T.S.Sarasan vs Kerala Police Housing And ...
2021 Latest Caselaw 4280 Ker

         IN THE HIGH COURT OF KERALA AT ERNAKULAM

                            PRESENT

              THE HONOURABLE MR.JUSTICE N.NAGARESH

 FRIDAY, THE 05TH DAY OF FEBRUARY 2021 / 16TH MAGHA,1942

                   WP(C).No.34083 OF 2018(I)


PETITIONER:

              T.S.SARASAN,
              AGED 62 YEARS,
              S/O SANKARAN, P.W.D CONTRACTOR,
              THOTTINKARA VEEDU, THAVALAM P.O.,
              PAKKULAM, PIN-688589

              BY ADVS.
              SRI.A.T.ANILKUMAR
              SMT.V.SHYLAJA

RESPONDENTS:

     1        KERALA POLICE HOUSING AND CONSTRUCTION
              CORPORATION LTD.,
              REP. BY ITS MANAGING DIRECTOR,
              CHANDRASEKHARAN NAIR STADIUM,
              PALAYAM, VIKAS BHAVAN P O,
              THIRUVANANTHAPURAM, PIN-695033.

     2        THE MANAGING DIRECTOR,
              KERALA POLICE HOUSING AND CONSTRUCTION
              CORPORATION LTD.,
              CHANDRASEKHARAN NAIR STADIUM,
              PALAYAM, VIKASBHAVAN P.O.,
              THIRUVANANTHAPURAM, PIN-695033.

     3        THE FINANCE MANAGER,
              KERALA POLICE HOUSING AND CONSTRUCTION
              CORPORATION LTD.,
              CHANDRASEKHARAN NAIR STADIUM,
              PALAYAM, VIKAS BHAVAN P.O.,
              THIRUVANANTHAPURAM, PIN-695033.

            R1-3 BY ADV. SRI.C.K.GOVINDAN, SC
            R1-3 BY ADV. SRI.L.P.ARAVINDAKSHAN
     THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.02.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 WP(C) No.34083/2018
                                :2 :




                        JUDGMENT

~~~~~~~~~

Dated this the 5th day of February, 2021

The petitioner, who is a licensed PWD Contractor,

was awarded with Ext.P1 work related to construction of

barrack block for India Reserve Battalion at Thrissur. The

work had to be completed within ten months from the date of

handing over of the site. Agreement was executed on

06.04.2011. The petitioner successfully completed the work

on 11.04.2016 and handed over the constructed building to

the respondents.

2. The petitioner would submit that the delay in

executing the work was not solely attributable to the petitioner.

During the construction work, all his part bills were therefore

honoured by the respondents. After completion of the

construction, the respondents issued Ext.P2 letter directing

the petitioner to show-cause why penalty should not be

imposed for delay in completion of the work. WP(C) No.34083/2018

3. The petitioner submitted a detailed reply to Ext.P2

and requested the respondents to condone the delay in

completion of the work. The petitioner requested the

respondents to exempt the petitioner from imposition of

penalty. However, the respondents, as per Ext.P3 letter,

upheld their demand. The petitioner would submit that the

respondents have computed the penalty at 23,71,863/-.

Against the said penalty, the final bill amount of ₹9,12,652/-

and retention money of ₹9 lakhs have been withheld from the

petitioner. There is a further order to recover ₹1,06,210/-.

4. The learned counsel for the petitioner would argue

that the time was not the essence of the contract. The delay

in completion of the work was not exclusively attributable to

the petitioner. If time was the essence of the contract, the

respondents ought to have terminated the contract after the

stipulated ten months' period. On the other hand, the

petitioner was not only permitted to continue with the work but

also the part bills submitted by the petitioner were honoured

by the respondents.

WP(C) No.34083/2018

5. The learned counsel for the petitioner would submit

that the petitioner had submitted a complaint before the

Secretary to the Government against the penalty and

requested to reconsider the illegal retention of the money.

The request was forwarded to the 1 st respondent-Kerala

Police Housing and Construction Corporation Limited. The

Secretary to the 1st respondent, by letter dated 27.06.2018,

informed the petitioner that 210 days delay was condoned

from the total 1427 days delay in completion of the work. The

counsel for the petitioner would urge that since time is not the

essence of the contract and the petitioner has completed the

work successfully to the satisfaction of the respondents,

though belatedly, no such extreme penalty can be imposed.

The respondents are therefore liable to be compelled to pay

the final bill amount withheld from the petitioner as also the

retention money due to the petitioner.

6. The respondents filed counter affidavit in the writ

petition and resisted the prayers of the petitioner. The learned

Standing Counsel appearing for respondents 1 to 3 would WP(C) No.34083/2018

submit that the petitioner's work was prolonged and there was

a huge and unexplained delay in completion of work. The

agreement was executed in April, 2011. The work ought to

have been completed within ten months. However, the

petitioner took more than five years to complete the work,

causing substantial loss to the respondents. Clause 2 of the

agreement made specific provisions for compensation for

delay. The respondents have calculated the

compensation/penalty strictly on the basis of the agreement

and as per the extent instructions.

7. As per the specific provision for the first extension,

1% of the total amount subject to a minimum of ₹1,000/- and

maximum of ₹50,000/- is liable to be realised. In the case of

the petitioner, the first 1% amount comes to ₹2,27,062/- and

same is limited to ₹50,000/-. For the second extension, 2% of

the total amount subject to a minimum of ₹2,000/- and

maximum of ₹1 lakh is leviable. This amount was limited to ₹1

lakh. The maximum time extension that can be given for a

work shall be limited to half of the TOC, i.e., five months. The WP(C) No.34083/2018

work was completed only on 11.04.2016. It was under such

circumstances that the respondents imposed ₹25,31,060/-

penalty on the petitioner.

8. Heard learned counsel for the petitioner and

learned Standing Counsel appearing for the respondents.

There is no dispute that the agreement was executed on

06.04.2011 and the agreement mandated that the work should

be completed within ten months. The work was, however,

completed after a very long delay of five years only. The

learned counsel for the petitioner would put forth many

reasons for the delay and contend that the delay was not

caused due to the fault of the petitioner. However, this is a

disputed question of fact. This Court cannot adjudicate in a

writ petition under Article 226 of the Constitution whether the

delay was caused due to the fault of the petitioner or was it

attributable to the respondents.

9. As long as the contract provides for levy of penalty

and since the petitioner has signed the agreement with open

eyes, the petitioner cannot now turn around and contend that WP(C) No.34083/2018

no penalty is leviable from the petitioner. True, the time may

not be of essence of the contract. However, the agreement

executed by the petitioner provided for levy of

penalty/compensation for delayed completion of work. The

fact that part bills were promptly honoured cannot be a ground

to urge that the respondents have impliedly condoned the

delay. The counter affidavit filed by the respondents would

show that the levy of penalty/compensation was strictly in

accordance with the agreement and extant instructions.

In such circumstances, this Court does not find any

reason to interfere with the matter. The writ petition is

therefore dismissed. However, it is made clear that the

petitioner will be at liberty to approach appropriate court of law

to establish that the delay was not caused due to any fault on

his part and to challenge the penalty imposed on that ground.

Sd/-

N. NAGARESH, JUDGE

aks/05.02.2021 WP(C) No.34083/2018

APPENDIX PETITIONER'S EXHIBITS:

EXHIBIT P1 TRUE COPY OF THE CONTRACT ENTERED BETWEEN THE PETITIONER AND RESPONDENTS IN RESPECT OF THE CONSTRUCTION OF BARRACK BLOCK FOR INDIA RESERVE BATTALION.

EXHIBIT P2 TRUE COPY OF THE SHOW CAUSE LETTER DATED 6.6.2016.

EXHIBIT P3 TRUE COPY OF THE LETTER DATED 30.10.2017 IMPOSING PENALTY.

EXHIBIT P4 TRUE COPY FO THE LETTER DATED 27.6.2018.

EXHIBIT P5 TRUE COPY OF THE LETTER ADJUSTING FINAL BILL AMOUNT OF EXHIBIT P1 WORK WITH ANOTHER WORK.

RESPONDENTS' EXHIBITS:

EXHIBIT R2(a) TRUE COPY OF THE LETTER DATED 26-05-

2012 ISSUED TO PETITIONER BY THE PROJECT ENGINEER.

EXHIBIT R2(b) TRUE COPY OF THE MEMO DATED 05-06-2012 ISSUED TO PETITIONER BY THE CHIEF ENGINEER.

EXHIBIT R2(c) TRUE COPY OF THE LETTER DATED 26-04-

2013 ISSUED TO PETITIONER BY THE PROJECT ENGINEER.

EXHIBIT R2(d) TRUE COPY OF THE MEMO DATED 22-05-2013 ISSUED TO PETITIONER BY THE CHIEF ENGINEER.

EXHIBIT R2(e) TRUE COPY OF THE LETTER DATED 17-07-

2012 ISSUED TO PETITIONER BY THE CHIEF ENGINEER.

WP(C) No.34083/2018

EXHIBIT R2(f) TRUE COPY OF THE LETTER DATED 11-12-

2013 ISSUED TO PETITIONER BY THE PROJECT ENGINEER.

EXHIBIT R2(g) TRUE COPY OF THE LETTER DATED 06-08-

2014 ISSUED TO PETITIONER BY THE ASSISTANT EXECUTIVE ENGINEER.

EXHIBIT R2(h) TRUE COPY OF THE LETTER DATED 20-09-

2014 ISSUED TO PETITIONER BY THE PROJECT ENGINEER.

EXHIBIT R2(i)         TRUE COPY OF THE     TERMINATION NOTICE
                      12-11-2014 ISSUED    TO PETITIONER BY
                      SECOND RESPONDENT.

EXHIBIT R2(j)         TRUE   COPY  OF   THE PROCEEDINGS OF

MANAGING DIRECTOR, SECOND RESPONDENT DATED 20-09-2016.

SR