High Court of KeralaSingle JudgeWrit petition disposed of. Exts.P10 and P15 set...

SREEVALLABHAN.P. v. THE STATE OF KERALA & ORS

Case / Petition Number:W.P.(C) No. 19081 of 2021

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • VIJU ABRAHAM
Judgment Date
2023-06-27
Court Decision / Holding
Exts.P10 and P15 set aside; authorizes reconsideration by the 2nd respondent regarding the termination; requires assessment of any loss due to re-tendering and, if no loss is found, release of admitted amounts to the petitioner; directs payment of the due amounts within two months, excluding damages and loss; disposes of the writ petition.
Final Disposition
Writ petition disposed of. Exts.P10 and P15 set aside; directions for reconsideration and payment of admitted amounts with damages to be determined later.

Parties to the Case

Appellants / Petitioners

  • Sreevallabhan.P., aged 72 years S/O Purushothamakarnavar, residing at Sree Bhavanam, Thulaparambu North, Mannarasala P.O., Haripad, Alappuzha District

Respondents

  • The State of Kerala represented by the Secretary to the Public Works Department, Secretariat, Thiruvananthapuram
  • The Superintending Engineer, PWD Roads and Bridges, South Circle, Thiruvananthapuram
  • The Executive Engineer, PWD Roads & Bridges, Office of the PWD Road & Bridges, Iron Bridge, Alappuzha
  • The Assistant Executive Engineer, PWD Roads & Bridges, Sub Division, Thatta mpally, Alappuzha
  • The Assistant Executive Engineer, PWD Roads & Bridges, Haripad Sub Division
  • The Assistant Engineer, Office of the Assistant Engineer, PWD, Haripad

Legal Representation & Advocates

Counsels for Petitioners

  • • N. Nandakumara Menon (Sr.), P.K. Manoj Kumar, A.K. Alex

Counsels for Respondents

  • • Advocate General Office Kerala

Case Synopsis & Summary

This writ petition (WP(C) No.19081/2021) challenges Exts.P10 and P15, which terminated the petitioner’s contract (agreement No.TN420/SESC/2018/19) at the petitioner’s risk and cost and re-arranged the work at his risk. The petitioner, a PWD contractor with a long and blemish-free service record, faced delays caused by obstructions on the National Highway-KV Jetty road—electric posts installed by KSEB, Water Authority pipelines, and BSNL cables along the carriage way. The tender for widening the road to 5.7 meters (from 3.7 meters) required removal of these obstacles, which were not shifted timely despite multiple requests. The 6th respondent recommended extending the completion period; however, the 4th and 2nd respondents later issued Ext.P5 and then Ext.P10 termination, asserting delay and risk. The petitioner argued that the delays were caused, or at least contributed to, by the departments’ failure to remove utilities, that some extensions were granted, and that widening was completed to 5.7 m with substantial personal expenditure; the non-removal of obstructions persisted even after termination. The court cites Antony v. State of Kerala and other Kerala High Court decisions to support the principle that admitted amounts should ordinarily be released, and that 30% ‘risk and cost’ cannot be used as punishment without quantified loss. The court sets aside Exts.P10 and P15, calls for reconsideration by the 2nd respondent, and directs payment of admissible amounts within a specified timeframe, keeping damages separate. The petition is disposed of accordingly.

Provisions of Law Cited

Article 226, Constitution of IndiaPWD Manual Clause 2116.2.1 (Realisation of loss on account of termination)GO(Rt) No.30/2018/PWD, Thiruvananthapuram (5.1.2018)GO(Rt) No.771/2021/PWD

Legal Doctrines & Maxims

  • The State and its instrumentalities are expected to deal with the citizens in a fair manner in all circumstances.
  • Admitted amount cannot be withheld except for the loss to be calculated by the Government; the 30% provision is to offset potential loss, not to punishment.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that he has an unblemished 35-year record as a PWD contractor and that the obstructions—electric posts by KSEB, Water Authority pipelines, and BSNL cables—were not removed, despite repeated requests. Extensions were granted, but the obstruction and consequent delays prevented completion within the agreed time. The petitioner spent substantial sums (over Rs. 50 lakhs) widening the road and constructing culverts, though these costs were not included in the original estimate. Ext.P10 (termination) and Ext.P15 (subsequent order) were issued without adequately considering the obstacles admitted by the department. The petitioner relies on Antony’s case and other Kerala High Court authorities to argue that admitted amounts should be released, with 30% risk-and-cost retained only as security for quantified losses and not as punishment. The court should direct payment of admitted amounts and order reconsideration of the loss/price calculations, especially since re-tendering produced no Government loss.”,

Contentions of Respondents

The respondents contend that the government extended the completion period, but the contractor failed to complete, despite extensions, due to obstructions and adverse conditions (heavy rain and waterlogging). They argue that termination under Clause 2116.2.1 was valid, allowing recovery of 30% of the remaining work cost as risk and cost as security until loss is quantified. They emphasize that critical utility shifting was not provided for in the initial estimate and that KSEB and other agencies did not shift utilities promptly, justifying the termination and re-tendering. They rely on PWD Manual provisions and GO orders to justify the risk-and-cost mechanism and contend that the re-tendering (AR Construction) did not generate a net loss to the Government, but the department still has a right to recover any demonstrable loss upon quantification.”},

Cited Precedents (4)

Case NameCitationTreatmentExplanation
Antony v. State of Kerala2023 (2) KLT 137PositiveCourt relied on Antony’s reasoning to hold that admitted amounts should be released except for quantified loss; 30% recoverable under Clause 2116.2.1 is for offsetting potential loss, not punishment.
Vijayakymari v. Kerala Land Development Corporation Limited2020 (3) KLT 773PositiveCited to support the proposition that the High Court has authority under Article 226 to grant reliefs to set right illegality; persuasive authority in the present context.
Vishnu v. State of Kerala2023 (2) KLT 186PositiveCited to bolster the view that the High Court can grant necessary reliefs to correct illegality under Article 226; persuasive authority.
W.P.(C). No. 17372/2020W.P.(C) No. 17372/2020Mentioned OnlyReferenced as background common judgment; not directly binding on the present issue but cited in the course of reasoning.

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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 VIJU ABRAHAM** ## **TUESDAY, THE 27[TH] DAY OF JUNE 2023 / 6TH ASHADHA, 1945** ## **WP(C) NO. 19081 OF 2021** ## **PETITIONER:** SREEVALLABHAN.P.,AGED 72 YEARS S/O.PURUSHOTHAMAKARNAVAR, RESIDING AT SREE BHAVANAM, THULAPARAMBU NORTH, MANNARASALA P.O., HARIPAD, ALAPPUZHA DISTRICT. BY ADVS. N.NANDAKUMARA MENON (SR.) P.K.MANOJKUMAR A.K.ALEX ## **RESPONDENTS:** 1 THE STATE OF KERALA,REPRESENTED BY SECRETARY TO THE PUBLIC WORKS DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2 THE SUPERINTENDING ENGINEER, PWD ROADS AND BRIDGES, SOUTH CIRCLE, THIRUVANANTHAPURAM-695 033. 3 THE EXECUTIVE ENGINEER,PWD ROADS AND BRIDGES, OFFICE OF THE PWD ROAD AND BRIDGES, IRON BRIDGE, ALAPPUZHA-688 011. 4 THE ASSISTANT EXECUTIVE ENGINEER,PWD ROADS AND BRIDGES, SUB DIVISION, THATTAMPALLY, ALAPPUZHA-688 013. 5 THE ASSISTANT EXECUTIVE ENGINEER, PWD ROADS AND BRIDGES, HARIPAD SUB DIVISION-690 514. 6 THE ASSISTANT ENGINEER, OFFICE OF THE ASSISTANT ENGINEER, PWD, HARIPAD-690 514. BY ADV ADVOCATE GENERAL OFFICE KERALA ## **OTHER PRESENT:** GP - SUNILKUMAR KURIAKOSE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C).No.19081 of 2021 2** ## **VIJU ABRAHAM,J** ## **-----------------------** **W.P.(C).No.19081 of 2021** **--------------------------------Dated this the 27[th] day of June, 2023** ## **JUDGMENT** The above writ petition is filed challenging Exts.P10 and P15 orders whereby the work undertaken by the petitioner as per the agreement No.TN420/SESC/2018/19 was terminated at the risk and cost of the petitioner and the work was rearranged at his risk and cost. 2. The Petitioner is a PWD Contractor, who has been doing the contract work of PWD for the last about 35 years. The Petitioner has unblemished service as a Contractor of PWD and has been doing the works awarded with utmost satisfaction to the department strictly within the time limit stipulated in the contracts and till date no complaints whatsoever was raised against the petitioner by the department. On 1-3-2021, tender was invited for the improvement and widening of _National Highway-KV Jetty road from Ch0/000 to_ _3/800_ . The estimated amount fixed by the 2nd ## **W.P.(C).No.19081 of 2021 3** respondent was Rs.3,99,84,584/- and the petitioner being the lowest bidder having quoted an amount of Rs.3,94,20,783/- was selected and awarded with the work as per Ext.P1 order. Petitioner was intimated as per Ext.P2 dated 5.3.2029 regarding the terms and conditions of the execution of the work and by Ext.P3 detailed estimate of the work to be executed by the petitioner was also issued to him. Thereafter, petitioner entered into an agreement with the 2[nd] respondent regarding the execution of the above said work. As per the terms of the contract, the petitioner has to widen the National Highway-KV Jetty Road to 5.7 meters from the existing 3.7 meters and in order to widen the road, 5 culverts and drainage has to be constructed in 5 different places and the culverts have to be constructed across the road. 3. Petitioner submits that there were several electric posts on the side of the road. Moreover the pipes of the Water Authority, cables of BSNL and other private operators were lying under the said road and that only after removal of the said ## **W.P.(C).No.19081 of 2021 4** obstacles the petitioner could complete the work. The obstructions stated above are to be removed by the concerned departments and it is not included in Ext.P3 estimate. Petitioner approached the respondents on several occasions requesting them to take necessary action to remove the hurdles so that he could execute the work within the time frame as contemplated as per the tender conditions. As per the agreement the petitioner had to complete the work on or before 4.10.2019. On the basis of the request of the petitioner, the 6th respondent after conducting a local inspection of the road, submitted Ext.P4 before the 4[th] respondent on being convinced that either sides of the road are flooded with water and thus it is not at all possible to construct the pipe culvert and that only on construction of the pipe culvert, the widening and raising of the road can be done, and thereupon he recommended to extend the period for completing the work till 28.2.2020. Since the KSEB has not taken any steps to shift and remove the electric posts from the sides of the road, the petitioner was not ## **W.P.(C).No.19081 of 2021 5** in a position to complete the work within the extended time as well. Therefore the 6[th] respondent had recommended for an extension of the period of the work up to 31-3-2020. While the matters thus stood, on 13-2-2020, the 4[th] respondent issued Ext.P5 letter intimating that the petitioner is responsible for the delay in completing the work and the petitioner was threatened that the contract will be terminated as his own risk and cost. On receipt of Ext.P5, petitioner submitted Ext.P6 reply highlighting the difficulties faced by him while executing the work and informed the 4[th] respondent regarding the non removal of electric posts, pipe line of Water Authority and the underground cable of BSNL and the stoppage of the work at the intervention of the Temple Committee of the area. Petitioner submits that on getting extension of time, the petitioner completed the widening of the entire stretch of the road to 5.7 meters as per the terms and conditions contained in the contract. But unfortunately the BSNL and Water Authority did not co-operate with the petitioner ## **W.P.(C).No.19081 of 2021 6** for removing the pipe line and the cable laid by them. In spite of all these, the petitioner had constructed 2 culverts by moving the pipe line and cable spending an additional amount of more than Rs.1,00,000/- and submitted further that the said expense is not included in Exhibit-P3 detailed estimate. Though the Petitioner had widened the road, as per the terms of the agreement the electric posts are still standing in the portion of the road already widened, which are now lying in a dangerous situation. In the said circumstance, petitioner had no other alternative than to stop the work. Petitioner submits that it is only due to the absolute laches, lapses and negligence on the part of respondents 3 to 6, in not taking effective steps to remove the obstacles caused in the matter of completing the work that the petitioner was compelled to stop the work. The petitioner has spent approximately Rs. 50 lakhs for widening the road and construction of the 2 culverts. Thereupon the petitioner had sent Ext.P7 letter to the respondent, requested to pay the bill ## **W.P.(C).No.19081 of 2021 7** for the work already done by him and to release the security amount and to absolve him from the work awarded. Thereupon the petitioner was served with Ext.P8 letter by the 3[rd] respondent threatening to cancel the contract awarded to the petitioner. Petitioner submitted Ext.P9 reply to the same. Thereafter, the 2[nd] respondent has passed Ext.P10 order terminating the contract awarded to the petitioner at his risk and cost. Petitioner submits that while passing Exhibit-P10 the 2nd respondent did not take into consideration the obstructions and hurdles faced by the petitioner to continue the work any further. The 6th respondent on a local inspection was convinced of the fact that there are obstacles and hurdles standing in the way of the petitioner in continuing and completing the work as per the terms and conditions of the contract. Thereupon, the petitioner again submitted Ext.P11 representation before the 1[st] respondent as well as the 2[nd] respondent highlighting his grievances and also Ext.P12 representation before the 1[st] respondent requesting to relieve him from the work ## **W.P.(C).No.19081 of 2021 8** awarded to him and also praying for the payment of the amounts covered by the work already executed by him and also for the release of the security deposit. It is pertinent to note that by Ext.P13 communication, the 6[th] respondent has practically admitted that the posts of KSEB has not been removed from the road margin by them inspite of specific requests made by the petitioner in that regard. Since there was no positive response from the respondents to Ext.P12, the petitioner was constrained to approach this Court by filing WP(C) No.8900/2020 and also WP(C) No.17372/2020 challenging Ext.P9 order. This Court heard the writ petitions together and disposed of both the writ petitions as per Ext.P14 common judgment directing the Government to consider Ext.P11 representation submitted by the petitioner in accordance with law. Thereafter, the Government by Ext.P15, issued an order dated 27.8.2021 without adverting to any of the valid contentions of the petitioner. Petitioner has a further case that the contract work was originally tendered by the government at a ## **W.P.(C).No.19081 of 2021 9** time when the State was under the grip of the Covid-19 pandemic and the dearth of labourers caused by the rapid spread of the dreadful disease, also contributed to a large extent in preventing the petitioner from completing the work within the time frame provided under the terms and conditions of the contract. Petitioner has preferred Ext.P16 communication requesting to release the amount legally due to him as he was under the threat of proceedings being initiated by the bank in respect of the overdraft facility availed by him for undertaking the work. Petitioner also relies on Ext.P17 communication, from the Assistant Engineer, PWD (Road Division), Harippad to the Assistant Executive Engineer, PWD (Road Division), Alappuzha recommending the payment of amount due to the petitioner for the work which is satisfactorily completed as per the contract. 4. A detailed statement was filed by the 4[th] respondent as directed by this Court wherein it is practically admitted that heavy rain and waterlogging in the sides of the road has affected the ## **W.P.(C).No.19081 of 2021 10** starting of the work. It is also submitted that intimations were given to KSEB Ltd., Kerala Water Authority and BSNL on 23.07.2019 itself, for shifting the posts and pipes but the same was not complied with. It is further stated that as per GO(Rt) No.30/2018 PWD Thiruvananthapuram dated 5.1.2018, it is the responsibility of the KSEB Ltd., to shift the electric post on the carriage way but they have not shifted the electric post till now. There is no amount provided for utility shifting in the estimate of the work. The period of the completion of work was extended to 15.01.2020 from 4.10.2019 and that in a stretch of 3.8 km., electric posts are to be shifted only in certain points and those posts are on the extreme edge of the carriage way and the petitioner could have easily carried out other preparatory works easily during the period, but the petitioner did not start any work stating the delay in the shifting of the electric posts. It is also submitted that the expenses occurred from the side of the petitioner during the pipe culvert laying can be met by the ## **W.P.(C).No.19081 of 2021 11** overhead charges included in the estimate for each work. It is the specific case in the statement that even after extending the time for completion of the work the petitioner could not complete the pipe culvert laying work. The time of completion of work was again extended up to 28.02.2020 and there was no visible progress in the work and therefore intimations were given to the petitioner to complete the work. It is admitted in the statement that the petitioner had completed the widening work, but could not complete the other works, such as pipe culvert laying and raising of the road at certain portions. It is admitted in the counter affidavit that intimations were given to the Assistant Engineer, Electrical Section, KSEB Ltd., on 23.07.2019, 20.11.2019, 07.12.2019 and 23.12.2019 regarding the shifting of the electric post. Thereafter, another complaint was given to the Electrical Inspector, Alappuzha on 18.12.2019 and as per letter dated 10.1.2020, the Electrical Inspector, Alappuzha has directed the Assistant Engineer, Electrical Section, KSEB Ltd., Karuvatta ## **W.P.(C).No.19081 of 2021 12** to shift the electric post. Despite issuance of such a direction, no measures were taken by the KSEB to shift the post and thereupon a complaint was also registered in the Alappuzha District Electrical Adalath held on 20.2.2020. Therefore, it was contended that all possible steps were taken by the department for removing the electric posts. Petitioner is attempting to shred away from the responsibility and the Covid-19 projected as another reason for delay of work, is absolutely without any basis. 5. A detailed reply affidavit was filed by the petitioner to the statement filed by the 6[th] respondent refuting the contentions taken in the counter affidavit and maintaining the stand that the delay occurred can only be attributed to the department. Petitioner relying on Ext.P18, which is the relevant extract of the re-tender notification issued by the 2[nd] respondent inviting tenders for the unfinished portion of the contract work submitted that the re-tender was for a total amount of Rs.3,41,96,557.57/-, which is much below the ## **W.P.(C).No.19081 of 2021 13** amount quoted by the petitioner as per the original tender. Petitioner on the basis of Ext.P19 would submit that the 4[th] respondent has sent a reply to the representation submitted by the petitioner requesting for payment of contract work undertaken and completed by him wherein he has stated that the total amount of work completed by the petitioner is for a value of 3,70,0184.70/-. As per the direction issued by this Court on 13.2.2023 a further statement was filed by the 2[nd] respondent wherein it is stated that the balance work was tendered to M/S.AR Construction and that the 2[nd] respondent directed the 3[rd] respondent Executive Engineer, PWD Road division, Alappuzha to calculate the risk and cost of the terminated contractor, the petitioner herein, and the 3[rd] respondent has reported that M/S.AR Construction have completed the work and the final bill has been submitted and that it was reported by the 3[rd] respondent that no loss has occurred to the Government on re-arranging the work. The stand taken in the statement is that as per Clause 2116.2.1 an amount equal to 30% of ## **W.P.(C).No.19081 of 2021 14** the cost of remaining work shall be recovered from the defaulted contractor towards risk and cost and therefore,30% of the balance work at the agreed rate of terminated contract comes to Rs.1,09,38,384.60/-, ie., 30% of Rs.3,64,61,282/- and therefore, petitioner is liable to pay the said amount. 6. Heard the contentions of both sides. 7. In support of the contentions, petitioner relies on the judgment in _**Antony v. State of**_ _**Kerala(2023 (2) KLT 137)**_ which held that the admitted amount due to the contractor cannot be withheld except for the loss to be calculated by the government and the stipulation in the PWD Manual to recover 30% of the cost of the remaining works is to offset the possible loss likely to suffer on breach of contract by the contractor and that if the amount has been already calculated, withholding any amount beyond the alleged loss suffered is arbitrary and unjust. Petitioner also relies on the judgment in _**Vijayakymari v. Kerala**_ _**Land Development Corporation Limited (2020 (3) KLT**_ **W.P.(C).No.19081 of 2021 15** _**773)**_ and also _**Vishnu v. State of Kerala (2023 (2)**_ _**KLT 186)**_ to contend for the position that the High Court under Article 226 has the authority to grant such reliefs as it deems necessary to set right the illegality, upon consideration of materials placed before it, the Court reaches a conclusion that the decision of the authority was so unfair, arbitrary or unreasonable. 8. The issue to be considered in this writ petition is as to whether the action of the 2[nd] respondent in terminating the work at the risk and cost of the petitioner and re-arrangement of the work at his risk as per Ext.P10 order is valid. 9. It is an admitted case that they were various obstructions for completion of the work by the petitioner like non removal of electric posts laid by the KSEB, pipeline laid by the Water authority and cables of BSNL and other private authorities. Petitioner has from the very early instance itself has intimated the department regarding the removal of obstructions for the smooth undertaking of the construction work. ## **W.P.(C).No.19081 of 2021 16** Petitioner as per Ext.P6 has intimated the PWD authorities regarding the difficulties he had undergone due to the non removal of the electric posts, pipeline of the Water Authority and cables of BSNL etc,. Ext.P13 is a communication issued by the Assistant Engineer dated 26.8.2020, ie, a communication issued after issuance of Ext.P10 order, in which also it is stated that the electric post of KSEB has not been removed till date and that is an obstacle for tarring the said portion of the road. In the statement filed by the department it is an admitted fact that no amount has been provided in the estimate of work under the head 'utility shifting'. It is also admitted in the said statement that there was heavy rain and water logging on the side of the road which affected the starting of the work. It is also admitted that intimations were given to the KSEB, Kerala Water Authority and BSNL on 23.7.2019 and further that going by GO Rt.No.13/2018/PWD Thiruvananthapuram dated 5.1.2018, it is the responsibility of KSEB Ltd, to shift electric post on the carriage way, ## **W.P.(C).No.19081 of 2021 17** but the same has not been done. It is also further stated in the statement filed by the 4[th] respondent that intimations were given to Assistant Engineer, Electrical Section KSEB Ltd., Karuvatta on 23.07.2019,20.11.2019, 7.12.2019 and 23.12.2019 and complaint has been given to Electrical Inspector, Alappuzha on 18.12.2019. As per letter No.B1- 6828/2019/EH of the Electrical Inspector, Alappuzha dated 10.01.2020, Assistant Engineer, Electrical Section, KSEB Ltd., Karuvatta was directed to shift electrical posts. But no step was taken to shift the posts by the KSEB Ltd. Again a complaint has been registered in Alappuzha District Electrical Adalath held on 20.2.2020. A reading of the statement filed, reveals that it is admitted by the department also that there was considerable delay in removing the obstructions and that even after the termination of the contract as per Ext.P10, the electric posts were not removed from the site. Petitioner has approached the department on several occasions requesting for taking steps to remove these obstructions and even going by the statement ## **W.P.(C).No.19081 of 2021 18** and documents produced, the department itself have made request in this regard, but was unsuccessful in making the KSEB authorities to remove the electric posts within time. Even a mighty department of the government was not able to remove the obstructions, and we cannot expect the petitioner to make it done. Even though the petitioner has raised a specific contention that the non removal of the obstruction in the site is the prime reason for not completing the work within time, Ext.P10 does not reveal that the said aspect was considered in a proper manner by the Superintending Engineer, the 2[nd] respondent herein, while taking a decision to terminate the work at the risk and cost of the petitioner. 10. It is also practically admitted in Ext.P15 that the petitioner has completed 35% of the work awarded. The work has been terminated at the risk and cost of the petitioner relying on Clause 2116.2.1 of the PWD manual. The relevant Clause reads as follows: ## _**2116.2.1 Realisation of loss on account of**_ _**termination** An amount equal to 30% of the cost_ ## **W.P.(C).No.19081 of 2021 19** _of the remaining works at agreed rates of the terminated contract shall be recovered from the defaulted contractor towards the risk and cost. The contractor shall be directed to remit the risk and cost amount within three months. There is no need to wait till the work is arranged alternatively through another contractor and the total loss sustainable due to the default of the original contractor is assessed. Such loss, if any, shall be realised after completion of the work. If he fails to remit the amount within this periods following steps can be adopted for realisation of loss. The amount can be realised from the following._ _2. EMD / Security_ _3. Bill amount / retention if any due to the contract._ _4. Any dues from department to the_ _contract_ _5. Bank Guarantee / Performance Guarantee or By filling civil suit against the contractor._ The said Clause specifically mandates that an amount equal to 30% of the cost of the remaining work shall be recovered from the contractor towards risk and cost. It further mandates that the department need not wait till the work is arranged alternatively through another contractor and the total loss sustained due to the default of the original contractor is assessed. The Clause further ## **W.P.(C).No.19081 of 2021 20** says that such loss if any shall be realised after completion of the work. 11. When the matter was admitted, this Court has passed an interim order dated 15.9.2021 whereby further proceedings pursuant to Ext.P15 was stayed however making it clear that this will not preclude the authority from re-tendering the work. It is seen that pursuant to the said order the work was re-tendered and M/S.AR constructions has taken up the balance work. The petitioner has taken a contention based on Exts.P18 and P19 that by Ext.P18 the work was re-tendered for a total amount of Rs.3,41,96,557.57/- whereas going by Ext.P19 the total amount due to the petitioner for the completed work is Rs.37,00,184.70/-. Based on the same, the petitioner would contend that there is no occasion for any loss caused to the department due to the re-tendering of the work. Subsequent statement filed by the 2[nd] respondent dated 6.3.2023 also throws light on this aspect, wherein it is stated that M/S.AR Constructions has completed the re-tendered work and final bills have been ## **W.P.(C).No.19081 of 2021 21** submitted and on verification of the same, it is seen that no loss has occurred to the Government due to re-arranging of the work. But in the statement filed, they have taken a specific contention that even though no loss has occurred to the Government on re-arranging the work, going by Clause 2116.2.1 an amount equal to 30% of the cost of remaining work could be recovered from the petitioner towards the risk and cost and that the amount will come Rs.1,09,38,384.60/- and the said amount has to be recovered from the petitioner. 12. This Court on a similar set of facts considered this issue in _**Antony's**_ case supra, paragraphs 8 and 9 of the judgment reads as follows: _“8. The State and its instrumentalities are expected to deal with the citizens in a fair manner in all circumstances. In a normal course, if the Government had not quantified the loss, the Court cannot order release of the amount agreed to be recovered, based on the contract. But that does not mean that the Court cannot order release of the withheld amount in excess of the loss already quantified by the public officials. The_ ## **W.P.(C).No.19081 of 2021 22** _admitted amount in this matter cannot be withheld except for the loss to be calculated by the Government. The stipulation in the PWD Manual to recover 30% of the cost of the remaining works to offset the possible loss likely to suffer on breach of contract by the contractor. If the amount has been already calculated withholding any amount beyond the alleged loss suffered is arbitrary and illegal._ _9. We, in such circumstances, are of the view that the admitted amount under part and 7[th] and 8[th] and final bills, be released to the appellant, except the amount calculated towards damages and loss. The security deposit and any other amount payable to the appellant towards performance guarantee as per the contract also be released to the appellant. We make it clear that, if the appellant has any other claim, other than that of the admitted amounts as above under part and 7[th] and 8[th] and final bills including the withheld amount, he can approach the civil court. With liberty as above, we dispose of this appeal. Needful shall be done to comply with the direction to release the amount as above to the Construction Corporation within one month. The Construction Corporation, on receipt of the amount, shall release the amount to the appellant within a further period of one month. No costs.”_ On a reading of Clause 2116.2.1 of the PWD Manual revised edition 2012 and the judgment in _**Antony's**_ ## **W.P.(C).No.19081 of 2021 23** case supra, there is no doubt that the department is well within its powers to recover an amount equal to 30% of the costs of the remaining work towards risk and cost. It is also not in dispute that the department need not wait for arranging the work alternatively through another contractor and also to assess the loss if any sustained to the department. But this retention of 30% of the amount is only as a security for the amount of loss if any, which is to be quantified at a later point of time and to recover any such loss found in such quantification, but this Clause does not empower the government to recover 30% of cost of the remaining work recovered towards risk and cost to be retained by the Government as a punishment. In the present case, the work was re-tendered and completed and final bills have been submitted and it is thereafter a statement has been filed by the 2[nd] respondent that no loss has occurred to the government on re-arranging the work. Therefore, I am of the opinion that in the facts and circumstances of this case, the decision ## **W.P.(C).No.19081 of 2021 24** in _**Antony's**_ case supra will squarely apply. As regards the cancellation of the work at the risk and cost of the petitioner as per Ext.P10, I am of the opinion that, the same is not sustainable in law especially for the reason that the obstacles pointed out by the petitioner for the delay in completion of the work are obstacles which were admitted by the department also and further that it is an admitted fact that even though earnest steps were taken by the department to remove the said obstacles, the same could not materialise. Therefore, something which could not done by the department, cannot be attributed on the petitioner as a reason for terminating the work at the risk and cost of the petitioner. Further the reason stated by the petitioner for the delay in completing the work has not been properly considered while issuing Ext.P10 order. Therefore, I am of the opinion that the matter requires reconsideration at the hands of the 2[nd] respondent and therefore, Exts.P10 and P15 orders are set aside. While the 2[nd] respondent reconsider the ## **W.P.(C).No.19081 of 2021 25** issue, as directed above, the 2[nd] respondent shall also look into the fact whether any loss has been sustained to the Government due to the re-tender of the work, especially when going by the statement filed by the 4[th] respondent dated 6.3.2023 no loss has occurred to the Government on re-arranging the work. The said aspect is also discernible from the re-tender notification Ext.P18 and the actual amount due to the petitioner quantified as per Ext.P19. Therefore, if no loss is sustained by the department due to the re-arranging of the work, in the light of the decision in _**Antony's**_ case supra, I am of the opinion that the amount due to the petitioner for the work he has actually undertaken is liable to be paid to him. A decision in this regard shall be taken by the 2[nd] respondent within a period of one month from the date of receipt of a copy of this judgment. The amount due to the petitioner towards the work undertaken by him shall also be disbursed to him within a period of 2 months thereafter except any amount towards damages and loss caused to the department. ## **W.P.(C).No.19081 of 2021 26** With the above said directions, the writ petition is disposed of. sd/- **VIJU ABRAHAM, JUDGE** pm ## **W.P.(C).No.19081 of 2021 27** ## **APPENDIX OF WP(C) 19081/2021** |PETITIONER EXHIBITS|| |---|---| |Exhibit P1|THE PHOTOSTAT COPY OF THE ORDER DATED| ||05.03.2019 NO.DB3/RD/2017/4879 ISSUED BY| ||THE 2ND RESPONDENT AWARDING THE WORK.| |Exhibit P2|THE PHOTOSTAT COPY OF THE LETTER DATED| ||05.03.2019 NO.DB3/RD/2017/4879 SENT BY| ||2ND RESPONDENT TO THE PETITIONER.| |Exhibit P3|THE PHOTOSTAT COPY OF THE ESTIMATE OF| ||THE WORK NO.RD/2017/4879 DATED| ||22.07.2019 TO BE EXECUTED BY THE| ||PETITIONER.| |Exhibit P4|THE PHOTOSTAT COPY OF THE LETTER DATED| ||07.01.2020 NO.D.B3.4879/2017 SENT BY THE| ||6TH RESPONDENT TO THE 4TH RESPONDENT.| |Exhibit P5|THE PHOTOSTAT COPY OF THE LETTER DATED| ||13.02.2020 NO.D.B3-4879/2017 SENT BY 4TH| ||RESPONDENT TO THE PETITIONER.| |Exhibit P6|THE PHOTOSTAT COPY OF THE REPLY DATED| ||06.03.2020 SENT BY THE PETITIONER TO THE| ||4TH RESPONDENT.| |Exhibit P7|THE PHOTOSTAT COPY OF THE LETTER DATED| ||12.03.2020 SENT BY PETITIONER TO ALL THE| ||RESPONDENT.,S| |Exhibit P8|THE PHOTOSTAT COPY OF THE LETTER| ||04.06.2020 NO.DB9(3)/4879/2017 ISSUED BY| ||THE 3RD RESPONDENT TO THE PETITIONER.| |Exhibit P9|THE PHOTOSTAT COPY OF THE RELY DATED| ||25.06.2020 SUBMITTED BY THE PETITIONER| ||TO THE SUPERINTENDING ENGINEER, TVM 33.| |Exhibit P10|THE PHOTOSTAT COPY OF THE ORDER DATED| ||30L07.2020 NO.DB-9(3)/4879/2017 ISSUED| ||BY THE 2ND RESPONDENT.| |Exhibit P11|THE PHOTOSTAT COPY OF THE REPRESENTATION| ||DATED 18.08.2020 SENT BY PETITIONER TO| ||THE SECRETARY, PWD, GOVERNMENT OF KERALA| ## **W.P.(C).No.19081 of 2021 28** TVM. Exhibit P12 THE PHOTOSTAT COPY OF THE REPRESENTATION DATED 16.09.2020 SUBMITTED BY THE PETITIONER TO THE SECRETARY PWD, SECRETARIAT, TVM 695 001. Exhibit P13 THE PHOTOSTAT COPY OF THE LETTER DATED 26.08.2020 NO.HSDB 4879/2017 ISSUED BY THE ASSISTANT ENGINEER, PWD, HARIPAD 690 514 TO THE PETITIONER. Exhibit P14 THE PHOTOSTAT COPY OF THE COMMON JUDGMENT DATED 07.09.2020 IN WPC NO.17372/2020 PASSED BY THE HON'BLE HIGH COURT OF KERALA AT ERNAKULAM. Exhibit P15 THE PHOTOSTAT COPY OF THE ORDER DATED 27.08.2021 GO(RT)NO.771/2021/PWD PASSED BY THE GOVERNMENT. Exhibit P16 THE PHOTOSTAT COPY OF THE REPRESENTATION DATED 16.3.2022 SUBMITTED BY THE PETITIONER, BEFORE THE SECOND RESPONDENT Exhibit P17 TRUE COPY OF THE LETTER DATED 21/02/202 ISSUED BY THE ASSISTANT ENGINEER, PWD, ALAPPUZHA TO THE EXECUTIVE ENGINEER, PWD ROAD DIVISION Exhibit P18 THE PHOTOSTAT COPY OF THE RELEVANT EXTRACT OF THE RETENDER NOTIFICATION, NO.TN 420/SFSC/2018-19 2017-19 IMPROVEMENTS AND WIDENING OF NH WAY-KV JETTY ROAD FROM CH 0/000 TO 3/800 Exhibit P19 THE PHOTOSTAT COPY OF THE REPLY NO.HSDB 4879/2017 DATED 13/7/2022 SUBMITTED BY THE ASSISTANT ENGINEER, PWD, ROAD SECTION, HARIPAD TO THE PETITIONER.