Kerala High Court
C.X.Varghese vs Union Of India on 24 April, 2014
Author: A.Muhamed Mustaque
Bench: A.Muhamed Mustaque
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
MONDAY,THE 24TH DAY OF NOVEMBER 2014/3RD AGRAHAYANA, 1936
WP(C).No. 27833 of 2014 (D)
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PETITIONER(S):
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C.X.VARGHESE, AGED 57,
S/O. XAVIER, RAILWAY CONTRACTOR, CHAKKANAT HOUSE,
VYTTILA, KOCHI - 19.
BY ADV. SRI.A.P.SUBHASH
RESPONDENT(S):
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1. UNION OF INDIA,
REPRESENTED BY THE GENERAL MANAGER, SOUTHERN RAILWAY,
PARK TOWN, CHENNAI - 01.
2. DIVISIONAL RAILWAY MANAGER (WORKS),
SOUTHERN RAILWAY, TRIVANDRUM -14.
3. THE MANAGER,
STATE BANK OF TRAVANCORE, BRACH, VYTTILA,
KOCHI - 19.
R1 & R2 BY ADV. SRI.C.S.DIAS,SC
R3 BY ADVS. SRI.SANTHOSH MATHEW
SRI.SATHISH NINAN
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
24-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
msv/
WP(C).No. 27833 of 2014 (D)
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APPENDIX
PETITIONER(S)' EXHIBITS
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EXHIBIT-P1-TRUE COPY OF LOA DATED 24/04/2014 ISSUED FROM THE
2ND RESPONDENT.
EXHIBIT-P2-TRUE COPY OF PERFORMANCE GUARANTEE DATED 21/06/2014
DRAWN BY THE PETITIONER IN FAVOUR OF SOUTHERN RAILWAY.
EXHIBIT-P3-TRUE COPY OF LETTER DATED 17/07/2014 SUBMITTED BY THE
PETITIONER TO THE 2ND RESPONDENT.
EXHIBIT-P4-TRUE COPY OF LETTER DATED 18/07/2014 ISSUED BY THE
2ND RESPONDENT TO THE PETITIONER.
EXHIBIT-P5-TRUE COPY OF DETAILED LETTER DATED 25/07/2014 SUBMITTED BY THE
PETITIONER TO THE 2ND RESPONDENT.
EXHIBIT-P6-TRUE COPY OF LETTER DATED 01/08/2014 ISSUED BY THE
2ND RESPONDENT TO THE PETITIONER.
EXHIBIT-P7-TRUE COPY OF LETTER DATED 08/08/2014, SUBMITTED BY THE
PETITIONER TO THE 2ND RESPONDENT.
EXHIBIT-P8-TRUE COPY OF LETTER DATED 24/09/2014, ISSUED BY THE
2ND RESPONDENT TO THE PETITIONER.
RESPONDENT(S)' EXHIBITS:
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EXT.R2(1): TRUE COPY OF THE ORDER ISSUED BY THE MINISTRY OF RAILWAYS,
NEW DELHI.
EXT.R2(2): TRUE COPY OF THE LETTER NO.V/W - 496/T.5/2014 ISSUED BY THE
2ND RESPONDENT TO THE PETITIONER.
//TRUE COPY//
P.S.TO JUDGE.
Msv/
A.MUHAMED MUSTAQUE, J.
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W.P.(C).No. 27833 of 2014
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Dated this the 24th day of November, 2014
J U D G M E N T
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The petitioner is a Railway Contractor. Pursuant to the open tender for raising of Kanjiramattom - `Raising an extension of plat form No.1', the petitioner has responded to the tender. Ext.P1 Letter of Acceptance indicates that petitioner has to submit a Performance Guarantee for an amount of Rs.2,29,345/-. The petitioner has remitted the above amount by way of Ext.P2. As per R2(1) order dated 31.12.2010 issued by the Indian Railway Board revived condition regarding performance guarantee is stipulated. Performance guarantee has to be submitted within 30 days from the date of issue of Letter of Acceptance, and period can be extended to another 30 days by the authority. Thus the petitioner has submitted the performance guarantee within the above time. However by Ext.P4, the petitioner was asked to remit a sum of Rs.1,56,420/- towards performance guarantee by way of bank guarantee or FD receipt. Admittedly this letter was issued after a W.P.(C).No.27833 of 2014 2 period of 60 days. It seems that there was some mistake on the part of Railways in reckoning the amount towards the performance guarantee. The petitioner has also sought a clarification from the 2nd respondent as per Ext.P4. The petitioner also submitted that he is prepared to furnish additional bank guarantee, which was sought in Ext.P4. However the contract was terminated as per Ext.P8 and forfeited the EMD. Challenging the above order, the petitioner has approached this Court.
2. As directed by this Court, the petitioner has filed an affidavit. It is submitted that he is prepared to furnish the balance performance guarantee of Rs.1,56,420/-. According to the petitioner, he is always willing to proceed with the tender quoted by him in the same rate, terms and conditions as provided in the tender condition.
3. In this matter a detailed counter affidavit has been filed on behalf of respondents 1 and 2. It is submitted that as per Clause W.P.(C).No.27833 of 2014 3 64 of the General Conditions of the contract all disputes and differences of any kind regarding contract shall be referred to Arbitration. It is further submitted that Railway is justified in forfeiting EMD as the petitioner failed to produce the performance guarantee within the time indicated in Ext.P4.
4. The Railway does not dispute the fact that Ext.P1 had only indicated payment of Rs.2,29,345/-. It is only thereafter noting a mistake on their part, they have issued Ext.P4 directing the petitioner to pay sum of Rs.1,56,420/-. It was admittedly after the period of 60 days. The Railway has no case that the petitioner has failed to produce the performance guarantee within the time originally granted. It is true that the petitioner is bound by the direction of the Railway in Ext.P4 based on the estimate calculated for the work awarded to the petitioner. However nothing is on the record to indicate that the petitioner ever failed to produce performance guarantee within the time. The lapse on the part of W.P.(C).No.27833 of 2014 4 the Railway for calculating the amount cannot be a reason to deny the petitioner an opportunity to perform his part of contract, especially when the petitioner has undertaken that he is ready and willing to perform the contract and he has only sought a clarification by Ext.P5 from the Railway regarding certain other matters. In Ext.P5 also he had undertaken that he was willing to pay the amount.
Therefore, the facts and circumstances clearly establishes the non-performance of the contract is not attributable to the petitioner and forfeiting the EMD is unsustainable. A further re- tender in this process will delay the project and may hamper the interest of the public. Considering the fact that the petitioner is willing to undertake the work and also taking note of the public interest in the matter, the petitioner shall be permitted to undertake the award as per Ext.P1 on the following conditions in addition to other terms and conditions of the contract: W.P.(C).No.27833 of 2014 5
1. The petitioner shall furnish the Performance Guarantee to the tune of Rs.3,85,765/- on or before 1.12.2014.
2. The petitioner shall undertake the work within four months from 1.12.2014.
3. Ext.P4 is set aside. However it is made clear that if the petitioner fails to furnish the performance guarantee, the Railway is at liberty to take appropriate action against the petitioner.
The writ petition is disposed of as above.
A.MUHAMED MUSTAQUE, JUDGE jm/