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2016 Supreme(Online)(KER) 16789
HIGH COURT OF KERALA
A. Muhamed Mustaque, J
P K MOHANAN – Appellant
Versus
EXECUTIVE ENGINEER – Respondent
WRIT PETITION (CIVIL) 31668/2015
A preliminary liability assessment does not equate to final liability; a party claiming loss must pursue civil remedies rather than unilateral claims.
Headnote:
Liability - Contractor's Work - N/A - The court determined that the State's initial liability fixation was not final, allowing the petitioner to secure part payment and continue work, emphasizing adherence to civil remedies for loss recovery.
Fact of the Case:
The petitioner, a contractor, faced termination of a contract for work in Kuttanadu and a claim for damages. Part payment for a second contract in Palakkad was withheld due to the Kuttanadu liability. The petitioner agreed to continue work in exchange for part payment release.
Finding of the Court:
The court found that the State's claim on the petitioner was not a final liability but an initial estimate. It ruled that the State must pursue civil remedies for any losses and that releasing part payment was justified to allow the petitioner to complete the work.
Issues: Whether the State could unilaterally impose liability on the petitioner and withhold part payment for ongoing work.
Ratio Decidendi: The court held that the fixation of liability was preliminary and not conclusive, thus allowing the petitioner to pursue the work in Palakkad with the requirement to sign a supplemental agreement.
Final Decision: The court ordered the release of part payment upon execution of a supplemental agreement for completing the Palakkad work.
JUDGMENT
The petitioner is a contractor. He has been engaged for executing two works. One is in Kuttanadu area and other is in Palakkad area.
2. In respect of the works undertaken by him, the contract work in Kuttanadu area is terminated and the liability of `92,08,796/- has been imposed on him towards loss sustained by the State.
3. In respect of the second work, certain part payment is due to him. In view of the fact that the petitioner has a liability in respect of Kuttanadu work, the part payment has not been released. The petitioner undertaken before this Court that he is prepared to complete the work in Palakkad area, provided, the part payment is released to him.
4. In respect of Kuttanadu work, the challenge is only in respect of the imposition of damages calculated by the respondents. The nature of fixation of liability would establish that it is a tentative fixation of the liability.
5. In the counter affidavit, it is stated as follows:
“ II. The subject work “Kuttanad Package-FMP- Mitigation of flood in Manathrakkal Ganapathy padasekharam in Group I Padasekharam” was entrusted with the contractor as per agreement No.25/SE/KDC/2011-12/CGNR dated 04.03.2011 and site was handed over on 20.04.2011. The Period of completion is 12 months. But he failed to complete the work even after extended up to 31.03.2013. Hence the work was terminated as per order No.D4-859/2010/KDC dated 21.04.2015 at his risk and cost liability on 21.04.2015.
1. Original Estimate amount of work : `5,23,22,647/- 2. Value of work executed by the contractor: `2,12,93,327/- 3. Amount of work to be executed : `3,10,29,320/-
4. As per PWD manual clause 2116.21 risk and cost liability is 30% of amount in (3) : `93,08,796/-
(i.e. 30% `3,10,29,320/-)
5. Security Deposit available : `1,00,00,00/-
6. Balance amount due from the contractor towards risk and cost liability : `92,08,796/-
============
Accordingly the initial liability is `92,08,796/-.
Final liability can be worked out only after completing the balance work which is approved by the Government as per G.O. (Rt) No.
215/2015/WRD dated 25.03.2015.”
6. The fact as above shows that the amount has not been finally determined.
7. The learned counsel for the petitioner would submit that if at all, the State has sustained a loss, the State has to resort for a civil remedy and the State cannot unilaterally determine their own loss by fixing the liability on the petitioner.
8. The learned counsel for the petitioner also refers to Ext.P8 circular issued by the Government of Kerala wherein the Government directed all departmental officers to file a civil suit.
9. It is settled law that no one can be allowed to arbitrate his own cause. In this matter, even there is no final fixation of liability to be recovered from the petitioner. The statement would indicate that it is only an initial fixation of the liability.
10. This Court is of the view that if the Government had sustained any loss, the Government is free to proceed against the petitioner in accordance with law. The fixation of the amount as referred in the notice can be only treated as a claim of the State not as a liability on the petitioner.
11. In the light of the above, this Court is of the view that there is no impediment in releasing the part payment to the petitioner. In view of the fact that the petitioner has expressed his willingness to undertake the work in Palakkad, this Court is of the view that the petitioner shall execute a supplemental agreement and complete the work. However, it is made clear that the part payment need be released to the petitioner only if the petitioner executes the supplemental agreement to complete the work in Palakkad area.
In view of the directions as above, the termination of the work awarded to the petitioner in Palakkad area has been set aside. Needful shall be done for release of the part payment as well as executing the supplemental agreement within a period of two months from the date of receipt of a copy of this judgment.
The wr
