M/S. CHERIAN VARKEY CONSTRUCTION COMPANY PRIVATE LIMITED v KERALA STATE COASTAL AREA DEVELOPMENT CORPORATION LIMITED and others

# `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ``` THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN TUESDAY, THE 19[TH] DAY OF MARCH 2024 / 29TH PHALGUNA, 1945 ``` ``` WP(C) NO. 1809 OF 2024 ``` ## `PETITIONER:` ``` M/S. CHERIAN VARKEY CONSTRUCTION COMPANY PRIVATE LIMITED, 5TH FLOOR, ALPHA PLAZA, KP VALLON ROAD, KADAVANTHRA,KOCHI, REPRESENTED BY ITS DIRECTOR, MR. REJI M. CHERIAN, PIN – 682020. ``` ``` BY ADVS. SANTHOSH MATHEW KARTHIKA MARIA ARUN THOMAS SHINTO MATHEW ABRAHAM ANIL SEBASTIAN PULICKEL MATHEW NEVIN THOMAS KURIAN ANTONY MATHEW JOE S. ADHIKARAM ``` ## `RESPONDENTS:` - `1 KERALA STATE COASTAL AREA DEVELOPMENT CORPORATION LIMITED, 1ST FLOOR, CHALACHITHRA KALABHAVAN BUILDING, VAZHUTHACAUD, JAGATHY P.O., THIRUVANANTHAPURAM REPRESENTED BY ITS MANAGING DIRECTOR, PIN – 695014.` ``` 2CHIEF ENGINEER, KERALA STATE COASTAL AREA DEVELOPMENT CORPORATION LIMITED, 1ST FLOOR, CHALACHITHRA KALABHAVAN BUILDING, VAZHUTHACAUD, JAGATHY P.O. THIRUVANANTHAPURAM 695014, PIN – 695014. ``` - `3 HARBOUR ENGINEERING DEPARTMENT GOVERNMENT OF KERALA KAMALESWARAM, MANACAUD P.O., THIRUVANANTHAPURAM 695009 REPRESENTED BY THE CHIEF ENGINEER, PIN – 695009.` - `4 EXECUTIVE ENGINEER, HARBOUR ENGINEERING DEPARTMENT (MALAPPURAM DIVISION) PONNANI NAGARAM P.O., PONNANI MALAPPURAM, PIN – 679583.` - `5 KERALA INFRASTRUCTURE INVESTMENT FUND BOARD` ``` WP(C) NO. 1809 OF 2024 ``` ``` -2- ``` ``` B3 BLOCK, CIVIL STATION RD, UP HILL, MALAPPURAM, KERALA REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER, PIN – 676505. ``` ``` BY ADV. SRI.SUNIL KUMAR KURIAKOSE, GP SRI.NINU M.DAS, SRI.S.CHANDRASEKHARAN NAIR ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -3- ``` ## `JUDGMENT` ``` The petitioner impugns Ext.P12 order issued by the 1[st] respondent, whereby, the request for disbursement of the eligible GST amounts has been rejected, saying that the bid made by them earlier subsumes the same. ``` ``` 2.Sri.Santhosh Mathew, learned Senior ``` ``` Counsel, instructed by Smt.Karthika Maria – learned counsel appearing for the petitioner, vehemently argued that, in fact, the legal ``` ``` issues involved in this case are fully covered ``` ``` against the 1[st] respondent by the declarations of this Court in Ext.P11 judgment, which had been earlier obtained by his client; and that, in any ``` ``` event of the matter, as per Clause 3.3.3, read with Clause 3.3.5 of Ext.P2 agreement between the parties, the 1[st] respondent can never take the stand that the bid amount made by his client ``` ``` took into account the GST component also. ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -4- ``` ``` 3.Sri.Santhosh Mathew argued that, when Clause 3.3.3 of the contract specifies that the bid should be exclusive of the GST, an argument to the afore effect is not merely untenable, but rather mischievous. He reiterated that, when these aspects have already been addressed by this Court in Ext.P11 judgment, it was imprudent on the part of the respondents to restate the very same in Ext.P12, which, he asserted, can only be seen as an affront to the process of law. He thus prayed that Ext.P12 be set aside ``` ``` and the 1[st] respondent be directed to honour the claim made by his client for the eligible GST, within a time frame to be fixed by this Court. ``` ``` 4.Sri.Ninu M.Das – learned Standing Counsel for the 1[st]respondent, however, submitted that Ext.P12 has been issued in conformity with the declarations in Ext.P11 judgment, which factum is evident because, ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -5- ``` ``` Clauses 3.3.3 and 3.3.5 of Ext.P2 render it perspicuous that the GST and any other tax applicable, are to be paid by the contractor; and that it is also made clear therein that, the Government will not entertain any such claim. He explained that this is specified in the contract because, as per Ext.P18 Circular by the Government of Kerala, in case of public works, for which estimates are prepared based on the Delhi Schedule of Rates (DSR), the latest Cost of Indices published by the Public Works Department (PWD) from time to time, excluding the VAT/GST component, is employed to arrive at estimate rates. He asserted that, it is, ``` ``` therefore, that the insistence, that the bid be made without a GST component, is made, since the same is taken into account by the latest Cost Indices published by the PWD; and therefore, that the stipulations in Clause 3.3.3 of the ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -6- ``` ``` contract cannot bring any benefit to the petitioner. He reiterated that the bid processes were designed in such a manner that every tenderer has to make their bids as per the Bill of Quantity (BOQ), excluding the GST, because the Cost Indices published by the PWD at the ``` ``` relevant time subsumed the same. ``` ``` 5.Sri.Ninu M.Das then argued that, when ``` ``` Clause 3.3.3 is read along with Clause 3.3.5 of Ext.P2, it cements the position that the ``` ``` contractor is expected to make his bid without the GST and is then enjoined to pay the same without any contribution from the respondents; thus, their bid was expected to be subsuming the ``` ``` GST component. He thus prayed that this Writ ``` ``` Petition be dismissed. ``` ``` 6.Sri.Sunil Kumar Kuriakose – learned GovernmentPleader,submittedthatthe controversy now impelled is between the ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -7- ``` ``` petitionerand the 1[st] respondent and that the Government cannot be burdened with any liability under the internecine contractual terms. He, however, affirmed that, as per Clause 3.3.5 of ``` ``` Ext.P2, the liability to pay the GST is squarely on the contractor; and therefore, that the petitioner cannot now shy away from the same on technical assertions. He also, therefore, prayed ``` ``` that this Writ Petition be dismissed. ``` ``` 7.I must record upfront that, as rightly ``` ``` argued by Sri.Santhosh Mathew, learned Senior ``` ``` Counsel, most, if not all, forensic issues in ``` ``` this case have been dealt with, adverted to and answered in Ext.P11 judgment, delivered by a learnedJudgeofthisCourtin ``` ``` W.P(C)No.855/2022. It were the terms of Ext.P2 which were dealt with by the learned Judge; and after consideration of all the precedents that cover the field, it was concluded therein that, ``` ## `WP(C) NO. 1809 OF 2024` ``` -8- ``` ``` when admittedly, Clause 3.3.3 thereof mandated the contractor to quote the rates exclusive of GST and when the Department itself directed that they shall do so, they cannot be found fault in having quoted an amount in such manner. ``` ``` 8.In fact, prior to the afore conclusion, the learned Judge also adverted to the contention of the respondents, that Clause 3.3.5 of Ext.P2 obligates the contractor to pay the GST and then entered the affirmative finding that the quoted bid can only be exclusive of the GST. As a matter of fact, this Court had also considered the impact of Ext.P18 herein - which was produced as Ext.P17 in the said Writ Petition - thus directing the respondents to consider the request for payment of GST on all the bills raised by the petitioner, adverting to two other precedents of this Court, namelyCA George v. State of Kerala and Others [2019 (4) ``` ## `WP(C) NO. 1809 OF 2024` ``` -9- ``` ``` KLT online 3268] and Sebastian Jose v. State of Kerala [2015 (5) KLT 445], after affording them an opportunity of being heard. ``` ``` 9.Pertinently, when there is an inter ``` ``` parte judgment covering the area, one fails to understand how the 1[st] respondent, or any other respondents, can now take a stand that it will not apply to them, or that the same is not attracted because, the foundational factual edifice is one and the same. ``` ``` 10.That said, I am also in affirmation with ``` ``` the findings of the learned Judge in Ext.P11 ``` ``` judgment and see no reason at all to differ from ``` ``` them. In any event, this judgment has become ``` ``` final, with the respondents having acted under it to issue Ext.P12. Therefore, it would have ``` ``` been fully justified for this Court to have ``` ``` issued conclusive orders, but I choose not to do so and to give the respondents another chance to ``` ## `WP(C) NO. 1809 OF 2024` ``` -10- ``` ``` act as per the directions in Ext.P11 judgment. ``` ``` In the afore circumstances, I allow this ``` ``` writ petition and set aside Ext.P12; with a resultant direction to the 1[st] respondent to re- ``` ``` consider the request of the petitioner for ``` ``` payment of GST at applicable rates on their bills, adverting to Ext.P18 and the declarations ``` ``` of this Court in CA George (supra) and Sebastian Jose(supra), strictly in compliance with Ext.P11 judgment, after affording an opportunity of being heard to them; thus culminating in an ``` ``` appropriate order and necessary action thereon, as expeditiously as is possible, but not later than one month from the date of receipt of a copy of this judgment. ``` ``` Sd/- ``` ## `DEVAN RAMACHANDRAN` ## `JUDGE` ``` akv ``` ## `WP(C) NO. 1809 OF 2024` ``` -11- ``` ## `APPENDIX OF WP(C) 1809/2024` ## `PETITIONER EXHIBITS` ``` EXHIBIT P1TRUE COPY OF THE NOTICE INVITING TENDER(NIT)VIDENO. 2737/F/KSCADC/2018, DATED 19.06.2019. EXHIBIT P2TRUE COPY OF THE RELEVANT PAGES OF THE INSTRUCTIONS TO THE BIDDERS EXHIBIT P3TRUE COPY OF THE BID DOCUMENT SUBMITTED BY THE PETITIONER EXHIBIT P4TRUE COPY OF THE SELECTION NOTICE DATED 29.12.2019 EXHIBIT P5A TRUE COPY OF THE AGREEMENT DATED 09.01.2020, WITHOUT SCHEDULES, BETWEEN THEPETITIONERANDTHE1ST RESPONDENT . EXHIBIT P6A TRUE COPY OF THE 1ST, 2ND, 3RD, AND 4TH PART BILLS AS PASSED, WITHOUT PAYING THE GST TO THE PETITIONER. EXHIBIT P7TRUE COPY OF THE REPRESENTATION PREFERRED BY THE PETITIONER DATED 29.01.2021 EXHIBIT P8TRUE COPY OF THE LETTER DATED 15.02.2021 SENT BY THE PETITIONER EXHIBIT P9TRUE COPY OF THE LETTER DATED 02.09.2021 SENT BY THE PETITIONER EXHIBIT P10TRUE COPY OF THE LETTER DATED 25.05.2021 SENT BY THE 1ST RESPONDENT TO THE 3RD RESPONDENT EXHIBIT P11TRUE COPY OF THE JUDGEMENT IN WA 855 ``` ``` WP(C) NO. 1809 OF 2024 ``` ``` -12- ``` ``` OF 2022 DATED 18-08-2023 BY THIS HON'BLE COURT ``` - `EXHIBIT P12 TRUE COPY OF THE ORDER 2737/C/KSCADC/2018 DATED 06-10-2023 ISSUED BY THE 1ST RESPONDENT` - `EXHIBIT P13 TRUE COPY OF THE JUDGMENT DATED 18.12.2019 IN W.A.445 OF 2018 BY THE HON'BLE HIGH COURT OF KERALA` - `EXHIBIT P14 TRUE COPY OF THE JUDGMENT, DATED 13.09.2021, BY THIS HON'BLE COURT IN W.P.(C) 11662 OF 2021` - `EXHIBIT P15 TRUE COPY OF THE JUDGEMENT, DATED 22.06.2022 BY THIS HON'BLE COURT IN W.A. 1710 OF 2021` - `EXHIBIT P16 TRUE COPY OF THE JUDGEMENT, DATED 2607-2023 BY THIS HON'BLE COURT IN W.P. (C) 12471 OF 2021 AND W.P.(C) 12454 OF 2021` - `EXHIBIT P17 TRUE COPY OF THE CIRCULAR NO 90/2017/FIN BY FINANCE (INDUSTRIES & PUBLIC WORKS B.) DEPARTMENT DATED 14.12.2017` - `EXHIBIT P18 TRUE COPY OF THE CIRCULAR, NO. 18/2019/FIN, ISSUED BY THE FINANCE (INDUSTRIES & PUBLIC WORKS B.) DEPARTMENT, DATED 01.03.2019,` ## `RESPONDENT EXHIBITS` ``` EXHIBIT R1(A)A TRUE COPY OF THE ADMINISTRATIVE SANCTION ACCORDED VIDE THE PROCEEDINGS OF THE CHIEF EXECUTIVE OFFICER, KIIFB AS PER ORDER NO: FSH006-01/APR- 3/2019/KIIFB DATED 11/02/2019 ``` ## `WP(C) NO. 1809 OF 2024` ``` -13- ``` ``` EXHIBIT R1(B)A TRUE COPY OF THE TECHNICAL SANCTION SLIP UNDER FILE NO.2737/F/2018/KSCADC AND TS NO. 80/PRICE/KSCADC/2018-2019 DATED 15/02/2019 EXHIBIT R1(C)A TRUE COPY OF THE 5 RELEVANT PORTION OF THE DETAILED ESTIMATE FOR THE WORK AS PER COST INDEX OF THE YEAR 2016, PRINTED ON 16/02/2019 ``` - `EXHIBIT R1(D) A TRUE COPY OF THE NIT VIDE NO. 2737/F/KSCADC/2018 AND PQ TENDER NO. ET-76/18-19 ISSUED BY 1 ST RESPONDENT DATED 18/02/2019` - `EXHIBIT R1(E) A TRUE COPY OF THE NIT VIDE NO. 2737/F/KSCADC/2018 AND PQ RE E-TENDER NO. ET-76/18-19 ISSUED BY 1 ST RESPONDENT DATED 19/06/2019` - `EXHIBIT R1(F) A TRUE COPY OF GOVERNMENT ORDER G.O. (RT)NO.635/2019/F` - `EXHIBIT R1(G) A TRUE COPY OF THE GOVERNMENT CIRCULAR NO. 90/2017 DATED 14/12/2017` - `EXHIBIT R1(H) A TRUE COPY OF THE CIRCULAR NO. CE/ADMN/PLA/EMP/1014(A)/05 ISSUED BY OFFICE OF THE CHIEF ENGINEER, PUBLIC WORKS DEPARTMENT DATED 06/03/2019` ``` EXHIBIT R1(I)A TRUE COPY OF THE LETTER NO.A1/190/2021/EEM ISSUED BY THE 4 TH RESPONDENT DATED 28/09/2021 ```