Kerala High Court
H.Dileep Kumar vs The Secretary on 26 November, 2020
Author: N. Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 26TH DAY OF NOVEMBER 2020/5TH AGRAHAYANA, 1942
WP(C).No.13419 OF 2013(B)
PETITIONER:
H.DILEEP KUMAR,
AGED 46 YEARS,
S/O. K. HARIDASAN NAIR,
PROPRIETOR, HI-ELECT ENTERPRISES,
TC 42/1305(1), ANRA 111,
ASAN NAGAR,
VALLAKKADAVU.P.O.,
THIRUVANANTHAPURAM-695008.
BY ADVS.
SRI.K.RAMAKUMAR (SR.)
SRI.K.R.SUNIL
RESPONDENTS:
1 THE SECRETARY,
INDUSTRIES DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
2 THE PROJECT MANAGER,
PROJECT IMPLEMENTATION UNIT,
KERALA SUSTAINABLE URBAN DEVELOPMENT PROJECT
CORPORATION OF KOLLAM,
KOLLAM-10.
3 THE MANAGER DIRECTOR,
UNITED ELECTRICAL INDUSTRIES LTD.,
A KERALA GOVERNMENT CO. PALLIMUKKU,
KOLLAM-10.
WPC No.13419/2013
:2:
ADDL. 4 PRINCIPAL SECRETARY,
LOCAL SELF GOVERNMENT DEPARTMENT,
STATE OF KERALA,
4TH FLOOR,
SECRETARIAT ANNEX,
ROOM NO.403,
SECRETARIATE,
THIRUVANANTHAPURAM-695 001
IS IMPLEADED AS ADDITIONAL R4 AS PER ORDER
DATED 02-11-2020 IN IA 1/2020
R1, R3 BY ADV. SRI.K.SUBASH CHANDRA BOSE
R2 BY ADV. SRI.M.K.CHANDRA MOHAN DAS, SC,
KOLLAM MPT
R3 BY ADV. SRI.THOUFEEK AHAMED
R1 BY GOVERNMENT PLEADER SMT. RESHMI K.M
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 26-11-2020, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
WPC No.13419/2013
:3:
N. NAGARESH, J.
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W.P.(C) No.13419 of 2013
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Dated this the 26th day of November, 2020
JUDGMENT
~~~~~~~~~ This writ petition of the year 2013, has been filed by the Proprietor of High-Elect Enterprises, Thiruvananthapuram seeking to compel respondents 1, 2 and 3 to release the balance amount shown in Ext.P4 to the petitioner forthwith.
2. The case of the petitioner in short, is as follows:-
The petitioner is an electrical contractor. The 3 rd respondent is a company under the Kerala Government.
On 01.10.2009, the 3rd respondent issued a work order to the petitioner for supply and execution of street lights under the project implementation scheme of the 3 rd respondent, WPC No.13419/2013 :4: for road upgradation and junction improvement for Kollam, Kappalandimukku-Muneeswaram Temple Road. The project was implemented by the 2nd respondent-Project Manager, Kerala Sustainable Urban Development Project, Corporation of Kollam, through the 3rd respondent.
3. The 3rd respondent entrusted the said work to the petitioner as per Ext.P1 sub-contract dated 01.10.2009 and the Articles of Agreement was executed by the 3 rd respondent as per Ext.P2 on 07.10.2009. The drawings submitted by the petitioner were approved by the 2 nd and 3rd respondents on 26.06.2012. The petitioner completed the work and the 3rd respondent issued Ext.P3 completion certificate certifying that actual date of completion of work is 31.12.2011. The 3rd respondent further certified that no material deviations from the sanctioned plans and specification other than those sanctioned by the competent authority, are effected by the petitioner.
4. The petitioner on receipt of Ext.P3, submitted Ext.P4 final bill dated 02.07.2012 for ₹52,32,312.63. WPC No.13419/2013 :5: Though the 2nd respondent acknowledged the receipt of Ext.P4, the amount was not disbursed. The petitioner thereafter submitted Exts.P5 to 7 representations and reminders, which were not heeded to. Hence, the petitioner is before this Court.
5. The 3rd respondent contested the writ petition and filed counter affidavits. The 3rd respondent stated that the writ petition is not maintainable. All disputes have to be redressed in Kollam. The 3rd respondent pointed out that as per Clause 14 of Ext.P2 agreement, the 3 rd respondent has been passing on the amount that is received from the 2 nd respondent to the petitioner. The payment of the contract amount to the writ petitioner is contingent upon the amount received from the 2nd respondent.
6. According to the 3rd respondent, the entire problem in delayed payment is invited by the petitioner due to the variation in substituting the stipulated MS painted polls as per specifications, with Galvanised Octagonal Poles, though Octagonal Poles are more durable and safe. WPC No.13419/2013 :6: The 3rd respondent further submitted that the petitioner quoted higher rates for certain items in excess of the rates quoted by the 3rd respondent.
7. The writ petitioner decided to use Galvanised Octagonal Poles made out of galvanised iron instead of MS tubular type. This variation has not been approved by the 2nd respondent. The 3rd respondent has issued the completion certificate in consequence to the completion certificate issued by the 2nd respondent. However, the 2 nd respondent has not yet approved the bill for variations and additions and extras.
8. On 24.03.2014, this Court passed an interim order directing the 2nd respondent to forthwith pay to the 3 rd respondent the amount claimed in the final bill submitted by the 3rd respondent expeditiously.
9. The 3rd respondent filed an additional counter affidavit dated 20.07.2016 wherein it has been stated that the writ petitioner has no right to claim amount of ₹52,32,312.63. The petitioner is eligible for only an amount WPC No.13419/2013 :7: of ₹7,19,628/-. The company issued a request to the 2 nd respondent to settle the final bill of the company for enabling the company to settle the amount to the sub contractor in order to comply with the interim direction of this Court. The 2nd respondent issued Ext.R3(e) letter wherein it was stated that the 3rd respondent is entitled for only an amount of ₹7,19,628/-.
10. The 2nd respondent filed a one page statement in the writ petition. The 2nd respondent took a technical approach and stated that neither the 2nd respondent nor Kollam Corporation are parties to Ext.P2 agreement and therefore the petitioner has no locus standi to raise any claim against the 2nd respondent.
11. Heard learned counsel for the petitioner, learned Government Pleader appearing for the 1st respondent, learned Standing Counsel appearing for the 2 nd respondent and the learned counsel appearing for the 3rd respondent.
12. The basic facts in the writ petition are not in dispute, though the exact amount payable by the 2 nd WPC No.13419/2013 :8: respondent is disputed. The 3rd respondent-Company is a Government of Kerala undertaking. The 3rd respondent undertook the work of 2nd respondent- Kerala Sustainable Urban Development Project of Kollam Corporation, the work being Street Lighting-Kollam. It was a project implemented with the assistance of Asian Development Bank. As the 3rd respondent had no expertise in doing the work, the 3rd respondent entered into Ext.R3(a) agreement with the petitioner.
13. The petitioner carried out the work. But, while carrying out the work, the petitioner used Galvanised Octagonal Poles instead of the original specification of MS painted poles. It is not in dispute that the Galvanised Octagonal Poles used and installed by the petitioner is costlier and more durable. However, variation permit was necessary as there was change in specifications.
14. Ext.P1 is the purchase order issued by the 3 rd respondent to the petitioner for ₹1,11,52,500/-. Ext.P2 is the Articles of Agreement between the 3 rd respondent and WPC No.13419/2013 :9: the petitioner. Payment Terms for the Supply and Installation as per Ext.P2, are as follows:-
"On progress of supply: 75% of the payment from KSUDP on the basis of supply value assessed by Engineer-in-charge shall be passed on to the Hi- Elect Enterprises.
On Progress of erection: 75% of the amount for the completed work, less initial payment till date shall be paid on final completion of the entire suppliers and installation work under contract, for which payments are claimed.
On taking over: 100% of the contract amount, less amount already paid and security deposits due, and retention money if any, shall be paid on completion of testing, trail run and satisfactory commissioning of the installation and issued of the final completion certificate and on acceptance of the same by UNITED ELECTRICAL INDUSTRIES LTD, after obtaining the clearance from the Electrical Inspectorate.
Refund of Security: 10% of the payment from first payment to each payment upto a maximum 10% of the contract amount is kept as retention money. The retention money can be refunded on the basis of Bank Guarantee issued by a Nationalized Bank infavour of United Electrical Industries Ltd., which is valid for period of one year form the date of execution of Bank Guarantee."
15. One Objection now raised by the 3rd respondent in these proceedings is that the petitioner has substituted MS Painted Poles with Galvanized Octagonal Poles without WPC No.13419/2013 : 10 : approval for variation.
16. The 3rd respondent, as per Ext.P3, has certified that the work mentioned was completed on 31.12.2011 and handed over on 30.06.2012. The 3rd respondent has further certified that there have been no material deviations from the sanctioned plans and specifications other than those sanctioned by the competent authority.
17. In view of Ext.P3 Completion Certificate issued by the 3rd respondent and Ext.R3(b) Completion Certificate issued by the 2nd respondent, it is evident that respondents 2 and 3 were satisfied that the work has been completed satisfactorily, the site with completed work was handed over by the petitioner and there was no material deviation.
18. The 2nd respondent-KSUDP has issued Ext.R3(b) certifying that the work mentioned was completed on 31.12.2011 and handed over on 30.06.2012 and further that there have been no material deviations from the sanctioned plans and specifications other than those sanctioned by the competent authority. The 3 rd WPC No.13419/2013 : 11 : respondent has stated in its counter affidavit dated 23.09.2013 that Galvanized Octagonal Poles are claimed as more durable and safe. The 2 nd respondent has not disputed this fact. The petitioner is not claiming any higher amount for the better and costlier Poles used. Therefore, going through Exts.P3 and R3(b), the only conclusion possible is that substitution of poles by using better material is with the sanction of respondents 2 and 3. If variation order in this regard is to be passed, it has to be passed by the 2nd respondent, taking into account the fact that better material has been used and if the deviation, if any, is made, it is with the sanction of the competent authority, as certified in Exts.P3 and R3(b). The petitioner is therefore entitled to receive the balance amount as per the contract.
19. Ext.P4 would show that the petitioner has received only ₹60,42,998/- towards the contractual amount. Therefore, the contract amount being ₹1,11,52,500/- as is evident from Ext.P1, the petitioner has yet to be paid the WPC No.13419/2013 : 12 : balance amount which will be more than ₹51 lakhs.
20. As regards the amount payable to the petitioner, Ext.P1 of the 3rd respondent would show that the total purchase value is `1,11,52,500/-. The petitioner has admitted receipt of `60,42,998/- in Ext.P4. Going by Exts.P1 and P4, the balance payable would be `51,09,502/-, subject to statutory deductions, if any. However, by Ext.R3(e), the 3rd respondent has taken a stand that the balance due is `4,14,430/- only.
21. Ext.P8 of the 3rd respondent would indicate that the amount payable to the petitioner is `67,80,387/-. This amount outstanding must necessarily be as on 27.05.2014, the date of Ext.P8. In Ext.P8, the 3 rd respondent again deducted `59,65,252/- from the outstanding of `67,80,387/-, stating that `59,65,252/- is already paid to the petitioner. The outstanding of `63,79,682/- being after adjusting the amounts already paid to the petitioner, the further deduction of `59,65,252/- therefrom can only be an WPC No.13419/2013 : 13 : arithmetical mistake. The balance payable to the petitioner, indeed is much higher than `4,14,430/-.
22. Another reason for not settling the Bill of the petitioner, advanced by the 3 rd respondent, is that in the invoice submitted by KSUDP, the total value of work executed by the Company is shown as ₹94,07,794/-. This is for the reason that the KSUDP has not approved the Bill for extra items. In fact, the Team leader of KSUDP as per Ext.P11 has required the 2nd respondent for approval for the substituted street poles and extra items. The 2 nd respondent is bound to consider whether the extra items were necessary for the work and whether actually used by the contractor and take an informed decision. The 2 nd respondent may accept or refuse payment for extra items, but it should be for reasons recorded. Without considering these aspects, the 2nd respondent just cannot sit on the bills and say that those are not approved.
23. In the afore circumstances, respondents 2 and 3 are directed to process the Final Bill of the petitioner in the WPC No.13419/2013 : 14 : light of the observations made hereinabove, within a period of four weeks and pay the balance amount to the petitioner within a further period of four weeks.
The writ petition is disposed of with the above directions.
Sd/-
N. NAGARESH, JUDGE aks/23.11.2020 WPC No.13419/2013 : 15 : APPENDIX PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE WORK ORDER DATED 1.10.2009 EXHIBIT P2 TRUE COPY OF THE ARTICLES OF AGREEMENT DATED 7-10-2009.
EXHIBIT P3 TRUE COPY OF THE COMPLETION CERTIFICATE DATED 30-6-2012 ISSUED BY THE 3RD RESPONDENT.
EXHIBIT P4 TRUE COPY OF THE FINAL BILL DATED 2- 7-12 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.
EXHIBIT P5 TRUE COPY OF THE LETTER DATED 5.3.13.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 15.3.13.
EXHIBIT P7 TRUE COPY OF THE LETTER DATED 29.4.13.
EXHIBIT P8 THE TRUE COPY OF THE LETTER DATED 27.5.2014 ISSUED BY THE 3RD RESPONDENT.
EXHIBIT P9 THE TRUE COPY OF THE LETTER DATED 18.2.2010 ISSUED BY THE 2ND RESPONDENT UNEQUIVOCALLY ACCEPTED THE VARIATIONS WITH THE REPORT OF THE CONSTRUCTION SUPERVISION ENGINEER.
EXHIBIT P10 THE TRUE COPY OF THE LETTER DATED 26.3.2010 ISSUED BY THE 2ND RESPONDENT UNEQUIVOCALLY ACCEPTED THE VARIATIONS WITH THE REPORT OF THE CONSTRUCTION SUPERVISION ENGINEER.
WPC No.13419/2013: 16 : EXHIBIT P11 THE TRUE COPY OF THE LETTER DATED 18.5.2010 ISSUED BY THE 2ND RESPONDENT UNEQUIVOCALLY ACCEPTED THE VARIATIONS WITH THE REPORT OF THE CONSTRUCTION SUPERVISION ENGINEER.
EXHIBIT P12 THE TRUE COPY OF THE LETTER DATED 4.6.2010 ISSUED BY THE 2ND RESPONDENT UNEQUIVOCALLY ACCEPTED THE VARIATIONS WITH THE REPORT OF THE CONSTRUCTION SUPERVISION ENGINEER.
EXHIBIT P13 THE TRUE COPY OF THE CHEQUE DATED 25.4.2014.
RESPONDENTS' EXHIBITS:
EXHIBIT R3(A) TRUE COPY OF THE AGREEMENT DATED 18.4.2009 BETWEEN WRIT PETITIONER AND 3RD RESPONDENT.
EXHIBIT R3(B) TRUE COPY COMPLETION CERTIFICATE WITH DETAILED REPORT AS ON 30.06.2012 ISSUED BY THE KSUDP TO THE 3RD RESPONDENT.
EXHIBIT R3(C) TRUE COPY OF THE LETTER DATED 25.04.2014 ISSUED TO THE WRIT PETITIONER.
EXHIBIT R3(D) TRUE COPY OF THE SHOW CAUSE NOTICE No.62/2014 DATED 15-05-2014 RECEIVED FROM THE OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX.
EXHIBIT R3(E) TRUE COPY OF THE LETTER DATED 22.4.2014, INVOICE AND THE CORRECTED C.C.III AND FINAL BILL RETURNED BY THE KSUDP.
EXHIBIT R3(F) TRUE COPY OF THE LETTER DATED
27.5.2014, WITH THE STATEMENT OF
ACCOUNTS SENT TO THE WRIT
PETITIONER.
WPC No.13419/2013
: 17 :
EXHIBIT R3(G) TRUE COPY OF THE CONTEMPT NOTICE
ISSUED THROUGH THE COUNSEL OF THE
WRIT PETITIONER.
EXHIBIT R3(H) TRUE COPY OF THE REPLY NOTICE DATED
10.07.2014 TO THE CONTEMPT NOTICE
ISSUED THROUGH THE COUNSEL OF THE
3RD RESPONDENT COMPANY.
EXHIBIT R3(I) TRUE COPY OF THE JUDGMENT IN
CONTEMPT CASE NO.1060 OF 2014 DATED
7.8.2014.