Babu S v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **WEDNESDAY, THE 27TH DAY OF JANUARY 2021/7TH MAGHA, 1942** ## **WP(C).No.30886 OF 2015(I)** ## **PETITIONER:** **BABU S, AGED 54 YEARS, S/O.SELVANOSE, B.C.HOUSE, EDACODE, NEMOM PO, THIRUVANANTHAPURAM-695 020. BY ADV. SRI.B.KRISHNA MANI RESPONDENTS:** |**1**|**STATE OF KERALA,**| |---|---| ||**REP. BY SECRETARY,**| ||**WATER RESOURCE (IRRIGATION-MI) DEPARTMENT,**| ||**THIRUVANANTHAPURAM-695001.**| |**2**|**SUPERINTENDING ENGINEER,**| ||**MINOR IRRIGATION CIRCLE,**| ||**AMBALAMUKKU, KOWDIAR,**| ||**THIRUVANANTHAPURAM-695003**| |**3**|**THE CHIEF ENGINEER,**| ||**IRRIGATION DEPARTMENT,**| ||**THIRUVANANTHAPURAM-695001**| |**4**|**CENTRAL BANK OF INDIA,**| ||**TC 28/885-5, CSI BUILDING, M.G.ROAD,**| ||**THIRUVANANTHAPURAM-695 001.**| |**5**|**KALLIYOOR GRAMA PANCHAYAT,**| ||**REPRESENTED BY ITS SECRETARY,**| ||**KALLIYOOR, THIRUVANANTHAPURAM-695 042.**| ||**R4 BY ADV. SRI.K.M.ANEESH**| ||**R4 BY ADV. SRI.ADARSH KUMAR**| ||**R4 BY ADV. SRI.BIJU VARGHESE ABRAHAM**| ||**R1 BY ADV. SRI.DEVAN RAMACHANDRAN**| WPC No.30886/2015 : 2 : **R4 BY ADV. SRI.DILEEP CHANDRAN R5 BY ADV. SRI.R.GOPAN R4 BY ADV. SRI.K.SANTHOSH KUMAR KALIYANAM R1-3 BY GOVT.PLEADER SMT. DEEPA NARAYANAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27-01-2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WPC No.30886/2015 : 3 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.30886 of 2015 ````````````````````````````````````````````````````````````` _Dated this the 27[th] day of January, 2021_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioner, who is a Government Contractor with Class-A grading, is before this Court seeking to direct respondents 1 to 3 to admeasure Ext.P1 work completed by him and to effect payment of amounts for the same and to allow him to participate in the proposed re-tender proceedings. 2. The petitioner states that he was the successful bidder and was entrusted with the work of “NABARD assisted Scheme under RIDF – XVIII – improvements and Side Protection Works to Nedinjil Ela Thodu from upstream of KWA Pump House to Vellayani lake in Kalliyoor Panchayat”. The petitioner executed Ext.P1 agreement. He deposited WPC No.30886/2015 : 4 : ₹50,000/- in cash and ₹1,00,000/- worth National Savings Certificates as security. Under Ext.P1, the petitioner had to execute 18 items of work, with an estimated cost of ₹44,79,163/-. 3. Though the petitioner commenced work, after four months, local people under the leadership of Nemom Block Member objected and resisted the work. They demanded realignment of the route. The petitioner was compelled to stop the work immediately. The petitioner informed the issue to respondents 2 and 3 and requested to take necessary remedial action. The petitioner had availed a loan of ₹25 lakhs from the 4[th] respondent, to execute the work. There was a delay in payment of bills for the work executed by the petitioner. 4. The petitioner repeatedly required respondents 2 and 3 to take necessary action to subdue people's protest so that the petitioner can carry on with the work. Ext.P3 series of representations were submitted by the petitioner in this regard. The petitioner submits that he could not proceed WPC No.30886/2015 : 5 : with the work due to the obstructions from local people. The petitioner was not at fault in any manner. The 2[nd] respondent has cleared only ₹11,72,440/- of his bill amount. Balance amounts are outstanding. In the meanwhile, the 2[nd] respondent has taken steps to re-tender the work by forfeiting the security deposit given by the petitioner. It is under such circumstances that the petitioner has approached this Court. 5. The 2[nd] respondent opposed the writ petition filing counter affidavit. The 2[nd] respondent stated that the resistance on the part of the local people was confined to only a small area. The remaining portions were free from issues. A few coconut trees standing were not an obstruction to execute the work. In spite of the availability of hindrance free site, the petitioner did not continue execution of the work. The Department sent repeated reminders to the petitioner to proceed with the remaining work. He did not respond to. On the other hand, the petitioner extended lame excuses. It was under such circumstances that respondents WPC No.30886/2015 : 6 : 1 to 3, on 20.09.2014, decided to terminate the contract with the petitioner at the risk and cost of the contractor. 6. The learned counsel for the petitioner argued that the petitioner could not have proceeded with the work due to the obstructions and resistance of the local people. The respondents were informed of the same. The respondents did not do anything to get the obstructions removed. Therefore, non-completion of the work is not due to the fault of the petitioner. The learned counsel for the petitioner further submitted that the proposed recovery of the cost from the petitioner is unsustainable. The respondents can recover only adjudicated amounts. Relying on a Division Bench judgment of this Court in _**Ponnappan K.A. v. DFO, Chalakudy and others** [1984 KLJ 853]_ , the learned counsel for the petitioner argued that only a determined amount can be recovered from the petitioner. What is sought to be realised is not liquidated damages. 7. Relying on the judgment of this Court in _**State of Kerala v. Universal Marine Agencies** [1980 KLT 187]_ , the WPC No.30886/2015 : 7 : learned counsel for the petitioner argued that as long as there is no adjudication of damages caused by the petitioner due to the alleged violation of contract, there cannot be any recovery. The action of the respondents in forfeiting the security deposit made by the petitioner is highly arbitrary and illegal. 8. I have heard the learned counsel for the petitioner and learned Government Pleader representing respondents 1 to 3. 9. It is evident from the pleading that there was some objection from local people regarding construction in a specific area of the Thodu. In the remaining portions, there was no obstruction at all. The respondents have stated that the petitioner was required to go ahead with the work. Letters were sent to the petitioner by the Department. The petitioner, however, did not resume work. Taking into consideration the importance of the work and seriousness of the matter, the respondents decided to terminate the contract and re-tender the work. WPC No.30886/2015 : 8 : 10. Part bill submitted by the petitioner for ₹13,76,122/- has already been settled and paid to the petitioner. The petitioner received the amount for the work done on 12.12.2013. It has also come out that a final notice was sent to the petitioner to resume and complete the work on 25.04.2014. Still, the petitioner did not resume the work. In the circumstances, this Court do not find any illegality or arbitrariness in the decision of the respondents to terminate the contract and re-tender the work. 11. The termination of the contract at the risk and cost of the contractor is for the failure of the Contractor to execute the work. Termination at risk and cost, is a part of the terms of contract. When a contract is terminated at the risk and cost of the existing contractor, the loss due to the termination will be calculated after re-tendering of the work and after calculating the actual loss suffered by the Government due to re-tender. Such amounts which would be evident from the records will ordinarily be indisputable. The petitioner therefore cannot take a stand that recovery can be made WPC No.30886/2015 : 9 : only after adjudication of the dues by a competent court. The petitioner has agreed and signed the contract which contains a risk and cost clause. The judgments relied on by the petitioner would not be of any help to the petitioner. 12. In the circumstances, this Court finds no reason to interfere with the re-tender proceedings proposed by respondents 1 to 3. If the petitioner has any claim for outstanding amounts to him from respondents 1 to 3, the petitioner will be at liberty to resort to appropriate legal proceedings. With the above observations, the writ petition is dismissed. Sd/- **N. NAGARESH, JUDGE** aks/25.01.2021 WPC No.30886/2015 : 10 : ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE AGREEMENT DATED 22.4.2013 AND SCHEDULE OF WORK EXHIBIT P2 TRUE COPY OF THE POWER OF ATTORNEY EXECUTED IN FAVOUR OF THE 4TH RESPONDENT** **EXHIBIT P3 TRUE COPY OF THE LETTER DATED 12.3.2014 SUBMITTED BEFORE THE 2ND RESPONDENT** **EXHIBIT P3(A) TRUE COPY OF THE LETTER DATED 5.11.2014 SUBMITTED BEFORE THE 3RD RESPONDENT EXHIBIT P3(B) TRUE COPY OF THE LETTER DATED 26.6.2015** ## **RESPONDENTS' EXHIBITS:** **EXHIBIT R2(A)** **A TRUE COPY OF THE SKETCH SHOWING THE ALIGNMENT OF COCONUT TREES IN THE PROJECT AREA.** SR