim for damages raised by the State against Late T.P. Paulose.
Hence the Writ petition is allowed. Exts.P6 and P8 are set aside. No order as to costs.
Sd/-
EASWARAN S. JUDGE jg WP(C) 8789/2018 21 APPENDIX OF WP(C) 8789/2018 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE PRICE SCHEDULE. EXHIBIT P2 TRUE COPY OF LETTER DT. 20.10.2016 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT.
EXHIBIT P3 TRUE COPY OF SELECTION NOTICE
DT.28.10.2016 ISSUED BY THE 2ND
RESPONDENT TO THE PETITIONER.
EXHIBIT P4 TRUE COPY OF LETTER DT. 14.12.2016 ISSUED
BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P5 TRUE COPY OF LETTER DT. 30.01.2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P6 TRUE COPY OF LETTER DT. 08.06.2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P7 TRUE COPY OF LETTER DT. 29.07.2017 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT. EXHIBIT P7(A) TRUE COPY OF ACKNOWLEDGMENT RECEIPT EVIDENCING RECEIPT OF EXHIBIT P7 LETTER. EXHIBIT P8 TRUE COPY OF LETTER DT. 16.01.2018 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P9 TRUE COPY OF LETTER DT. 02.03.2018 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT. ADDL.EXHIBIT P10 TRUE COPY OF THE GOVERNMENT ORDER DATED 30.07.2015 ADDL.EXHIBIT P11 TRUE COPY OF LETTER DATED 29.5.2018 ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE RESPONDENT.
WP(C) 8789/2018 22 ADDL.EXHIBIT P12 TRUE COPY OF LETTER DATED 12.6.2018 ISSUED BY THE 3RD RESPONDENT UNDER THE RIGHT TO INFORMATION ACT.
ADDL.EXHIBIT P13 TRUE COPY OF THE CIRCULAR DATED 10.5.2005 OF GOVERNMENT OF KERALA.
ADDL.EXHIBIT P14 DEATH CERTIFICATE ISSUED BY THE KOCHI MUNICIPAL CORPORATION.
ADDL.EXHIBIT P15 TRUE COPY OF THE LEGAL HEIRSHIP CERTIFICATE ISSUED BY THE TAHSILDAR, ALUVA RESPONDENT'S EXHIBITS EXHIBIT R2(a) TRUE COPY OF THE LETTER DATED 1.12.2016