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2021 Supreme(Online)(KER) 22743
HIGH COURT OF KERALA
T. R. Ravi, J
HEATHER CONSTRUCTIONS – Appellant
Versus
UNION OF INDIA – Respondent
WP(C)/10866/2020
SRI.V.G.ARUN (K/795/2004), SMT.V.JAYA RAGI, SRI.R.HARIKRISHNAN (KAMBISSERIL), SRI.NEERAJ NARAYAN, SHRI.P.VIJAYAKUMAR, ASG OF INDIA, SRI.M.AJAY, SC, NATIONAL RURAL HEALTH MISSION, SMT.K.N.RAJANI, SRI.RADHIKA RAJASEKHARAN, P.SRI.K.P.SHIBU, SMT.ANILA PETER, SRI.SAJEN THAMPAN, SRI.ANIL S.RAJ, SRI.GOVT. PLEADER, SMT.DEEPA NARAYANAN
Payments owed under construction contracts must be made unless directly linked to the petitioner's own obligations or consequences.
Headnote:
Payment - Construction Contract - Act Section List - The court examined the withholding of payments under construction contracts citing provisions on payment obligations and management consultancy charges, ultimately ruling for partial payment to the contractor.
Fact of the Case:
The petitioner claimed non-payment of amounts due from the final bill for a construction project, alleging that the withholding of ₹30 lakhs was unjustified as it stemmed from a dispute between the 4th and 6th respondents regarding consultancy charges.
Issues: Whether the withholding of payment was justified due to a dispute over management consultancy fees between the 4th and 6th respondents.
Ratio Decidendi: The court established that the petitioner’s entitlement to payment could not be thwarted by inter-party disputes over charges unrelated to the petitioner's claim.
Final Decision: The court ordered the payment of ₹15 lakhs to the petitioner within three weeks.
JUDGMENT
The writ petition has been filed by the petitioner complaining that the amounts due to them towards their final bill with regard to the construction of 50 Bed MCH at Taluk Head Quarters Hospital, Irinjalakkuda, Thrissur is not paid in its entirety. Admittedly, the 6th respondent has withheld a sum of ₹30 lakhs from the bill for the reason that the 4th respondent who is liable to pay 7% of the project cost towards management consultancy charges has paid only 5% as charges. The case of the petitioner is that the dispute between the 4th respondent and the 6th respondent cannot be a reason to withhold the amounts which are due to the petitioner.
2. Today, when the case was taken up, the learned counsel appearing for the 6th respondent submitted that out of the amounts which have been made over to them by the 4th respondent, an amount of ₹16,08,374/- is available with them for payment. It is also pointed out that the 4th respondent in their counter affidavit have stated that they have released to the 6th respondent the entire amounts due towards the final payment after withholding an amount of ₹6,21,511/- for rectifying the defects pointed out by the hospital authorities and that on further inspection by the Assistant Engineer of the Public Works Department, it is reported that the rectification of defects may require ₹15 lakhs.
3. In the above circumstances, the 6th respondent is directed to pay a sum of ₹15 lakhs to the petitioner out of ₹30 lakhs which has been withheld from the final bill. The right of the petitioner to claim the balance amounts due will not in any way be prejudiced by their accepting the payment of ₹15 lakhs from the 6th respondent. The 6th respondent is at liberty to take up the issue regarding the reduced 2% from their management consultancy charges with the 4th respondent and this Court is not making any observation regarding their right to receive the same. The amount of ₹15 lakhs shall be paid within a period of 3 weeks. All other issues which have been raised in the writ petition and in the counter affidavits of the parties are left open.
This writ petition is disposed of accordingly.
T.R.RAVI JUDGE
APPENDIX OF WP(C) 10866/2020 PETITIONERS' EXHIBITS EXHIBIT P1 TRUE COPY OF NOTIFICATION OF AWARD DATED
21-01-2014 BEARING NO. HSCC/NRHM-KRL/MCH-
IRINJALAKUDA/HC/2014 ISSUED BY THE 6TH RESPONDENT ACCEPTING THE FINAL OFFER FOR A TOTAL ESTIMATED CONTRACT PRICE OF RS.9,92,03,796/- ( RUPEES NINE CRORES, NINETY TWO LAKHS, THREE THOUSAND, SEVEN HUNDRED AND NINETY SIX ONLY)
EXHIBIT P2 TRUE COPY OF THE FORM OF AGREEMENT DATED
05-03-2014 BETWEEN STATE MISSION DIRECTOR, NRHM, GOVERNMENT OF KERALA FOR THE CONSTRUCTION OF 50 BEDDED MCH BLOCK AT THQH, IRINJALAKUDA, THRISSUR, KERALA UNDER NRHM AND M/S. HEATHER CONSTRUCTIONS, T.C
9/1226, MANGALAM LANE, SASTHAMANGALAM, THIRUVANANTHAPURAM 695 010 EXHIBIT P3 TRUE COPY OF THE COMPLETION CERTIFICATE DATED 31-01-2016 ISSUED AND SIGNED BY THE
4TH RESPONDENT, COUNTER SIGNED BY SUPT/MO-
SUPERINTENDENT, GENERAL HOSPITAL, IRINJALAKUDA EXHIBIT P4 TRUE COPY OF THE LETTER COMMUNICATION BETWEEN THE 6TH RESPONDENT AND 5TH RESPONDENT DATED 03--02-2018 WITH REF NO.
HSCC/SAT-TVM/2016/54 EXHIBIT P5 TRUE COPY OF PAYMENT ADVICE OF BILL-FINAL BILL (10TH RA) CONFIRMING RS. 81,28,934/-
(RUPEES EIGHTY ONE LAKHS TWENTY EIGHT THOUSAND NINE HUNDRED AND THIRTY FOUR ONLY)
DATED 31-01-2016 (MEASURED UP TO
31.01.2016)
EXHIBIT P6 TRUE COPY OF DETAIL OF WITHHOLD TOWARDS NON AVAILABILITY OF FUND ISSUED BY NRHM, KERALA (INRINJALAKUDA) TO M/S. HEATHER CONSTRUCTIONS- FINAL BILL (10TH RA)
M.DT.31/01/16 RESPONDENTS' EXHIBITS EXHIBIT R4(a) A TRUE COPY OF THE G.O(P) NO.408/2007/FIN DATED 07.09.2007 ISSUED BY SECOND RESPONDENT.
EXHIBIT R4(b) A TRUE COPY OF THE AGREEMENT DATED 2.3.2013 BETWEEN SIXTH RESPONDENT AND THE NRHM.
EXHIBIT R4(c) A TRUE COPY OF THE G.O(P)
NO.311/14/2007/FIN DATED 30.07.2014 ISSUED BY SECOND RESPONDENT.
EXHIBIT R4(d) A TRUE COPY OF THE LETTER COMMUNICATION DATED 26/04/2019 FROM SUPERINTENDENT, GH IRIN
