Back
2016 Supreme(Online)(KER) 9720
HIGH COURT OF KERALA
P. B. Suresh Kumar, J
M/S NEW CONSTRUCTION COMPANY – Appellant
Versus
THE EXECUTIVE ENGINEER – Respondent
WRIT PETITION (CIVIL) 16059/2016
Completion of contracted work necessitates release of security and retention amounts, independent of commissioning timelines.
Headnote:
Contractor - Work Completion - Relevant Acts and Sections - The court interpreted the contractual obligations concerning security deposits and retention amounts, determining that the completion of work entitles the contractor to release of funds despite the commissioning status.
Fact of the Case:
The petitioner, a contractor for the Kerala Water Authority, completed pipe laying work according to an agreement and received a work completion certificate. However, the retention amount and security deposit were withheld due to pending commissioning, which the petitioner contested.
Finding of the Court:
The court found in favor of the petitioner, acknowledging that the work was completed satisfactorily. The obligation to guarantee performance should not prevent the return of funds due to completion status.
Issues: Whether the withholding of the security deposit and retention amount based on non-commissioning of work was justified after the work was completed.
Ratio Decidendi: The court reiterated that completion of work warrants the return of withheld amounts, absolving further obligations tied to commissioning not directly related to the contractor's performance.
Final Decision: The court ordered the return of the withheld amounts to the petitioner within three months against execution of a simple bond.
JUDGMENT
The petitioner is a contractor. They have completed a pipe laying work of the Kerala Water Authority as per the terms of Ext.P2 agreement. Ext.P3 is the work completion certificate issued by the Kerala Water Authority in respect of the said work. Ext.P3 recites that the work assigned to the petitioner has been completed in all respects and is ready for commissioning. The grievance voiced by the petitioner in the writ petition is that despite the completion of the work to the satisfaction of the awarder, the security deposit made by the petitioner and the retention amount collected from them in respect of the work have not been returned.
2. Heard the learned counsel for the petitioner as also the learned Standing Counsel for the Kerala Water Authority.
3. The learned Standing Counsel for the Kerala Water Authority pointed out that as per the terms of agreement executed by the petitioner in respect of the work in question, they are obliged to guarantee the satisfactory performance of the work for a period of eighteen months, after the completion and commissioning of the work, that the work is yet to be commissioned and it is on account of the said reason that the security deposit and retention amount are not returned.
4. The learned counsel for the petitioner submitted that the work has been completed as early as on 31.10.2014 and that the petitioner has nothing to do with the commissioning of the work. As such, according to the learned counsel, there is no justification for withholding the amounts due to the petitioner on the said ground.
5. I find force in the submission made by the learned counsel for the petitioner. It is seen that under similar circumstances, this Court, as per Ext.P5 judgment, directed the Kerala Water Authority to disburse the security deposit and retention amount against execution of a simple bond. In the circumstances, I deem it appropriate to dispose of this writ petition also in tune with Ext.P5 judgment.
In the result, the writ petition is disposed of directing the respondents to return to the petitioner the amount retained/withheld from them towards retention amount and security deposit, within a period of three months from today against execution of a simple bond.
