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2023 DIGILAW 893 (KER)

Kico Business Corporation v. Municipality Of Pandalam

2023-11-13

N.NAGARESH

body2023
JUDGMENT : The petitioner is a Partnership Firm which has been awarded with the work of supplying street lights and its materials during 2021-2022 by the Pandalam Municipality. The petitioner is aggrieved by the delay on the part of the Municipal authorities in releasing the bill amount due to the petitioner. 2. The petitioner states that after following an e-tender process, the respondents awarded the work of supplying street lights and its materials to the petitioner on 09.08.2021. Ext.P1 supply order was issued to the petitioner on 16.08.2021. The petitioner supplied 3500 tubes and 1000 LED bulbs. Two consignments of single tube sets were supplied later. Another consignment of single tube sets along with nuts, bolts and clamp, 70 coils of aluminium wire of 1.5 mm, also were supplied. 3. The petitioner states that the 2nd respondent had taken samples from the supplied goods and tested the quality of supplied goods in NSS Polytechnic College, Pandalam. The goods were accepted by the Municipality only after ensuring the quality of the goods. Thereafter, the 2nd respondent released the bill amount in respect of the supplies, on 23.12.2021 after deducting applicable taxes. 4. To the surprise of the petitioner, on 07.01.2022, the 2nd respondent issued a letter alleging lack of quality of the goods supplied. The 2nd respondent stated that certain Councilors and AMC contractors had filed complaints regarding the quality of the materials supplied. The said letter dated 07.01.2022 did not specify as to which items of materials supplied, were found below standard. On enquiry, the petitioner learnt that there is an allegation that many of the florescent tubes supplied by the petitioner were found to be blown after a few months. 5. The petitioner was required to replace them. The petitioner states that those fluorescent tubes were subjected to severe quality tests in the ideal situations and were found to be up to the mark, as evidenced by Ext.P2. It was after the tests that the petitioner was paid the bill amount. In spite of that, the petitioner replaced the entire number of fluorescent tubes told to have been blown. 6. Thereafter, the petitioner supplied goods in response to Ext.P4 supply order. The cost of the supply pursuant to Ext.P4 was Rs.4,27,947/-. Inclusive of earlier balance in respect of single tube sets amounting to Rs.3,09,717/-a total amount of Rs.7,37,664/-was due to the petitioner. 6. Thereafter, the petitioner supplied goods in response to Ext.P4 supply order. The cost of the supply pursuant to Ext.P4 was Rs.4,27,947/-. Inclusive of earlier balance in respect of single tube sets amounting to Rs.3,09,717/-a total amount of Rs.7,37,664/-was due to the petitioner. The said amount was withheld by the 2nd respondent-Secretary without any justifiable reason. The petitioner states that bills for the disputed tubes were settled by the respondents. But, the payments against Exts.P5 to P5(c) bills are not paid. 7. The petitioner sent Ext.P7 letter to the 2nd respondent requesting to disclose reasons for stopping payment. Ext.P7 was followed up by Exts.P8 and P9 representations. However, the respondents have not settled the bills for the materials supplied nor have they disclosed reasons for not settling the bills. It is aggrieved by the arbitrary delay and withholding of amounts under Exts.P5 to P5(c) bills of the petitioner that the petitioner has filed this writ petition. 8. The petitioner states that there is no allegation in respect of the quality of materials supplied under Exts.P5 to P5(c) bills. The quality of the materials supplied was cleared as per Exts.P2 to P6 quality certificates. There are no circumstances which warrant retention of any amount due to the petitioner, contended the counsel for the petitioner. 9. Respondents 1 and 2 opposed the writ petition filing a statement dated 29.08.2022. The respondents submitted that a petition to issue writ of mandamus will not normally be entertained for the purpose of payment of payment of money. The petitioner was awarded the work of supplying street lights and materials during the year 20212022. The petitioner was paid Rs.16,36,586/-against the supply of goods. 10. Based on the complaints received from almost 90% of the Councilors alleging low quality of materials used by the petitioner, the then Chair Person of Pandalam Municipality intervened in the matter. The petitioner replaced some items. Thereafter, the second supply order was given to the petitioner on 04.02.2022. The petitioner was directed to get the materials tested by IHRD, Adoor and the petitioner was required to produce test certificates before supply. The petitioner, instead, gave test certificates issued by the Pandalam NSS Polytechnic. 11. The Councilors of the Municipality inspected the execution of the work and found that the petitioner used low quality materials once again. The petitioner was directed to get the materials tested by IHRD, Adoor and the petitioner was required to produce test certificates before supply. The petitioner, instead, gave test certificates issued by the Pandalam NSS Polytechnic. 11. The Councilors of the Municipality inspected the execution of the work and found that the petitioner used low quality materials once again. The issue was discussed in detail in the Council meeting held on 25.03.2022 and among the 31 Councilors present, 19 opined that the quality of the goods supplied by the petitioner was very low and restrained the Municipality from clearing the balance amount to the petitioner. The respondents submitted that as per Section 34 of the Kerala Municipality Act, the respondents are bound to give effect to every resolution of the Council unless such resolution is suspended or cancelled. 12. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents. 13. The petitioner was awarded the work of supplying street lights and materials pursuant to an e-tender process. The petitioner was initially issued with Ext.P1 supply order dated 16.08.2021. The petitioner supplied the said materials. The 2nd respondent took samples from the supplied goods and subjected them to quality check in NSS Polytechnic College, Pandalam. As the quality of the supplied materials was found to be satisfactory, the bill amount due to the petitioner was released. 14. Subsequently, as per Ext.P3, the petitioner was informed that the quality of the goods supplied by the petitioner was not up to the mark and complaints were received from Councilors and AMC Contractors. Ext.P3 does not indicate as to which of the materials supplied were of low quality. The petitioner submits that in spite of the fact that the materials supplied were found to be of good quality, in view of the complaints, the petitioner replaced the florescent tubes which were alleged to have been blown. The petitioner would submit that the damaged tubes were not returned to the petitioner in spite of his request. It is to be noted that the bill amount in connection with the said supply was paid by the Municipality after deducting applicable taxes. 15. Thereafter, the petitioner was issued with Ext.P4 supply order dated 04.02.2022. The petitioner supplied the materials worth Rs.4,27,947/-. The payment of the said bill was withheld though the materials were supplied. It is to be noted that the bill amount in connection with the said supply was paid by the Municipality after deducting applicable taxes. 15. Thereafter, the petitioner was issued with Ext.P4 supply order dated 04.02.2022. The petitioner supplied the materials worth Rs.4,27,947/-. The payment of the said bill was withheld though the materials were supplied. Exts.P5 to P5(c) are the bills in respect of subsequent supply. It may be noted that the Electrical and Electronics Engineering Department of NSS Polytechnic College, Pandalam has issued quality test certificates in respect of those materials also. The respondents have withheld the bill amount without disclosing any reason. 16. In the statement filed by the respondents, it has been stated that 90% of the Councilors of the Municipality alleged that the quality of materials supplied by the petitioner was low and was in violation of the agreement. The respondents admit that the petitioner has replaced some items and that the then Chair Person of Pandalam Municipality intervened in the matter and solved the problem. 17. If that be so, there is no reason why bills in respect of subsequent supplies in respect of which no complaints were received, have been withheld. Ext.P4 communication of the Secretary to the Municipality directed the petitioner to supply materials after producing quality inspection report. The petitioner submitted Ext.P6 quality inspection report. Ext.P6 is issued by NSS Polytechnic College, Pandalam. 18. There is no allegation that the supply later made by the petitioner is of low quality. The petitioner has obtained quality certificate from a recognised institution. The stand taken by the respondents in the statement filed by them is that the petitioner failed to test the materials by IHRD, Adoor. The matter was discussed in Council meeting on 25.03.2022 and majority of the Councilors opined that the quality of the supplied goods is low and decided not to clear the balance amount due to the petitioner, as per Ext.R1(a) minutes. The respondents would contend that as per Section 34 of the Kerala Municipality Act, the respondents are bound to give effect to every resolution of the Council unless such resolution is suspended or cancelled. 19. There is no complaint regarding the materials supplied by the petitioner of which the bills are withheld. The respondents would contend that as per Section 34 of the Kerala Municipality Act, the respondents are bound to give effect to every resolution of the Council unless such resolution is suspended or cancelled. 19. There is no complaint regarding the materials supplied by the petitioner of which the bills are withheld. Assuming that materials supplied by the petitioner did not function as expected, there is no scientific data or evidence to show that those did not function due to low quality. Nonfunctioning of electric/electronic goods can be due to other reasons also, like voltage fluctuation etc. There is no material in the pleadings to show that quality certificate from IHRD, Adoor was a condition of contract. It is not disputed that the petitioner had produced quality certificate from NSS Polytechnic College, Pandalam. In respect of the earlier supply, the respondents have cleared the bills based on the quality certificates issued by the NSS Polytechnic College. 20. Section 34 of the Kerala Municipality Act provides that every standing Committee, other Committees and the Secretary shall be bound to give effect to every resolution of the Council unless such resolution is suspended or cancelled. Section 34 has been included in Chapter III of the Kerala Municipality Act which provides for administration, powers, functions and responsibilities of Municipality. In this case, the Municipal Council has passed a resolution in respect of quality of electronic materials supplied by a Contractor based merely on majority opinion. The majority decision of the Councilors on the quality of electric/electronic materials supplied, is not based on any scientific data. Contractual obligations of the Municipality with third parties cannot be subjected to majority opinion of the Councilors. When the Municipality itself is a party to contract with a private citizen, the contract should be governed by the stipulated terms. Section 34 cannot be brought in to violate a contract voluntarily entered into by the Municipality. 21. I find that the decision of the respondents to withhold the bills payable to the petitioner on the basis of majority opinion of the Councilors, without support of any authentic data as to the quality of the materials supplied by the petitioner, is highly illegal and arbitrary and offends Article 14 of the Constitution of India. The writ petition is therefore allowed. The writ petition is therefore allowed. The respondents are directed to release the bill amount pursuant to Exts.P5 to P5(c) to the petitioner, within a period of one month.