Kerala High Court
M/S. Nath Infrastructures vs State Of Kerala on 12 April, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
WEDNESDAY, THE 12TH DAY OF APRIL 2023 / 22ND CHAITHRA, 1945
WA NO.743 OF 2023
AGAINST THE JUDGMENT DATED 29.03.2023 IN WP(C)
NO.16798/2022
APPELLANT/PETITIONER:
M/S. NATH INFRASTRUCTURES,
AGED 64 YEARS, 28/309 A1, THONDAYAD, KOTTOOLY
ROAD, CHERVARAMBALAM (PO), KOZHIKODE
REPRESENTED BY ITS MANAGING PARTNER,
PIN - 673017.
BY ADVS.
SANTHOSH MATHEW
ARUN THOMAS
KARTHIKA MARIA
ANIL SEBASTIAN PULICKEL
ABI BENNY AREECKAL
MATHEW NEVIN THOMAS
MANASA BENNY GEORGE
KURIAN ANTONY MATHEW
RESPONDENTS/RESPONDENTS:
1 STATE OF KERALA,
REPRESENTED BY THE SECRETARY TO THE GOVERNMENT,
PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, KERALA, PIN - 695001.
2 PROJECT DIRECTOR,
KERALA ROAD FUND BOARD-PROJECT MANAGEMENT UNIT,
GROUND FLOOR, BSNL OFFICE BUILDING, CGM(O)
DOORSANCHAR BHAVAN, PMG JUNCTION,
THIRUVANANTHAPURAM, KERALA, PIN - 695033.
3 THE CHIEF EXECUTIVE OFFICER
KERALA INFRASTRUCTURE INVESTMENT FUND BOARD 2ND
FLOOR, FELICITY SQUARE, MG ROAD, STATUE,
THIRUVANANTHAPURAM, KERALA, PIN - 695001.
4 THE TEAM LEADER, PMU-KRFB, GROUND FLOOR, BSNL
OFFICE BUILDING, CGM(O) DOORSANCHAR BHAVAN, PMG
W.A.Nos.743 & 750 of 2023 2
JUNCTION, THIRUVANANTHAPURAM, KERALA,
PIN - 695033.
5 EXECUTIVE ENGINEER,
KERALA ROAD FUND BOARD-PROJECT MANAGEMENT UNIT,
KOZHIKODE / WAYANAD, A-16, VRINDAVAN COLONY,
CHEVAYUR, KERALA, PIN - 673017.
6 THE AUTHORIZED OFFICER,
THE FEDERAL BANK LTD., LCRD KOZHIKODE DIVISION,
1ST FLOOR, FEDERAL TOWERS, ARAIYIDATHUPALAM,
KOZHIKODE, KERALA, PIN - 673016.
BY ADV.SRI.MOHAN JACOB GEORGE
BY SRI.K.V.MANOJ KUMAR,STANDING COUNSEL
BY SRI.S.CHANDRASEKHARAN NAIR, STANDING COUNSEL BY
SRI.B.UNNIKRISHNA KAIMAL, SENIOR GOVERNMENT
PLEADER
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12.04.2023,
ALONG WITH W.A.NO.750/2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.A.Nos.743 & 750 of 2023 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
WEDNESDAY, THE 12TH DAY OF APRIL 2023 / 22ND CHAITHRA, 1945
WA NO. 750 OF 2023
AGAINST THE JUDGMENT DATED 29.03.2023 IN WP(C) 16643/2022
APPELLANT/S:
M/S. NATH INFRASTRUCTURES,
AGED 64 YEARS, 28/309 A1, THONDAYAD,
KOTTOOLY ROAD, CHERVARAMBALAM (PO),
KOZHIKODE REPRESENTED BY ITS MANAGING PARTNER, PIN
- 673017.
BY ADVS.
SANTHOSH MATHEW
ARUN THOMAS
KARTHIKA MARIA
ANIL SEBASTIAN PULICKEL
ABI BENNY AREECKAL
MATHEW NEVIN THOMAS
MANASA BENNY GEORGE
KURIAN ANTONY MATHEW
RESPONDENT/S:
1 STATE OF KERALA,
REPRESENTED BY THE SECRETARY TO THE GOVERNMENT,
PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, KERALA, PIN - 695001.
2 PROJECT DIRECTOR,
KERALA ROAD FUND BOARD-PROJECT MANAGEMENT UNIT,
GROUND FLOOR, BSNL OFFICE BUILDING, CGM(O)
DOORSANCHAR BHAVAN, PMG JUNCTION,
THIRUVANANTHAPURAM, KERALA, PIN - 695033.
W.A.Nos.743 & 750 of 2023 4
3 THE CHIEF EXECUTIVE OFFICER,
KERALA INFRASTRUCTURE INVESTMENT FUND BOARD 2ND
FLOOR, FELICITY SQUARE, MG ROAD, STATUE,
THIRUVANANTHAPURAM, KERALA -, PIN - 695001.
4 THE TEAM LEADER,
PMU-KRFB, GROUND FLOOR, BSNL OFFICE BUILDING,
CGM(O) DOORSANCHAR BHAVAN, PMG JUNCTION,
THIRUVANANTHAPURAM, KERALA, PIN - 695033.
5 EXECUTIVE ENGINEER,
KERALA ROAD FUND BOARD-PROJECT MANAGEMENT UNIT,
KOZHIKODE / WAYANAD, A-16, VRINDAVAN COLONY,
CHEVAYUR, KERALA, PIN - 673017.
6 THE AUTHORIZED OFFICER,
THE FEDERAL BANK LTD., LCRD KOZHIKODE DIVISION,
1ST FLOOR, FEDERAL TOWERS, ARAIYIDATHUPALAM,
KOZHIKODE, KERALA, PIN - 673016.
BY ADV. SRI.MOHAN JACOB GEORGE
BY SRI.K.V.MANOJ KUMAR, STANDING COUNSEL
BY SRI.S.CHANDRASEKHARAN NAIR, STANDING COUNSEL BY
SRI.B.UNNIKRISHNA KAIMAL, SENIOR GOVERNMENT
PLEADER
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12.04.2023,
ALONG WITH W.A.NO.743/2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.A.Nos.743 & 750 of 2023 5
JUDGMENT
[W.A.Nos.743/2023 and 750/2023]
A.Muhamed Mustaque, J.
The appellant in these matters is a contractor.
They challenged the termination of the contract at
their risk and cost. They approached this court
for various reliefs including a challenge against
termination. The learned Single Judge dismissed the
writ petition.
2. In contractual matters, the court shall
not interfere except when it forms an opinion that
ex facie termination is arbitrary and illegal. In
all other situations, the remedy lies for an
aggrieved contractor to challenge such termination
before the civil court. It is submitted at the Bar
that in the matter arising from the termination in
W.P.(C) No.16643/2022 (W.A.No.750/2023), the loss
has already been quantified by the Department which
is lesser than the bill amount due to the
contractor. In the light of the judgment in
W.A.No.2319/2019 dated 10.02.2023, we order that if
the amount of loss quantified is lesser than the
bill amount, retaining the loss amount quantified,
the balance be released to the contractor. That
shall be done within a period of two weeks. The
performance guarantee, as far as this contract is
concerned, is to be released after the defect
liability period. In addition to this, the learned
counsel for the appellant seeks to release the
additional performance guarantee. The learned
Government Pleader opposed the prayers and
submitted that the performance guarantee cannot be
released as the Department found that the
appellant-contractor committed the breach. The
performance guarantee furnished by the appellant-
contractor was for an amount of Rs.1,48,15,000/-.
The additional performance guarantee was for an
amount of Rs.2,55,72,900-.
3. Having considered the plea, we are of the
view that as far as the release of the performance
guarantee is concerned, the contractor can approach
the civil court while challenging the termination
itself and the retention of the amount towards the
loss quantified. However, the additional
performance guarantee be released to the extent of
the works carried out by the appellant-contractor.
In regard to the challenge of termination,
which is the subject matter of W.P.(C)
No.16798/2022 (W.A.No.743/2023), the Department has
quantified the loss as more than Rs.9 crores and
the bill amount payable to the appellant-contractor
is less than Rs.6 crores. The appellant's case is
that they furnished bank guarantee for more than
Rs.9 crores and therefore, the amount due to them
may be released to them with liberty to them to
approach the civil court in regard to the
invocation of bank guarantee. We are not inclined
to pass any orders in this matter for the simple
reason that an effective and efficacious remedy is
available to the appellant-contractor before the
civil court. For any relief in this regard, the
appellant may approach the civil court and move an
application for interim orders before the civil
court. However, we make it clear that the civil
court shall consider the appellant's challenge
untrammelled by any observations in the impugned
judgment and in the appeal. This Court had
already relegated the parties to work out their
remedy before the civil court. The bank guarantee
shall not be invoked for a period of two months.
The appellant undertook to keep it in force. The
continuation of the bank guarantee will be subject
to further orders to be passed by the civil court.
The amount payable to the writ petitioners be
released at the earliest, at any rate, within two
weeks.
The writ appeals are disposed of as above.
Sd/-
A.MUHAMED MUSTAQUE, JUDGE
Sd/-
SHOBA ANNAMMA EAPEN, JUDGE
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