T.P. Paulose vs The State Of Kerala
2024 Latest Caselaw 10683 Ker

Kerala High Court

T.P. Paulose vs The State Of Kerala on 12 April, 2024

                                                       "C.R."
         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                         PRESENT
          THE HONOURABLE MR. JUSTICE EASWARAN S.
 FRIDAY, THE 12TH DAY OF APRIL 2024 / 23RD CHAITHRA, 1946
                  WP(C) NO. 8789 OF 2018
PETITIONER/S:

    1    T.P. PAULOSE        "DIED, LRS IMPLEADED"
         AGED 72 YEARS
         THELAPPILLY HOUSE, PULIYANAM P.O, ANGAMALY,
         ERNAKULAM DISTRICT - 683 572.

    2    ADDL.P2. ANIAMMA PAULOSE
         AGED 56 YEARS, WIFE OF DECEASED T.P.PAULOSE,
         RESIDING AT THELAPPILLY HOUSE, PULIYANAM P.O.,
         ANGAMALY, ERNAKULAM DISTRICT - 683 572.

    3    ADDL.P3. ELDHO PAUL
         AGED 44 YEARS, SON OF DECEASED T.P.PAULOSE,
         RESIDING AT THELAPPILLY HOUSE, PULIYANAM P.O.,
         ANGAMALY, ERNAKULAM DISTRICT - 683 572.

    4    ADDL.P4. SUNI JAMES
         AGED 50 YEARS, DAUGHTER OF DECEASED T.P.PAULOSE,
         RESIDING AT MARACHERY PUTHENPURA, MARAMANGALAM,
         KUTHUKUZHY P.O., KUTHUKUZHY, ERNAKULAM DISTRICT -
         686 691.

[ADDITIONAL PETITIONER NOS.P2 TO P4 ARE IMPLEADED AS PER
ORDER DATED 11.07.2022 IN I.A.1/2022 IN WP(C)8789/2018]
          BY ADVS.
          SRI.JACOB P.ALEX
          SRI.RANJITH VARGHESE
          SRI.RAHUL VARGHESE
          SANTHA VARGHESE


RESPONDENT/S:

    1    THE STATE OF KERALA
         REPRESENTED BY THE SECRETARY TO GOVERNMENT, PWD
         (IRRIGATION DEPARTMENT), GOVERNMENT SECRETARIAT,
         THIRUVANANTHAPURAM.
 WP(C) 8789/2018
                                     2



     2        THE EXECUTIVE ENGINEER
              PWD BUILDINGS DIVISION, ERNAKULAM, EDAPPALLY,
              KOCHI - 682 024.

     3        THE ASSISTANT EXECUTIVE ENGINEER
              BUILDINGS SUB DIVISION, MUVATTUPUZHA - 686 673.

     4        THE DISTRICT COLLECTOR
              COLLECTORATE, KAKKANAD, ERNAKULAM - 682 030.
              BY ADV GOVERNMENT PLEADER


OTHER PRESENT:

              SRI.BIMAL.K.NATH,,SR.G.P.
       THIS       WRIT   PETITION   (CIVIL)   HAVING   COME   UP   FOR
ADMISSION ON 11.04.2024, THE COURT ON 12.04.2024 DELIVERED
THE FOLLOWING
 WP(C) 8789/2018
                                    3



                                                                       "C.R"

                          J U D G M E N T

Two intriguing questions arise for

consideration in this writ petition. Can the

respondents initiate revenue recovery measures for

alleged damages caused on account of re-tendering

of the work awarded to one Late T.P Paulose?

Secondly, even if it is held so, can the legal

heirs of the Late T.P.Paulose be held liable to

the alleged damages caused to State exchequer.

2. Sri.T.P.Paulose, a contractor, was the

successful tenderer in terms of Ext.P1 notice

inviting tenders for providing rain shade to the court complex at Muvattupuzha. Ext.P1 is dated

7.10.2016. Sri.T.P.Paulose on 20.10.2016 addressed

to the 2nd respondent requesting to relieve him

from the obligation to complete the work, which

was awarded to him. Despite this notice, the 2 nd

respondent proceeded to select late

Sri.T.P.Poulose as lowest tenderer pursuant to

Ext.P1 notice on 28.10.2016. As per Ext.P4 dated WP(C) 8789/2018

14.12.2016, late Sri.T.P.Paulose was put on notice

that his failure to execute agreement will entail

further consequences and proceedings against him.

Thereafter, on 30.1.2017, the attempt of the 2nd

respondent to persuade the second lowest bidder to

complete the work failed, and therefore,

proceedings for recovery against Sri.T.P.Paulose

was recommended. It is pursuant to this order

that Ext.P6 was issued to late Sri.T.P.Paulose

stating that an amount of Rs.6,01,929.74 was the

loss caused to the Department consequent to the

re-tendering of the work. In response to Ext.P6,

late Sri.T.P.Paulose addressed to the 2nd

respondent on 29.7.2017 vide Ext.P7 stating that he is not liable under any circumstances for the

loss that was caused. It is pertinent to note

that Ext.P6 was dated 8.6.2017 and by Ext.P8, the

said request was turned down and the 2nd respondent

decided to proceed with recovery measures against

late Sri.T.P.Paulose. By order dated 11.7.2022 in

I.A.No.1/2022, his legal heirs were impleaded as WP(C) 8789/2018

additional petitioners 2 to 4, who are prosecuting

the present writ petition.

3. A counter affidavit has been filed on

behalf of the 2nd respondent in which it is

contended that as per notice inviting tender for

the works, every bidder is expected before quoting

his rate to inspect the site of the proposed

works. It is also stated that the rates quoted

shall be inclusive ones, covering all the

operations contemplated in the specifications and

tender schedules and all incidental works

necessary for such operations such as shoring

bailing out work, scaffolding etc. Therefore, it

is contended that since late T.P.Paulose carried out joint inspection with officers of the

respondent and found that various items involved

in the work were not provided in the price

schedule and that the petitioner had not inspected

the site before quoting the tender. It is further

averred that if the contractor does not come

forward to execute the original agreement after

the work is awarded, the selection notice issued WP(C) 8789/2018

in his favour gets cancelled and, hence, a breach

is committed by him.

4. Controverting to the averments contained

in the counter affidavit, late Sri.T.P.Paulose had

filed a reply affidavit, in which it is stated

that re-tendering of the work at his risk and cost

was belatedly issued on 12.10.2017 as per

Ext.R2(a). It is also pointed out that under

Ext.R2(a) report, the 3rd respondent has submitted

to the 2nd respondent that the agreement to re-cast

the estimate with all required items was done

since the drawings were not provided with the

tender. The assertion that the cement concrete

works under Ext.P1 price schedule needs to be carried out in case rain water falls on the

varanda floor etc. is denied. The re-tendering

work, according to Sri.T.P.Paulose, has been done

without following the procedure laid down under

Ext.P10 Government Order.

5. I have heard Sri.Ranjith Varghese,

learned counsel appearing for the petitioner and WP(C) 8789/2018

the learned Senior Government Pleader on behalf of

the respondents.

6. Learned counsel for the petitioner

submits that damages for breach of contract with

the Government could be recovered only after

assessing the damages arising out of the breach.

He further contends that unless the said damages

are liquidated and found in an appropriate civil

proceeding, there cannot be any attempt to recover

the alleged loss caused due to re-tendering of the

work. He relies on the decision of this Court in

Build Tech. India v. State of Kerala and Others

[2000 (2) KLJ 142]. He further relies on the

decisions of the Hon'ble Supreme Court in Tulsi Narayan Garg v. M.P.Road Development Authority

[2019 SCC OnLine SC 1158]; State of Karnataka v.

Shree Rameshwara Rice Mills [(1987) 2 SCC 160] and

J.G.Engineers Pvt. Ltd. v. Union of India and

Another [(2011) 5 SCC 758].

7. On the other hand, learned Senior

Government Pleader takes me to Ext.R2(a) letter in

which it is specifically stated by the Assistant WP(C) 8789/2018

Executive Engineer that it is because of the

refusal of late Sri.T.P.Paulose that the work had

to be re-tendered. He also refers to the

averments in paragraph Nos.4 and 6 of the counter

affidavit to assert that the proceedings initiated

for recovery of damages on account of re-tendering

of the work was proper. Therefore, he prays for

the dismissal of the writ petition.

8. I have considered the rival submissions

raised across the bar.

9. Insofar as the first question is concerned,

it is explicitly clear that there was no agreement

executed between late Sri.T.P.Paulose and the

respondents. It is also evident from the records that at the first possible instance,

Sri.T.P.Paulose had intimated to the tendering

authority his inability to execute the agreement

for various reasons. This apparently was ignored

while the selection order was issued on

28.10.2016. Thus, there is a unilateral decision

on the part of the respondents to award the work WP(C) 8789/2018

to late Sri.T.P.Paulose, despite his reluctance to

proceed further in this matter.

10. The issue as to whether a claim for

either liquidated damages or unliquidated damages

could be raised in terms of the provisions

contained under the Kerala Revenue Recovery Act,

1963, came up for consideration before this court

in Ponnappan K.A. Vs D.F.O., Chalakudy and others

[1984 KHC 442] and in Govindankutty v. State of

Kerala [2016 (4) KLT 929]. It was held that

unless the damages are quantified in a civil

proceedings, the provisions of Kerala Revenue

Recovery Act cannot be invoked. In the light of

the aforesaid principles, I am inclined to take a view that the additional petitioners are justified

in contending that the attempt made by the 2 nd

respondent to recover the differential amount

between the lowest tenderer - the amount quoted by

late Sri.T.P.Paulose and the amount for which the

retender was made - cannot be sustained.

11. Insofar as the second question raised in

the present writ petition is concerned, WP(C) 8789/2018

admittedly, there was no agreement between late

Sri.T.P.Paulose and the respondents by which the

terms and conditions were settled between the

parties. Even one was to assume that there was

such contract and the mere application for the bid

and its consequential acceptance would result into

a contract between the parties, still the question

would be whether the legal heirs are liable for

the loss allegedly caused due to the respondents.

Therefore, while answering the second question,

this Court would have to decide whether there is a

concluded contract or not, and even if there is

none, whether the additional petitioners are

liable to the claim for damages.

12. It is pertinent to note that the parties

are at variance as to whether there was concluded

contract or not between late Sri.T.P.Paulose and

the respondents. The argument of the State is that

the mere fact that Late T.P Poulose had applied

for tender pursuant to the notice inviting e-

tender and further that he was selected as lowest WP(C) 8789/2018

tenderer itself is sufficient to conclude that

there is a concluded contract.

13. Before answering the question on the

liability of the legal heirs for damages claimed

by the State, the question as to whether there is

a concluded contract or not is required to be

decided. It is not possible to assume or conclude

that due to mere fact that an application was

filed/submitted by Sri.T.P.Paulose pursuant to

Ext.P1 notice and the consequential acceptance and

selection of Sri.T.P.Paulose as the lowest

tenderer will not ipso facto lead to a conclusion

that there was a concluded contract between the

parties. This is especially so, when late Sri.T.P.Paulose had given a request to withdraw

from the tender immediately on coming to know that

he will not be able to perform his part of the

contract. Despite this letter, it appears that

the 2nd respondent had proceeded to select late

Sri.T.P.Paulose as the lowest tenderer. Can such

a unilateral decision on the part of the 2nd

respondent be sufficient to fasten the liabilities WP(C) 8789/2018

on late Sri.T.P.Paulose, so as to make his legal

heirs liable?.

14. The learned counsel for the petitioner

Sri.Ranjith Varghese further submitted that there

is no concluded contract between late

Sri.T.P.Paulose and the respondents. The learned

counsel for the petitioner, further submits that

the stand of the respondents as reflected from the

counter affidavit, especially paragraph 8, that

the moment late T.P.Paulose submitted his

application pursuant to the tender notice, that

itself is sufficient to warrant initiation of

further steps by the respondents to recover the

loss, if any, caused by recovering the same as arrears of land revenue, cannot for a moment be

sustained. He further relies on a Constitution

Bench decision of the Hon'ble Supreme Court in

K.P.Chaudhari v. State of Madhyapradesh & Others

[1966 SCC Online 21] to drive home his point. On

a close reading of the aforesaid judgment,

especially paragraph No.10, shows that the Hon'ble

Apex Court had occasion to consider the issue as WP(C) 8789/2018

to whether in the absence of a concluded contract

between the contractor and the Government in terms

of Article 299(1) of the Constitution of India,

whether there can be any liability cast upon the

contractor?. The question as to whether there

could be an implied contract between the parties

based on the application submitted for

participation in tender process, was also

considered. Ultimately, the Hon'ble Apex Court

went on to hold that "in view of the mandatory

terms of Article 299(1) of the Constitution of India, no implied contract could be spelled out between the Government and the appellant at the stage of bidding, for, Article 299 in effect rules out all implied contracts between the Government and another person."

15. In view of the categoric finding, this

Court finds that on facts of the present case,

there was no concluded contract and therefore,

this Court has no hesitation in its mind to reject

the contention of the respondents that there was a

contract between late T.P.Paulose enabling them to WP(C) 8789/2018

proceed against his legal heirs. It may be noticed

that these incidental issues came up for

consideration before this Court only because of

the death of Sri.T.P.Paulose during the pendency

of the present writ petition and the legal heirs

were permitted to implead as additional

petitioners and prosecute this writ petition.

Hence precisely, the second issue was framed and

decided by this court.

16. Another argument raised by the learned

Senior Government pleader appearing for the State

is that the fact that late T.P Paulose applied for

tender and that he was selected itself is

sufficient to make him liable for the damages and

hence the State is entitled to recover it from the

legal heirs. This issue regarding the enforcement

of contract on legal representatives becomes

rather incidental since this court has already

found that there is no concluded contract between

the parties. However, since the State insists that

it is entitled to recover the damages on account

of re-tendering of work from the legal WP(C) 8789/2018

representatives of the deceased Late T.P. Paulose,

this issue also requires to be considered.

17. Law relating to performance of a contract

and the liabilities of legal heirs is stated under

Section 37 of the Indian Contract Act, 1872. The

effect of death of a person and his liabilities is

governed by Section 306 of the Indian Succession

Act, 1925.

18. Section 306 of the Indian Succession Act,

1925 reads as under

"All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease survive and against his executors or administrators, except causes of action for defamation, assault, as defined in the Indian Penal Code or other personal injuries not causing the death of the party: and except also cases where, after the death of the party, the relief sought could not be enjoyed or granting it would be nugatory."

19. Though the aforesaid provision speaks

only of executors and administrators, the same WP(C) 8789/2018

principles must necessarily prevail in the case of

other legal representatives also. This proposition

is affirmed by the Hon'ble Supreme Court in M.

Veerappa Vs Evelyn Sequeria [AIR 1988 SC 506].

Therefore, the section applies to devolution of

rights and liabilities in contract and proceedings

relating to contact.

20. A further question would also have to be

necessarily answered by this Court. If the law is

as aforesaid, then the question to be considered

is whether there is a vested right of action for

the breach of contract. If the answer is in

affirmative, then the death of either party has no

effect upon it, whether or not it arose from a contract of personal nature (see Halsbury's Law of

England, fourth Edn, Vol.9 Page 615).

21. On a further analysis of facts at hand,

it is seen that parties did not choose their

bargain to be reduced in writing. Although the law

relating to enforcement of contracts on legal

representative being succinctly stated above, the

prime consideration should be that the obligation WP(C) 8789/2018

arises only on execution of a contract. In Pollock

and Mulla On Indian Contract Twelfth Edition Page

947, the learned Author has opined, that there can

be no obligation without a contract. More or less

similar issue came up for consideration before the

Apex Court in Bombay HSG Board V Karbhase Nairk

and Co [AIR 1975 SC 763], wherein the Apex Court

was called upon to decide on a certificate for

appeal on a decision of Division Bench of Bombay

High Court, whether without a concluded contract,

a contractor was bound to be paid at the rates

quoted by him in notice for damages. Answering the

question, the Apex Court held that mere fact that

Engineer-in-charge did not exercise his power to cancel the order would not mean a contract is

concluded on contractor's term. The Apex Court

went on to negative the claim of the contractor.

22. Be that as it may, it will also be

appropriate to consider whether under a contract

which basically involves personal skills of the

contractor, whether the legal representatives

would be liable to perform the contract?. WP(C) 8789/2018

Governing provision under the Indian Contract Act

is Section 40 of the Indian Contract Act, 1872

which reads as under:

"40. If it appears from the nature of the case that it was the intention of the parties to any contract that any promise in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it".

Reading of the aforesaid Section gives answer to

the question posed before this court in the

following manner:

A) Necessarily there should be a contract between the parties;

B) Liability of the representative should be

provided in the contract itself.

23. It may be apposite to note that a

contract for designing a building by an architect

is held to be a personal contract and which could

not be enforceable against his legal

representative. {See Morsel Cleaners Ltd Vs Hicks

[(1966) 2 Lloyd's Rep 338]}. Based on the above, WP(C) 8789/2018

this Court is inclined to take a view that in the

present case, no liability could be fastened on

the legal heirs.

24. In Vinayak Purshottam Dube (D) v.

Jayashree Padamkar Bhat & Others [2024 SCC Online

212], the Hon'ble Supreme Court was called upon to

decide whether a contract executed in a personal

capacity would bind the legal heirs or not? While

answering the question in affirmative, the Apex

Court held as under:

"21. Thus, a contract can be performed vicariously by the legal representatives of the promisor depending upon the subject matter of the contract and the nature of performance that was stipulated thereto. But a contract involving exercise of individual's skills or expertise of the promisor or which depends upon his/her personal qualification or competency, the promisor has to perform the contract by himself and not by his/her representatives. A contract of service is also personal to the promisor. This is because when a person contracts with another to work or to perform service, it is on the basis of the individual's skills, competency or other qualifications of the promisor and in WP(C) 8789/2018

circumstances such as the death of the promisor he is discharged from the contract."

25. In the aforesaid decision also the

principles as expounded by this Court is affirmed

by the Hon'ble Supreme Court of India. Added to

the above, the Apex Court went on to hold, even in

a case of concluded contract which involving

personal skill, the legal representatives are not

liable. Therefore, it must be necessarily held

that the legal representatives are not liable to

the claim for damages by the State.

26. In the result, this Court finds that the

additional petitioners 2 to 4 are entitled to succeed. It is declared that they are not liable

to answer the claim for damages raised by the

State against Late T.P. Paulose.

Hence the Writ petition is allowed. Exts.P6

and P8 are set aside. No order as to costs.

Sd/-

EASWARAN S. JUDGE jg WP(C) 8789/2018

APPENDIX OF WP(C) 8789/2018

PETITIONER EXHIBITS

EXHIBIT P1 TRUE COPY OF THE PRICE SCHEDULE.

EXHIBIT P2 TRUE COPY OF LETTER DT. 20.10.2016 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT.

EXHIBIT P3        TRUE    COPY    OF     SELECTION     NOTICE
                  DT.28.10.2016    ISSUED    BY    THE    2ND
                  RESPONDENT TO THE PETITIONER.

EXHIBIT P4        TRUE COPY OF LETTER DT. 14.12.2016 ISSUED

BY THE 2ND RESPONDENT TO THE PETITIONER.

EXHIBIT P5 TRUE COPY OF LETTER DT. 30.01.2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.

EXHIBIT P6 TRUE COPY OF LETTER DT. 08.06.2017 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.

EXHIBIT P7 TRUE COPY OF LETTER DT. 29.07.2017 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT.

EXHIBIT P7(A) TRUE COPY OF ACKNOWLEDGMENT RECEIPT EVIDENCING RECEIPT OF EXHIBIT P7 LETTER.

EXHIBIT P8 TRUE COPY OF LETTER DT. 16.01.2018 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.

EXHIBIT P9 TRUE COPY OF LETTER DT. 02.03.2018 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT.

ADDL.EXHIBIT P10 TRUE COPY OF THE GOVERNMENT ORDER DATED 30.07.2015

ADDL.EXHIBIT P11 TRUE COPY OF LETTER DATED 29.5.2018 ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE RESPONDENT.

WP(C) 8789/2018

ADDL.EXHIBIT P12 TRUE COPY OF LETTER DATED 12.6.2018 ISSUED BY THE 3RD RESPONDENT UNDER THE RIGHT TO INFORMATION ACT.

ADDL.EXHIBIT P13 TRUE COPY OF THE CIRCULAR DATED 10.5.2005 OF GOVERNMENT OF KERALA.

ADDL.EXHIBIT P14 DEATH CERTIFICATE ISSUED BY THE KOCHI MUNICIPAL CORPORATION.

ADDL.EXHIBIT P15 TRUE COPY OF THE LEGAL HEIRSHIP CERTIFICATE ISSUED BY THE TAHSILDAR, ALUVA

RESPONDENT'S EXHIBITS

EXHIBIT R2(a) TRUE COPY OF THE LETTER DATED 1.12.2016