M/S. THOPPIL CONTRACTORS (INDIA) PRIVATE LIMITED v. STATE OF KERALA & ORS.

W.P.(C).No.29625/16 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **THURSDAY, THE 21ST DAY OF MAY 2020 / 31ST VAISAKHA, 1942** **WP(C).No.29625 OF 2016(C)** ## **PETITIONER:** **M/S. THOPPIL CONTRACTORS (INDIA) PRIVATE LIMITED REPRESENTED BY NIZAMUDEEN.A., MANAGING DIRECTOR,THOPPIL BUILDINGS, THOLIKUZHI, ADAYAMON P.O.,KILIMANOOR, THIRUVANANTHAPURAM695 614.** **BY ADV. SRI.AJITH KRISHNAN** ## **RESPONDENTS:** **1 STATE OF KERALA REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT,PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM - 695 001. 2 THE CHIEF ENGINEER PUBLIC WORKS DEPARTMENT (ROADS AND BRIDGES),PUBLIC OFFICE, THIRUVANANTHAPURAM - 695 033. 3 THE EXECUTIVE ENGINEER PUBLIC WORKS DEPARTMENT (ROADS DIVISION),P.M.G.JUNCTION, THIRUVANANTHAPURAM - 695 033.** |**4**|**THE SUPERINTENDING ENGINEER**| |---|---| ||**PUBLIC WORKS DEPARTMENT ROADS & BRIDGES**| ||**(C),PUBLIC OFFICE, THIRUVANANTHAPURAM - 695**| ||**033.**| W.P.(C).No.29625/16 2 - **5 KERALA STATE CONSTRUCTION CORPORATION LTD. REPRESENTED BY MANAGING DIRECTOR,VYTTILA, ERNAKULAM.** - **6 THE REGIONA MANAGER KERALA STATE CONSTRUCTION CORPORATION LTD.,REGIONAL OFFICE, P.W.D. STORE COMPOUND,P.M.G.JUNCTION, THIRUVANANTHAPURAM - 695 033.** **R1 BY GOVERNMENT PLEADER R1 BY ADV. SRI.M.V.THAMBAN SC. KSCC LTD. R5 BY ADV. SRI.M.V.THAMBAN, SC., KSCC LTD. R5-6 BY ADV. SRI.M.RAJAGOPALAN NAIR R5-6 BY ADV. SRI.G.BIJU** ## **OTHER PRESENT:** ## **SR. GP. K.V. MANOJ KUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-02-2020, THE COURT ON 21-05-2020 DELIVERED THE FOLLOWING:** W.P.(C).No.29625/16 3 ## **JUDGMENT** ## **Dated this the 21[st] day of May 2020** - 1.This writ petition is filed with the following prayers:- - “i) Call for the records leading to Ext.P2 and P3 and quash the same by writ of certiorari. ii)Issue a writ of mandamus or any other writ, order or direction, directing the respondents to pay the 6[th] part and final bill amount in respect of the work “NABARD- improvements to Vithura Peppara Road from KM 0/000 to 9/500 forthwith.” - 2.Heard the learned Senior counsel for the petitioner and the learned counsel appearing for the respondents. 3. The petitioner, a government contractor, had been awarded the work of improvements to the Thiruvallam Junction to Panchalloor Vazhamutton road from Ch 0/000 to 4/050. The work was completed on 31.1.2015, well within time. The PAC of the work was Rs.6,21,47,819/-. Exhibit P1 is the copy of the work order dated 26.11.2014. It is submitted that Exhibit P2 letter was issued on 23.7.2016 by the 3[rd] respondent to 5[th] respondent stating that a total amount of Rs.6,03,11,588/- had W.P.(C).No.29625/16 4 been paid in respect of the work. Since the bitumen had been purchased by the petitioner, the cost of the same was reimbursed at market rates. It is stated that while passing the bill, the rate of bitumen was recovered excluding cost index and that there is a short recovery of Rs.84,86,670/-, which is liable to be recovered from other pending bills due to the Corporation. The Corporation consequently informed the petitioner that the amount would be recovered from bills of another work which is pending payment. 4. It is submitted by the learned counsel for the petitioner that the action of the respondents is completely without jurisdiction and is against the facts of the case. It is stated that Exhibits P4 and P5 Government orders specifically provided that in case of bitumen is purchased by the contractor the cost, profit and overhead charges can be allowed for the estimates based on the MORTH data book and in such cases the cost of bitumen shall be calculated, excluding the cost index. It is stated that in the instant case also, no bitumen had been provided departmentally and the petitioner had procured W.P.(C).No.29625/16 5 the entire bitumen required for the work from the BPCL and the claim made in the bills was supported by invoices, which was duly approved by the respondents. It is, therefore, contended that the exercise in Exhibits P2 and P3 is completely illegal and unsustainable. The learned Senior Counsel places reliance on the decision of the Apex Court in General Manager, North East Frontier Railway and others v. Dinabandhu Chakraborty [MANU/SC/0048/1970] and of this Court in P.R.Ramavarma Raja v. Tahasildar and others [ 1987 KHC 12] to contend that the respondents who are parties to the contract cannot unilaterally decide the liability of the petitioner. 5. A statement has been placed on record by the 3[rd] respondent, wherein it is contended as follows:- 4. It is submitted that, estimate of cost on departmental material (bitumen) for Rs.2,95,38,721/- was arrived by the department including the cost index. As per the accounting system adopted in Public Works Department, cost of bitumen as per estimate is to be recovered from the bill amount. The actual amount as per the invoice (either higher or lower as compared to estimate rate) reimbursed to the contractor in respect of the said work. Cost for W.P.(C).No.29625/16 6 the bitumen was estimated by applying the cost index. Cost index is based on Delhi Schedule of Rate 2014. It is the factor to leverage the difference in price with respect to Delhi Schedule of Rate 2014 and local price variation with respect to Delhi. Hence, this respondent arrived estimate cost of bitumen along with cost index. While processing the bill, cost index was not deducted from the bill. While conducting the audit the Accountant General, Kerala pointed out the above defect and directed to recover the short recovery of Rs.84,86,670/- from the Contractor. Therefore this respondent adjusted the said amount from the pending bill in connection with another work done by the Contractor “NABARD- Improvements to Vithura Peppara Road from KM 0/000 to 9/500”. A true copy of the bill accepted by the 5[th] respondent Kerala State Construction Corporation Ltd. is produced herewith and marked as **Annexure R3(a).** 6. A reply affidavit has been placed on record by the petitioner. It is stated that it is apparent that the calculation in Exhibits P2 and P3 is on the mistaken impression that the bitumen had been supplied to the petitioner by the department. It is submitted that since there was no departmental supply, the cost index of bitumen could not be deducted and therefore the calculation is per se illegal. The relevant portions of the special conditions attached to the contract between the petitioner and the 5[th] respondent is produced as Exhibit P6 W.P.(C).No.29625/16 7 and is relied upon to contend that where bitumen is not made available departmentally, cost index cannot be deducted and deductions on such basis is completely unwarranted. 7. A counter affidavit has been placed on record by respondents 5 and 6 as well. It is submitted that the contract provided that where cement, steel and bitumen are not available in departmental store, the contractor has to purchase the same from open market and he will be paid market price of the material and conveyances. It is stated that in the present case, the cost incurred for the purchase of bitumen was Rs.1,83,19,718/-, but the petitioner had raised a claim for a higher amount. It is stated that though Exhibit P3 letter was issued to the petitioner, he had replied only on 18.8.2016. It is stated that the PWD had recovered the amount of Rs.84,86,617/- from the 6[th] and final part bill of the Vithura Peppara Road from the construction corporation and therefore the corporation has no other means, but to recover the same from the petitioner. Exhibit R5(a) reply of the petitioner is also produced. W.P.(C).No.29625/16 8 8. I have considered the contentions advanced. It is the specific case of the petitioner that no departmental bitumen had been made available to him in respect of the work of improvements to the Thiruvallam Junction to Panchalloor Vazhamutton road from Ch 0/000 to 4/050. This aspect is not controverted in the counter affidavits, either of the 3[rd] respondent or respondents 4 and 5. Admittedly, the petitioner had purchased the bitumen required from the open market and had made claims for the price of the bitumen as well as the transportation charges of the same, as provided in Exhibit P6 special conditions. The invoices for the said purchase and transportation of bitumen at market price had been duly approved at the relevant time. Exhibit P3 proceeds on the basis that the cost index for bitumen is liable to be deducted from the amount payable to the petitioner as per the agreement and that an amount of Rs.84,86,617/- is, therefore, paid in excess. However, from a perusal of Exhibits P4, P5 and P6, I find that in case where bitumen is not supplied departmentally, the contractor is entitled to purchase the bitumen from the open market and to be reimbursed the cost at market price. It is apparent from W.P.(C).No.29625/16 9 the pleadings placed on record that the bills and invoices produced by the petitioner with regard to the market price of bitumen and the expenses had been duly approved and passed. In the above view of the matter, I find that the contention in Exhibit P3 that the cost index ought to have been deducted in the calculation and that the petitioner has drawn amount in excess is an incorrect statement. Going by the provisions of the Government orders as well as the contract entered into between the parties, the contention of the petitioner appears to be completely justified. Moreover, without any impartial quantification of amounts in dispute, the direction for recovery of amounts is unjustified. In case the respondents have any contention with regard to drawal of excess amounts by the petitioner, such dispute will have to be decided in a manner known to law. 9. In the above view of the matter Exhibits P2 and P3 are set aside. There will be a direction to the respondents to take appropriate steps to see that the amount withheld from the petitioner's 6[th] part and final bill is released without delay to W.P.(C).No.29625/16 10 the 5[th] respondent to effect payments to the petitioner. Necessary shall be done within a period of three months from the date of receipt of a copy of this judgment. Sd/- **Anu Sivaraman, Judge** sj ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT-P1: TRUE COPY OF THE WORK ORDER NO.CC/RG/TVM/33/2014/569, DTD.26/11/2014 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONER. EXHIBIT-P2: TRUE COPY OF THE LETTER NO.E1-73/IR/16 DATED 23/7/2016 ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT-P3: TRUE COPY OF THE LETTER NO.CC/RO/TVM/NGSTPVR/18/2014/388 DATED 27/7/2016 ISSUED BY THE 5TH RESPONDENT.** - **EXHIBIT-P4: TRUE COPY OF THE GOVERNMENT ORDER NO.G.O. (P) NO.30/2016/FIN./DATED 29/2/2016 ISSUED BY THE ADDITIONAL CHIEF SECRETARY, FINANCE DEPARTMENT.** - **EXHIBIT-P5: TRUE COPY OF THE GOVERNMENT ORDER NO.G.O. (P)NO.96/2016/FIN.DATED 15/7/2016 ISSUED BY THE FINANCE DEPARTMENT.** - **EXHIBIT P6 TRUE COPY OF THE RELEVANT PAGES OF SPECIAL CONDITIONS ATTACHED TO THE CONTRACT AGREEMENT EXECUTED BETWEEN THE PETITIONER AND 5TH RESPONDENT** Respondent's Exhibits **EXHIBIT R5 A TRUE COPY OF THE LETTER DAT 18.08.2016 ISSUED BY THE PETITIONER** True copy PS to Judge