Indian Kanoon - Search engine for Indian Law

8. The Corporation also contended that no bills were submitted by the Contractor but it was the Engineer-in-Charge who passed the bill for Rs.4,19,302/-. It was, however, admitted that the final bill was sent to the Head quarter for payment on queue basis. The relevant portion of the written statement reads as under:

"5. However, it is submitted that bills were not submitted by the plaintiff and the bill for work order no.437 dated 30.9.13 were passed on 13.12.13 for Rs.4,99,778/- (gross) net amount was passed for Rs.4,19,302/-. The same was sent to the Head quarter for payment on Queue basis vide demand no.297/19 dated 16.1.14. It is submitted that the security amount can only be paid after payment of final bill that too when the contractor applied for refund of security amount and make necessary formalities in this regard, including submission of clearance certificate from the labour officer as per clause 45 of the General Terms and conditions of the tender documents. It is submitted that the plaintiff is not entitled for refund of security for non-compliance of clause 45 of the General Terms and conditions as per clause 17 of the said conditions. The security amount shall not be refunded before expiry of one year from the date of completion"

Question No.2 - Refund of Security deposit

58. In respect of each work order, the Contractors have to deposit 10% as the security deposit at the initial stage. Upon the payment of the final bill and after issuance of labour clearance certificate, the security deposit is liable to be refunded. The Contractors have, in some of the appeals included the security deposit amount in the principal amount claimed and in some other cases the refund of security deposit has been sought for separately. In either case, there is no doubt that the security deposit is liable to be refunded after the submission of the documents, certificates from the Labour Officer. Clause 17 and Clause 45 relating to refund of security deposit reads as under:

CLAUSE 45 Release of Security deposit after labour clearance :

Security Deposit of the work shall not be refunded till the contractor produces a clearance certificate from the Labour Officer. As soon as the work is virtually complete the contractor shall apply for the clearance certificate to the Labour Officer under intimate on to the Engineer-in-Charge. The Engineer- in-Charge on receipt of the said communication, shall write to the Labour Officer to intimate if any complaint is pending against the contractor in respect of the work. If complaint is pending on record till after 3 months after completion of the work and/or no communication is received from the Labour Officer to this effect till six months after the date of completion it will be deemed to have received the clearance certificate and the security Deposit will be released if otherwise due."

60. A perusal of all the aforementioned Clauses reveals that:

a) For refund of security deposit, a clearance certificate is needed from the Labour Officer;

b) Once the work is completed, the Contractor would apply for the clearance certificate under intimation to the Engineer-in-Charge;

c) The Engineer-in-Charge has to communicate to the Labour Officer if there is any complaint in respect of the work executed;

d) If after completion of the work, 3 months have elapsed and no communication is received, after date of completion, there is a deemed clearance certificate and the security deposit is liable to be released.