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2025 Supreme(Online)(Ker) 46465
IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. Muhamed Mustaque, HARISANKAR V. MENON, JJ
KERALA STATE CONSTRUCTION CORPORATION LIMITED – Appellant
Versus
M/S.GM ENGINEERS AND CONTRACTORS – Respondent
WA NO.2450 OF 2025 | WP(C) NO.7839 OF 2022
For the Appellants/Petitioners: Adv Sri.T.B.Hood
For the Respondents: Sri.Mohammed Rafiq, Spl GP
The appellant must reconsider the payment claims under the contract after verifying the TDS deductions in compliance with the contractual terms.
Headnote:This case involves a dispute regarding the TDS deductions made by the Public Works Department from the net payments owed under a contractors' agreement (Paragraph 1). The court clarified that the appellant is required to reconsider the first respondent's claim for payments, with an emphasis on the contract's terms (Paragraph 3). As such, the appellant should review the contract terms and reach a decision within one month while the previous findings of the learned Single Judge are set aside (Paragraph 3).
A.Muhamed Mustaque, J.
The dispute between the appellant and the first respondent arises out of a contract. The dispute is regarding the TDS deducted by the Public Works Department (PWD). The first respondent herein is the Subcontractor under the appellant-Corporation. The case of the appellant is that they are entitled to retain 5% of the net amount, and the PWD deduction of TDS cannot be calculated as part of 5% net amount. The grievance of the first respondent is that, as per the contract, the appellant is only entitled to retain 5% and, beyond that, the appellant also availed the benefit of TDS deduction made by the PWD, which is incorrect, and the calculation of the net amount at 5% should be inclusive of TDS deductions. The stand of the PWD is that the contract was awarded to the appellant. The learned Single Judge directed the appellant to reconsider the claim of the first respondent and observed that “if the 1st respondent has received any amount in excess of 5% either on account of deduction from the amounts received from the 2nd respondent or by taking the benefit of TDS on the amount paid by the 22nd respondent to the 1st respondent, the same would amount to the 1st respondent receiving benefits over and above what is contemplated by the terms of the contract/agreement/MoU between the petitioner and the 1st respondent.”
It is essential that the parties understand the contract.
The appellant is a Government-owned company. We are of the view that the appellant shall reconsider the claim now made by the first respondent with an open mind after referring to the terms and conditions of the contract and take an appropriate decision after hearing the first respondent within one month of hearing. All other observations and findings made by the learned Single Judge in the impugned judgment are accordingly set aside.
The writ appeal is disposed of as above.
