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2020 Supreme(Online)(KER) 45225
HIGH COURT OF KERALA
ANU SIVARAMAN, J
P.X. FOUNDATION – Appellant
Versus
PUBLIC WORKS DEPARTMENT – Respondent
WP(C)/10990/2020
SRI.T.RAJESH, SMT.PRINCY XAVIER, GP
Rights of contractors to adjust unpaid bills as security guarantees were affirmed, promoting fair practices in public contracts.
Headnote:
Contractor - Security Deposit - Relevant Legal Provisions - The court granted relief to the petitioner by allowing the unpaid bill to be adjusted towards the security deposit and performance guarantee required for the execution of the contract, referencing established precedents.
Fact of the Case:
The petitioner, a contractor for the Public Works Department, was requested to furnish a security deposit and performance guarantee for a new work. The petitioner sought to utilize an unpaid bill as the required guarantee.
Finding of the Court:
The court acknowledged that similar relief has been granted to other contractors and decided in favor of the petitioner, allowing the unpaid bill to cover the security deposit and performance guarantee.
Issues: Whether the petitioner can utilize an unpaid bill to meet the requirements for a security deposit and performance guarantee as demanded by the Department.
Ratio Decidendi: The court concluded that there is no specific provision prohibiting the adjustment of unpaid bills towards the security deposit and performance guarantee, aligning with prior judgments.
Final Decision: The writ petition is allowed, directing payment adjustments for security deposits.
JUDGMENT
Dated this the 1 1 t h day of June 2020 The petitioner is a contractor undertaking works of the Public Works Department of the State Government. Now, the petitioner is awarded a new work. Ext.P1 is the communication issued to the petitioner by the Department in this connection. It is stated that the petitioner is required by the Department to furnish security deposit and additional performance guarantee for the work covered by Ext.P1 so as to enable the Department to enter into the requisite agreement for the execution of the work. The limited prayer made by the petitioner in the writ petition is for a direction to the respondents to accept their unpaid bill towards security deposit and additional performance guarantee for the work covered by Ext.P1.
2. It is submitted by the learned Government Pleader, on instructions, that the bill referred in Ext.P3 communication issued by the 3rd respondent to the 2nd respondent is pending for payment to the petitioner and that the said bill covers an amount of Rs.56,70,821/-. It is submitted that there is no provision to adjust unpaid bills towards security deposit or performance guarantee.
3. It is seen that in large number of cases, this Court has granted the relief sought for by the petitioner to similarly placed contractors.
In the above circumstances, the writ petition is allowed and the respondents are directed to adjust the unpaid bill of sufficient value to cover the amounts towards the security deposit and additional performance guarantee for the work covered by Ext.P1 communication. The period prescribed for execution of the agreement for the work will also stand extended by two weeks from today.
Sd/-
ANU SIVARAMAN
JUDGE
APPENDIX PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE COMMUNICATION D4-4368/2017/PRICE DATED 21.4.2020 OF THE 2ND RESPONDENT EXHIBIT P2 THE TRUE COPY OF THE CIRCULAR ISSUED BY THE GOVERNMENT DEPARTMENT ON 7/09/2003 EXHIBIT P3 THE TRUE COPY OF THE COMMUNICATION C-101067/2019 DATED 27.05.2020 OF THE 3RD RESPONDENT EXHIBIT P4 THE TRUE COPY OF THE REQUEST FORWARDED BY THE PETITIONER TO THE 2ND RESPONDENT ON 19.05.2020 EXHIBIT P5 THE TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WP(C)NO.28705/2016 DATED 09.09.2016 IN A SIMILAR MATTER EXHIBIT P6 THE TRUE COPY OF THE COMMUNICATION D4-4368/2017/
PRICE DATED 20.5.2020 OF 2ND RESPONDENT
