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2023 Supreme(Online)(KER) 1083
HIGH COURT OF KERALA
AMIT RAWAL, J
M/S. Midland Engineering and Contracting Company – Appellant
Versus
KERALA WATER AUTHORITY – Respondent
WP(C) 25959/2023
P.SHANES METHAR, N.KRISHNA PRASAD, P.M.JOHNY – SC KWA, SRI.ARUN AJAY SNAKAR - GP
Contractors must comply with contractual provisions regarding deductions for unexecuted work, based on tender estimates rather than quoted prices.
Headnote:
Contractor - Writ Petition - Clause-8.19(A), 8.19(B) - The court emphasized adherence to contractual payment terms, determining deductions for under-executed items based on tendered estimates rather than quoted rates.
Fact of the Case:
The petitioner, a contractor, challenged a directive affecting payments for work under several contracts, alleging and seeking enforcement of contract terms that require deductions to be made based on estimated rates for unexecuted items.
Finding of the Court:
The court found that the directive in question complied with the contract’s payment terms and mandated adherence to the rules and conditions established in the tender document.
Issues: The primary issue was whether the payment deductions for unexecuted work should be based on the quoted rate or the estimated rates as outlined in the contract.
Ratio Decidendi: The court ruled that deductions for under-executed items should reflect the estimated rates in the tender, as laid out in clauses 8.19(A) and 8.19(B) of the contract.
Final Decision: The writ petition was disposed of favoring the strict adherence to the contractual payment provisions.
JUDGMENT
1. This writ petition has been originally filed with the following prayers:
(1) To issue a writ of certiorari or any other appropriate writ/order or direction calling for original of Ext.P3 and quash the same.
(ii) Issue a writ of mandamus or any other appropriate writ/order or direction commanding the respondents to deduct the amount of work/item not executed at the quoted rate of the contractor.
(iii) Render such other orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.”
2. Thereafter sought the indulgence of this Court in I.A.No.1/2023 for amendment which has been allowed vide order dated 23.11.2023. The facts have been taken from the amended writ petition.
3. Petitioner is alleged to be partnership firm, a work contractor and is executing a work namely “JJM (2021-22) ARWSS to Krishnangiri, Purakkady and Ambalavayal Villages –
Providing Functional House Hold Tap Connection in Meenangadi Panchayath which was awarded at an amount of Rs.24,12,81,809/- (rupees twenty four crore twelve lakhs eighty one thousand eight hundred and nine only) alleged to be 3.45% below the tendered price. It is averred that the subject work ie., Re-Tender No.56/PHC/KKD/31/2021-22 dated 13.1.2022 of the second respondent was under the Quality and Cost Based Selection (QCBS) mode. Thus the successful bidder is entitled to get the work awarded at the quoted/offered price. Petitioner quoted above the price but the 2nd respondent by applying rules, awarded the work at 3.45% below the tendered price. The work agreement was entered on 20.04.2022 Ext.P2. However, vide Ext.P2 which contains clauses 8.19(A) and 8.19(B), the aforementioned process basically deal with the payments when alterations are involved. Executive Engineer, Kerala Water Authority - respondent No.3 vide letter dated 05.08.2022 directed the Assistant Engineer and Assistant Executive Engineer that the amounts for items/work if not executed shall be reduced from the bill while preparation and payment. The gap amount between the estimate rate and the quoted amount should be reduced from the Contractor’s bill.
4. Learned counsel appearing on behalf of the petitioner submitted that the issue covered by Ext.P3 would affect not only the present contract but three other contracts under the 1st respondent ie., awarded on 14.12.2021 and another on 12.04.2022, Exts.P4, P5 & P6. There is no uniformity in the stand. The deviation from Ext.P3 and Clause 8.19 amounts to amending the contract conditions and therefore illegal and sought the indulgence of this Court in the following manner:
(I) To Issue a writ of mandamus or any other appropriate writ/order or direction commanding the respondents that in relation to Ext.P2, Ext.P4, Ext.P5 & Ext.P6 works Ext.P3 and clause 8.19 shall be complied with while preparing the works.
B. Issue a writ of mandamus or any other appropriate writ/
order or direction commanding the respondents that in relation to Ext.P2, Ext.P4, Ext.P5 & Ext.P6 for under executed/not executed item whether the item is high quoted or low quoted, the deduction shall be at par with tendered departments estimated in conformity with clause
8.19.
C. Render such other orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.
5. As per the stand of the respondent, it is contended that petitioner is a registered A class contractor who had undertaken an agreement for implementation “Jal Jeevan Mission (2021-22). Clauses 8.19(A) and 8.19 (B) belong to mother document ie., Notice Inviting Tender of Kerala Water Authority approved by the Board of Kerala Water Authority and thus have to be adhered strictly for all works. Issuance of Ext.P3 is not in deviation of the agreement but strictly as per the terms and conditions of agreement Ext.P2.
6. I have heard the learned counsel for the parties and appraised the paper book and of the view there is no force and merit.
7. Clauses 8.19(A) and 8.19(B) reads as under:
“8.19 (A) PAYMENTS
