Point of Law: Rule 232 deals with general principles for award of grants-in-aid for centrally sponsored schemes.

JUDGMENT :

P.V.KUNHIKRISHNAN, J.

There are a catena of decisions of this Court and Apex Court about the jurisdiction of this Court under Article 226 of the Constitution of India to interfere in contractual matters. The normal rule is that the jurisdiction of this Court to interfere in contractual matters is very limited. But, the parties to the contract are approaching this court in almost all contractual matters contending that their case will come within the sphere of this limited jurisdiction under Article 226 of the Constitution of India. Therefore, now the constitutional courts are forced to consider each and every contractual matter that comes before it and determine whether the same will come within the four corners of the limited jurisdiction of this Court under Article 226 of the Constitution to warrant the Court’s interference.

2. The main contention of the petitioners in these batch of cases is regarding the applicability of certain office memorandums issued by the Government of India by which the payment of the performance guarantee and additional performance guarantee to be paid by contractors as per the Notice Inviting Tender (NIT) were relaxed due to the Covid 19 pandemic economic slow down. In tune with some of the Government of India orders, the State of Kerala issued certain orders reducing the performance guarantee to be paid and also granting exemption regarding the payment of additional performance guarantee, while executing agreements for the contract works.

3. The petitioners in these batch cases are contractors working under the Public Works Department and also under the Kerala Water Authority. The points raised in these batch cases were actually considered by this Court in detail as per judgment dated 21.03.2023 in WP(C)No.14051/2022 and connected cases. After the disposal of the above cases, a writ appeal was filed in one of the cases and an interim order was passed in the writ appeal. Thereafter these batch of cases are filed. Contentions almost similar to the contentions which were previously decided by this Court in the judgment dated 21.03.2023 in WP(C) No.14051/2022 and connected cases are raised in these writ petitions also.

4. The arguments were advanced in these writ petitions mainly by Adv. Babu Joseph Kuruvathazha, Adv. V. Premchand and Adv. George Mathew. All other lawyers also endorse the arguments of the above lawyers. Therefore, I will take WP(C) No.22727/2023 filed by Adv. Babu Joseph Kuruvathazha, WP(C) No.19229/2023 filed by Adv. V. Premchand and WP(C) No.13012/2023 filed by Adv. George Mathew as leading cases. I will narrate the brief facts in the above three cases which will be sufficient for understanding the pleadings and contentions of all the petitioners in these batch cases.

5. WP(C) No.22727/2023 is filed by a contractor having an A Class registration. In response to the tenders issued by the Kerala Water Authority, the petitioner in that case submitted the tender and he was issued with a letter of acceptance dated 04.07.2023 as evidenced by Ext.P1 in that writ petition. In Ext.P1 letter of acceptance, it is stated that the petitioner was directed to furnish 5% of the contract value towards the performance guarantee and to pay an amount of Rs.3,93,12,431/-towards additional performance guarantee. It is submitted that as per Ext.P2 Office Memorandum No.F.9/4/2020-PPD dated 12.11.2020 (for short OM dated 12.11.2020 regarding the performance guarantee) issued by the Government of India it is ordered that the performance guarantee would be restricted to 3% of the value of the work and there would be no subsequent increase in the performance guarantee even beyond 31.12.2021.

6. Ext.P3 is the Office Memorandum No.F.9/4/2020-PPD dated 12.11.2020 regarding the additional performance guarantee (for short OM 12.11.2020 regarding additional performance guarantee). Exts.P2 and P3 are on the same date. In the OM dated 12.11.2020, regarding additional performance guarantee, it is stated tha