Kerala High Court
Ozone Granites Private Limited vs Dmrc Kochi Metro Project on 18 November, 2020
Author: V.G.Arun
Bench: V.G.Arun
WP(C).18574 OF 2018
and connected cases 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
WEDNESDAY, THE 18TH DAY OF NOVEMBER 2020 / 27TH KARTHIKA, 1942
WP(C).No.18574 OF 2018(V)
PETITIONER/S:
OZONE GRANITES PRIVATE LIMITED
VPI/427 MANKUZHY, WEST VENGOLA POST,PERUMBAVOOR,
ERNAKULAM REPRESENTED BY ITS MANAGING PARTNER P M
BASHEER, SON OF MUSTHAFA, AGED 48 YEARS, VPI/427
MANKUZHY, WEST VENGOLA POST, PERUMABVOOR, ERNAKULAM
BY ADV. SRI.JOSE TOM C. KANDATHIL
RESPONDENT/S:
1 DMRC KOCHI METRO PROJECT
2ND FLOOR, GCDA EASTERN ENTRY TOWER,ERNAKULAM SOUTH
RAILWAY STATION, KOCHI 682 016
2 MS ERA ENGINEERING LIMITED ERA RANKEN IV
KOCHI METRO PROJECT, VYTTILA KOCHI 682
019REPRESENTED BY ITS PROJECT HEAD
R1 BY SMT.LATHA ANAND, SC, DELHI METRO RAIL CORPN.
R1-2 BY ADV. SRI.P.S.BIJU
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
7.7.2020, ALONG WITH WP(C).20568/2018(U), WP(C).12463/2019(G),
THE COURT ON 18.11.2020 DELIVERED THE FOLLOWING:
WP(C).18574 OF 2018
and connected cases 2
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
WEDNESDAY, THE 18TH DAY OF NOVEMBER 2020 / 27TH KARTHIKA, 1942
WP(C).No.20568 OF 2018
PETITIONER/S:
M/S. JVJ PROJECTS PVT LTD
48/821-A (OLD NO. 30/1588 B1) NEELAMURI (NH) LANE,
PONNURUNNI, VYTTILA, KOCH-682019. KERALA, INDIA
REPRESENTED BY ITS MANAGING DIRECTOR V.J. JOSEPH.
BY ADVS.
SRI.S.EASWARAN
SRI.M.A.AUGUSTINE
SRI.P.MURALEEDHARAN (IRIMPANAM)
SMT.P.A.MENISHA
SMT.SOUMYA JAMES
SRI.P.SREEKUMAR (THOTTAKKATTUKARA)
RESPONDENT/S:
1 DMRC KOCHI METRO PROJECT
GCDA EASTERN ENTRY TOWER, ERNAKULAM SOUTH RAILWAY
STATION, KOCHI-682 016, REPRESENTED BY ITS CHIEF
ENGINEER
2 MS. ERA ENGINEERING LIMITED ERA RANKEN JV KOCHI
METRO PROJECT, VYTTILA, KOCHI-682019, REPRESENTED
BY ITS PROJECT HEAD
R1 BY SMT.LATHA ANAND, SC, DELHI METRO RAIL CORPN.
R1-2 BY ADV. SRI.P.S.BIJU
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
7.7.2020, ALONG WITH WP(C).18574/2018(V), WP(C).12463/2019(G),
THE COURT ON 18.11.2020 DELIVERED THE FOLLOWING:
WP(C).18574 OF 2018
and connected cases 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
WEDNESDAY, THE 18TH DAY OF NOVEMBER 2020 / 27TH KARTHIKA, 1942
WP(C).No.12463 OF 2019(G)
PETITIONER/S:
M/S.SHIKHA METALS (P) LTD.
7/570A, KUNDANOOR, N H BYE PASS, KOCHI-682304.
BY ADVS.
SRI.JOJU KYNADY
SRI.TOM THOMAS (KAKKUZHIYIL)
RESPONDENT/S:
1 DMRC KOCHI METRO PROJECT,
REPRESENTED BY ITS CHIEF ENGINEER, 2ND FLOOR, GCDA
EASTERN ENTRY TOWER, ERNAKULAM SOUTH RAILWAY
STATION, KOCHI-682019.
2 M/S.ERA ENGINEERING LIMITED (ERA RANKEN JV),
REPRESENTED BY ITS PROJECT HEAD, KOCHI METRO
PROJECT, VYTTILA, KOCHI-682019.
R1 BY ADV. SMT.LATHA ANAND
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
7.7.2020, ALONG WITH WP(C).18574/2018(V), WP(C).20568/2018(U),
THE COURT ON 18.11.2020 DELIVERED THE FOLLOWING:
WP(C).18574 OF 2018
and connected cases 4
V.G.ARUN, J.
-----------------------------------------------
W.P(C).Nos.18574 & 20568 of 2018
&
12463 of 2019
-----------------------------------------------
Dated this the 18th day of November, 2020
JUDGMENT
The Delhi Metro Rail Corporation (DMRC) had entered into a contract with Era-Ranken JV (a Joint Venture) for the construction of certain portion of the Kochi Metro Project. Era-Infrastrtucture Engineering Ltd. (EIEL), one of the partners in the Joint Venture and in charge of the construction, had entered into agreements with the petitioners. The agreement with the petitioner in W.P(C).No.20568 of 2018 is for piling and the other civil works, with the petitioner in W.P(C).No.18574 of 2018 for the supply of crushed materials and the petitioner in W.P(C).No.12463 of 2019 for supply of steel and other materials.
2. Heard learned counsel for the petitioners and the learned Standing Counsel for the DMRC.
3. Leading the arguments on behalf of the petitioners, learned counsel Sri.S.Easwaran submitted that even though the agreements were entered into between the petitioners and EIEL, the construction work and supply of materials undertaken by the petitioners being for WP(C).18574 OF 2018 and connected cases 5 the Kochi Metro Rail Project, the DMRC is under an obligation to ensure payments for the work done and materials supplied by the petitioners. Relying on the exhibits in W.P(C).No.20568 of 2018, it is contended that at the request of Era-Ranken JV direct payment had been effected by the DMRC on earlier occasions. A further sum of Rs.83,88,083/- being due towards the works done, the DMRC is bound to make the balance payment also. Exhibit P1 in W.P(C).No.12463 of 2019 is a letter issued by the DMRC assuring direct payment for the materials supplied.
4. A statement has been filed on behalf of the DMRC, contending that there is no privity of contract between DMRC and the petitioners and that the prayer in the writ petition being in the nature of a monetary claim, cannot be agitated in a writ petition filed under Article 226 of the Constitution of India. It is stated that Era-Ranken JV, with whom DMRC had entered into the construction agreement, consists of two entities, namely, EIEL and a Chinese Company by name, M/s.Chengdu Ranken Railway Construction Group Company Ltd. The petitioners are contractors engaged by Era-Ranken JV and at the request of Era-Ranken JV, some amounts were paid to the petitioners directly. Among the two partners in the joint venture, EIEL is undergoing corporate insolvency proceedings. As per order dated 8.5.2018 of the NCLT an Insolvency Resolution Professional (IRP) is put in charge of its affairs and moratorium under Section 14 of the WP(C).18574 OF 2018 and connected cases 6 Insolvency and Bankruptcy Code has also been declared. It is pointed out that in terms of the contract entered into between DMRC and Era- Ranken JV, a bank guarantee of Rs.17,09,12,913/- was submitted as security, which has been encashed by the DMRC and an amount of Rs.41,61,465/- retained as security deposit for realisation of the amounts due. It is stated that going by the estimates, the amount due from Era-Ranken JV is likely to exceed the amount retained as security deposit.
5. Learned counsel for the DMRC reiterated the contention of there being no privity of contract between the DMRC and the petitioners, and of the writ petitions being not maintainable. Reliance is placed on the decisions of the Honourable Supreme Court in State of U.P and Others v. Bridge & Roof Co.(India) Ltd. [AIR 1996 SC 3515], Kerala State Electricity Board and Others v. Kurien E. Kalathil and Others [AIR 2000 SC 2573] and National Highway Authority of India v. Ganga Enterprises and Others [AIR 2003 SC 3823], in support of the contention that contractual disputes cannot be resolved in writ petition filed under Article 226 of the Constitution of India.
6. The learned counsel for the petitioners contended that, there being no dispute with regard to the amounts due towards bills raised by the petitioners, the writ petitions are maintainable. Referring to Exhibit P10 in W.P(C).No.20568 of 2018, it is contended that the WP(C).18574 OF 2018 and connected cases 7 insolvency proceedings need not stand in the way of the petitioners' bills being honoured, since, going by the terms of the joint venture agreement, EIEL has only a limited role in the contract awarded by the DMRC. It is also contended that in spite of the insolvency proceedings, direct payments had been effected by the DMRC and hence the moratorium declared by the NCLT cannot be urged as a reason for denying payment to the petitioners.
7. On consideration of the rival contentions, I find the contention of there being no privity of contract between DMRC and the petitioners to be well-founded. The mere fact that on the request of EIEL, some amounts were directly paid to the petitioners is not sufficient to hold the DMRC liable for the balance payments. As per the terms of the agreements entered into between the petitioner and EIEL, the amounts due to the petitioners is to be paid by EIEL. For the default committed by the said Company, the DMRC cannot be made liable, unless the bills are cleared and a request for direct payment made by EIEL and accepted by the DMRC.
8. In the decisions cited by the learned counsel for the DMRC, the Apex Court has reiterated the settled position that the remedy for violation of a term of contract is not under Article 226 of the Constitution of India. In Kurien E.Kalathil's case (supra), the Apex Court observed that a contract would not become statutory simply because it is for construction of a public utility and was awarded by a WP(C).18574 OF 2018 and connected cases 8 statutory body and that like private parties, the statutory bodies also have power to contract or deal with property.
9. The above being the legal position, the prayer for payment of the amounts due to the petitioners by the DMRC is liable to be rejected. The petitioners will have to resort to their statutory and common law remedies for realisation of the amounts.
In the result, the writ petitions are dismissed. No order as to costs.
Sd/-
V.G.ARUN, JUDGE vgs WP(C).18574 OF 2018 and connected cases 9 APPENDIX OF WP(C) 18574/2018 PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF TRUE COPIES OF THE LETTER OF INTENT DATED 1-3-2014, 13-10-2014 AND 31- 10-2014 EXHIBITP2 TRUE COPY OF THE PURCHASE ORDER DATED 13-3- 2015 EXHIBIT P3 TRUE COPY OF THE PURCHASE ORDER DATED 2-3- 2017 EXHIBIT P4 TRUE COPY OF THE STATEMENT OF ACCOUNT OF THE PETITIONER WITH SOUTH INDIAN BANK EXHIBITP5 TRUE COPY OF THE STATEMENT OF ACCOUNT OF THE PETITIONER WITH FEDERAL BANK EXHIBITP6 TRUE COPY OF THE LETTER DATED 23-10-2017 ISSUED BY THE SECOND RESPONDENT WP(C).18574 OF 2018 and connected cases 10 APPENDIX OF WP(C) 20568/2018 PETITIONER'S/S EXHIBITS:
EXHIBITS P1 COPY OF WORK ORDER DATED 12.12.2015 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER EXHIBIT P2 COPY OF COMMUNICATION DATED 24.10.2016 ISSUED BY THE 2ND RESPONDENT TO THE 1ST RESPONDENT EXHIBIT P3 COPY OF STATEMENT SHOWING THE DATE OF PAYMENT AND THE AMOUNT PAID BY THE 1ST RESPONDENT THROUGH THE ACCOUNT OF THE PETITIONER EXHIBIT P4 COPY OF REPRESENTATION DATED 22.7.2017 ADDRESSED TO THE CHIEF ENGINEER OF THE 1ST RESPONDENT BY THE PETITIONER EXHIBIT P4(A) COPY OF STATEMENT OF STATUS OF OUTSTANDING DUE FROM THE 2ND RESPONDENT AS ON 22.7.2017 EXHIBIT P5 COPY OF COMMUNICATION DATED 05.08.2017 ISSUED BY THE 2ND RESPONDENT EXHIBIT P6 COPY OF ORDER DATED 31.8.2017 IN W.P.(C) NO. 27338 OF 2017 EXHIBIT P7 COPY OF AGREEMENT DATED 20.9.2017 EXECUTED BETWEEN THE PETITIONER OAND THE 2ND RESPONDENT EXHIBIT P8 COPY OF JUDGMENT DATED 8.11.2017 W.P.C. NO.
27338 OF 2017 EXHIBIT P9 COPY OF REPRESENTATION DATED 3.5.2018 ALONG WITH THE STATEMENT OF ACCOUNT SUBMITTED BY THE PETITIONER BEFORE 1ST RESPONDENT EXHIBIT P10 A COPY OF THE REVISED INTIMATION DATED JUNE 15,2018 ISSUED BY THE INTERIM INSOLVENCY PROFESSIONAL FOR ERA INFRA ENGINEERING LIMITED TO THE 1ST RESPONDENT WP(C).18574 OF 2018 and connected cases 11 APPENDIX OF WP(C) 12463/2019 PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF LETTER DATED 20.12.2017.
EXHIBIT P2 TRUE COPY OF PURCHASE ORDER DATED 15.03.2018.
EXHIBIT P3 TRUE COPIES OF INVOICES RAISED BY THE PETITIONER.
EXHIBIT P4 TRUE COPY OF LETTER DATED 20.09.2018. EXHIBIT P5 TRUE COPY OF LETTER DATED 25.02.2019. EXHIBIT P6 TRUE COPY OF LETTER DATED 08.04.2019. EXHIBIT P7 TRUE COPY OF LETTER DATED 26.02.2019. EXHIBIT P8 TRUE COPY OF ACCOUNT STATEMENT SHOWING BALANCE DUE AMOUNT AS RS.87,35,958.00.