Movell Solution Private Limited v. Kerala State Electronics Development Corporation Ltd.
2021-03-18
N.NAGARESH
body2021
DigiLaw.ai
JUDGMENT : The petitioner, a Company engaged in Scanning and Digitisation of records, has filed this writ petition seeking to direct the 1st respondent to consider the demands in Ext.P8 notice afresh and pay the outstanding balance amount to the petitioner. 2. The 2nd respondent-Accountant General’s office needed digitisation of pension records and entrusted the work to the 1st respondent-Kerala State Electronics Development Corporation Limited (KELTRON). The 1st respondent-KELTRON entered into a sub-contract agreement with the petitioner and Ext.P2 work order was issued on 16.09.2014. Ext.P2 provided that the conditions imposed by the 2nd respondent on KELTRON regarding payment will be applicable to the petitioner on a back-to-back basis. 3. The petitioner would contend that after completing each work, the petitioner issued invoices to the 1st respondent. The 1st respondent received payments from the 2nd respondent for the first part of the work completed by the petitioner. Subsequently, by Ext.P3 invoice dated 31.03.2015, the petitioner claimed payment of Rs.8 lakhs. Invoice Tax (TDS) was deducted in full. The 2nd respondent released payment to the 1st respondent. But, the 1st respondent paid only an amount of Rs.2,86,518/-to the petitioner. The petitioner issued Ext.P4 invoice dated 14.07.2016 claiming Rs.24,06,952/-. Tax was deducted for the full amount. But, only Rs.16,94,299/-was paid to the petitioner. Ext.P5 invoice was for Rs.27,67,100/-, but only Rs.10,00,000/-was paid. Thus, an amount of Rs.29,93,235/-is outstanding against Exts.P3 to P5 invoices. 4. The petitioner would submit that the KELTRON is eligible for only a small margin of the amount received from the 2nd respondent. But, the 1st respondent is illegally retaining the amounts due to the petitioner. The petitioner sent Ext.P8 lawyer notice on 11.06.2019. As per Ext.P9 dated 02.07.2019, the 1st respondent replied that as and when any amount is received from the 2nd respondent, the proportionate amount will be paid to the petitioner. The petitioner would contend that the 1st respondent has already received payments from the 2nd respondent, but the 1st respondent is withholding the amount payable to the petitioner. 5. The 1st respondent filed a counter affidavit and opposed the writ petition. According to the 1st respondent, payment against the first invoice was made since the quality of work was satisfactory. The subsequent work of the petitioner lacked quality and hence security retention had to be made in the second invoice.
5. The 1st respondent filed a counter affidavit and opposed the writ petition. According to the 1st respondent, payment against the first invoice was made since the quality of work was satisfactory. The subsequent work of the petitioner lacked quality and hence security retention had to be made in the second invoice. Only part payment was made by the 2nd respondent due to deficit quality and defects in the scanning. However, the 1st respondent made corresponding payment to the petitioner. 6. The 1st respondent stated that the petitioner did not complete the work to the satisfaction of the 2nd respondent who is the customer. The retention amount has been withheld due to the low quality of the work. The work of file linking to the Office Management System of the 2nd respondent was not completed as scheduled by the petitioner. The petitioner lacked the capacity to do so. Therefore, now the 2nd respondent is doing the linking process otherwise than through the petitioner. 7. The learned Standing Counsel for the 1st respondent submitted that the balance work is being executed through other agencies, as the work of the petitioner was found to be unsatisfactory. Balance amount, if any, due to the petitioner can be worked out only after finalisation certificate is received and thereafter actual amount, if any, due to the petitioner will be calculated and paid. 8. Respondents 2 and 3 filed a counter affidavit in which it has been stated that invoice dated 30.04.2018 for an amount of Rs.17,03,628/-of the 1st respondent in connection with the Phase I digitisation of pension records, is pending in their office due to some discrepancy in the number of pages totally scanned as claimed by the 1st respondent. This amount was subsequently passed and sent to the Director of Treasury as per letter dated 04.02.2021. 9. I have heard the learned counsel for the petitioner, learned Standing Counsel for the 1st respondent and the learned Standing Counsel for respondents 2 and 3. 10. The petitioner states that they have been paid only the first invoice in full and the subsequent invoices have not been fully paid. It is the allegation of the petitioner that the 1st respondent is withholding amount due to the petitioner, after receiving the payment for the work done by the petitioner from the 2nd respondent.
10. The petitioner states that they have been paid only the first invoice in full and the subsequent invoices have not been fully paid. It is the allegation of the petitioner that the 1st respondent is withholding amount due to the petitioner, after receiving the payment for the work done by the petitioner from the 2nd respondent. The learned Standing Counsel for the 1st respondent would contend that the amount payable to the petitioner is paid in part and the balance amount is retained due to the low quality of work rendered by the petitioner. The 1st respondent would further contend that the petitioner failed to link the files to the Document Management System of the 2nd respondent's Office. The work is now being carried out and completed engaging the officers of the 1st respondent. The retention amount will be paid to the petitioner only on finalisation of accounts. 11. Though the counsel for the petitioner would dispute the allegations of the 1st respondent regarding low quality of work and would contend that as the 1st respondent has received the amount payable by the 2nd respondent against the invoices raised by the petitioner, the 1st respondent is bound to release the entire amount due to the petitioner. If the quality of the work rendered by the petitioner is substandard, then the 1st respondent indeed would be justified in withholding retention amount. The question whether the work of the petitioner was up to the standard required by the respondents or was substandard, is a question of fact which this Court cannot go into, in exercise of the powers under Article 226 of the Constitution of India. For the very same reason, this Court cannot direct the 1st respondent to effect payment to the petitioner now. In the facts of the case, the writ petition is dismissed reserving the right of the petitioner to proceed against the respondents for balance amount if due, through appropriate legal proceedings, if the petitioner is so advised.