High Court of KeralaSingle Judge2014-01-24Writ petition dismissed. The court refused to d...

T.K. Abdulkhader v. State of Kerala & Ors

Case / Petition Number:W.P.(C).No.29471/2003 (H)

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Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A.M. Shaffique
Judgment Date: 2014-01-24
Court Decision / Holding: The writ petition is dismissed.
Final Disposition: Writ petition dismissed. The court refused to direct payment/arbitration and held disputes to be contractual in nature; relief under writ not available; remedy via civil suit if appropriate.

Parties to the Case

Appellants / Petitioners

T.K. Abdulkhader, S/O Kunhappu, PWD contractor, Pattuvathil House, Thekkil Post, Kasaragod District

Respondents

State of Kerala represented by the Principal Secretary, Department of Higher Education, Thiruvananthapuram
Director, L.B.S. Centre for Science & Technology, Palayam, Thiruvananthapuram

Legal Representation & Advocates

Counsels for Petitioners

• Sri M. Sasindran
• Sri P.V. Jayarajan
• Sri T.P. Eldho

Counsels for Respondents

• Sri S. Jamal (Government Pleader)
• Sri P.B. Suresh Kumar, S.C.

Case Synopsis & Summary

This writ petition concerns a building contractor who undertook construction for the LBS Centre for Science & Technology, Kasaragod, including the administrative block and a ladies hostel. The petitioner seeks payment of the final bill for the completed works, plus the security deposit of Rs. 2 lakhs with interest, and requests appointment of an Arbitrator to resolve disputes. The respondents claim that although the works were completed to general satisfaction, defects were noticed and rectified at the respondents’ cost, and deductions were made from the contractor’s bill to cover rectification expenses. The contract contains General Conditions of Contract: E.53 imposes a defect liability obligation for 12 months from the date of completion and requires the contractor to make good any damages at his own cost; E31(i) provides for liquidated damages at 1% per day for delays beyond the agreed or extended time. The respondents argue that liability to pay disputed under the contract; security deposit is recoverable only after adjusting damages. They further contend there is no arbitration clause, so arbitration cannot be ordered, and the petitioner should have pursued a civil suit. The court held the dispute to be contractual, rejected writ relief directing refund, and distinguished State of Karnataka v. Shree Rameshwara Rice Mills on facts, noting the presence of contractual remedies. The writ petition was dismissed; recovery and adjustments proceed under the contract, with arbitration not mandated.

Provisions of Law Cited

E.53E.31(i)

Legal Doctrines & Maxims

When a claim is disputed by a party to the contract, the other party cannot be an arbiter to his own cause.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends entitlement to the final bill and the security deposit, with payment and interest, and seeks appointment of an Arbitrator to settle contractual disputes. He argues the work was completed to satisfaction and that deductions were improper or excessive, with defects rectified at the respondents’ cost. He asserts a right to arbitration where disputes arise under the contract.

Contentions of Respondents

The respondents rely on contract provisions E.53 and E.31(i), noting defects were rectified at their own cost and deductions were made accordingly. They emphasize the absence of an arbitration clause, arguing the petitioner should have invoked civil remedies, and contend that disputed liability cannot be resolved by writ. They cite the contractual mechanism for liquidated damages and defect liability, and distinguish the petitioner’s claim from other cases, including challenges to arbitration when contracts already provide remedies.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
State of Karnataka v. Shree Rameshwara Rice Mills, Thirthahalli	AIR 1987 SC 1359	Distinguished	Court distinguished the cited decision on facts since there is a contractual remedy (liquidated damages and rectification costs) and no arbitration clause, making the general principle from the cited case inapplicable to the present contractual dispute.

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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 A.M.SHAFFIQUE** **FRIDAY, THE 24TH DAY OF JANUARY 2014/4TH MAGHA, 1935** ## **WP(C).No. 29471 of 2003 (H)** **----------------------------------------** **PETITIONER:** **-------------------** **T.K. ABDULKHADER, S/O. KUNHAPPU, P.W.D. CONTRCTOR, PATTUVATHIL HOUSE, THEKKIL POST, KASARAGOD DISTRICT.** **BY ADVS.SRI.M.SASINDRAN, SRI.P.V.JAYARAJAN, SRI.T.P.ELDHO.** **RESPONDENTS:** **------------------------** **1. STATE OF KERALA – REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF HIGHER EDUCATION, THIRUVANANTHAPURAM.** **2. THE DIRECTOR, L.B.S. CENTRE FOR SCIENCE & TECHNOLOGY, PALAYAM, THIRUVANANTHAPURAM.** **R1 BY GOVERNMENT PLEADER SRI. S. JAMAL, R2 BY ADV. SRI.P.B.SURESH KUMAR S.C.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-01-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Prv.** ## **W.P.(C).NO.29471/2003-H:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **EXT.P.1: COPY OF THE COMPLETION REPORT DTD. 23/11/1999 SENT BY THE PRINCIPAL OF THE ENGINEERING COLLEGE TO THE R.2.** - **EXT.P.2: COPY OF THE LETTER DTD. 24/10/2001 SENT BY THE PETITIONER TO THE R.2.** - **EXT.P.3: COPY OF THE LAWYER NOTICE DTD. 24/01/2002.** - **EXT.P.4: COPY OF THE REPLY DTD. 04/03/2002.** - **EXT.P.5: COPY OF THE NOTICE DTD. 27/12/2002.** - **EXT.P.6: COPY OF THE REPLY NOTICE DTD. 22/02/2003.** ## **RESPONDENTS' EXHIBITS:** - **EXT.R2.(A): COPY OF THE AGREEMENTS ENTERED INTO WITH THE PETITIONER AND THE R.2. IN RESPECT OF THE CONSTRUCTION OF AN ADMINISTRATIVE BLOCK DTD. 17/12/1995.** - **EXT.R2.(B): COPY OF THE AGREEMENTS ENTERED INTO WITH THE PETITIONER AND THE R.2. IN RESPECT OF THE CONSTRUCTION OF THE LADIES HOSTEL, DTD. 22/03/1996.** - **EXT.R2.(C): COPY OF THE COMPLETION CERTIFICATES ISSUED IN RESPECT OF THE CONSTRUCTION OF THE ADMINISTRATIVE BLOCK DTD. 29/02/2000.** - **EXT.R2.(D): COPY OF THE COMPLETION CERTIFICATES ISSUED IN RESPECT OF THE CONSTRUCTION OF THE LADIES HOSTEL DTD. 23/11/99.** - **EXT.R2.(E): COPY OF THE LETTERS DTD. 10/01/2001 ISSUED TO THE PETITIONER REQUESTING URGENT RECTIFICATION OF THE DEFECTS IN THE CONSTRUCTION OF THE ADMINISTRATIVE BUILDING.** - **EXT.R2.(F): COPY OF THE COPY OF THE LETTERS DTD. 12/02/2001 ISSUED TO THE PETITIONER REQUESTING URGENT RECTIFICATION OF THE DEFECTS IN THE CONSTRUCTION OF THE LADIES HOSTEL.** - **EXT.R2.(G): COPY OF THE LETTER ISSUED BY THE R.2. TO THE PETITIONER REQUESTING URGENT RECTIFICATION OF THE DEFECTS IN THE CONSTRUCTION OF THE LADIES HOSTEL DTD. 24/03/2000.** **EXT.R2.(H): COPY OF THE LETTER DTD. 10/03/2001 SENT BY THE PETITIONER TO THE R.2.** - **EXT.R2.(I): COPY OF THE LETTER SENT BY THE R.2. TO THE PRINCIPAL, L.B.S. ENGINEERING COLLEGE, KASARAGOD, DTD. 19/03/2001.** **Prv.** ## **W.P.(C).NO.29471/2003-H:** - **EXT.R2.(J): COPY OF THE LETTER SENT BY THE R.2. TO THE PRINCIPAL, L.B.S. ENGINEERING COLLEGE, KASARAGOD, DTD 24/04/2001.** - **EXT.R2.(K): COPY OF THE REPORT SUBMITTED BY SRI. JAYAMOHAN DTD. 28/02/2002.** - **EXT.R2.(L): COPY OF THE AGREEMENT EXTENDING THE TIME FOR CONSTRUCTION OF THE ADMINISTRATIVE BLOCK AND THE LADIES HOSTEL WITHOUT INVOKING THE PENALTY CLAUSE DTD. 24/03/1997.** - **EXT.R2.(M): COPY OF THE AGREEMENT EXTENDING THE TIME FOR CONSTRUCTION OF THE ADMINISTRATIVE BLOCK AND THE LADIES HOSTEL WITHOUT INVOKING THE PENALTY CLAUSE DTD. 31/05/1997.** - **EXT.R2.(N): COPY OF THE AGREEMENT EXECUTED BY THE CONTRACTOR FOR EXTENSION OF TIME AGREEING THE INVOCATION OF THE PENALTY CLAUSE DTD. 04/04/2000.** - **EXT.R2.(O): COPY OF THE AGREEMENT EXECUTED BY THE CONTRACTOR FOR EXTENSION OF TIME AGREEING THE INVOCATION OF THE PENALTY CLAUSE, DTD. 08/09/1999.** - **EXT.R2.(P): COPY OF THE LETTER SENT BY THE R.2. TO THE PETITIONER DTD. 25/04/2001.** **EXT.R2.(Q): COPY OF THE LETTER SENT BY THE R.2. TO THE PETITINER DTD. 24/04/2001.** ## **//TRUE COPY//** ## **P.A. TO JUDGE.** **Prv.** ## **A.M. SHAFFIQUE, J.** **- - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.29471 of 2003 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 24[th ] day of January, 2014** ## **J U D G M E N T** The petitioner who is a building contractor has approached this court seeking a direction to the 1[st] respondent to pay the entire amount towards the final bill submitted by the petitioner in respect of the work viz. construction of ladies hostel and administrative block of LBS Engineering College, Kasaragod and for a direction to pay the security amount of Rs.2 lakhs with interest to the petitioner. The petitioner further seeks a direction to appoint an Arbitrator to settle the disputes. 2. The facts involved would show that the petitioner was awarded the work based on certain terms and conditions. According to him though he had completed the entire works to the satisfaction of the respondents he has not paid the full value of work. Certain amounts had been retained by the respondents alleging that such amounts W.P.(C) No.29471 of 2003 **-2-** have been spent for rectifying the defects for the said building. That apart, it is his contention that the security deposit has not been paid. 3. Counter affidavit is filed by the 2[nd] respondent referring to the terms of the contract. The specific terms with respect to general conditions of the contract was also extracted. Clause E.53 reads as under: “i) The contractor shall take upon himself the whole risk of executing the works and all materials obtained for the purpose of the contract and all works executed shall be at his risk till the expiry of the defect liability period. ii) The contractor shall at his own cost make good to the satisfaction of the Centre all damages, losses or injuries that may happen to any portion of the works from whatsoever cause arising and shall deliver up the works in complete and undamaged condition. The liability of the contractor for the above shall extend for a period of 12 months from the date of issue of the completion certificate.” Clause E 31 (i) of the General Conditions of contract is as ## under: “If the contractor fails to complete the works within the time agreed or extended, the contractor shall pay the Centre as liquidated damages for such delay or default, for every day or part of the day which shall lapse between the time agreed or the extended time as the case may be and the actual time of completion of works an amount equal to 1% (one percent) or such smaller sum as the Centre may decide on the value of the whole work.” W.P.(C) No.29471 of 2003 **-3-** A perusal of the counter affidavit would show that after completion of the building the respondent authorities noticed certain defects which had to be rectified at their own cost as the contractor failed to rectify the said defects. That apart, it is evident that supplementary agreement had to be executed for extending the time for performance of the contract subject to the levy of liquidated damages. The counter affidavit also spells out a case which would apparently show that the amounts now claimed by the contractor has been disputed by the respondents and the amounts were deducted on the basis of specific provisions under the contract. Since the liability to pay has been disputed based on the contractual terms, I do not think that this court can entertain the writ petition and direct refund of the amounts recovered by the respondents from the contractor's bill. As far as security deposit is concerned, the same is liable to be paid as per the terms of the contract only after adjusting the damages, losses or injuries suffered by the respondents. Insofar as the respondents have a case W.P.(C) No.29471 of 2003 **-4-** that the amounts are to be adjusted since the petitioner had committed breach of contract, this court cannot consider the said issue as substantial facts are involved to find out as to whether the petitioner has committed breach of contract. 4. In regard to the claim for referring the matter to arbitration, as long as there is no provision for arbitration, this court cannot direct the parties to settle the disputes by way of arbitration. The remedy apparently open for the petitioner was to prefer a civil suit at the relevant point of time. Having failed to do so, this court cannot extend any relief to the petitioner. The learned counsel for the petitioner relies upon the judgment in **State of Karnataka v. Shree Rameshwara Rice Mills, Thirthahalli [AIR 1987 SC 1359]** . That was the case in which the court had come to the conclusion that when a claim is disputed by a party to the contract the other party cannot be an arbiter to his own cause. That is not the situation here. Here there is specific provision enabling the respondents to recover liquidated damages which is an agreed amount. That apart W.P.(C) No.29471 of 2003 **-5-** the parties have also agreed to pay the actual cost of the amount involved for rectifying the defects of the building under construction. When the respondent authority has only recovered such amount from the bills of the contractor, I do not think that the judgment in **Shree Rameshwara Rice Mills** 's case can be applied to the facts of this case. In the result, the writ petition is dismissed. Sd/- **A.M. SHAFFIQUE JUDGE** shg/