M/S. Movell Solution Private ... vs Kerala State Electronics ...
2021 Latest Caselaw 9027 Ker

         IN THE HIGH COURT OF KERALA AT ERNAKULAM

                           PRESENT

           THE HONOURABLE MR.JUSTICE N.NAGARESH

THURSDAY, THE 18TH DAY OF MARCH 2021/27TH PHALGUNA, 1942

                  WP(C).No.29448 OF 2019(E)

PETITIONER:
              M/S. MOVELL SOLUTION PRIVATE LIMITED,
              CENTRE POINT, THRISSUR-680021.
              REPRESENTED BY ITS DIRECTOR MANAS.K.V.

           BY ADVS.
           SRI.THOMSTINE K.AUGUSTINE
           SRI.C.M.MOHAMMED IQUABAL
RESPONDENTS:

     1        KERALA STATE ELECTRONICS DEVELOPMENT
              CORPORATION LTD.,
              KELTRON HOUSE, VELLAYAMBALAM,
              THIRUVANANTHAPURAM-695033,
              REPRESENTED BY ITS MANAGING DIRECTOR.

     2        ACCOUNTANT GENERAL,
              ACCOUNTANT GENERAL'S OFFICE,
              THIRUVANANTHAPURAM-695001.

     3        DEPUTY ACCOUNTANT GENERAL,
              ACCOUNTANT GENERAL'S OFFICE,
              THIRUVANANTHAPURAM-695001.

     4        STATE OF KERALA,
              REPRESENTED BY SECRETARY,
              DEPARTMENT OF INDUSTRIES,
              SECRETARIAT, THIRUVANANTHAPURAM-695001.

              R1 BY ADV. SMT.M.A.ZOHRA
              R2-3 BY SRI.K.I.MAYANKUTTY MATHER, SC, I.A.
              AND A.D.
              R4 BY SR. GOVT.PLEADER SMT. DEEPA NARAYANAN

     THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 18-03-2021, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
 W.P.(C) No.29448/2019
                                          :2:




                              N. NAGARESH, J.

             `````````````````````````````````````````````````````````````
                         W.P.(C) No.29448 of 2019

             `````````````````````````````````````````````````````````````
                  Dated this the 18th day of March, 2021

                               JUDGMENT

~~~~~~~~~

The petitioner, a Company engaged in Scanning

and Digitisation of records, has filed this writ petition seeking

to direct the 1st respondent to consider the demands in

Ext.P8 notice afresh and pay the outstanding balance

amount to the petitioner.

2. The 2nd respondent-Accountant General's office

needed digitisation of pension records and entrusted the

work to the 1st respondent-Kerala State Electronics

Development Corporation Limited (KELTRON). The 1 st

respondent-KELTRON entered into a sub-contract

agreement with the petitioner and Ext.P2 work order was W.P.(C) No.29448/2019

issued on 16.09.2014. Ext.P2 provided that the conditions

imposed by the 2nd respondent on KELTRON regarding

payment will be applicable to the petitioner on a back-to-back

basis.

3. The petitioner would contend that after completing

each work, the petitioner issued invoices to the 1st

respondent. The 1st respondent received payments from the

2nd respondent for the first part of the work completed by the

petitioner. Subsequently, by Ext.P3 invoice dated

31.03.2015, the petitioner claimed payment of `8 lakhs.

Invoice Tax (TDS) was deducted in full. The 2 nd respondent

released payment to the 1st respondent. But, the 1 st

respondent paid only an amount of `2,86,518/- to the

petitioner. The petitioner issued Ext.P4 invoice dated

14.07.2016 claiming `24,06,952/-. Tax was deducted for the

full amount. But, only `16,94,299/- was paid to the petitioner.

Ext.P5 invoice was for `27,67,100/-, but only `10,00,000/-

was paid. Thus, an amount of `29,93,235/- is outstanding

against Exts.P3 to P5 invoices.

W.P.(C) No.29448/2019

4. The petitioner would submit that the KELTRON is

eligible for only a small margin of the amount received from

the 2nd respondent. But, the 1st respondent is illegally

retaining the amounts due to the petitioner. The petitioner

sent Ext.P8 lawyer notice on 11.06.2019. As per Ext.P9

dated 02.07.2019, the 1st respondent replied that as and

when any amount is received from the 2nd respondent, the

proportionate amount will be paid to the petitioner. The

petitioner would contend that the 1st respondent has already

received payments from the 2nd respondent, but the 1 st

respondent is withholding the amount payable to the

petitioner.

5. The 1st respondent filed a counter affidavit and

opposed the writ petition. According to the 1 st respondent,

payment against the first invoice was made since the quality

of work was satisfactory. The subsequent work of the

petitioner lacked quality and hence security retention had to

be made in the second invoice. Only part payment was

made by the 2nd respondent due to deficit quality and defects W.P.(C) No.29448/2019

in the scanning. However, the 1st respondent made

corresponding payment to the petitioner.

6. The 1st respondent stated that the petitioner did

not complete the work to the satisfaction of the 2 nd

respondent who is the customer. The retention amount has

been withheld due to the low quality of the work. The work of

file linking to the Office Management System of the 2 nd

respondent was not completed as scheduled by the

petitioner. The petitioner lacked the capacity to do so.

Therefore, now the 2nd respondent is doing the linking

process otherwise than through the petitioner.

7. The learned Standing Counsel for the 1 st

respondent submitted that the balance work is being

executed through other agencies, as the work of the

petitioner was found to be unsatisfactory. Balance amount, if

any, due to the petitioner can be worked out only after

finalisation certificate is received and thereafter actual

amount, if any, due to the petitioner will be calculated and

paid.

W.P.(C) No.29448/2019

8. Respondents 2 and 3 filed a counter affidavit in

which it has been stated that invoice dated 30.04.2018 for an

amount of `17,03,628/- of the 1st respondent in connection

with the Phase I digitisation of pension records, is pending in

their office due to some discrepancy in the number of pages

totally scanned as claimed by the 1 st respondent. This

amount was subsequently passed and sent to the Director of

Treasury as per letter dated 04.02.2021.

9. I have heard the learned counsel for the petitioner,

learned Standing Counsel for the 1st respondent and the

learned Standing Counsel for respondents 2 and 3.

10. The petitioner states that they have been paid only

the first invoice in full and the subsequent invoices have not

been fully paid. It is the allegation of the petitioner that the

1st respondent is withholding amount due to the petitioner,

after receiving the payment for the work done by the

petitioner from the 2nd respondent. The learned Standing

Counsel for the 1st respondent would contend that the

amount payable to the petitioner is paid in part and the W.P.(C) No.29448/2019

balance amount is retained due to the low quality of work

rendered by the petitioner. The 1 st respondent would further

contend that the petitioner failed to link the files to the

Document Management System of the 2nd respondent's

Office. The work is now being carried out and completed

engaging the officers of the 1 st respondent. The retention

amount will be paid to the petitioner only on finalisation of

accounts.

11. Though the counsel for the petitioner would

dispute the allegations of the 1st respondent regarding low

quality of work and would contend that as the 1 st respondent

has received the amount payable by the 2 nd respondent

against the invoices raised by the petitioner, the 1 st

respondent is bound to release the entire amount due to the

petitioner. If the quality of the work rendered by the

petitioner is substandard, then the 1 st respondent indeed

would be justified in withholding retention amount. The

question whether the work of the petitioner was up to the

standard required by the respondents or was substandard, is W.P.(C) No.29448/2019

a question of fact which this Court cannot go into, in exercise

of the powers under Article 226 of the Constitution of India.

For the very same reason, this Court cannot direct the 1 st

respondent to effect payment to the petitioner now.

In the facts of the case, the writ petition is

dismissed reserving the right of the petitioner to proceed

against the respondents for balance amount if due, through

appropriate legal proceedings, if the petitioner is so advised.

Sd/-

N. NAGARESH, JUDGE aks/17.03.2021 W.P.(C) No.29448/2019

APPENDIX PETITIONER'S EXHIBITS:

EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION OF THE PETITIONER COMPANY.

EXHIBIT P2 TRUE COPY OF THE WORK ORDER ISSUED TO THE PETITIONER BY THE RESPONDENT NO.1 DATED 16.9.2014

EXHIBIT P3 TRUE COPY OF THE NOTICE SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 31.3.2015

EXHIBIT P4 TRUE COPY OF THE INVOICE SUBMITTED BY THGE PETITIONER TO THE 1ST RESPONDENT DATED 14.7.2016.

EXHIBIT P5 TRUE COPY OF THE INVOICE SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 19.4.2018

EXHIBIT P6 TRUE COPY OF THE MINUTES OF MEETTING OF THE DIGITIZATUIN OF PENSION RECORDS DATED 20.10.2016

EXHIBIT P7 TRUE COPY OF THE PAYMENT ADVICE MAITAINED BY THE RESPONDENT NO.1 DATED 26.11.2018

EXHIBIT P8 TRUE COPY OF THE LAWYER NOTICE ISSUED TO THE 1ST RESPONDENT DATED 11.6.2019

EXHIBIT P9 TRUE COPY OF THE REPLY SENT BY THE COUNSEL TO RESPONDENT NO.1 DATED 2.7.2019.

EXHIBIT P10 THE TRUE COPY OF THE CERTIFICATE ISSUED BY THE STATE BANK OF INDIA DATED 16/1/2021 W.P.(C) No.29448/2019

RESPONDENTS' EXHIBITS:

ANNEXURE-RI TRUE COPY OF ACTUAL PAYMENT SCHEDULE

ANNEXURE-RII TRUE COPY OF THE TREASURY CREDIT DATED 24/2/2021 IN KELTRON'S ACCOUNT.

SR