K. SUBRAMANIAN, S/O. KUTTAN PANICKER v. SUPERINTENDENT ENGINEER, TRIVANDRUM CENTRAL CIRCLE, CENTRAL PUBLIC WORKS DEPARTMENT, POOMKULAM
2017-02-28
DEVAN RAMACHANDRAN
body2017
DigiLaw.ai
JUDGMENT : The petitioner claims to be a contractor, engaged in civil constructions. According to him, he had entered into a contract with the second respondent, Executive Engineer of the Central Public Works Department relating to work of repair of the ESI Model Hospital, Asramam, Kollam. 2. The involvement of the petitioner as a contractor was because, the hospital which was owned by the Employees State Insurance Corporation, Kerala, had engaged the Central PWD for the said works and the Central PWD in turn, had engaged the petitioner as a contractor. For this purpose, the petitioner had entered into an agreement with the second respondent detailing the terms of the contract between them. According to the petitioner, he had carried on the work smoothly and without any cause for concern and that he had submitted three running bills for the work which were all cleared by the CPWD within time. As regards the 4th running bill, the same was not paid for want of funds and when it came to the 5th running bill submitted by him, the respondents 1 and 2 began to raise issues, allegedly to cause impediments in payment of the same. At least this is the allegation made by the petitioner. He has, therefore, filed this writ petition seeking several reliefs, primary of them, for a direction to the first respondent to foreclose the agreement between him and the CPWD and also for payment of the balance amount due to him including the EMD and additional security that had been obtained from him. 3. I have heard the learned counsel for the petitioner Shri.M.P.Ramnath, the learned Standing Counsel for the 3rd and additional 4th and 5th respondents and the learned ASGI appearing for respondents 1 and 2. 4. The nature of controversy in this case is of several layers. The facts are not greatly in dissonance, except one or two, in which also I do not see substantial force in the disputation. The fact remains that the work was entrusted by the ESIC as the primary contractor. ESIC had entrusted the CPWD for the repair work of the hospital building owned by them and the CPWD had engaged the petitioner as a contractor. However, on account of an intervening fact the entire contract appears to have been frustrated.
The fact remains that the work was entrusted by the ESIC as the primary contractor. ESIC had entrusted the CPWD for the repair work of the hospital building owned by them and the CPWD had engaged the petitioner as a contractor. However, on account of an intervening fact the entire contract appears to have been frustrated. This fact is that ESIC, as early as in the year 2009, seems to have withdrawn the contract given to the CPWD and to have engaged some other agencies for the balance of the repair work for certain reasons. This is obvious from the counter affidavit filed by the ESIC. They have said in the counter affidavit specifically that in Paragraph 3 (ii), (iii) and (iv) which reads as follows: "(ii) It is submitted that for the purpose of carrying out special repairs of the ESIC Model Hospital, Asramam, Kollam, Kerala, the Employees' State Insurance Corporation New Delhi sanctioned an amount of Rs.90,55,700/- (i.e., Rs.87,80,000/- for civil work and Rs.2,75,000/- for electric work). It was directed that the said civil work should be completed within a period of 4 months from the date of receipt of the funds by the Construction Agency. The true and correct copy of the sanction letter dated 06.12.2007 is enclosed herewith and marked as ANNEXURE R-1. (iii) That thereafter the said work was assigned to CPWD. However, it was found that the CPWD was not doing the work with required pace and therefore the work was withdrawn from CPWD and was allotted to M/s. Hindustan Latex Ltd., vide letter dated 09.02.2009 issued by the ESIC, New Delhi. 5. Obviously, therefore, the contract between ESIC and CPWD having been frustrated, there was no reason why the contract between the petitioner and the CPWD should have continued except to the extent of the works already completed. In fact, this is virtually admitted by the second respondent in his letter addressed to the first respondent, namely, Ext.P25. In this letter, the second respondent has unambiguously stated that since ESIC is not interested in continuing the contract with the CPWD, there will be no purpose in continuing the agreement with the petitioner any further.
In fact, this is virtually admitted by the second respondent in his letter addressed to the first respondent, namely, Ext.P25. In this letter, the second respondent has unambiguously stated that since ESIC is not interested in continuing the contract with the CPWD, there will be no purpose in continuing the agreement with the petitioner any further. He has therefore, recommended that the Superintending Engineer, namely, the first respondent herein, foreclose the agreement, in terms of clause 1(iii) of the agreement between them and also in terms of the powers assigned to the Superintending Engineer under the manual of the CPWD. It is this recommendation that the petitioner wants to be now implemented. According to him, unless and until formal orders are issued by the first respondent foreclosing the agreement, based on the recommendation contained in Ext.P25, the second respondent will not take action for clearing his bills. It is on these assertions that the petitioner has moved this writ petition. 6. As I have already noticed above, the fact that the ESIC has withdrawn the work from the CPWD is admitted. There is no dispute about that and I do not think the parties are in substantial contest on this. The respondents 1 and 2 have admitted this in the records specifically in Ext.P25. I do not know, therefore, why the payment should be denied to the petitioner merely because, there is no formal order of foreclosure issued by the first respondent. Normally in such circumstances, the first respondent ought to have passed an order immediately, especially because there appear to be no reason why the agreement between the petitioner and the CPWD should be allowed to continue specially when ESIC vehemently asserts that they have withdrawn the work to the CPWD. The entire cause of issue in this case is because, the first respondent has not acted in the manner that he should have acted by considering and passing orders as to whether the agreement between the petitioner and the CPWD should be foreclosed. Had that been done at the proper time, obviously, the further consequences and release of the payment to the petitioner, subject to his entitlement, would have been considered by the authorities below. 7. The above being said, I also notice that the second respondent has issued Ext.P10 letter to the petitioner in response to his request for release of his balance payment.
7. The above being said, I also notice that the second respondent has issued Ext.P10 letter to the petitioner in response to his request for release of his balance payment. That letter only says that the petitioner produce certain documents. The documents that have been detailed therein are as under: "1. Date of submission of bills to the Executive Engineer for the work done by you as per contract conditions with copy of letter of submission. 2. Copies of requests made to the Executive Engineer for payment and reply received from Executive Engineer on your request or rejection of your request. 3. Copy of letter or directions issued to you by the Executive Engineer for stopping the work 4. Details and evidence in support of the claims made by you and as to how the amount is arrived at 5. Clause of the Contract or provision of the Agreement under which the claim is made to Superintending Engineer" 8. The learned counsel for the petitioner says that this is only a ruse by the second respondent to further harass him. He says that all the documents mentioned therein have already been produced and are in the custody of the authorities. He says that the bills are before the authorities as is discernible from Ext.P21; that the dates of submission of the bills and copies of the requests as also the copy of the relevant letters are already with the authorities; and that there was no requirement in Ext.P10 to have then asked the petitioner to submit the records except that it was intended to frustrate his claim. He takes specific umbrage to Item No.3 above, because, according to him, there was no letter that was issued by the Executive Engineer to him for stopping the work. He says that he was not given any formal letter and that he was asked to stop the work when ESIC had withdrawn the work from the CPWD. This appears to be very logical, because I do not think the Executive Engineer could object to the payment of the petitioner merely because, he had not issued a formal order asking the petitioner to stop the work, because, it was inevitable that no work could have been continued by the petitioner after ESCI withdrew work from the CPWD. 9. I understand the agony of the petitioner and I cannot be blind to his predicament.
9. I understand the agony of the petitioner and I cannot be blind to his predicament. He has prayed that the contract be foreclosed by the first respondent so as to enable the second respondent to process the bills. I can find no fault with the petitioner in having asked so, because, according to him, it is only after formal foreclosure of the agreement can the second respondent consider the bills of payment. I am however of the view that since it is obvious from the counter affidavit filed on behalf of the ESIC and from the attended circumstances and materials on record that the contract entered into by the ESIC with the CPWD had been completely frustrated, the foreclosure of the contract of the petitioner with the CPWD is only a formality. If the Superintending Engineer, namely, the first respondent herein does not do it in spite of the recommendations contained in Ext.P25, then, it will have to be presumed that the contract stands foreclosed by operation of time and on account of intervening circumstances. However, I think the respondents 1 and 2 require to be given one more chance to ensure that there is no stagnation in the processes and that the proceedings is allowed to flow profluently. 10. In such circumstances, I direct the first recommendation of the second respondent and to pass orders regarding the foreclosure of the agreement with the petitioner based on the recommendations contained therein within a period of one month from the date of receipt of a copy of this judgment. On the first respondent passing such appropriate orders, the second respondent shall immediately take up the petitioner's claim for payment along with his refund of EMD and other eligible security deposits and consider the same in terms of all the documents produced in this case, after hearing the petitioner, within a further period of 2 months therefrom. I make it clear that if the first respondent does not pass orders as directed herein above, on the lapse of one month from the date of receipt of a copy of this judgment, it shall be taken as deemed that the agreement between the petitioner and the CPWD as being foreclosed and the second respondent would, thereafter, be obligated by the terms of this judgment to act in the manner directed above. 11.
11. Since this writ petition has been pending before this Court for more than 6 years, it is only appropriate that the respondents 1 and 2 follow the directions contained in this judgment strictly and act within the time frames granted herein without seeking any further extension of time. The writ petition is ordered as above. In the facts and circumstances of this case, I make no order as to costs and the parties are directed to suffer their respective costs.