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2024 Supreme(Ker) 353

IN THE HIGH COURT OF KERALA AT ERNAKULAM
EASWARAN S., J.
T.P. Paulose “Died, Lrs Impleaded” & Ors. - Petitioners
Versus
The State of Kerala, Represented by the Secretary to Government, PWD (Irrigation Department), Government Secretariat & Ors. - Respondents
WP(C) No. 8789 of 2018
Decided On : 12-04-2024

Advocates Appeared:
For the Petitioner: Sri. Jacob P. Alex, Sri. Ranjith Varghese, Sri. Rahul Varghese, Santha Varghese.
For the Respondent: Sri. Bimal K. Nath, SR.G.P.

Headnote:

re-tendering - Contractual Liability - Kerala Revenue Recovery Act, 1963 - The court considered the provisions of the Kerala Revenue Recovery Act, 1963 and various legal precedents to determine that damages for breach of contract with the Government could only be recovered after assessing the damages in a civil proceeding. The court also established that there was no concluded contract between the contractor and the Government, and therefore, the legal heirs were not liable for the damages claimed by the State.

Fact of the Case:

The contractor, Late T.P. Paulose, was awarded a work but requested to be relieved from the obligation to complete it. The work was re-tendered, and the State sought to recover alleged damages from the contractor and later from his legal heirs.

Finding of the Court:

The court found that there was no concluded contract between the contractor and the Government, and therefore, the legal heirs were not liable for the damages claimed by the State.

Issues: 1. Whether damages for breach of contract with the Government could be recovered without assessing the damages in a civil proceeding. 2. Whether the legal heirs of the contractor could be held liable for the alleged damages caused to the State exchequer.

Ratio Decidendi: The court established that damages for breach of contract with the Government could only be recovered after assessing the damages in a civil proceeding. It also determined that there was no concluded contract between the contractor and the Government, and therefore, the legal heirs were not liable for the damages claimed by the State.

Final Decision: The writ petition was allowed, and the claims for damages against the legal heirs were set aside.

 

Two intriguing questions arise for consideration in this writ petition. Can the respondents initiate revenue recovery measures for alleged damages caused on account of re-tendering of the work awarded to one Late T.P. Paulose? Secondly, even if it is held so, can the legal heirs of the Late T.P. Paulose be held liable to the alleged damages caused to State exchequer.

2. Sri. T.P. Paulose, a contractor, was the successful tenderer in terms of Ext.P1 notice inviting tenders for providing rain shade to the court complex at Muvattupuzha. Ext.P1 is dated 7.10.2016. Sri. T.P. Paulose on 20.10.2016 addressed to the 2nd respondent requesting to relieve him from the obligation to complete the work, which was awarded to him. Despite this notice, the 2nd respondent proceeded to select late Sri. T.P. Poulose as lowest tenderer pursuant to Ext.P1 notice on 28.10.2016. As per Ext.P4 dated 14.12.2016, late Sri. T.P. Paulose was put on notice that his failure to execute agreement will entail further consequences and proceedings against him. Thereafter, on 30.1.2017, the attempt of the 2nd respondent to persuade the second lowest bidder to complete the work failed, and therefore, proceedings for recovery against Sri. T.P. Paulose was recommended. It is pursuant to this order that Ext.P6 was issued to late Sri. T.P. Paulose stating that an amount of Rs.6,01,929.74 was the loss caused to the Department consequent to the re-tendering of the work. In response to Ext.P6, late Sri. T.P. Paulose addressed to the 2nd respondent on 29.7.2017 vide Ext.P7 stating that he is not liable under any circumstances for the loss that was caused. It is pertinent to note that Ext.P6 was dated 8.6.2017 and by Ext.P8, the said request was turned down and the 2nd respondent decided to proceed with recovery measures against late Sri. T.P. Paulose. By order dated 11.7.2022 in I.A.No.1/2022, his legal heirs were impleaded as additional petitioners 2 to 4, who are prosecuting the present writ petition.

3. A counter affidavit has been filed on behalf of the 2nd respondent in which it is contended that as per notice inviting tender for the works, every bidder is expected before quoting his rate to inspect the site of the proposed works. It is also stated that the rates quoted shall be inclusive ones, covering all the operations contemplated in the specifications and tender schedules and all incidental works necessary for such operations such as shoring bailing out work, scaffolding etc. Therefore, it is contended that since late T.P. Paulose carried out joint inspection with officers of the respondent and found that various items involved in the work were not provided in the price schedule and that the petitioner had not inspected the site before quoting the tender. It is further averred that if the contractor does not come forward to execute the original agreement after the work is awarded, the selection notice issued in his favour gets cancelled and, hence, a breach is committed by him.

4. Controverting to the averments contained in the counter affidavit, late Sri. T.P. Paulose had filed a reply affidavit, in which it is stated that re-tendering of the work at his risk and cost was belatedly issued on 12.10.2017 as per Ext.R2(a). It is also pointed out that under Ext.R2(a) report, the 3rd respondent has submitted to the 2nd respondent that the agreement to re-cast the estimate with all required items was done since the drawings were not provided with the tender. The assertion that the cement concrete works under Ext.P1 price schedule needs to be carried out in case rain water falls on the varanda floor etc. is denied. The re-tendering work, according to Sri. T.P. Paulose, has been done without following the procedure laid down under Ext.P10 Government Order.

5. I have heard Sri. Ranjith Varghese, learned counsel appearing for the petitioner and the learned Senior Government Pleader on behalf of the respondents.

6. Learned counsel for the petitioner submits that damages for b

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