Koppara Enterprises Printing And Copy Solutions (India) Pvt. Ltd. , Represented By Its Director Rajeev Ramakrishnan v. State Of Kerala, Represented By The Principal Secretary To Government
2023-06-07
SHOBA ANNAMMA EAPEN
body2023
DigiLaw.ai
JUDGMENT : 1. This writ petition is filed with the following prayers; “i) to issue a writ of certiorari or any other appropriate writ or order quashing Ext.P7, P9 & P13 orders and Ext.P14 notice; ii) to issue a writ of mandamus or any other appropriate writ or order declaring that the blacklisting of the petitioner and fixation of liability as well as forfeiture of bill amount on termination of contract are unauthorized and in violation of the stipulations in the General Conditions of Contract appended to Ext.P1 tender notification and Ext.P3 Agreement; iii) to issue a writ of mandamus or any other appropriate writ or order directing the respondents 2 and 3 to disburse the price of the copies of Information Guide (Diary, 2013) supplied by the petitioner under Ext.P3 contract at once; iv) to issue a writ of mandamus or any other appropriate writ or order declaring that imposition of risk and cost on the petitioner in Ext.P7 order is illegal and unenforceable; v) to issue a writ of mandamus or any other appropriate writ or order prohibiting the respondents from enforcing Ext.P9, P13 & P14;” 2. The brief facts of the case of the petitioner is as follows; 2.1. The petitioner, a private limited company, running a printing press at Kilikolloor in Kollam district, is aggrieved by Ext.P9 order passed by the second respondent – the Kerala State Backward Classes Development Corporation Ltd., terminating the contract, blacklisting the petitioner and imposing a compensation of Rs.6,00,000/- along with forfeiture of bill payment of Rs.2,74,476/-, alleging delayed delivery of 'Information Guide, 2013' supplied to them, Ext.P13 Appellate Order and Ext.P14 revenue recovery notice. 2.2 The second respondent Corporation, by Ext.P1 notification dated 05.10.2012, invited sealed tenders for printing and supplying 10000 copies of 'Information Guide, 2013' for their use. The petitioner submitted tender and thereafter, the petitioner was invited for negotiation and after negotiation, the rate per copy of the diary was fixed at Rs.59.89. The petitioner deposited Rs.24,000/- as security deposit. The third respondent approved the proof of the diary on 12.12.2012, but the petitioner was directed to defer the printing and the final clearance of the proof was given on 19.12.2012. The petitioner started printing of the diaries and supplied a total number of 4608 diaries. Ext.P3 agreement was executed only on 18.01.2013.
The petitioner deposited Rs.24,000/- as security deposit. The third respondent approved the proof of the diary on 12.12.2012, but the petitioner was directed to defer the printing and the final clearance of the proof was given on 19.12.2012. The petitioner started printing of the diaries and supplied a total number of 4608 diaries. Ext.P3 agreement was executed only on 18.01.2013. As per the tender condition and Ext.P3 agreement, the entire supply of diaries should be made within 15 days from the date of receipt of approval of proof. On 18.01.2013 itself, Ext.P4 notice was issued by the third respondent – Managing Director of the Kerala State Backward Classes Development Corporation Ltd., to the petitioner to show cause why their contract should not be terminated by blacklisting them due to the failure in supplying all the diaries within 15 days' time of approval of the proof. The petitioner filed Ext.P5 reply, stating that the work could not be completed as there was difficulty in getting proper supply of paper from Tamilnadu owing to a scheme for free supply of note books to students being enforced in Tamilnadu and due to the delay in getting import supply of material for making the outer cover of the diaries. Though the petitioner supplied 4563 diaries as on 31.01.2013, no payment was effected by the second respondent, however, Ext.P9 order was served on the petitioner, informing him that the Board of Directors of the Corporation, in its meeting held on 29.04.2013, decided to include the establishment of the petitioner in blacklist and to impose and realize an amount of Rs.6,00,000/- towards compensation for not supplying agreed copies of Information Guide within the stipulated time. It was further stated therein that the Board of Directors also decided not to give bill payment to the Information Guides already supplied by the petitioner. The petitioner filed Ext.P10 review application before the Board of Directors to review Ext.P9 order passed by the second respondent. Aggrieved by the non consideration of Ext.P10 review application, the petitioner had filed WP(C) No.25845 of 2013 before this Court, and this Court, as per Ext.P11 judgment, disposed of the matter, directing the competent authority to pass orders on Ext.P10.
The petitioner filed Ext.P10 review application before the Board of Directors to review Ext.P9 order passed by the second respondent. Aggrieved by the non consideration of Ext.P10 review application, the petitioner had filed WP(C) No.25845 of 2013 before this Court, and this Court, as per Ext.P11 judgment, disposed of the matter, directing the competent authority to pass orders on Ext.P10. Thereafter, Ext.P13 order was passed by the third respondent dismissing the application for review, pursuant to which, Ext.P14 revenue recovery notice dated 21.03.2014 was issued for recovery of Rs.6,00,000/- towards the loss alleged to have been suffered by them. Hence, the petitioner has approached this Court with this writ petition. 3. Respondents 1 to 3 filed a counter affidavit, contending that the petitioner being the lowest bidder, was awarded with the supply order of 10000 numbers of “Information Guide, 2013” and it was on failure of compliance, Ext.P4 was issued to the petitioner on 18.01.2013. In reply to Ext.P4, the petitioner sought three days' time, which was allowed, and even after the extended time, they did not supply the diaries and hence, the decision was taken by the Board of Directors, which was informed to the petitioner. It was further contended that the Corporation could not re-tender the work as per the general condition of the contract since the information in the guide pertains to that particular year and by passage of time, the guide becomes obsolete. It is pointed out that the guide ought to have been issued before 2013. According to the respondent Corporation, because of the wilful carelessness of the petitioner, they could not distribute the guide on time and achieve its aim. It is further contended that they are not responsible for the non availability of labour or printing materials or shortage of power and the decision of the subcommittee was discussed in detail by the Board of Directors in a meeting held on 19.12.2013 and it is based on the decision taken in the said meeting that Ext.P10 review application was rejected. Thereafter, Ext.P14 revenue recovery notice was issued for realization of the compensation amount after due compliance of all parameters of law. 4. Heard the learned counsel for the petitioner, the learned Government Pleader and the learned Standing Counsel for the respondent Corporation. 5.
Thereafter, Ext.P14 revenue recovery notice was issued for realization of the compensation amount after due compliance of all parameters of law. 4. Heard the learned counsel for the petitioner, the learned Government Pleader and the learned Standing Counsel for the respondent Corporation. 5. The sole issue to be decided in this writ petition is whether revenue recovery proceedings can be initiated by the respondent Corporation for realizing damages arising out of alleged breach of contract, especially, when damages are not quantified through proper adjudication. 6. Ext.P1 is the tender notification inviting tender for supply of “Information Guide, 2013”. As per the tender conditions, the petitioner had to supply diaries within 15 days from the date of approval of the proof. According to the petitioner, the proof was approved and confirmed only on 19.12.2012, whereas, according to the second respondent, the proof was approved on 12.12.2012. As per the agreement entered into between the parties, the petitioner is bound to supply materials within 15 days from the date of receipt of approval of the proof of diary. However, the petitioner could supply only 4608 numbers of diary instead of 10000 copies as agreed. 7. The learned counsel for the petitioner submits that the non supply of the remaining copies was due to reasons beyond the control of the petitioner and there is no wilful laches on their part in not supplying the remaining copies. It is pointed out that the petitioner supplied 4608 copies of diary, in respect of which, an amount of Rs.2,74,476/- is due to the petitioner. According to the learned counsel for the petitioner, it is without any basis that the petitioner was blacklisted and compensation was fixed at Rs.6,00,000/- and further, the decision was taken to forfeit the bill amount on termination of the contract. It is further submitted that there is nothing on record to show that how the second respondent has suffered a loss of Rs.6,00,000/- and how the quantification was done without adducing any evidence. 8. The learned Standing Counsel for the respondent Corporation submits that the second respondent could not re-tender the work because the information in the guide pertains to a particular year and it was to be supplied before 01.01.2013, which could not be done by the petitioner. 9.
8. The learned Standing Counsel for the respondent Corporation submits that the second respondent could not re-tender the work because the information in the guide pertains to a particular year and it was to be supplied before 01.01.2013, which could not be done by the petitioner. 9. The learned counsel for the petitioner submits that there was no breach of contract and according to them, the termination was illegal and without reasons. It was further submitted that in Ext.P1 tender conditions or in Ext.P3 agreement, there is no specific provision authorising the second or third respondent to determine the breach of contract or to assess damages by themselves and to recover the same from the contractor. The learned counsel further submits that Ext.P9 or Ext.P13 does not reveal in what manner the loss has been quantified and the damage has been assessed by the Corporation for the delayed supply of diaries, 2013. It is also submitted that the termination of the contract was without following the procedures enumerated in Ext.P1 tender notification and Ext.P3 agreement. 10. The learned Standing Counsel for the respondent Corporation contended that the petitioner has committed breach of contract by not supplying agreed number of diaries even after the admitted period of delivery; and subsequent to the termination of the contract, the Board of Directors discussed the issue in detail and vide Resolution No.146/2013, the following were resolved: 1) The petitioner should be black listed from the printing work of Corporation. 2) To realize an amount of Rs.6 lakh from the petitioner towards compensation for not supplying all the copies of Information Guide within time, since the Corporation had suffered a loss as its schemes could not be given due publicity due to the lapse on the part of the petitioner. 3) Not to give bill payment to the 'Information Guides' already supplied by the petitioner firm. Since, the petitioner did not pay the said amount, revenue recovery proceedings were initiated. 11. Though it is submitted that the Board of Governors passed a resolution to recover the amount, there is nothing on record to show how the respondent Corporation quantified the loss suffered by them. 12. Section 73 of the Contract Act reads as follows: “73.
Since, the petitioner did not pay the said amount, revenue recovery proceedings were initiated. 11. Though it is submitted that the Board of Governors passed a resolution to recover the amount, there is nothing on record to show how the respondent Corporation quantified the loss suffered by them. 12. Section 73 of the Contract Act reads as follows: “73. Compensation for loss or damage caused by breach of contract.—When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract. — When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.” When a contract is broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or damage caused to him/her thereby. The primary duty, therefore, is to fix the liability for the breach. Here, liability has been fixed unilaterally. When a dispute arises as to breach of contract, that dispute cannot be decided and settled by one of the parties to the contract. In writ matters, this Court need not entertain such challenge against termination of contracts. If any of the rights of the parties is impaired by such termination, they have efficacious equal remedy before the civil court to challenge such action. The reasons for performance or non performance are matters, that could be established through evidence. Without having an adjudication of the issue by the competent authority and an assessment of damages, the respondent Corporation cannot unilaterally fix and seek compensation from the petitioner.
The reasons for performance or non performance are matters, that could be established through evidence. Without having an adjudication of the issue by the competent authority and an assessment of damages, the respondent Corporation cannot unilaterally fix and seek compensation from the petitioner. It was thus decided in Alavikutty @ Babu, PWD Contractor v. State of Kerala & Others, [2007:KER:11140] that one of the parties to the contract cannot adjudge his own cause and impose a liability thus on the other party to the contract. It is fundamental rule in the administration of justice that a person cannot be judge in a case, wherein he is interested. Nemo sibi esse judex vel suis jus dicere debet, i.e., no man can judge his own cause. 13. In Kerala State Electricity Board v. Kurien E. Kalathil [ (2000) 6 SCC 293 ], the apex court has held that the contract between the parties is in the realm of private law and it is not a statutory contract and that the disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India, which is a matter for adjudication by a civil court or in arbitration, if provided for in the contract. It was further held that the issue as to whether any amount is due and if so, how much, and the refusal of the party to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition, and that the parties should be relegated to other remedies. 14. Here, the question is, whether revenue recovery proceedings can be initiated by the respondent Corporation for realizing damages arising out of alleged breach of contract, especially, when damages are not quantified through proper adjudication. The Kerala Revenue Recovery Act was enacted in the year 1986 with an aim to recover the amounts due to the Government, Statutory bodies, Corporations and other notified institutions. The Kerala Revenue Recovery Act does not create any new right. It merely provides a process for speedy recovery of money due. Revenue Recovery Act is only a procedure and is not substantive law. Revenue recovery proceedings can be initiated only in respect of the fixed, settled or adjudicated dues through the machinery under the Kerala Revenue Recovery Act. 15.
The Kerala Revenue Recovery Act does not create any new right. It merely provides a process for speedy recovery of money due. Revenue Recovery Act is only a procedure and is not substantive law. Revenue recovery proceedings can be initiated only in respect of the fixed, settled or adjudicated dues through the machinery under the Kerala Revenue Recovery Act. 15. In V.P.Kunhammed v. State of Kerala [ 1999(2) KLJ 678 ] as well as in K.A.Sobhanadas v. State of Kerala & another [ 1984 KLJ 684 ], it was held that disputed damages cannot be recovered by proceedings under the Revenue Recovery Act, which can only be realized by adjudication and the only remedy available is to file a suit. 16. Since the amount now demanded is disputed by the petitioner, without filing a suit, obtaining a decree and executing it, the respondent Corporation cannot recover the claim amount under the Kerala Revenue Recovery Act. Hence, Ext.P9 to the extent it fixes the liability of Rs.6,00,000/- and the decision taken not to make the bill payment for the diaries already supplied, are unsustainable in law. The learned counsel for the petitioner sought for a direction to the respondents to pay the amount for the diaries already supplied to the respondents. Since the parties are being relegated to approach the civil court for redressal of their grievance, the prayer of the petitioner for direction to the respondents to disburse the price of the diaries supplied, cannot be allowed. It is made clear that I have not gone into the merits of the case. 17. Hence, Ext.P9 to the extent it fixes the liability of Rs.6,00,000/- and Ext.P14 revenue recovery proceedings are set aside. The parties, if so advised, shall move the civil court to challenge any such action for recovery of the amounts due. The civil court, untrammelled by any observation made in this judgment, shall take up the matter and dispose of the same in accordance with law. The writ petition is disposed of, as above.