Kerala High Court
K.I. Paulose vs Kerala Water Authority on 21 September, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR. A.J.DESAI
&
THE HONOURABLE MR.JUSTICE V.G.ARUN
THURSDAY, THE 21ST DAY OF SEPTEMBER 2023 / 30TH BHADRA,
1945
WA NO. 1608 OF 2023
JUDGMENT IN WP(C) 16438/2023 OF HIGH COURT OF KERALA
APPELLANT/S:
K.I. PAULOSE, AGED 66 YEARS, S/O.ITTIAVIRAH,
KUNNEL HOUSE, KUNNACKAL P.O., MUVATTUPUZHA
TALUK, VALAKOM, ERNAKULAM DISTRICT, PIN - 682316
BY ADVS.
GEORGE MATHEW
M.D.SASIKUMARAN
SUNIL KUMAR A.G
MATHEW K.T.
GEORGE K.V.
STEPHY K REGI
RESPONDENT/S:
1 KERALA WATER AUTHORITY, REPRESENTED BY ITS
MANAGING DIRECTOR, HEAD OFFICE, JALA BHAVAN,
VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695033
2 THE SUPERINTENDING ENGINEER, OFFICE OF THE
SUPERINTENDING ENGINEER, P.H. CIRCLE, KERALA
WATER AUTHORITY, ERNAKULAM, KOCHI, PIN - 682011
OTHER PRESENT:
ADV.GEORGIE JOHNNY FOR KWA
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
21.09.2023, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
W.A.No.1608 of 2023
-2-
JUDGMENT
Dated this the 21st day of September, 2023
V.G.Arun, J.
This writ appeal is filed, aggrieved by the
directions in the common judgment dated
19.07.2023 in W.P.(C) No.35311 of 2022 and
connected cases. The essential facts are as
under;
The appellant is a contractor issued with
work order by the Kerala Water Authority,
pursuant to his participation in the tender. The
letter of acceptance issued to the appellant,
prior to the execution of the work contract
agreement, mandate the furnishing of Additional
Performance Guarantee, if the offer made is less
than the Tendered Probable Amount of Contract.
The writ petition was filed challenging the said
condition. By the impugned judgment, the learned
Single Judge disposed of the writ petition with
W.A.No.1608 of 2023
the following directions;
"1) It is declared that the OM No.
F.9/4/2020-PPD dated 12.11.2020 regarding
the performance guarantee, OM No.
F.9/4/2020-PPD dated 12.11.2020 regarding
the additional performance guarantee and
the other Office Memorandums issued by
the Government of India are not binding
to the State Government and consequently
to the Kerala State Water Authority.
2) If the contract of any of the
petitioners fall within the purview of
GO(P) No. 7/2021/FIN dated 07.01.2021 and
GO(P) No. 32/2022/FIN dated 15.03.2022,
then they are entitled to the benefit of
those Government Orders.
3) If any work in accordance with
the agreement executed based on the
interim order passed by this Court in any
of these cases is completed by any of the
contractors, no Additional Performance
Guarantee shall be insisted from those
contractors. If the work has progressed
to a level exceeding 80%, the tendering
authority is left with the liberty to
take a decision as to whether any
Additional Performance Guarantee is to be
insisted upon, taking into account the
efficiency, reputation, men and machinery
engaged, and other positive factors of
W.A.No.1608 of 2023
the respective contractors. If the work
has exceeded 30% of the total work, then
the tendering authority is directed to
secure Additional Performance Guarantee
proportionate to the balance work.
4) In all other cases, the
contractors/petitioners are directed to
furnish an Additional Performance
Guarantee to the tendering authority as
specified in the tender documents within
three weeks from the date of receipt of a
copy of this judgment.
5) In cases where a Performance
guarantee is furnished by the contractors
in spite of its relaxation up to
31.03.2023, the said amounts can be
adjusted against the Additional
Performance guarantee required in the
circumstances specified above.
6) If the tenders are invited on the
basis of the Percentage Rate Contracts,
then the contractors are liable to
furnish the Additional Performance
Guarantee on the basis of (X-10)% of the
estimated PAC.
7) If the tenders are invited on the
basis of Items Rates Contract, then the
contractors are liable to furnish
Additional Performance Guarantee for each
item of work on the basis of (X-10)% of
W.A.No.1608 of 2023
the estimated amount for each item of
work.
I make it clear that the directions
are issued as above taking into account
the peculiar facts, features and
circumstances involved in these cases
consequent to the interim orders granted;
and it shall not be treated as a
precedent, except in regard to the writ
petitions pending in the above context."
2. Learned Counsel for the appellant
submitted that an earlier judgment containing
similar directions, rendered in the writ
petitions filed by a set of identically placed
contractors, was the subject matter of challenge
in Writ Appeal No.725 of 2023 and connected cases
and those writ appeals were allowed by the
Division Bench with the following directions;
"15. Considering the above aspects, we
allow these appeals and set aside the judgment
passed by the learned Single Judge. It is made
clear that the appellants would not be liable
to execute the Additional Performance
Guarantee, if the over all rate is below 10%
of TPAC. However, the appellants would be
liable to furnish Additional Performance
W.A.No.1608 of 2023
Guarantee as per the letter dated 10.01.2019,
ie, x-10%. Additional Performance Guarantee
should be executed for the balance amount of
work where the amount of work is above 10-25%
of the TPAC."
3. To a specific query put by us, learned
Standing Counsel submitted that the Kerala Water
Authority has so far not challenged the judgment
in Writ Appeal No.725 of 2023 and connected
cases. In such circumstances, the instant appeal
is liable to be allowed.
4. In addition to the challenge against the
demand for Additional Performance Guarantee, the
appellant is challenging the condition requiring
him to furnish 5% of the contract value as
Performance Guarantee. Learned Counsel submitted
that, by G.O.(P)No.7/2021/FIN dated 07.01.2021,
the Government of Kerala had reduced the
requirement of Performance Guarantee from 5% to
3% till 31.03.2023 and now, by G.O.(P)
No.95/2023/FIN dated 07.09.2023, the reduction
stands extended up to 31.03.2024, with
W.A.No.1608 of 2023
retrospective effect from 01.04.2023. A copy of
the latest Government Order is also made
available for perusal. In our opinion, insofar as
orders issued by the Government are applicable to
the Water Authority, G.O.(P)No.95/2023/FIN dated
07.09.2023 reducing the Performance Guarantee
from 5% to 3%, will also be applicable.
In the result, the writ appeal is allowed and
the impugned judgment is set aside.
It is made clear that the appellant is not
liable to execute the Additional Performance
Guarantee, the overall rate quoted by him being
7.20% below TPAC, within 10% of TPAC.
sd/-
A.J.Desai
Chief Justice
sd/-
V.G.Arun
Judge
scl
