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2013 Supreme(Online)(KER) 13951

HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, J
vs
WRIT PETITION (CIVIL) 1657/2013



Advocates:
SRI.MATHEW JOHN (K), SRI.DOMSON J.VATTAKUZHY

Contractual disputes, particularly regarding performance guarantees, must be adjudicated in civil courts as stipulated in contract provisions, avoiding the use of discretionary writ jurisdiction.

Headnote:

Contract - Road Work - Performance Guarantee - Clause 4 and Clause 46 - Summary: The court analyzed the performance guarantee release issue under the contract terms, noting delays caused by respondents and the need for a civil court to resolve disputes per the contract's ADR provisions, highlighting the procedural requirements and adjudicatory limits of Article 226.

Fact of the Case:

The petitioner, awarded a road work contract, claimed that the respondents failed to meet contractual requirements for taking initial measurements on time, leading to the rescission of the contract and a request for the return of the performance guarantee and security deposit.

Issues: The main issue was whether the performance guarantee and security deposit should be released to the petitioner considering the delays caused by the respondents.

Ratio Decidendi: The court held that disputes arising from contract execution must be settled by a civil court as per the agreement, particularly due to conflicting assertions from both parties regarding compliance with contract terms.

Final Decision: The petitioner must approach the competent civil court to resolve the disputes regarding the performance guarantee.

J U D G M E N T

Non release of the performance guarantee and security deposit furnished by the petitioner at the time of awarding a road work is the issue involved herein. The case of the petitioner is that on proving the credentials, the work in question was awarded to him, based on which Ext.P5 agreement was executed to have the work completed within 'nine' months from the date of handing over the site, with regard to which there is no dispute. But by virtue of Clause 4 of Ext.P5 agreement, before starting the earth work, the 'initial levels' had to be taken by the Asst. Engineer, check measured by the Asst. Executive Engineer and the 'initial levels' put up with the proposal had to be approved by the Superintending Engineer. This was never complied with on time, despite several reminders made by the petitioner vide Exts.P7 to P9 communications dated 15.05.2012, 05.07.2012 and 17.09.2012. It was in the said circumstance that the petitioner rescinded from the contract as per Ext.P9 communication dated 17.09.2012 and sought to release the performance guarantee and the security deposit. Since the said request was not acceded to and the respondents proceeded with further steps to have the liability mulcted upon the shoulders of the petitioner, the writ petition came to be filed seeking for disbursement of the due amount and for such other reliefs.

2. A counter affidavit and an additional counter affidavit have been filed from the part of the respondents. The petitioner has filed a reply affidavit as well. During the course of hearing, the learned Counsel for the petitioner submits that the averments of the respondents that initial levels were taken on 04.07.2012, it was check measured on 06.07.2012 and that approval was given by the concerend authority on 26.07.2012 [sought to be substantiated with reference to Exts.R3(a),(b) and (c)] are not correct. It is stated that the factual position is discernible from Ext.P10 communication issued by the first respondent/Superintending Engineer on 02.11.2012, referring to the proposal submitted from the office of the Executive Engineer (referred to therein)on 14.09.2012 (wrongly mentioned as 14.09.2011). By the time Ext.P10 came to be passed on

02.11.2012, almost '9' months had already expired and as such, it was rather impossible for the petitioner to have performed the contract and hence Ext.P9(b).

3. The learned Counsel places reliance on Exts.P18 and P19 proceedings of the Asst. Executive Engineer and Superintending Engineer, wherein the delay occurred on the part of the Department stands conceded. It is stated that there was some delay in the fixation of alignment and this is discernible from the aforsaid proceedings and it was only to cover up the said lapse on the part of the Departmental authorities, that the liability was sought to be mulcted on the shoulders of the petitioner, which in turn is sought to be interfered by this Court.

4. The learned Government Pleader appearing for the respondent submits that the version of the petitioner is not at all correct or proper and that the initial level was taken, which was check measured and approval was given, as borne by Exts.R3(a) to (c). It is also stated that several communications were issued to the petitioner in this regard, which however were not properly responded to. The learned Government Pleader also points out that the Clause sought to be relied on in Ext.P5 agreement , i.e. 'Clause 4' as to the taking of initial levels, check measurement and approval by the Superintending Engineer, is only with regard to the earth work, which constitutes only a small portion of the total work. So many other works are also attached to the contract and the petitioner could have taken up such works earlier. Ext.P9 communication, at its opening paragraph is also sought to be pressed into service, which reads as follows:

'In pursuance to the tender notification issued by your goodself for effecting improvements to Vattappara-Thovala- Kattadikavala-

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