Kerala High Court
K.C.Antony vs State Of Kerala on 10 February, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
FRIDAY, THE 10TH DAY OF FEBRUARY 2023 / 21ST MAGHA, 1944
WA NO. 2319 OF 2019
AGAINST THE JUDGMENTWP(C) 4786/2019 OF HIGH COURT OF KERALA
APPELLANT/S:
K.C.ANTONY,
AGED 60 YEARS
S/O.LATE CHACKO, CONTRACTOR, KAITHACKAL HOUSE,
CHEMMALAMATTOM P.O., ERATTUPETTA - VIA, KOTTAYAM
DISTRICT, PIN-686529.
BY ADVS.
JACOB P.ALEX
SRI.JOSEPH P.ALEX
SHRI.MANU SANKAR P.
ANISH JOSE ANTONY
RESPONDENT/S:
1 STATE OF KERALA,
REPRESENTED BY ITS SECRETARY TO GOVERNMENT, PUBLIC
WORKS DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001.
2 THE CHIEF ENGINEER,
PUBLIC WORKS DEPARTMENT, ROADS AND BRIDGES, PUBLIC
OFFICES, MUSEUM P.O., THIRUVANANTHAPURAM-695033.
3 THE SUPERINTENDING ENGINEER,
PWD (ROADS AND BRIDGES), SOUTH CIRCLE,
THIRUVANANTHAPURAM-695033.
W.A.No.2319 of 2019
-:2:-
4 THE EXECUTIVE ENGINEER,
PWD (ROADS AND BRIDGES), KOTTAYAM, PIN-686001.
5 KERALA STATE CONSTRUCTION CORPORATION,
OLD PWD STORE COMPOUND, PMG, VIKAS BHAVAN P.O.,
BEHIND BSNL OFFICE, THIRUVANANTHAPURAM-695033,
REPRESENTED BY ITS GENERAL MANAGER .
6 K.R.RADHAKRISHNAN,
KIZHAKKEMURAYIL HOUSE, KADANADU PO, AMICOMPU,
KOTTAYAM, PIN-686653.
BY ADVS.
GOVERNMENT PLEADER (BY ORDER)
SRI.M.RAJAGOPALAN NAIR FOR R5
SRI.G.BIJU
SHRI GEORGE MATHEW FOR R6
GOVERNMENT PLEADER SHRI K.V.MANOJ FOR R1 TO R4
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 7.2.2023, THE
COURT ON 10/2/2023 DELIVERED THE FOLLOWING:
A.MUHAMED MUSTAQUE & SHOBA ANNAMMA EAPEN, JJ.
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W.A.No.2319/2019
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Dated this the 10th day of February, 2023
J U D G M E N T
A.Muhamed Mustaque, J.
The fate of this appeal, at the instance of
the writ petitioner, is based on a turn of events
subsequent to the disposal of the writ petition.
2. The appellant is a contractor for
executing the work relating to a road of a project
sponsored by NABARD. The contract was terminated
at the risk and cost of the appellant and another
contractor was engaged to complete the work. The
work was awarded to the Kerala State Construction
Corporation. The Corporation in turn awarded the
work to the appellant. The challenge regarding
W.A.No.2319 of 2019
termination of the contract was unsuccessful as
well as the claim for the bills for the work
executed by the appellant including the release of
security deposit.
3. We are not detailing the facts involved in
this case obviously for the reason that we are now
deciding this appeal based on admitted facts which
are borne on the record.
4. Admittedly, as per 7th and part bill, the
appellant was entitled to Rs.58,23,726/-. As seen
from Annexure-A12, PWD already collected this
amount from NABARD. It is also admitted in the
affidavit filed along with I.A.No.2/2022 by PWD
before this Court on 3/12/2019 that a sum of
Rs.13,09,411/- is due under the 8th and final bill.
As seen from Annexure-A10 produced along with
I.A.No.1/2022 in the writ appeal, a sum of
Rs.2,42,688.77 has been quantified as damage
suffered. No other claim has been raised by PWD
from the appellant. No one has a case that the
W.A.No.2319 of 2019
new contractor engaged after the termination of
the contract with the appellant has done the work
covered by the part and 7th bill and 8th and final
bill above.
5. The learned Government Pleader placed
reliance on PWD manual, revised in 2012, which
reads thus :
2116.2.1. Realisation of loss on account of termination
An amount equal to 30% of the cost of the remaining
works at agreed rates of the terminated contract shall
be recovered from the defaulted contractor towards the
risk and cost. The contractor shall be directed to remit
the risk and cost amount within three months. There is
no need to wait till the work is arranged alternatively
through another contractor and the total loss
sustainable due to the default of the original
contractor is assessed. Such loss, if any, shall be
realised after completion of the work. If he fails to
remit the amount within this periods following steps can
be adopted for realisation of loss. The amount can be
realised from the following.
2. EMD/Security
3. Bill amount / retention if any due to the
contract.
4. Any dues from department to the contract.
5. Bank Guarantee / Performance Guarantee or
By filling civil suit against the
contractor
W.A.No.2319 of 2019
It was argued that the appellant is bound by a
contract and based on the clause of PWD manual as
above, the appellant can claim an amount only less
than the amount covered by the clause as above.
The learned Government Pleader also placed
reliance on the judgment of the Apex Court in
State of Gujarat Through Chief Secretary and
Another v. Amber Builders [(2020) 2 SCC 540].
6. The learned Senior Counsel appearing for
the appellant, on the other hand, placing reliance
on the judgment of the Apex Court in M.P.Power
Management Company Limited, Jabalpur v. Sky Power
Southeast Solar India Private Limited and Others
[2022 SCC Online SC 1591] submitted that the Court
is not precluded from issuing any directions in
the matter of contract, and any arbitrary action
of the State or its instrumentality can be
interfered with by invoking writ jurisdiction.
7. Placing reliance on Amber Builders case,
the learned Government Pleader rightly pointed out
W.A.No.2319 of 2019
that it is not necessary for the Government to
have a recourse to adjudication, to withhold or
recover any amount based on contract. The point
in this case is in context to, not only the
authority of the Government to withhold or recover
the amount due to the contractor on a premise of
breach of contract, but also on the authority of
the Government to retain any amount in excess of
the loss already quantified by them.
8. The State and its instrumentalities are
expected to deal with the citizens in a fair
manner in all circumstances. In a normal course,
if the Government had not quantified the loss, the
Court cannot order release of the amount agreed to
be recovered, based on the contract. But that
does not mean that the Court cannot order release
of the withheld amount in excess of the loss
already quantified by the public officials. The
admitted amount in this matter cannot be withheld
except for the loss to be calculated by the
W.A.No.2319 of 2019
Government. The stipulation in the PWD Manual to
recover 30% of the cost of the remaining works to
offset the possible loss likely to suffer on
breach of contract by the contractor. If the
amount has been already calculated withholding any
amount beyond the alleged loss suffered is
arbitrary and illegal.
9. We, in such circumstances, are of the view
that the admitted amount under part and 7th and 8th
and final bills, be released to the appellant,
except the amount calculated towards damages and
loss. The security deposit and any other amount
payable to the appellant towards performance
guarantee as per the contract also be released to
the appellant. We make it clear that, if the
appellant has any other claim, other than that of
the admitted amounts as above under part and 7th
and 8th and final bills including the withheld
amount, he can approach the civil court. With
liberty as above, we dispose of this appeal.
W.A.No.2319 of 2019
Needful shall be done to comply with the direction
to release the amount as above to the Construction
Corporation within one month. The Construction
Corporation, on receipt of the amount, shall
release the amount to the appellant within a
further period of one month. No costs.
Sd/-
A.MUHAMED MUSTAQUE, JUDGE
Sd/-
SHOBA ANNAMMA EAPEN, JUDGE
ms
