High Court of KeralaSingle Judge2021-10-11Disposed

Prathiba Developers (P) Ltd. v. State of Kerala and Others

Case / Petition Number:W.P.(C).No.34375/2019

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. V. Kunhikrishnan
Judgment Date: 2021-10-11
Court Decision / Holding: 1. The 2nd respondent is directed to disburse the entire amount due to the petitioner including the performance security deposit and retention amount, as expeditiously as possible, at any rate, within three weeks from the date of receipt of a copy of this judgment. 2. Before disbursing the amount, the petitioner will execute a foreclosure agreement with the 3rd respondent. 3. The execution of the foreclosure agreement will be without risk and cost to the petitioner.
Final Disposition: Disposed

Parties to the Case

Appellants / Petitioners

Prathiba Developers (P) Ltd., represented by its Director, Mr. George Bijoy

Respondents

State of Kerala represented by Secretary to Government, Schedule Tribes Development Department, Government Secretariat, Thiruvananthapuram - 695001
Director, Schedule Tribes Development Department, Government Secretariat, Vikas Bhavan, Thiruvananthapuram - 695033
KITCO Ltd., Regd. Office, Femit hs, P.B. No.4407, Puthiya Road, NH Bypass, Vennala, Kochi - 682028, represented by its Managing Director
Secretary, Vattavada Grama Panchayat, Idukki District - 685615
District Collector, Collectorat, Kuyilimal a, Painavu P.O., Idukki - 685603
Village Officer, Vattavada Village Office, Idukki District - 685615

Legal Representation & Advocates

Counsels for Petitioners

• Santosh Mathew
• Sri Arun Thomas
• Sri Jennis Stephen
• Sri Vijay V. Paul
• Smt. Veena Raveendran
• Sri Anil Sebastian Pulickel
• Smt. Divya Sara George
• Smt. Jaisy Elza Joe

Counsels for Respondents

• Sri Nithin George
• Sri M.K. Thankappan
• Sri Vizzy George Kokkat
• Sri B. Deepak

Case Synopsis & Summary

Prathiba Developers (P) Ltd., a contractor, was awarded the construction of a Tribal Hostel Block for Girls at Vattavada under KITCO’s letter of award dated 1 February 2016. The project was to be completed within 18 months from the award or the date of handing over the site, whichever was later. By September 2016, partial work had begun (first floor slab and form work for the second floor). A stop memo (Ext. P6) was issued by the Vattavada Grama Panchayat on 7 September 2016, which stalled progress. The petitioner claims repeated attempts to recall the stop memo and release payments for the work already carried out were to no avail, culminating in an extended standstill for more than two years. The petitioner had earlier approached W.P.(C) No. 5534 of 2017 seeking relief to complete the project, but the Government indicated it did not intend to proceed with the project. The petitioner thus sought mandamus to (i) disburse the admitted final bill of Rs 2,921,732.49 including retention and security deposits with interest from 7-09-2016, (ii) terminate the contract without risk or cost, (iii) decide Exhibit P21’s representation, and (iv) quash the records leading to Exhibits P17. The respondents contended that the amount had already been transferred to KITCO’s MD and pressed for execution of a foreclosure agreement. The High Court disposed of the petition directing the 2nd respondent to pay the full amount within three weeks and to execute a foreclosure agreement with the 3rd respondent, on condition that payment be made without risk or cost to the petitioner.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner's case is that it was awarded construction of the Tribal Hostel Block for Girls at Vattavada via Ext. P2 and that the project was to be completed within 18 months from the date of the award or the handing over of the site, whichever is later. By September 2016, partial progress had been made on the first floor and second floor form work. The stop memo (Ext. P6) issued on 07/09/2016 effectively halted work. The petitioner submits continued requests to recall the stop memo and release payments for work already performed were ignored, leading to more than two years of standstill. It seeks a mandamus to disburse the admitted final bill (Rs. 2,921,732.49) including retention and security deposits with interest, terminate the contract without risk and costs, and finalize the representation (Exhibit P21). It also seeks quashing of records pertaining to Exhibits P17. The petitioner argues that the Government mitigation of the project and the inability to proceed justifies settlement terms and termination on favorable terms.

Contentions of Respondents

Respondents contend that the amount due to the petitioner has already been transferred to the Managing Director of KITCO and they do not oppose payment, but require execution of a foreclosure agreement. They maintain that the Government had dropped the project and that foreclosure on terms would protect state interests; the relief sought—payment with no risk or cost and termination of contract—would need a suitable framework to avoid future liabilities. The respondents emphasize that a formal foreclosure agreement is a precondition to disbursement, and that the project has been halted by Government decision. The Special Government Pleader and Standing Counsel express that the payment should proceed with appropriate conditions, given the prior communications and status of the project.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN MONDAY, THE 11[TH] DAY OF OCTOBER 2021 / 19TH ASWINA, 1943 WP(C) NO. 34375 OF 2019** ## **PETITIONER:** PRATHIBA DEVELOPERS (P) LTD., KARUKUNNATHU BUILDING, KASIM LANE, KALOOR, COCHIN - 682 017, REPRESENTED BY ITS DIRECTOR, MR.GEORGE BIJOY. BY ADVS. SANTHOSH MATHEW SRI.ARUN THOMAS SRI.JENNIS STEPHEN SRI.VIJAY V. PAUL SMT.VEENA RAVEENDRAN SRI.ANIL SEBASTIAN PULICKEL SMT.DIVYA SARA GEORGE SMT.JAISY ELZA JOE ## **RESPONDENTS:** 1 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, SCHEDULED TRIBES DEVELOPMENT DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 2 THE DIRECTOR, SCHEDULED TRIBES DEVELOPMENT DEPARTMENT, GOVERNMENT SECRETARIAT, VIKAS BHAVAN, THIRUVANANTHAPURAM - 695 033. 3 KITCO LTD., REGD. OFFICE FEMITHS, P.B.NO.4407, PUTHIYA ROAD, NH BYPASS, VENNALA, KOCHI - 682 028, REPRESENTED BY ITS MANAGING DIRECTOR. 4 THE SECRETARY, VATTAVADA GRAMA PANCHAYAT, IDUKKI DISTRICT, PIN - 685 615. **2** ## **W.P.(C).No.34375/2019** 5 THE DISTRICT COLLECTOR, COLLECTORATE, KUYILIMALA, PAINAV P.O., IDUKKI, PIN - 685 603. 6 THE VILLAGE OFFICER, VATTAVADA VILLAGE OFFICE, IDUKKI DISTRICT, PIN - 685 615. BY ADVS. SRI.NITHIN GEORGE SRI.M.K.THANKAPPAN SRI.VIZZY GEORGE KOKKAT SRI.B.DEEPAK ## **OTHER PRESENT:** SMT.PREETHA.K.K., SR.GP **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.10.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C).No.34375/2019** **3** ## **P.V.KUNHIKRISHNAN, J. -------------------------------W.P.(C).No.34375 of 2019** **---------------------------------------------Dated this the 11[th] day of October, 2021** ## **JUDGMENT** This writ petition is filed with following prayers: - i. Issue a writ of mandamus or any other appropriate writ, order or direction, commanding the respondents to disburse the admitted amount due to the petitioner on accounts of final bill, retention amount and security deposit (Rs.2,921,732.49) and the interest from 7-092016, within a time limit prescribed by this Honourable Court. - ii. Issue a writ of mandamus or any other appropriate writ, order or direction, commanding the respondents 1 to 3 to terminate the contract and relieved the petitioner from the contract without risk and costs. - iii. Issue a writ of mandamus or any other appropriate writ, order or direction, commanding the respondents to take a final decision on Exhibit P21 representation submitted by the petitioner. **W.P.(C).No.34375/2019** **4** - iv. Call for the records leading to Exhibits.P17 and issue a writ of certiorari quashing the same. - v. To issue such other appropriate writ, order or direction as this Hon'ble Court may deem fit and just in the circumstances of this case. 2. Petitioner was awarded the work for construction of Tribal Hostel Block for Girls at Vattavada, as per Ext.P2 letter of award of work dated 01.02.2016. It is submitted by the petitioner that as per Ext.P2, time allowed for completion of the work is 18 months from the date of letter of award of work or from the date of handing over the site, whichever is later. It is the case of the petitioner that by September 2016, the petitioner had partially completed the first floor slab and form work for second floor was in progress. At that time Ext.P6 stop memo was issued by the Secretary of the Vattavada Grama Panchayat on 07.09.2016. According to the petitioner, in spite of repeated requests to various authorities, no steps have been taken to recall the stop memo so as to enable the petitioner to carry out the work. It is further stated in the writ petition that due to the inordinate delay on the part of the respondents in effecting payment for the construction carried out by the petitioner and removing the obstructions to enable **5** ## **W.P.(C).No.34375/2019** the petitioner to complete the work awarded to the petitioner as per Ext.P2 work order, the petitioner preferred W.P.(C). No.5534 of 2017 seeking for a direction to respondents to take necessary steps to enable the petitioner to complete the work awarded as per Ext.P2 in a time bound manner. The Government intimated this Court that they are not intending to proceed further with the project. Now, it is the case of the petitioner that the petitioner is not in a position to continue with the work agreed in the earlier terms since the work has been standstill for more than 2 years. The petitioner requested the respondents to disburse the amount due to the petitioner and further requested to terminate the contract without risk and cost. Respondents 2 and 3 have not taken any steps to disburse the amount as per the final bill including the retention amount and security deposit and to terminate the contract without risk and cost as requested by the petitioner. Hence this writ petition is filed. 3. Heard the counsel for the petitioner, Standing Counsel for the 3[rd] respondent and the Special Government Pleader for the official respondents. 4. Today, when the matter came up for consideration, **W.P.(C).No.34375/2019** **6** the Special Government Pleader submitted that the amount due to the petitioner is already transferred to the Managing Director of the 3[rd] respondent and the Government has no objection in releasing the amount. The Standing Counsel for the 3[rd] respondent submitted that the petitioner has to execute a foreclosure agreement. The counsel for the petitioner submitted that the foreclosure agreement can be executed on condition that there will not be any risk and cost to the petitioner. The Special Government Pleader submitted that there will not be any risk and cost in the light of the fact that the Government already dropped the project. In the light of the above submissions, this writ petition is disposed in the following manner: 1. The 2[nd] respondent is directed to disburse the entire amount due to the petitioner including the performance security deposit and retention amount, as expeditiously as possible, at any rate, within three weeks from the date of receipt of a copy of this judgment. 2. Before disbursing the amount, the petitioner will execute a foreclosure agreement with the **7** ## **W.P.(C).No.34375/2019** 3[rd] respondent. 3. The execution of the foreclosure agreement will be without risk and cost to the petitioner. Sd/- **P.V.KUNHIKRISHNAN JUDGE** JV **W.P.(C).No.34375/2019** **8** ## **APPENDIX OF WP(C) 34375/2019** PETITIONER EXHIBITS |EXHIBIT P1|TRUE COPY OF E-TENDER NOTICE DATED| |---|---| ||02/12/2015 PUBLISHED BY THE THIRD| ||RESPONDENT.| |EXHIBIT P2|TRUE COPY OF THE LETTER OF AWARD OF| ||WORK DATED 1ST FEBRUARY, 2016.| |EXHIBIT P3|TRUE COPY OF THE DEMAND DRAFT DATED| ||6/4/2016 FOR AN AMOUNT OF| ||RS.14,65,816/- SUBMITTED BY THE| ||PETITIONER.| |EXHIBIT P4|TRUE COPY OF THE BANK GUARANTEE FOR| ||RS.14,65,816/- OFFERED BY THE| ||PETITIONER.| |EXHIBIT P5|TRUE COPY OF THE AGREEMENT EXECUTED| ||BETWEEN THE PETITIONER AND THE THIRD| ||RESPONDENT ON 15TH FEBRUARY, 2016.| |EXHIBIT P6|TRUE COPY OF THE STOP MEMO DATED| ||7/9/2016 ISSUED BY THE VATTAVADA GRAMA| ||PANCHAYAT.| |EXHIBIT P7|TRUE COPY OF THE REQUEST DATED| ||09/09/2016 SUBMITTED BY THE PETITIONER| ||TO THE MANAGING DIRECTOR, KITCO.| |EXHIBIT P8|TRUE COPY OF THE REPRESENTATION DATED| ||15/09/2016 SUBMITTED BY THE PETITIONER| ||TO THE 3RD RESPONDENT.| |EXHIBIT P9|TRUE COPY OF THE REQUEST SUBMITTED BY| ||THE PETITIONER TO THE DISTRICT| ||COLLECTOR, DATED 22/09/2016.| |EXHIBIT P10|TRUE COPY OF THE REPRESENTATION| ||SUBMITTED BY THE PETITIONER TO THE| ||THIRD RESPONDENT DT. 7/11/2016.| |EXHIBIT P11|TRUE COPY OF THE REPRESENTATION| ||SUBMITTED BY THE PETITIONER TO THE| ||THIRD RESPONDENT DT.5/1/2017.| |EXHIBIT P12|TRUE COPY OF THE REPRESENTATION| ||SUBMITTED BY THE PETITIONER TO THE| ||THIRD RESPONDENT DT. 9/2/2017.| |EXHIBIT P12|TRUE COPY OF THE SETTLEMENT ENTERED BY| ||THE PARTIES BEFORE THE MEDIATION.| |EXHIBIT P13|TRUE COPY OF THE PART BILL SUBMITTED| ||BY THE 3RD RESPONDENT TO THE 2ND| ||RESPONDENT DATED 10/04/2017.| **9** ## **W.P.(C).No.34375/2019** EXHIBIT P14 TRUE COPY OF THE INTERIM ORDER DATED 17/07/2017 IN I.A.NO.10708 OF 2017 IN W.P.NO.5534 OF 2017. EXHIBIT P15 TRUE COPY OF THE COMMUNICATION ISSUED BY THE 3RD RESPONDENT DATED 25TH SEPTEMBER, 2018 TO THE PETITIONER. EXHIBIT P16 TRUE COPY OF THE REQUEST MADE BY THE PETITIONER ON 11/10/2018 TO THE 3RD RESPONDENT. - EXHIBIT P16 TRUE COPY OF THE COMMUNICATION ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER DATED 11/10/2018. - EXHIBIT P17 TRUE COPY OF THE NOTICE DATED 9/8/2018 ISSUED BY THE GENERAL MANAGER OF THE 3RD RESPONDENT TO THE PETITIONER. - EXHIBIT P18 TRUE COPY OF THE REQUEST MADE BY THE PETITIONER ON 23/11/2018 TO THE 3RD RESPONDENT. - EXHIBIT P19 TRUE COPY OF THE ORDER DATED 21/1/2019 IN I.A.NO.1/2019 IN W.P.(C) NO.5534 OF 2017. EXHIBIT P20 TRUE COPY OF THE BILL ISSUED BY THE 3RD RESPONDENT. EXHIBIT P21 TRUE COPY OF THE REQUEST ALONG WITH THE DETAILED STATEMENT MADE BY THE PETITIONER ON 09/04/2019.