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2026 Supreme(Online)(Ker) 11600
IN THE HIGH COURT OF KERALA AT ERNAKULAM
ZIYAD RAHMAN A.A., J
MIDLAND CONTRACTING PRIVATE LIMITED – Appellant
Versus
STATE OF KERALA – Respondent
WP(C) NO. 5812 OF 2026
For the Appellants/Petitioners: SRI.P.SHANES METHAR, SHRI.N.KRISHNA PRASAD, SHRI.A.MOHAMMED FAIZAL, SHRI.ARJUN P.V., SHRI.HARKISH SREETHU V.S.
For the Respondents: SHRI.GEORGIE JOHNY, SC
A contractor can substitute a performance guarantee with an unpaid sanctioned bill if permissible under relevant Government Order.
Headnote:The petitioner, a contractor, sought to substitute the performance guarantee with an unpaid sanctioned bill as per relevant Government Orders, supported by judicial precedent. The court acknowledged this substitution as compliant with prior directions in similar circumstances. Upon agreement, the court ordered the third respondent to process the substitution within three months, referencing the need for necessary documentation and directions from prior judgments.
| Table of Content |
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| 1. petitioner is a contractor involved in significant public works. (Para 1) |
| 2. court reviews relief sought on guaranteeing performance via payment. (Para 2) |
| 3. court permits substitution of performance guarantee based on unpaid bill. (Para 3) |
J U D G M E N T
The petitioner is a partnership firm and is a contractor, who was entrusted with the work, as evidenced by Exts.P1 and P2, namely, Jal Jeevan Mission (JJM) - WSS to Peravoor & adjoining Panchayths (Peravoor, Muzhakunnu, Kolayad, Chittariparamba, Aralam and Ayyankunnu) -Supplying and laying Gravity main for Aralam & amp; Ayyankunnu Panchayath-Pipeline Work and Jal Jeevan Mission (JJM) - Kannur District- WSS to Alakode and adjoining Panchayth – Package II – Transmission Main Reach II – Supplying and Laying transmission main from GLSR at Mandalaaduvil west OHSR, Various Reservoirs in Alakkode Panchayath, Udayagiri Panchayath, Peringome Vayakkara Panchayath and Cherupuzha Panchayath and road restoration works -Pipeline Work .
2. The relief sought in this writ petition is to permit the petitioner to substitute the performance guarantee furnished by the petitioner in the form of treasury deposits, with the audited and sanctioned pending bill, which is Ext.P5. It is pointed out that, as per Ext.P3 Government Order, such exercise is permissible in respect of the contracts where, the Government is a party to the granted. Moreover, this Court has passed similar directions, in similar circumstances, as evidenced by Ext.P7.
3. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I am of the view that, the relief sought by the petitioner can be granted, as it is an admitted position that, the sanctioned bill remaining unpaid, is sufficient to meet the requirements of performance guarantee.
In such circumstances, this writ petition is disposed of directing the 3rd respondent to permit the petitioner to substitute the performance guarantee furnished by the petitioner in the form of treasury deposit, submitted in respect of Ext.P1 and P2, with Ext.P5. Necessary orders in this regard shall be passed within a period of three months from the date of receipt of copy of this judgment, upon the petitioner executing necessary documents in this regard.
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