Kerala High Court
Ashrae Clean Room Presentations ... vs The Department Of Industries And ... on 1 February, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 1ST DAY OF FEBRUARY 2022 / 12TH MAGHA, 1943
WP(C) NO. 28448 OF 2021
PETITIONER:
ASHRAE CLEAN ROOM PRESENTATIONS PRIVATE LTD
A COMPANY INCORPORATED UNDER THE COMPANIES ACT,
REP BY MANAGING DIRECTOR, MR.MS. ANAND,
S/O. N.C.G.NAIR, AGED 74, D-73, 1ST FLOOR,
MADHURA NAGAR, S.R.NAGAR P.O.,
HYDERABAD-500038 , TELENGANA
BY ADV NAVIA SEBASTIAN
RESPONDENTS:
1 THE DEPARTMENT OF INDUSTRIES AND COMMERCE
REPRESENTED BY ITS PRINCIPAL SECRETARY
(INDUSTRIES), SECRETARIAT,
THIRUVANANTHAPURAM-695 001
2 THE KERALA STATE DRUGS & PHARMACEUTICALS LTD,
KALAVOOR,
ALAPUZHA, KERALA-688 522, REPRESENTED BY ITS
MANAGING DIRECTOR
BY ADV SHRI.P.C.SASIDHARAN, SC, KERALA STATE
DRUGS AND PHARMACEUTICALS LIMITED
SRI.P.SANTHOSHKUMAR, SPL.GP (INDUSTRIES)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 01.02.2022, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.P.(C) No.28448/2021
:2:
N. NAGARESH, J.
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W.P.(C) No.28448 of 2021
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Dated this the 1st day of February, 2022
JUDGMENT
~~~~~~~~~
The petitioner is a Company doing business in
Heating, Ventilation and Air Conditioning. The petitioner is
also specialised in Clean Room Technology. The petitioner
has filed this writ petition seeking the following reliefs:
(i) Issue any appropriate Writ by declaring
the action of the 2nd respondent in calling for Tender
for Supply, Installation, Testing, Commissioning &
Validation of HVAC Works as per GMP Standard for
Non-Beta Lactam Project vide Ext.P14 Tender
Reference Number KSDP/PRJ/NB/HVAC/10/21-
22/124 DATED 07/12/2021 AT 01:43 PM, as
arbitrary, illegal and unreasonable.
(ii) Issue any appropriate Writ by declaring
the action of the 2nd respondent in calling for Tender
for Supply, Installation, Testing and Commissioning
of Clean Room Panel Works Using PCGI Panels as
per GMP Standard for Non-Beta Lactam Project vide
Ext.P15 Tender Reference Number
KSDP/PRJ/NB/PCGI/09/21-22/123 DATED
W.P.(C) No.28448/2021
07/12/2021 01:48 PM, as arbitrary, illegal and
unreasonable.
(iii) Issue any appropriate Writ by declaring
the action of the 2nd respondent in calling for Tender
for Supply, Installation, Testing, Commissioning and
Validation of HVAC System as per GMP Standard for
Beta Lactam Blister Packing Project vide Ext.16
Tender Reference Number KSDP/PRJ/BETA/11/21-
22/125 DATED 07/12/2021 01:45 PM, as arbitrary,
illegal and unreasonable.
(iv) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to recall
& cancel the Tender for Supply, Installation, Testing,
Commissioning & Validation of HVAC Works as per
GMP Standard for Non Beta Lactam Project vide
Ext.P14 Tender Reference Number
KSDP/PRJ/NB/HVAC/10/21-22/124 DATED
07/12/2021 AT 01:43 PM.
(v) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to recall
& cancel the Tender for Supply, Installation, Testing
and Commissioning of Clean Room Panel Works
Using PCGI Panels as per GMP Standard for Non-
Beta Lactam Project vide Ext.P15 Tender Reference
Number KSDP/PRJ/NB/PCG1/09/21- 22/123
DATED 07/12/2021 01:48 PM.
(vi) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to recall
& cancel the Tender for Supply, Installation, Testing,
Commissioning and Validation of HVAC System as
per GMP Standard for Beta Lactam Blister Packing
Project vide Ext.P16 Tender Reference Number
KSDP/PRJ/BETA/11/21-22/125 DATED 07/12/2021
01:45 PM.
(vii) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to
cancel the Termination of Workup order dated
19/02/2018 and permit the petitioner to continue the
works.
W.P.(C) No.28448/2021
(viii) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to
cancel Termination Notice dated 28/09/2021 of Work
order dated 19/02/2018 and permit the petitioner to
continue the works.
(ix) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to
cancel the Termination Notice dated 28/09/2021 of
Work order 30/12/2017 and permit the petitioner to
continue the works.
(x) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to
cancel the Termination Notice dated 28/09/2021 of
Work order dated 10/01/2018 and permit the
petitioner to continue the works.
(xi) Issue Writ of Mandamus or any other
appropriate writ directing the 2nd respondent to settle
the accounts after conducting the measurements for
the works done and release the payments to the
petitioner.
2. In the writ petition, it has been pleaded as follows.
The 2nd respondent-Kerala State Drugs and Pharmaceuticals
Limited is a Government of Kerala Undertaking. The
petitioner has executed a number of works for the 2 nd
respondent. The 2nd respondent awarded three new works
and issued work order Nos.KSDP/PRJ/NBETA/HVAC/
30/1718/57 dated 30.12.2017, KDSP/PRJ/NBETA/PCGI/13/
17-18/38 dated 11.11.2017 and KDSP/PRJ/BETABLISTER/
W.P.(C) No.28448/2021
HVAC/38/17-18/77 dated 12.11.2018. Though the petitioner
has been executing these works, the 2 nd respondent
withheld payments. The petitioner was not provided with
structural drawings and site for progress of the work. At the
same time, the 2nd respondent tried to invoke Bank
Guarantee provided by the petitioner. The petitioner filed
O.S. No.1275/2019 before the XXI Junior Civil Judge,
Hyderabad. When the 2nd respondent tried to invoke Bank
Guarantee, the petitioner filed injunction Suit. The 2 nd
respondent arbitrarily invoked Bank Guarantee.
3. The petitioner issued Ext.P3 letter dated
11.08.2021 to the 2nd respondent seeking payment of Bills to
the tune of ₹1,58,35,448/- due to the petitioner. The 2 nd
respondent, in response, directed the petitioner to complete
all pending works within 30 days, as per Ext.P4 letter dated
26.08.2021. The petitioner submitted Ext.P5 reply dated
28.08.2021 pointing out that the work order was amended on
three occasions and the 2nd respondent has not adhered to
the contractual obligation of diminishing Bank Guarantee.
W.P.(C) No.28448/2021
The design of the partition was changed 14 to 16 times and it
is humanly impossible to complete the work even in 90 days.
By Ext.P6 letter dated 28.08.2021, the petitioner reminded
the 2nd respondent about the pending bills.
4. To the dismay of the petitioner, the 2 nd
respondent terminated all the three work orders as per
Exts.P7 to P9 dated 28.09.2021. The petitioner submitted
Exts.P10 to 12 replies dated 29.09.2021 to Exts.P7 to P9
cancellations. The petitioner also requested for a joint
measurement as to the work completed by the petitioner and
requested for return of tools, as per Ext.P13 letter dated
10.11.2021. The request of the petitioner fell in deaf ears.
Hence, the petitioner is before this Court.
5. The 2nd respondent filed a Statement and
contested the writ petition. The 2nd respondent stated that the
petitioner though entered into three agreements, did not
show any progress in terms of the work order. The
respondents have been issuing letters one after another to
the petitioner requiring to complete the works as scheduled.
W.P.(C) No.28448/2021
The entire modernisation work of the 2 nd respondent-
Company was unduly delayed. Negotiations were held with
the petitioner. A joint meeting was convened on 12.06.2019.
The petitioner agreed to complete all works on or before
31.07.2019. Even thereafter, the works were not proceeding.
Further discussions with the petitioner were held on
09.11.2019. The petitioner was granted extended time to
complete the works. The petitioner as per Annexure-R2(e)
agreed to complete the works by 27.02.2020.
6. The petitioner still did not honour its commitment.
The delay on the part of the petitioner in executing the works
would result in payment of liquidated damages to the States
with whom the 2nd respondent entered into agreements for
supply of medicines. In the circumstances, the 2 nd
respondent had no other option than to terminate the
contracts. Time is the essence of all the three contracts. The
agreement provided that if there is a dispute between the
petitioner and the 2nd respondent, it should be resolved
through arbitration proceedings. O.S. No.1275 of 2019 filed
W.P.(C) No.28448/2021
by the petitioner before the Junior Civil Judge, City Civil
Court, Hyderabad was dismissed as per Annexure-R2(f).
O.S. No.2174 of 2019 filed by the petitioner was closed as
per Annexure-R2(g) as the issue was referred to Arbitrator.
7. The 2nd respondent has already revoked the Bank
Guarantee and has terminated the agreements. The works
were re-tendered. The contention of the petitioner that
measurement was not taken in its presence does not merit
any consideration. The measurement was taken in the
presence of the representatives of the petitioner-Company.
The 2nd respondent is entitled to recover the loss incurred
from the petitioner. The petitioner cannot invoke this Court's
writ jurisdiction for redressal of disputes of a commercial
nature.
8. The learned counsel for the petitioner submitted
that in view of the judgment of the Apex Court in Union of
India and others v. Tantia Constructions Private Limited
[(2011) 5 SCC 697], alternative remedy is not an absolute
bar to invoke the jurisdiction of this Court. Arbitration is only
W.P.(C) No.28448/2021
one alternate remedy as per the agreement. The petitioner
had assured the 2nd respondent that work will be completed
in all respects and plant handed over to the 2 nd respondent
on or before 27.02.2020, provided the 2 nd respondent clears
all the 22 points mentioned in the e-mail dated 18.11.2019
forwarded by the petitioner.
9. The counsel for the petitioner pointed out that the
measurements noted by the respondents in Ext.R2(k) are not
visible and is not countersigned by the petitioner. Entire joint
measurements have not been taken. Joint measurements of
a large number of works, have not been done. The
termination of the contracts is highly arbitrary. As per the
terms of contract, Agreement Authority shall give 15 days
notice of termination in writing to the Contractor, which has
not been done by the 2nd respondent. The drawings given by
the 2nd respondent were incomplete, which is the major
reason for the delay.
10. I have heard the counsel for the petitioner, the
Special Government Pleader (Industries) for the 1 st
W.P.(C) No.28448/2021
respondent and the Standing Counsel for the 2 nd
respondent.
11. Three contracts were entered into by the petitioner
and work orders were issued on 11.11.2017, 30.12.2017 and
12.11.2018. The first two works were to be completed within
90 days and the 3rd one within 30 days. The petitioner did not
carry out the work with promptitude. A joint meeting was
convened by the 2nd respondent on 12.06.2019. By the time,
more than 18 months had elapsed. In this meeting, the
petitioner agreed to complete all the works before
31.07.2019. Annexure-R2(d) minutes of the meeting would
disclose that the petitioner had not raised any technical
issues which would hamper the completion of work. The
issue of drawings is not seen raised by the petitioner in the
meeting. The only concern expressed appears to be in
respect of payment of Bills.
12. The petitioner did not complete the work by
31.07.2019. Again, another meeting was held on
09.11.2019. By Annexure-R2(e), the petitioner again agreed
W.P.(C) No.28448/2021
to complete the work by 27.02.2020. It is the specific case of
the 2nd respondent that it had cleared all the 22 points as
mentioned in the petitioner's e-mail dated 18.11.2019. Yet,
the work was not completed even by 27.02.2020. The
inordinate delay on the part of the petitioner delayed the
modernisation plans of the 2nd respondent and consequential
financial losses were incurred.
13. The agreements provided for arbitration
proceedings for resolution of any disputes arising from the
agreements. The petitioner, however, filed O.S.
No.1275/2019 in the Court of the Junior Civil Judge, City Civil
Court, Hyderabad during the extended period of contract,
which was withdrawn on 30.07.2019. In another O.S.
No.2174/2019 filed before the Court of the Junior Civil Judge,
the said court referred the dispute for arbitration as per
Annexure-R2(g) order.
14. The 2nd respondent has already terminated the
contracts and has invoked Bank Guarantee. The works have
been already retendered.
W.P.(C) No.28448/2021
15. The grounds urged by the petitioner challenging
termination of contracts are all disputed questions of facts
which cannot be decided by this Court, in exercise of the
powers conferred under Article 226 of the Constitution of
India. The agreements executed by the petitioner provide for
arbitration for resolution of disputes arising out of the
contract. The counsel for the petitioner urged that even if the
petitioner is to be relegated to arbitration proceedings, this
Court may order a joint inspection in respect of the works
completed by the petitioner in pursuance of the agreements.
The 2nd respondent disputed the said claim also stating the
measurements of works done by the petitioner have already
been taken in the presence of the officials of the petitioner-
company.
16. In the facts and circumstances of the case, this
Court find that the petitioner has to resort to arbitration or
other civil proceedings for redressal of grievances and a writ
petition is not maintainable, in the facts of the case.
W.P.(C) No.28448/2021
The writ petition fails and it is consequently
dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/28.01.2022
W.P.(C) No.28448/2021
APPENDIX OF WP(C) 28448/2021
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF ORDER IN IA NO.223/2019
IN OS NO.1275/2019 DATED 06.06.2019
PASSED BY THE HON'BLE XXI JUNIOR CIVIL
JUDGE, HYDERABAD
Exhibit P2 TRUE COPY OF ORDER IN IA NO.510/2019
IN OS NO.2174/2019 DATED 19.09.2019
PASSED BY THE HON'BLE XXI JUNIOR CIVIL
JUDGE, HYDERABAD
Exhibit P3 TRUE COPY OF LETTER DATED 11.08.2021
ISSUED BY THE PETITIONER TO THE
RESPONDENT NO.2 REGARDING NON PAYMENT
OF AN AMOUNT OF RS 1,58,35,448/-
Exhibit P4 TRUE COPY OF RESPONDENT NO.2 ISSUED
LETTER DATED 26.08.2021 TO PETITIONER
WHEREIN 30 DAYS WERE PROVIDED TO
COMPLETE ALL THE PENDING WORKS
Exhibit P5 TRUE COPY OF REPLY LETTER DATED
28.08.2021 ISSUED BY THE PETITIONER TO
THE LETTER DATED 26.08.2021
Exhibit P6 TRUE COPY OF LETTER DATED 28.08.2021
ISSUED BY THE PETITIONER WHEREIN IT
WAS CATEGORICALLY STATE THAT THE
DESIGN FOR THE PETITIONERS WERE
CHANGED 14 TO 16 TIMES
Exhibit P7 TRUE COPY OF LETTER DATED 28.09.2021
ISSUED BY RESPONDENT NO.2 TERMINATING
WORK ORDER DATED 19.02.2018
Exhibit P8 TRUE COPY OF LETTER DATED 28.09.2021
ISSUED BY RESPONDENT NO.2 TERMINATING
WORK ORDER DATED 30.12.2017
Exhibit P9 TRUE COPY OF LETTER DATED 28.09.2021
ISSUED BY RESPONDENT NO.2TERMINATING
WORK ORDER DATED 10.01.2018
Exhibit P10 TRUE COPY OF THE SAID CANCELLATION OF
WORK ORDER DATED 30.12.2017 WAS
REPLIED BY THE PETITIONER BY VIRTUE OF
LETTER DATED 29.09.2021
W.P.(C) No.28448/2021
Exhibit P11 TRUE COPY OF THE SAID CANCELLATION OF
WORK ORDER DATED 10.01.2018 WAS
REPLIED BY THE PETITIONER BY VIRTUE OF
LETTER DATED 29.09.2021
Exhibit P12 TRUE COPY OF THE SAID CANCELLATION OF
WORK ORDER DATED 19.02.2018 WAS
REPLIED BY THE PETITIONER BY VIRTUE OF
LETTER DATED 29.09.2021
Exhibit P13 TRUE COPY OF LETTER DATED 10.11.2021
ISSUED BY PETITIONER FOR REQUESTING
FOR COMBINED MEASUREMENTS FOR ALL THE
JOBS ALONG WITH RETURNING OF TOOLS AND
TACKLES TO THE RESPONDENT NO.2
Exhibit P14 TRUE COPY OF TENDER FOR SUPPLY
INSTALLATION TESTING COMMISSIONING &
VALIDATION OF HVAC WORKS AS PER GMP
STANDARD FOR NON-BETA LACTAM PROJECT
VIDE TENDER REFERENCE NUMBER
KSDP/PRJ/NB/HVAC/10/21-22/124 DATED
07.12.2021 AT 01.43 PM
Exhibit P15 TRUE COPY OF TENDER FOR SUPPLY
INSTALLATION TESTING AND COMMISSIONING
OF CLEAN ROOM PANNEL WORKS USING PCGI
PANELS AS PER GMP STANDARD FOR NON-
BETA LACTAM PROJECT VIDE TENDER
REFERENCE NUMBER
KSDP/PRJ/NB/PCGI/09/2021-22/123 DATED
07.12.2021 AT 01.48 PM
Exhibit P16 TRUE COPY OF TENDER FOR SUPPLY
INSTALLATION TESTING COMMISSIONING AND
VALIDATION OF HVAC SYSTEM AS PER GMP
STANDARD FOR BETA LACTAM BLISTER
PACKING PROJECT VIDE TENDER REFERENCE
NUMBER KSDP/PRJ/BETA/11/21-22/125
DATED 07.12.2021 AT 01.45 PM
RESPONDENT EXHIBITS
Exhibit R2(a) COPY OF WORK ORDER DT 11.11.2017
Exhibit R2(b) COPY OF WORK ORDER DT 30.12.2017 BY
2ND RESPONDENT
Exhibit R2(c) COPY OF WORK ORDER DT 12.11.2018
Exhibit R2(d) COPY OF MINUTES OF MEETING WITH THE
PETITIONER ON 12.6.2019
W.P.(C) No.28448/2021
Exhibit R2(e) COPY OF AGREEMENT REGARDING COMPLETION
OF WORKS DT 28.11.2019
Exhibit R2(f) COPY OF ORDER OF JUNIOR CIVIL JUDGE,
CITY CIVIL COURT, HYDERABAD.
Exhibit R2(g) COPY OF ORDER OF JUNIOR CIVIL JUDGE,
CITY CIVIL COURT, HYDERABAD IN
IA.581/2019
Exhibit R2(h) COPY OF EMAIL DT 31.5.2021.
Exhibit R2(I) TRUE COPY OF THE LETTER DATED
03/10/2019 ADDRESSED TO THE PETITIONER
REGARDING INFORMING OF THE ACT
Exhibit R2(J) TRUE COPY OF THE HVAC WORK FOR NON
BETALCTUM PLANT MEASURED BY THE 2ND
RESPONDENT
Exhibit R2(K) TRUE COPY OF THE MEASUREMENT IN
RELATION TO PCGI PANEL OF NON
BETALACTUM PROJECT WAS MADE ON
09/03/2021
Exhibit R2(L) TRUE COPY OF THE JOINT MEASUREMENT
MADE ON 25/03/2021
Exhibit R2(M) TRUE COPY OF THE ACKNOWLEDGEMENT MADE
BY THE PETITIONER REGARDING THE JOINT
MEASUREMENT DATED 05/07/2021
Exhibit R2(N) TRUE COPY OF THE TENDER DETAILS
CONTAINING THE DRAWINGS DATA SHEET AND
SPECIFICATION
