Kerala High Court
T.K. Kesavan vs Kerala Police Housing And ... on 5 February, 2021
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.8786 OF 2014
PETITIONER:
T.K. KESAVAN,
THALIYARA HOUSE, P.O.NIRAMARUDUR,
TIRUR, MALAPPURAM DISTRICT-676 109.
BY ADV. SRI.O.D.SIVADAS
RESPONDENTS:
1 KERALA POLICE HOUSING AND CONSTRUCTION
CORPORATION LIMITED,
CHANDRASEKHARAN NAIR STADIUM,
VIKAS BHAVAN P.O.,
THIRUVANANTHAPURAM-695 033,
REPRESENTED BY ITS MANAGING DIRECTOR.
2 THE CHAIRMAN-CUM-MANAGING DIRECTOR,
KERALA POLICE HOUSING AND CONSTRUCTION
CORPORATION LIMITED,
CHANDRASEKHARAN NAIR STADIUM,
VIKAS BHAVAN P.O.,
THIRUVANANTHAPURAM-695 033.
3 THE SENIOR PROJECT ENGINEER,
KERALA POLICE HOUSING AND CONSTRUCTION
CORPORATION LIMITED,
CHANDRASEKHARAN NAIR STADIUM,
VIKAS BHAVAN P.O.,
THIRUVANANTHAPURAM-695 033.
BY ADV. SRI.C.K.GOVINDAN, SC
BY ADV. SRI.V.J.JOSEPH, SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.02.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C) No.8786/2014
:2 :
JUDGMENT
~~~~~~~~~
Dated this the 5th day of February, 2021
The petitioner, a Building Contractor, has filed this
writ petition seeking the following reliefs:-
"i) Call for the records leading to the
proceeding and quash Ext.P5 by issuing a writ of
certiorari.
ii) Issue a writ of mandamus or any other
appropriate writ, order or direction to the respondents
to release the security deposit of one lakh rupees
without any further delay.
iii) Declare that Ext.P5 order issued 2nd
respondent imposing penalty for the delay in
completing the work is illegal, arbitrary and without
any authority."
2. The work of construction of Lower Subordinate
Quarters, Pandikkad, Malappuram was awarded by the
respondents to the petitioner as per Ext.P1 dated 09.01.2006.
An Agreement was executed on 11.07.2006. The agreed
WP(C) No.8786/2014
contract amount was ₹65,13,600/-. The work site was handed
over to the petitioner on 14.08.2006. The work was agreed to
be completed within nine months.
3. The petitioner would submit that the original plan
was to construct two buildings with two floors each. However,
there was shortage of space to construct two buildings. The
respondents therefore required the petitioner to execute the
work as a primary structure with four floors, pending revision
of estimates. The change from the original plan caused
considerable delay, contended the petitioner.
4. When the site was handed over, it was noted that a
Three-Phase Electric Line was passing very close by the
proposed building, endangering the life of the workers. The
Project Engineer insisted that work can be started only after
shifting the electric line. The electric line was shifted only in
March, 2007.
5. The supply of laterite in the area was short and the
petitioner was forced to stop the works for weeks together.
The petitioner had to bring laterite from quarries situated
WP(C) No.8786/2014
40 Km. away from the work site. Furthermore, there was
acute water scarcity in the area which forced the petitioner to
stop work frequently. Machine cut first quality bricks were
also not readily available. On account of the afore facts, there
occurred a delay of 14 months in completing the work.
6. The work was completed on 24.03.2010 and the
completion report was submitted by the Project Officer.
Taking into account the aforesaid facts and circumstances,
the final bill of the petitioner was settled and disbursed to the
petitioner on 28.04.2010. However, the security deposit of
₹1,00,000/- was retained for the defect liability period. The
respondents did not release the security deposit in spite of
Ext.P2 request made by the petitioner.
7. Surprisingly, the 2nd respondent issued Ext.P3
show-cause notice dated 25.06.2012 to the petitioner
proposing to impose a penalty of ₹32,17,622/- on account of
the delay in completion of work. The petitioner submitted
Ext.P4 objection dated 23.07.2012. However, the 2 nd
respondent issued Ext.P5 proceedings dated 12.11.2013
WP(C) No.8786/2014
imposing a penalty of ₹18,57,351/- for the delay in execution
of work. The petitioner challenges Ext.P5.
8. According to the petitioner, the delay occurred in
completion of the work is due to the fact that there was initially
a change of plan. Three-phase electric lines were to be
shifted by the KSEB before starting the construction work.
There was acute nonavailability of bricks which are extremely
necessary for the construction. The petitioner had to bring
laterite from far away quarries. And the scarcity of water also
hampered the work intermittently. The respondents were
aware of all these facts. There is no complaint against the
work of the petitioner. The respondents have settled the final
bill of the petitioner. In the circumstances, imposing such a
heavy penalty is highly arbitrary, illegal and unsustainable,
contended the counsel for the petitioner.
9. The Standing Counsel pointed out that the total
delay on the part of the petitioner in completing the work is
1130 days. The respondents condoned delay of 857 days.
However, there was no reason to condone the balance 273
WP(C) No.8786/2014
days delay. The compensation for delay was calculated on
the basis of Clause 2 of the Causes of Contract contained in
the tender document. Therefore, the respondents are
perfectly justified in quantifying and demanding the amount as
per Ext.P5.
10. I have heard the learned counsel for the petitioner
and the learned Standing Counsel appearing for the
respondents.
11. It is an admitted fact that the respondents directed
the petitioner to change the agreed plan for constructing the
building with two floors into one building with four floors. It is
also not disputed that a three-phase electrical line was
passing by the proposed building, making it unsafe to start
construction of the building without shifting the electric line by
the KSEB. Such shifting of the KSEB line also took
considerable time. The petitioner would submit that there
was shortage of machine cut bricks, lack of laterite and
scarcity of water, without which any construction work cannot
be proceeded smoothly.
WP(C) No.8786/2014
12. It is to be noted that the total consideration for the
agreed work was ₹65,13,600/- and the petitioner satisfactorily
completed the work, though there was a delay. The bills of
the petitioner were also settled. Apparently there was no
complaint as regards the work of the petitioner. Still, an
amount of ₹18,57,351/- has been imposed on the petitioner
towards compensation for delayed work. The said amount is
a substantial part of the total amount, more than 28%. Though
there may be a provision in the tender documents for claiming
compensation at specified rates, the respondents are bound
to consider the totality of the circumstances and levy or
demand just compensation.
13. If the petitioner has shown sufficient reasons for the
delay, imposition of fine or demand for compensation cannot
be mechanical. However, this Court is disabled from
examining the adequacy or proportionality of the
fine/compensation claimed due to non-availability of sufficient
data. In the said circumstances, this Court deem it
appropriate to direct the 2nd respondent to reconsider the
WP(C) No.8786/2014
quantum of penalty imposed on the petitioner, taking into
account the entire circumstances which caused delay.
Accordingly, the writ petition is disposed of directing
the 2nd respondent to reconsider the quantum of
fine/compensation imposed on the petitioner, untrammelled by
any observations contained in Ext.P5 proceedings, within a
period of three months. The petitioner shall be granted an
opportunity of hearing before passing the final order.
Sd/-
N. NAGARESH, JUDGE
aks/08.02.2021
WP(C) No.8786/2014
APPENDIX
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE LETTER DTD.9.1.2006.
EXHIBIT P2 TRUE COPY OF THE REQUEST SUBMITTED BY
THE PETITIONER DTD.23.6.2012.
EXHIBIT P3 TRUE COPY OF THE PROCEEDINGS
DTD.25.6.2012.
EXHIBIT P4 TRUE COPY OF THE REPLY SUBMITTED BY
THE PETITIONER DTD.23.7.2012.
EXHIBIT P5 TRUE COPY OF THE PROCEEDINGS
DTD.12.11.2013 OF THE 2ND RESPONDENT.
SR
