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1999 Supreme(Ker) 272

Judges : A.R.LAKSHMANAN,S.SANKARASUBBAN
Anirudhan - Appellant
Versus
Government of Kerala - Respondent
Case No : O.P.No.4579 of 1998
Decided On : 07/26/1999
Advocates Appeared :
K.M. Joseph & Saigi Jacob For Petitioners Advocate. General (M.K. Damodaran) & Senior Government Pleader (K.K. Raveendranath) For Respondents

The main legal point established in the judgment is that the Government must adhere to the terms of the agreement, Kerala Financial Code, and Kerala P.W.D. Manual, and make timely payments to contractors. The court emphasized the principle of 'first done first paid' and held the State liable to pay interest at the rate of 18% per annum if payments were not made within four months.

Headnote:

Contractors - Government Contracts - Kerala Financial Code, Kerala P.W.D. Manual - Art.180 of the Kerala Financial Code, Arts.15-2.2, 10.2.4.1 and 10.2.4.2 of the Kerala P.W.D. Manual - The court directed the State of Kerala to effect payments to the contractors within four months failing which the State shall pay interest at the rate of 18% per annum to all the contractors. The interest is payable on the matured liability after the completion of one month's time from the date of completion of the work with reference to each contractor.

Fact of the Case:

The All Kerala Government Contractors Association filed multiple petitions seeking mandamus to direct the Government to allot sufficient funds to clear arrears due to contractors of the Kerala Public Works and Irrigation Departments and to pay interest on the matured liability. The contractors complained about non-payment of bills, affecting their financial stability and public interest.

Finding of the Court:

The court found that the contractors were entitled to receive payments as per the agreement, Kerala Financial Code, and Kerala P.W.D. Manual. The court held that the Government's failure to make timely payments was causing grave injustice to the contractors and affecting public interest. The court directed the State to make payments within four months, failing which interest at the rate of 18% per annum would be payable to the contractors.

Issues: The issues involved non-payment of bills to contractors, violation of agreement terms, Kerala Financial Code, and Kerala P.W.D. Manual, and the impact on the contractors' financial stability and public interest.

Ratio Decidendi: The court held that the Government must adhere to the provisions of the agreement, Kerala Financial Code, and Kerala P.W.D. Manual, and make timely payments to the contractors. The court emphasized the principle of 'first done first paid' and directed the State to pay interest at the rate of 18% per annum if payments were not made within four months.

Final Decision: The court directed the State of Kerala to make payments to the contractors within four months, failing which the State would be liable to pay interest at the rate of 18% per annum on the matured liability after the completion of one month's time from the date of completion of the work with reference to each contractor.

Judgment :-

AR. Lakshmanan, Ag. C.J.

O.P. 4579/98 was filed by the All Kerala Government Contractors Association, Trivandrum through its Secretary, G. Anirudhan. The second petitioner is the President of the Kerala Government Contractors Association, Alleppey District. The relief asked for in this Original Petition is for a mandamus directing the Government to allot sufficient funds to clear the arrears due to the contractors of the Kerala Public Works and Irrigation Departments in the budget for the year 1998-99 and to pay interest at the rate of 24% on the matured liability after the completion of one month from the date of completion of the work.

2. W.A.1747/98 was filed by All Kerala Government Contractors Association, Kannur District Unit represented by its President and by one P.V. Kunhiraman Nambiar of All Kerala Government Contractors Association, Kannur District Unit. The Writ Appeal was filed against the judgment in O.P. 15313/97 dated 4.8.98 which was filed for a mandamus commanding the respondents not to invite fresh tenders without passing the pending bills of the petitioners and to declare that they are entitled for interest at the rate of 18% per annum on the amount due to them. K.A. Abdul Gafoor, J. by his judgment dated 4.8.1998 directed the Government to see that allotment of fund for each of the work tendered is made available to the respective divisions within twelve months from the date of such tender. A further direction was also issued to the State to evolve certain procedure to see that allotment of funds to different divisions, circles and districts shall be in a uniform basis and necessary norms shall be prescribed in this regard within six months from that date.

3. W.A. Nos. I486,1321,1323 and 1327/98 were filed by the State of Kerala and the contractors respectively against the judgment in O.P. Nos. 4772, 9277, 7649 and 9276/98. By the impugned judgment in O.P. 4772/98, K. Narayana Kurup, J. directed the respondents to pay the bill amount in respect of the work executed by the petitioner and outstanding as on date as expeditiously as possible and at any rate not later than three months from the date of receipt of copy of the judgment. Likewise in O.P. 9277/ 98 (W.A. 1321/98) this Court issued certain directions regarding payment of amounts due to the contractors. In O.P. 7649/98 which is the subject matter of W.A.1323/98 the contractors were directed to make a representation pointing out Ext. P4 judgment (W.A. 2144/97 dated 23.1.98) and directed the Government to consider the representation and pass appropriate orders within a specified time. In O.P. 9276/98 (W.A. 1327/ 98) certain directions were issued directing payment of the amounts due to the contractors in accordance with the priority and the norms prescribed.

4. W.A. Nos. 2344,2510,1217,2513,2195,2630/98 and W.A. Nos. 1025,412, 470, 713,1044 and 1486/99 were all filed by different contractors. Different Original Petitions were filed by the contractors for a mandamus directing the respondents to pay the amounts covered by the bills submitted by them and for other consequential reliefs. C.S. Rajan, J. by his judgment directed the respondents to pay the bills submitted by the Contractors in accordance with the priority. In some cases the learned judges have directed the Government to pay the bills submitted by the contractors within a stipulated time. In some cases learned judges have directed the contractors to make representation and directed the authorities also to consider the same within a stipulated time. In few cases the learned judges have recorded the submissions made by the Government Pleader on instructions that the bills would be paid to the contractors strictly in accordance with priority.

5. W.A. 39/97 was filed by the petitioners in the Original Petition against the judgment in O.P. 10671/96 dated 22.11.96. The Original Petition was disposed of by K.S. Radhakrishnan, J. In that case the complaint was that the Chief Engineer has diverte











































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