Karnataka High Court
M/S Karnataka State Tourism ... vs M Chiranjeevi on 17 January, 2025
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WA NO.1013 of 2022
C/W CCC NO.1005 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17th DAY OF JANUARY 2025
PRESENT
THE HON'BLE MRS JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR JUSTICE UMESH M ADIGA
WRIT APPEAL NO. 1013 OF 2022 (GM-RES)
C/W
CCC NO.1005/2022(CIVIL)
IN WA NO.1013 OF 2022
BETWEEN:
M/S. KARNATAKA STATE TOURISM
DEVELOPMENT CORP.
BMTC- TERMINAL, YESHWANTHPUR,
BANGALORE.
REP. BY ITS MANAGING DIRECTOR.
...APPELLANT
(BY SRI.GURURAJ JOSHI, ADVOCATE)
AND:
1 . M. CHIRANJEEVI
S/O. LATE K.MUNIKRISHNA RAJU,
AGED ABOUT 60 YEARS,
CLASS I CONTRACTOR,
NO.1820/1, 21ST CROSS,
6TH MAIN ROAD,- C BLOCK,
SAHAKARNAGAR,
BANGALORE-560 092.
2 . THE STATE OF KARNATAKA,
REP. BY ITS SECRETARY,
DEPARTMENT OF TOURISM,
VIKASA SOUDHA, AMBEDKAR VEEDHI,
BANGALORE -560 001.
3 . THE DIRECTOR,
DEPARTMENT OF TOURISM,
EMBASSY BUILDING, INFANTRY ROAD,
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WA NO.1013 of 2022
C/W CCC NO.1005 of 2022
AMBEDKAR VEEDHI,
BANGALORE-560 001.
...RESPONDENTS
(BY SRI. ASHOK B PATIL, ADVOCATE/CR/R1,
SRI.VIKAS ROJIPURA, AGA FOR R2 & R3)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO CALL FOR RECORDS IN
WP No-46302/2018 DISPOSED OF ON 03.09.2022 FROM THE
RECORDS, OF THIS HONBLE COURT AT BANGALORE AND SET ASIDE
THE IMPUGNED ORDER/ JUDGEMENT DATED 03.09.2022 PASSED IN
WP No-46302/2018 BY THE LEARNED SINGLE JUDGE OF THIS
HONBLE COURT AT BANGALORE THE CC OF WHICH IS PRODUCED AT
ANNEXURE-I THERE BY ALLOWING THIS APPEAL AND DISMISS THE
WRIT PETITION FILED IN WP No-46302/2018 FILED BY THE
RESPONDENT No-1.
IN CCC NO.1005 OF 2022
BETWEEN:
SHRI. M. CHIRANJEEVI,
S/O LATE K.MUNISWAMY RAJU,
AGED 61 YEARS,
CLASS I CONTRACTOR,
NO.1820/1, 21ST CROSS,
6TH MAIN ROAD,
"C" BLOCK, SAHAKARANAGAR,
BENGALURU-560 092.
...COMPLAINANT
(BY SRI. ASHOK B PATIL, ADVOCATE)
AND:
SHRI. G. JAGADEESH, IAS,
THE MANAGING DIRECTOR,
THE KARNATAKA STATE TOURISM
DEVELOPMENT CORPORATION LTD,
GROUND FLOOR,
BMTC YESHWANTHPUR,
T.T.M.C BUS STAND,
YESHWANTHPUR CIRCLE,
BENGALURU-560 022.
...ACCUSED
(BY SRI. GURURAJ JOSHI, ADVOCATE)
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WA NO.1013 of 2022
C/W CCC NO.1005 of 2022
THIS CCC IS FILED UNDER SECTION 11 AND 12 OF THE
CONTEMPT OF COURTS ACT,1971 R/W UNDER ARTICLE 215 OF THE
CONSTITUTION OF INDIA, BY THE COMPLAINANT, WHEREIN HE
PRAYS THAT THE HON BLE COURT BE PLEASED TO ISSUE SUMMON
THE ACCUSED AND INITIATE PROCEEDINGS FOR PUNISHING HIM
FOR COMMITTING CIVIL CONTEMPT OF COURT FOR THE WILLFUL
DISOBEDIENCE OF THE DIRECTIONS ISSUED BY THIS HONBLE
COURT IN THE ORDER DATED 3.9.2022 PASSED IN WP
NO.46302/2018(ANNEXURE-A).
THIS APPEAL AND CCC HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 05.11.2024 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, UMESH M. ADIGA J.,
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS JUSTICE ANU SIVARAMAN
and
HON'BLE MR JUSTICE UMESH M ADIGA
CAV JUDGMENT
(PER: HON'BLE MR JUSTICE UMESH M ADIGA) This intra Court appeal is filed under Section 4 of Karnataka High Court Rules challenging the correctness of the orders dated 03.09.2022 passed in W.P.No.46302/2018(GM-RES) by the writ Court.
2. Respondent No.1 filed the writ petition praying to quash the letter dated 7/9.4.2018 and 10.5.2018, issued by respondent No.2 and direct the respondent No.2 to pay Rs.34,85,179/- and Rs.11,94,983/- with interest at -4- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 the rate of 18% p.a. The writ Court after hearing both the parties, by the impugned order allowed the writ petition.
3. Brief facts of the case of respondent No.1 herein/writ petitioner are that he was a successful bidder of the tender floated by respondent Nos.2 and 3 in respect of construction of additional rooms of Gandhi Nilaya on Nandi Hills, Chikkaballapura District. The value of the said tender was Rs.146.36 lakhs. Later on additional work of construction was also given to respondent No.1 and total tender amount of the construction was enhanced to Rs.194 lakhs. An agreement dated 30-4-2011 was entered into between respondent No.1 and the appellant in this regard. Respondent No.1 completed the construction in terms of the said agreement. As per terms of agreement, respondent No.1 was submitting running account bills (for short 'RA bills') from time to time and they have been paid by the appellant. Respondent No.1 submitted final bill dated 21.11.2017 for Rs.34,85,179/- after deducting the retention money Rs.2,42,285/-. It was -5- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 certified by architects engaged by the appellant. Amount of the said bill was not paid by the appellant.
4. Appellant took possession of the building on 04.04.2017 in the presence of Assistant Executive Engineer and representative of the architect of the appellant. The said building was inaugurated on 10.04.2017 by the then Transport Minister of Government of Karnataka and it was put to use by the appellant.
5. Appellant did not pay the amount of the Bill dated 21.11.2017. Respondent waited for nearly a year and wrote a letter requesting appellant to pay the amount of the bill. The appellant instead of paying the amount, has sent a letter dated 07/09 April 2018 contending that there were certain defects in the construction, which needs to be rectified by respondent No.1. There were exchanges of letters/notices between appellant and respondent No.1 but appellant did not pay the amount of the said outstanding bill. As per Clause No.47.1 of the condition of the contract, appellant was required to make -6- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 payment within 90 days in the absence of any defect in the works or discrepancy in the bill. However appellant did not pay the amount within 90 days and even not raised any objection in this regard within that period. Appellant with an intention to delay the payment of the bill raised unnecessary objection after an year of taking over possession of the building and put it to use contrary to the terms of tender documents and agreement. The said act of Appellant is arbitrary and illegal. With these reasons prayed for the above said reliefs.
6. Appellant contended that there were defects in the construction of the building, which were noted in the letters under challenge. Appellant called upon the respondent No.1 to cure all the defects noted in the letter. However, respondent No.1 did not cure the defects of the construction as well as fixtures. In view of the said reason, the said RA bill submitted by respondent No.1 was not approved. Merely Appellant took possession of the building and inaugurated the same does not mean that there were no defects. Bill amount was inflated. Hence -7- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 Respondent No.1 was not entitled for entire amount of the Bill. He cannot file Writ Petition to recover the alleged outstanding amount. Serious question of facts are involved in this case, which has to be decided by the civil court and not under extraordinary jurisdiction of the High court under Article 226 of the Constitution. Writ petition is not maintainable. With these reasons appellant prayed to dismiss the writ petition.
The learned Single Judge considered the contentions, directed the respondent to pay to the petitioner a sum of Rs.34,85,179/- plus the retention amount, if any, with interest at the rate of 12% per annum along with a cost of Rs.2,00,000/- and report compliance to the Registrar General of this Court within six weeks. Delay if brooked would attract an additional interest of 1% per mensem. The appeal is directed against the said direction.
7. We have heard the arguments of learned advocates appearing for both the sides. In addition to oral -8- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 arguments, both sides filed written arguments. We have perused materials placed on record.
8. The learned advocate for the appellant would submit that respondent No.1 did not complete the construction in time as per the terms of the agreement. There was long delay in completing the construction. Respondent No.1 did not construct the building in accordance with the plan approved by the appellant. The quality of fixtures and electrical items are not as prescribed in the tender. These defects were noted by visit of responsible officers of the Government as well as the appellant. Thereafter, notices were sent to respondent No.1 to rectify the said defects. Respondent No.1 did not attend the said work and hence he is not entitled for relief prayed in the writ petition.
9. The appellant further contended that respondent No.1 ought to have approached civil court for recovery of the alleged dues. Serious question of facts are involved in this case and hence respondent No.1 cannot -9- WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 file petition under Article 226 of Constitution for recovery of the amount due. Alternative/efficacious remedy available to respondent No.1 and hence writ petition is not maintainable.
10. Appellant further contended that merely possession was handed over to appellant and the building was inaugurated will not come in the way of right of the appellant to call upon the respondent No.1 to cure the defects of the construction. The Writ Court did not consider all these facts.
11. It is further contended that pleading of Respondent No.1 in the writ petition are not in accordance with the provisions of CPC. He has not pleaded several facts in the writ petition and not substantiated by materials to prove the facts pleaded. They were not considered by the writ court. Therefore, the findings of the writ court are erroneous and prayed to allow the appeal and set aside the impugned order passed by the
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 writ court. In support of his contentions learned advocate relied on the following judgments:
i. Union of India & Ors. V. M/s Puna Hinda [AIR 2021 SC 4187] ii. M/s Kelkar & Kelkar V. M/s Hotel Pride Executive Pvt. Ltd. [AIR 2022 SC 2159].
iii. Union of India V. Major General Shrikant Sharma [2015-6-SCC- 773] iv. Kanaiyalal Lalchand & Sachdev & Ors V. State of Maharashtra & Ors [2011(2) SCC 782] v. City & Industrial Development Corporation V. Dosu Aardeshir Bhiwandiwala [SCC p.175, para 30] vi. Nivedita Sharma V. Cellular Operators Association of India & Ors [2011 (14) SCC 337] vii. Mafatlal Industries Ltd V. Union of India [SCC p.607, para 77] viii. Executive Engineer, Southern Electricity Supply Company or Orissa Ltd & another V. Sri Seetaram Rice Mill [2012 (2) SCC 108) ix. Cicily Kallarackal V. Vehicle Factory (2012(8) SCC
524) x. Commissioner of Income Tax & Ors V. Chhabil Dass Agarwal (2014(1) SCC 603] xi. Thansingh Nathmal V. Superintendent of Taxes (AIR p.1423, para 7) xii. Titaghur Paper Mills co. Ltd V. State of Orissa [SCC p.440-41, para 11]
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 xiii. Associated Provincial Picture Houses Ltd V. Wednesbury Corporation [1948(1)KB 223. xiv. Council of Civil Service Unions V. Minister for Civil Service [1984(3) All ER 935(HL)] xv. Siemens Public Communication V. Union of India [2008-16- SCC-215] [AIR 2009 SC 1204] xvi. Gohil Vishwaraj Hanubhai & Ors. V. State of Gujarat [2017-13- SCC-621] xvii. Chairman, All India Railway Recruitment Board V. K.Shyam Kumar (2010 (6) SCC 614 at para 22] xviii. Union of India V. T.R. Varma [AIR 1957 SC 882] xix. Hon'ble Apex Court in the matter of The State of Maharashtra and others Vs Great ship (India) Ltd, in Civil Appeal No.4956 of 20212- dt.20.9.2022- reported in Live-Law (SC)-Page-784.
12. The learned counsel for respondent No.1 submitted that very same points were urged by the appellant before the writ court. Writ Court has considered them and by assigning the reasons rejected them. Most of the facts of the case are not in dispute. Appellant did not pay the amount of the bill in question on the ground that there were certain defects/short comings in the construction of the building. As per the terms of agreement, it should have brought them to the notice of respondent No.1 within 90 days of submission of the bill.
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 In this case alleged defects were intimated to respondent No.1 after lapse of nearly a year after submission of final bill and that too after respondent sent letter requesting for payment of outstanding amount.
13. Learned counsel for respondent No.1 would further submit that there are no serious disputes regarding the facts in issue. Most of the facts are admitted facts. At the time of handing over of the building on 04.04.2017 in the presence of an expert i.e. Assistant Executive Engineer of Department of tourism as well as a representative of architect appointed by the KSTDC, possession was taken and the building was inaugurated by the then Minister of Government of Karnataka. Even appellant had published in the newspaper stating that after renovating and construction of rooms at Nandi hills in Chikkmagalur District, (the building in question) it had earned more than Rs.4.57 crores. A year after the submission of the final bill by the respondent No.1, with a mala fide intention to delay the payment, objections were raised regarding payment of bill. That cannot be reason to withhold bill
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 amount. The writ court in detail discussed these facts and rightly held that this could be decided under Article 226 of Constitution of India and it does not call for interference by this Court. With these reasons respondent No.1 prayed to dismiss the appeal.
14. The writ Court considering the materials available on record as well as considering the contentions of both the parties and also following the law laid down by the Hon'ble Apex court held that the writ petition is maintainable. Pleadings of the parties indicates that most of the facts of the case are undisputed. Entitlement of respondent No.1 to claim the amount of the bill is also not disputed. Contention of the appellant is that there were defects in the construction work as noted in letters under challenge and they were not attended by the respondent No.1. The alleged defects of construction stated by the appellant in its reply letters were not at all notified by the engineers of Tourism Department or Architect nominated by the appellant at the time of joint inspection of building while taking over possession. Undisputedly building was
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 put into use by the appellant and earned few crores of rupees as per press statement, which is not disputed. During the use of building also, alleged defects were not notified to respondent No.1. The alleged defects appear to be noted for the first time when respondent No.1 sent letter requesting the appellant for payment of the dues. From the materials placed on record any prudent man can infer that just to delay the payment of the bill amount said notice was sent by the appellant. The officers of the appellant (KSDTC) themselves requested the Government to grant the funds for clearing outstanding bills of respondent No.1. About a year after handing over the building, appellant started contending that there were defects in the construction. Even at that time also there was no joint inspection of the construction to assess the defects/short comings in the buildings.
15. Appellant is "State" as defined under Article 12 of the Constitution of India. Its act shall be ideal to others. It shall act prudently to do justice to its subjects. Admittedly respondent No.1 invested his hard earned
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 money in construction work with legitimate expectation of payment of the same by Appellant in time. Unfortunately, appellant did not pay the same. There are no serious questions of facts involved in this lis to be decided by the Civil Court. Matter is pending for last about four years and payments were not made to respondent No.1. It appears just to further delay the payment, appellant-State is taking all these hyper-technical objections. Arbitrary acts of State and illegal exercise or abuse of power by the authorities is indeed open to challenge in writ proceedings. Hence Writ Petition is maintainable.
16. The learned advocate for appellant relied on the several judgments referred above. The law laid down in the above judgments are that, when efficacious remedies are available, writ is not maintainable. Depending upon the facts and circumstances of respective cases said laid law is laid down. Looking to peculiar facts and circumstances of this case as stated above, writ petition is maintainable. The principle of law laid down in the above said judgments are not applicable to facts of
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 present case. It is clear that the existence of an alternate remedy is not a bar for exercise of writ jurisdiction and it is for the writ Court to consider the efficacy of the remedy and the necessity to relegate parties to such other remedies. Therefore, we do not find any reasons to find fault with the order passed by the writ court in exercising the jurisdiction under Article 226 of Constitution of India for granting the relief in favour of respondent No.1.
17. The Managing Director of appellant - Corporation wrote a letter dated 16-12-2017 (Annexure X) to the Director of the Tourism Department requesting the Government to pay outstanding dues of Rs.34,85,179/- to the contractor/respondent No.1. It also indicates that as per letter of RC architects, the construction work was already completed and building has been handed over to the Corporation. On 08.02.2018, respondent No.1 wrote a letter to appellant (Annexure-Y) requesting for payment of the amount of the bill submitted about eight months prior to the said letter. It appears there after dispute started regarding construction, the Managing Director wrote letter
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 dated 07.04.2018, for the first time informing respondent No.1, that there were defects in the construction of the building and called upon the respondent No.1 to cure the said defects. Respondent No.1 sent notice dated 25.04.2018 (Annexure - AV) through his advocate calling upon the appellant to pay the amount due to him. Thereafter, the appellant sent another notice dated 10.05.2018 informing additional defects in the building and the defects were increased to seven in numbers. These defects were not noted, while taking over possession of the building. Undisputedly possession was taken by the appellant, respondent No. 2 and 3, in the presence of Engineer of Tourism Department as well as architect- representative appointed by the appellant - KSTDC. Even thereafter, till writing of letter by the respondent No.1, no such complaint was made. These facts prima facie shows that just to delay payment of outstanding bill of respondent No.1 said objections were raised by officers of the appellant, as repeatedly contended by respondent No.1. If, really, there were such
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 defects, they should have made joint inspection in the presence of Respondent No.1 immediately after taking over possession of the building.
18. The writ Court considering all the facts and circumstances of the case righty allowed the writ petition. Respondent No.1 claimed interest @18% per annum on the amount due. The writ court has awarded reasonable rate of interest, i.e., @12% per annum. The said interest is also not exorbitant. Respondent No.1 has invested his money in completion of the building with fond hope that it will be reimbursed with in short period. Appellant did not pay the said dues in time and without justifiable reasons delayed the payment. Respondent is kept out of his money for last about 7 years. We do not find any error in awarding interest @ 12% p.a.
19. In the written arguments as well oral arguments the appellant contended that provision of Order VI, VII and VIII of C.P.C., are not strictly followed by the respondent No.1. The said contention is not tenable. Writ
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 petitioner pleaded facts in the petition and produced necessary documents in support of his contention. Most of them are not disputed. Strict rule of pleading and proof as required in civil litigation, may not be applicable to writ proceedings. Therefore on the ground of such hyper technical reasons writ petition cannot be dismissed.
The appellant did not comply the direction of the writ court in time. Hence respondent No.1 has filed contempt petition. In the mean while this appeal has been filed. Hence it cannot be held that accused appellant deliberately disobeyed the order/direction of this court. Hence contempt petition needs to be closed.
20. For the above said reasons we are of view that writ court has not committed any error which requires interference in the said findings. Accordingly we pass following ORDER The writ appeal is dismissed.
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WA NO.1013 of 2022 C/W CCC NO.1005 of 2022 Appellant shall comply the directions of writ Court with in eight weeks from the date of this order.
Contempt petition is closed.
Sd/-
(ANU SIVARAMAN) JUDGE Sd/-
(UMESH M ADIGA) JUDGE AG