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2022 Supreme(Online)(KER) 54393

HIGH COURT OF KERALA
C. JAYACHANDRAN, J
BADARUDDEEN. K.K – Appellant
Versus
KANHANGAD MUNICIPALITY – Respondent
WP(C)/30682/2013



Advocates:
SRI.M.RAMESH CHANDER (SR.), SRI.ANEESH JOSEPH, SMT.DENNIS VARGHESE, SRI.T.K.VIPINDAS

Municipality cannot withhold payment for completed work due to lack of council approval when previous evaluations confirm completion.

Headnote:

Municipality - Contract Dispute - Kerala Municipality Act - Sections 22(1)(l), 22(3) - The court interpreted the provisions related to municipal approvals for work completed and concluded that the Municipality's refusal to pay the contractor was unjustified due to prior assurances of work completion.

Fact of the Case:

The petitioner contracted with the Municipality for waste removal, claiming completion of 95% of work but only receiving partial payment. The Municipality withheld payment based on an outdated report regarding the work completion.

Finding of the Court:

The court found the Municipality's refusal to pay unsubstantiated as it relied on an earlier report ignoring subsequent assessments showing 95% completion, reaffirmed by the governing council's recognition.

Issues: Whether the contractor completed the work as per the contract and if the Municipality's withholding of payment was justified under applicable municipal regulations.

Ratio Decidendi: The court held that municipal regulations regarding approvals do not bar payment when the Municipality accepted completed work and failed to produce evidence disputing the contractor's completion claims.

Final Decision: Writ petition allowed; Municipality directed to pay Rs.7,50,000 with 8% interest.

JUDGMENT

Pursuant to the tender issued by the 1st respondent Municipality, the work of removing waste from the trenching ground was given to the petitioner/Contractor vide Ext.R1(a) work order dated 25.06.2011. The period stipulated for performance was one month. This period was however subsequently extended by the 1st respondent Municipality. According to the learned counsel, on 24.01.2012, the entire work was completed. However, the payment due to him, to the tune of Rs.15 lakhs, was not paid by the 1st respondent Municipality. Instead, a sum of Rs.6.61 lakhs alone has been paid. The payment was withheld on the strength of Ext.R1(i) document, wherein, the Junior Health Inspector attached to the Municipality has reported that the old waste in the trenching ground has not been removed fully. In answer to the stand of the Municipality, the petitioner propounded Ext.P4, which is the minutes of the meeting of the governing council of the Municipality, wherein it is certified that 95 percentage of the work has been completed, which fact has been taken note of in the said meeting.

2. Having regard to the limited compass of controversy, it is not necessary to narrate in detail the respective pleadings of the parties. This Court will straight away refer to Ext.P4 minutes, wherein it is recorded thus.

" തീരുമാനം / മിനു്ᩢ്സ്

24.09.201-ലെ(cid:14) ലെ(cid:15)ൽ്ᩈ് ᪚➚ാ്ᩙിംഗ് ക്ᩜി്ᩢിയുലെ(cid:24) റി്ᩔ(cid:27)ാർ്ᨾിലെ്ᩙ അ(cid:24)ി്ᩝാന്ᩈിൽ (cid:24)്ലെരഞ്ചിങ്‌ ഗ്രൗ്ᩂ് പരി്ᩔ’ാധി്ᨴ.് ്ᩝ(cid:14) പരി്ᩔ’ാധനയുലെ(cid:24) അ(cid:24)ി്ᩝാന്ᩈിൽ ആ്ᩔരാഗ്യ ᪚➚ാ്ᩙിംഗ് ക്ᩜി്ᩢിയുലെ(cid:24) നിഗമനം ലെ’രിയാലെ+്ᩐ് ്ᩔ-ാധ്യലെ(cid:27)്ᨾു. ആയതനുസരി്ᨴ് പ്രവൃ്ᩈി 95% പൂർ്ᩈീകരി്ᨴി്ᨾു്ᩦ വിവരം ലെ(cid:24)ൻഡർ ക്ᩌിലെയ വിളി്ᨴു ്ᩔനരി്ᨾറിയി്ᨪാനും കൗ+്സി(cid:14)ി്ᩔനാ(cid:24)്

വിവരം ’ുപാർ’ ലെചയ്യാനും തീരുമാനി്ᨴു.”

3. This Court also takes note of the contents in Ext.R1(i).

“submitted

05.03.2012 ലെച്ᩜ്ᨾംവയൽ (cid:24)്ലെരഞ്ചിങ്

ഗ്രൗ്ᩂിൽ ’്രീ.കു്ᨼിരാമലെനാ(cid:27)ം പരി്ᩔ’ാധന ന(cid:24)്ᩈി. പഴകിയ മാ(cid:14)ിന്യം പൂർ്ᩆമായും നീ്ᨪം ലെചയ്തി്ᨾി(cid:14)്(cid:14) എ്ᩐുകാ+ു്ᩐ് ആയതിലെ്ᩙ ചിത്ര്ᨲൾ ഇ്ᩔതാലെ(cid:24)ാ(cid:27)ം സമർ(cid:27)ി്ᨪു്ᩐു. അന്ᩌര ന(cid:24)പ(cid:24)ികൾ്ᨪും ഉ്ᩈരവിനുമായി.”

4. It is relevant to note that Ext.R1(i) is dated

05.03.2012, whereas Ext.P4 is dated 10.12.2012. Therefore, going by the very showing as per the document of the Municipality vide Ext.P4, what stands established is that 95 percent of the work allotted to the petitioner has already been executed/performed. The amounts due to the petitioner by virtue of Ext.R1(a) work order cannot be withheld on the strength of Ext.R1(i), which is prior in point of time and which does not contain any indication as to who submitted the same, to whom. All what is decipherable from Ext.R1(i) is that it is in the letter head of the 1st respondent Municipality.

5. Learned counsel for the respondent raised a technical contention based on Sections 22 (1)(l) and 22 (3) of the Kerala Municipality Act , 1994. According to the learned counsel, the Municipal Council has not approved that the petitioner had completed 95% of the work allotted to him, in the absence of which, the petitioner cannot claim the amount due under Ext.R1(a) work order. This court finds little merit in the said contention. Section 22 (1)(l) stipulates that the standing Committee for health shall deal with the matters of public health, health services, sanitation etc. A perusal of Ext.P4 minutes would indicate that the report of the Health Standing Committee dated 24.09.2012 has been reckoned and the trenching ground was inspected pursuant to the same. There is further reference in the minutes that the conclusions arrived at by the Health Standing Committee was correct and it is accordingly, that the all party meeting held on 10.12.2012 took note that 95% of the work has been completed by the petitioner. This Court therefore finds that the 1st respondent Municipality cannot be gainsaid by propounding (1)(l) of the Act.

6. It is true that Section 22 (3) mandates the resolutions passed by t

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