N. Vijayakumary v. Kerala Land Development Corporation Limited and The Construction Engineer, Kerala Land Development Corporation Limited

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** ## **&** **THE HONOURABLE MR. JUSTICE GOPINATH P.** **FRIDAY, THE 29TH DAY OF MAY 2020 / 8TH JYAISHTA, 1942** ## **WA.No.2040 OF 2019** **AGAINST THE ORDER/JUDGMENT IN WP(C) 38183/2018(W) OF HIGH COURT OF KERALA** ## **APPELLANT/S:** **N.VIJAYAKUMARY, AGED 56 YEARS W/O.JAGADEVAN, SREERANGAM, MARKET JUNCTION, ADOOR P.O., PATHANAMTHITTA DISTRICT.** **BY ADVS. SRI.S.SHYAM KUMAR SRI.M.SASINDRAN** ## **RESPONDENT/S:** **1 THE KERALA LAND DEVELOPMENT CORATION LIMITED, REGISTERED OFFICE THRISSUR -680 001, REPRESENTED BY ITS MANAGING DIRECTOR. 2 THE CONSTRUCTION ENGINEER, THE KERALA LAND DEVELOPMENT CORPORATION LIMITED, ALAPPUZHA -688 001.** **R1 BY ADV. SRI.GEORGE POONTHOTTAM (SR.) R1 BY SRI.BAIJURAJ G., SC, KLDC LTD.** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 18-03-2020, THE COURT ON 29-05-2020 DELIVERED THE FOLLOWING:** W.A.No.2040/2019 2 ## **(C.R)** ## **JUDGMENT** ## **Dated this the 29[th] day of May 2020** ## **Gopinath.P.J,** This Writ Appeal is filed challenging the judgment dated 26.7.2019 in W.P.(C)No.38183/2018. 2. The facts which are required to be noticed for the purposes of this case are as follows. The appellant had entered into three separate contracts with the 1[st] respondent for the following works:- i) Infrastructural Development Works of Kuttinalthara Ela and surrounding Dry Lands in Enadimangalam Panchayath in Pathanamthitta District [Contract No.KLDC/ALPY/2014-15/9(9)]. ii) “NABARD-RIDF XIX-SAHASRASAROVAR” Infrastructural Development Works of Karuvayal Ela in Kalanjoor in Pathanamthitta District [Contract No.KLDC/ALPY/2014-15/9(7)] for a PAC of Rs.93,66,313/-. iii) “NABARD-RIDF XIX-SAHASRASAROVAR” Project renovation of Pampettukulam, construction of diversion channel pond at Ward No.XXVIII of Adur Municipality in Pathanamthitta District W.A.No.2040/2019 3 ## [Contract No.KLDC/ALPY/2014-15/9(6)]. 3. In respect of work shown against item No.(i) above, the appellant had quoted 15.21% below the estimate rate (PAC). In respect of that work, there was some revision in the quantities regarding which supplemental agreement was also executed. As regards the work shown as item No.(ii) above, the appellant quoted 12.21% below the estimate rate (PAC). In respect of the work shown as item No.(iii) above, the appellant has quoted 18.21% below the estimate rate (PAC). It is not disputed that the works in question were completed by the appellant, in time. 4. According to the appellant, when there was inordinate delay in processing the final bills submitted by the appellant, the appellant approached the 1[st] respondent and it was informed that there was a verification of the tender documents by the Vigilance and Anti Corruption Bureau and in respect of the work shown as item No.3 above, the Vigilance and Anti Corruption Bureau had found that there was some over payment to the appellant. It was also stated that the documents relating to the other two works completed by the appellant were also being verified. The appellant approached this Court by filing W.P.(C)Nos.28866, 28878 and 29611 of 2017, which were disposed of directing the respondents to make part payment of the balance amounts due and further directing that, if there are any anomalies or deficiencies, the same shall be informed to the appellant and thereafter the matter shall be adjudicated, after receiving W.A.No.2040/2019 4 objections and after affording an opportunity of hearing to the appellant (Ext.P14 judgment dated 5.3.2018). Writ Appeals were carried to a Division Bench of this Court against Ext.P14 judgment. By Ext.P15 judgment dated 23.10.2018, the Writ Appeals were disposed of essentially noticing that the Managing Director of the 1[st] respondent Corporation had, pursuant to the directions issued in Ext.P14 judgment, determined the amounts payable to the appellant and had issued an order dated 4.8.2018 in that regard. The appellant was given liberty to challenge the determination so made by the Managing Director through his proceedings dated 4.8.2018 and the Writ Appeals were accordingly disposed of. The proceedings dated 4.8.2018 (Ext.P17 in W.P.(C)No.38183/2018) were challenged by the appellant in the Writ Petition. The learned Single Judge has declined relief to the appellant through the impugned judgment dated 26.7.2019, essentially holding that there are several seriously disputed questions of fact and this Court would not be justified in venturing into a determination of the various disputed questions in a Writ Petition under Article 226 of the Constitution of India. The appellant was given the liberty to have his claims adjudicated through the Civil Court. 5. We have heard Sri. M.Sasindran, learned counsel appearing for the appellant and Sri. George Poonthottam learned Senior Counsel ably assisted by Ms. Chithra. P. George, for the respondents. 6. Sri.M. Sasindran, learned counsel for the appellant would W.A.No.2040/2019 5 _inter alia_ contend that a reading of Ext.P17 would show that the Managing Director of the 1[st] respondent proceeded to re-determine the amounts payable to the appellant on three specific grounds. A perusal of Ext.P17 would show that the first ground on which the amount due to the appellant was re-determined was that the 1[st] respondent Corporation had wrongly determined the probable amount of contract (PAC) by applying the cost index of 1.38 instead of 1.35 which had to be applied in respect of works in Pathanamthitta District. The second ground on which the amount was redetermined was that the claim for headload expenses raised by the appellant could not have been sanctioned for the reason that the nature of the work and the site would show that there were no headload expenses involved. The third ground on which the amount payable to the appellant was re-determined was that she had used the ordinary earth and not gravel earth as required under the terms of the contract. According to Mr.Sasindran, the reasons set out in Ext.P.17 are unsustainable, arbitrary and without any basis whatsoever. He would urge that the Learned Single Judge erred in law in refusing to exercise jurisdiction under Article 226 of the Constitution of India. According to him there are no seriously disputed questions of fact which would dissuade this Court from examining the rival claims. 7. Sri. George Poonthottam, learned Senior Counsel, for the 1[st] respondent Corporation, would vehemently urge that the learned Single W.A.No.2040/2019 6 Judge has rightly refused interference and has relegated the appellant to her remedy, if any, before the Civil Court on account of the fact that the issues arising for adjudication involved seriously disputed questions of fact. He would place before us the judgment of the Supreme Court in _**Himmat Singh**_ v. _**State of Haryana and others**_ [(2006) 9 SCC 256] and rely on the finding in Paragraph 18 of the judgment, which read as follows:- _“18......... In the grounds of a writ petition only a question of law can be raised and not a statement of fact. No statement has been made in the body of the writ petition. The statement made in the said grounds was also not verified in accordance with the writ rules. Despite the same, as we have noticed hereinbefore, the fifth respondent in his affidavit denied or disputed the contents thereof. Whether the statement of the appellant or the fifth respondent was correct or not could not ordinarily be decided in a writ proceeding. It is well known that in a writ petition ordinarily such a disputed question of fact should not be entertained. The High Court arrived at a finding of fact on the basis of affidavit evidence.”_ Sri.Poonthottam would further contend that the fixation of the PAC in respect of all the work contemplated, by applying a higher cost index was the result of collusion between the appellant and certain officers of the 1st respondent corporation 8. On a consideration of the matter, we are of the opinion that the re-determination of the amounts payable to the appellant on account of there being no requirement of meeting headload expenses and for using W.A.No.2040/2019 7 normal earth instead of gravel earth cannot be questioned in proceedings under Article 226 of the constitution of India, as these issues are seriously disputed by either side and it is not appropriate for us to determine those issues in the present proceedings. It is for the appellant to plead and prove her entitlement for headload charges/expenses and establish that she had used gravel earth and not ordinary earth in the work as claimed by her in duly constituted proceedings before the competent Civil Court. Thus we are of the opinion that the contention of the learned Senior counsel appearing for the respondents is well founded in respect of two out of the three heads under which the amounts due to the appellant were redetermined through Ext.P17 order. However, we are unable to accept the contention of the learned Senior counsel with regard to the redetermination of the amounts on account of reduction in the PAC, which in turn was on the basis that a wrong cost index had been applied at the time the tenders were invited. The law in relation to interference under Article 226 in contractual matters is fairly well settled. Would it be possible for a 'State' or 'other authority' under Article 12 of the Constitution of India to contend that the High Court should not adjudicate any issue arising under a contract on the spacious plea that there are seriously disputed question of fact involved ? Would it be proper or justified for this Court to refuse jurisdiction under Article 226 even when it is established that the 'State' or 'other authority' was acting unfairly, W.A.No.2040/2019 8 ## arbitrarily or unreasonably ? The answer to these questions must obviously be an emphatic 'NO'. In **U.P. Financial Corpn. v. Gem Cap (India)** ## **(P) Ltd., (1993) 2 SCC 299** it was held:- _“....In the matter of administrative action, it is well known, more than one choice is available to the administrative authorities; they have a certain amount of discretion available to them. They have ‘a right to choose between more than one possible course of action on which there is room for reasonable people to hold differing opinions as to which is to be preferred’. (Lord Diplock in Secy. of State for Education and Science v. Metropolitan Borough Council [1977 AC 1014 : (1976) 3 WLR 641 : (1976) 3 All ER 665 (CA & HL)] , All ER at p. 695f.) The Court cannot substitute its judgment for the judgment of administrative authorities in such cases. Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action, can the Court intervene. To quote the classic passage from the judgment of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. [(1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] : (All ER pp. 682 H-683 A)_ _It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word ‘unreasonable’ in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting ‘unreasonably’. Similarly, there may be_ W.A.No.2040/2019 9 _something so absurd that no sensible person could ever dream that it lay within the powers of the authority.” [Ed.: Quoting from, pp. 306-07, para 11.]”_ It must therefore be held that when the High Court, under Article 226 were to reach a conclusion, upon consideration of materials placed before it, that a decision of the authority was so unfair, arbitrary or unreasonable, its hands are not tied and it is entitled to grant such reliefs as it deems necessary to set right the illegality. It would, at this juncture, be appropriate to refer to the principles stated by the Supreme Court in _**ABL**_ _**International Ltd. & any v. Export Credit Guarantee Corporation of India & ors**_ **(2004) 3 SCC 553 @** 572, paras 27-28:- _“27. From the above discussion of ours, following legal principles emerge as to the maintainability of a writ petition:_ _(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable._ _(b) Merely because some disputed questions of facts arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule._ _(c) A writ petition involving a consequential relief of monetary claim is also maintainable._ _28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to_ W.A.No.2040/2019 10 _the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it ” necessary to exercise the said jurisdiction. (Emphasis is ours)_ _**ABL International (supra)**_ was recently followed in _**Joshi Technologies International Inc. v. Union of India and others,**_ **(2015) 7 SCC 728.** In _**D.F.O., South Kheri v. Ram Sanehi Singh, (1971) 3 SCC 864**_ it was held:- _“4. Counsel for the appellants contends that since the dispute arose out of the terms of the contract and the Divisional Forest Officer under the terms of the contract had authority to modify any action taken by a subordinate forest authority, the remedy of the respondent was to institute an action in the civil court and that the writ petition was not maintainable. But in the present case the order is passed by a public authority modifying the order or proceeding of a subordinate forest authority. By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy case [(1955) 1 SCR 305] there can be no doubt that the petition was maintainable, even if the right to relief arose out of_ W.A.No.2040/2019 11 _an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.”_ ## In a recent judgment in _**Punjab National Bank & ors v. Atmanand**_ _**Singh & ors,**_ **2020 SCC OnLine SC 433,** the Supreme Court has observed _“We restate the above position that when the petition raises questions of fact of complex nature, such as in the present case, which may for their determination require oral and documentary evidence to be produced and proved by the concerned party and also because the relief sought is merely for ordering a refund of money, the High Court should be loath in entertaining such writ petition and instead must relegate the parties to remedy of a civil suit. Had it been a case where material facts referred to in the writ petition are admitted facts or indisputable facts, the High Court may be justified in examining the claim of the writ petitioner on its own merits in accordance with law.”_ It is clear from the facts of the case that the appellant (Contractor) was required to quote on the basis of the PAC indicated in the tender documents. As already noticed, she had quoted 15.21% below the estimate rate (PAC) in respect of the first item of work, 12.21% below the estimate rate (PAC) in respect of the second item of work and 18.21% below the estimate rate (PAC) in respect of the third item of work. When the quotations submitted by the appellant/Contractor were as a percentage above or below the PAC fixed in the tender document (which is as per tender requirements), it would be extremely unjust, unfair and arbitrary W.A.No.2040/2019 12 for the 1st respondent to revise the PAC, after the work was completed on the basis of a finding that the PAC was fixed wrongly. On application of the principles culled out from the judgments referred to above, We are of the definite opinion that we would be justified in directing that the amounts due to the Contractor shall be determined with reference to the original PAC and not with the revised PAC. The determination of this issue is purely legal and does not require us to enter into the realm of any disputed questions of fact. 9. We make it clear that we have not expressed any opinion regarding the case of the 1st respondent that fixation of a higher PAC while floating tenders was a result of collusion between the appellant and certain officers of the 1st Respondent. We cannot adjudicate such issues in these proceedings. We have held that the appellant/Contractor was entitled to claim payment on the basis of the original PAC only on account of the fact that her quotation was, as noticed above, expressed in terms of a percentage below the declared PAC and in such situation, it would be unfair to allow re-determination of PAC, after the work has been completed. 10. In the light of our findings, we allow this Appeal setting aside the judgment of the Learned Single Judge, and the following directions are issued:- W.A.No.2040/2019 13 i) We direct the respondents to redetermine the amounts payable to the appellant/Contractor on the basis of the original _'Probable Amount of Contract (PAC)'_ and not on the basis of the revised PAC determined by the respondents (by applying the cost index at 1.35 instead of 1.38) and disburse the amount, if any, found payable to the appellant on this account within a period of three months from the date of receipt of a copy of this judgment; ii) We hold that the claim of the appellant/Contractor on the basis that she had to meet headload expenses cannot be determined by us in these proceedings. We leave it open for the appellant to claim such amount, if any, due to her, after proving her entitlement before the competent Civil Court. iii) We hold that the appellant/Contractor is also not entitled to claim that the additional amounts are due to her on account of the fact that she had used gravel earth and not ordinary earth, in these proceedings under Article 226 of the Constitution of India and that such claim has to be adjudicated in duly constituted proceedings before the Civil Court. We leave it open for the appellant to claim such amount, if any, due to her, after proving her entitlement before the competent Civil Court. iv) In view of the contention of Sri. George Poonthottam, learned Senior counsel appearing for the respondents that there was some collusion between the appellant and the certain officials of the 1[st] W.A.No.2040/2019 14 respondent Corporation in wrongly fixing the PAC at higher amount by applying the cost index 1.38 instead of 1.35 and that inquiries in that regard are on going, we make it clear that this judgment should not be read as a justification for applying the cost index of 1.38 and thereby determining the PAC at higher amount. Sd/- **A.M.SHAFFIQUE JUDGE** Sd/- **GOPINATH P. JUDGE** acd