ROHINI FACILITY MANAGEMENT SERVICES v. STATE OF KERALA
2025-02-28
HARISANKAR V.MENON
body2025
DigiLaw.ai
JUDGMENT : These two writ petitions are filed challenging the steps taken by the 6 th respondent Corporation in W.P(C)No.39941 of 2018 (3 rd respondent in W.P(C)No.7129 of 2018) with respect to the dispute over the user fee collection at the overbridges at S.N junction, Tripunithura-Irumpanam in the Seaport-Airport road and Ponnurunni overbridge respectively. 2. The petitioner in W.P(C)No.39941 of 2018 states that he was the successful bidder for the collection of user fee on contract basis on the overbridges noticed above, awarded by the 6 th respondent - a Government of Kerala undertaking. The total amount payable by the petitioner was to the extent of Rs.3,67,20,000/-, in 24 installments commencing from 01.06.2014 and ending by 16.05.2015. The contract was for a period of one year from 01.06.2014 to 01.06.2015. A bank guarantee for Rs.93,63,600/- is stated to have been furnished towards the security deposit. The petitioner contends that they were not in a position to collect the user fee on account of agitation by the regional residents associations and the local politicians, according to whom, more than sufficient collection compared to the cost of construction has already been made. On account of the afore, the petitioner states that he could not effect the installments as stipulated. The petitioner states that though he filed a writ petition seeking police protection, during the pendency of the same, the 6 th respondent Corporation, as per Ext.P1 dated 16.08.2014, terminated the contract. The petitioner states that they submitted a detailed representation to the 6 th respondent pointing out the difficulties faced by them. However, the respondent Corporation invoked the bank guarantee submitted by the petitioner. The petitioner also approached the Government voicing his grievance and the same was rejected by the Government. The said rejection was the subject matter for challenge in W.P(C)No.3022 of 2015 filed by the petitioner, which stood disposed of by judgment dated 26.10.2016, noticing that the impugned order was issued by the Managing Director of the respondent Corporation at that point of time, who was also holding the charge of the Secretary to the Government.
The said rejection was the subject matter for challenge in W.P(C)No.3022 of 2015 filed by the petitioner, which stood disposed of by judgment dated 26.10.2016, noticing that the impugned order was issued by the Managing Director of the respondent Corporation at that point of time, who was also holding the charge of the Secretary to the Government. This Court noticing that the encashment of the bank guarantee was made without a proper adjudication and consequential quantification of liability, permitted the petitioner to make a motion to that effect to the Government, further directing the Government to take a decision on the matter after obtaining legal advice from the Law Department, if found necessary. 3. The Government thereafter issued Ext.P9 dated 28.08.2017 and found that the amount realized by invoking the bank guarantee was required to be refunded to the petitioner on “humanitarian reasons”. It may straight away be noticed that the order recorded that the petitioner was not able to collect the user fee on account of the public outcry. 4. The afore order of the Government was challenged by the respondent Corporation by filing W.P(C)No.29860 of 2017, essentially on the ground that out of the security deposit encashed-Rs.93,63,600/-, an amount of Rs.47,42,400/- has been adjusted to the installments defaulted by the petitioner prior to termination of the contract and it is the balance of Rs.45,79,420/-, that need to be refunded to the petitioner. However, by Ext.P11 judgment dated 10.10.2017, that writ petition was withdrawn by the respondent Corporation unconditionally. Later, notice dated 29.06.2018 was issued seeking to recover the installments defaulted till the termination of the contract to which the petitioner submitted Ext.P13 reply, that nothing remains to be recovered from the petitioner in the light of Ext.P9 Government Order dated 28.08.2017. The respondent Corporation has thereafter sought to realize the afore arrears through revenue recovery proceedings by Exts.P16 and P17. It is in the afore circumstance that W.P(C)No.39941 of 2018 is filed. 5. W.P(C)No.7129 of 2018 is filed by the petitioner contending that he was the successful bidder for the collection of user fee on a contract basis from the Ponnurunni overbridge, that no collection could be effected on account of the public uproar as in the other case.
It is in the afore circumstance that W.P(C)No.39941 of 2018 is filed. 5. W.P(C)No.7129 of 2018 is filed by the petitioner contending that he was the successful bidder for the collection of user fee on a contract basis from the Ponnurunni overbridge, that no collection could be effected on account of the public uproar as in the other case. When it was pointed out, the respondent Corporation sought to cancel the agreement upon the petitioner consenting to the same by Ext.P6 dated 14.11.2014, without endorsing the risk and cost liability allowing an amount of Rs.4,60,571/- to the petitioner, however, adjusting the afore amount to the alleged dues payable with respect to the overbridges which are the subject matter of the dispute in the connected case. The petitioner has sought a refund of the afore amounts through this writ petition. 6. I have heard Sri. Varghese C. Kuriakose, the learned counsel for the petitioners, Smt. Resmitha R. Chandran, the learned Standing Counsel for the respondent Corporation and Sri. E.G. Gorden, the learned Senior Government Pleader for the State. 7. The following issues arise for consideration in these writ petitions: - i. Whether the petitioner can maintain a challenge against the recovery proceedings through a writ petition filed under Article 226 of the Constitution of India in the facts and circumstances of the case? ii. Whether the respondent Corporation is entitled to take steps to realize the alleged defaulted arrears of installments in the light of the findings in Ext.P9 Government Order? 8. The first issue arising for consideration in these writ petitions is with reference to the maintainability of the writ petitions. Smt. Resmitha, the learned counsel for the respondent Corporation relied on the judgment of the Apex Court in Joshi Technologies International Inc. v. Union of India and Others [ (2015) 7 SCC 728 ] . True, the afore judgment of the Apex Court held that writ jurisdiction of High Court was not intended to facilitate avoidance of contractual obligation. However, in the case at hand, the contention raised by the petitioner is to the effect that the liability, if any of the petitioner stood governed by the orders issued by the Government at Ext.P9 dated 28.08.2017 and on the face of the afore, the respondent Corporation cannot proceed to invoke the power under the Kerala Revenue Recovery Act, 1968, for realization of the alleged defaulted installments.
In other words, the case of the petitioner is centered around the scope of Ext.P9 Government Order. The prayer in the writ petition is also with reference to the proposal to realize the defaulted installments on the face of Ext.P9, and when that be so, I am of the opinion that the petitioner can maintain a writ petition challenging the coercive proceedings. Therefore, the first objection raised by Smt. Resmitha is only to be recorded and rejected. 9. The second issue arising for consideration is with reference to the steps taken to realize the alleged defaulted installments by the respondent Corporation under the Kerala Revenue Recovery Act, 1968. The amount sought to be realized is the arrears of installments till termination of the contract, is clear from a perusal of Ext.P12. 10. The learned counsel Smt.Resmitha relied on clauses 3.18 and 3.19 of Ext.R6(1) agreement executed between the parties to contend that once there is a default, the respondent Corporation is at liberty to recover the loss. She would also rely on clause 3.12 to contend that the petitioner cannot plead ignorance of the ground realities, with reference to the public protest pointed out by the petitioner. 11. I have considered the afore contention. True, clause 3.12 of Ext.R6(1) agreement reads as under:- “3.12 Contractor has to make all arrangements other than what are existing at the tollbooths for the smooth running of user fee collection at his own expense. RDBCK has no liability in this regard.” Therefore, it is for the petitioner to make arrangements for the smooth running of the toll booth. The petitioner has contended that when obstruction was created, they had approached this Court seeking police protection and it was at that point, the agreement was terminated. In this connection, I notice the dictum laid down by the Apex court in ABL International Ltd. and Another v. Export Credit Guarantee Corporation of India Ltd. and Others [ (2004) 3 SCC 553 ] wherein it is held that when the State or its instrumentality is a party to a contract, it has an obligation to act fairly, justly and reasonably with reference to the requirement under Article 14 of the Constitution.
It is in the light of the afore principles that in the proceedings at Ext.P9 the existence of the public outcry, as pointed out by the petitioner, which prevented him from making the toll collection, is found correct. In the light of the afore, the case built up by the respondent Corporation with reference to clauses 3.12 and 3.19, does not appear to be convincing. 12. It is also to be noticed that under clause 3.19, once there is a default in payment of the installments as stipulated in clause 3.17, the work can be rearranged at the risk and cost for the petitioner and the loss if any sustained by the respondent Corporation can be recovered from either the security deposit or by revenue recovery action. In the case at hand, along with termination of the contract, the entire amount of security deposit is seen realized from out the bank guarantee furnished by the petitioner. Therefore, the respondent Corporation has invoked the provisions of clause 3.19 against the petitioner. But the Government intervened, taking note of the special circumstance, which, according to the Government, requires the application of “humanitarian reasons”, ordering the entire security deposit of Rs.92,63,600/- to be returned to the petitioner. In the light of the afore, I am of the opinion that the Government has thought it as a fit case not to invoke clause 3.19 of the agreement. When the Government directs a fixed deposit to be returned back to the petitioner even after the same being invoked, there cannot be a separate recourse to the revenue recovery proceedings under clause 3.19. 13. From the afore, I notice that the respondent Corporation was also aware that there cannot be any further proceedings against the petitioner in the light of Ext.P9 order and that is why W.P(C)No.29860 of 2017 was filed by them challenging the Government Order at Ext.P9. However, the afore writ petition was withdrawn by the respondent Corporation themselves and in the light of the afore, there cannot be any further proceedings against the petitioner. In this connection, I take note of the contention raised by the learned counsel Smt. Resmitha, with reference to Ext.R6(a) communication of the Government dated 16.05.2018, whereby the Government informed the respondent Corporation that the default amount may be dealt with as per the Rules of the company.
In this connection, I take note of the contention raised by the learned counsel Smt. Resmitha, with reference to Ext.R6(a) communication of the Government dated 16.05.2018, whereby the Government informed the respondent Corporation that the default amount may be dealt with as per the Rules of the company. However, I notice that the afore communication has not been issued with specific reference to the Government Order at Ext.P9 dated 28.08.2017 and that the petitioner was also not heard while issuing the same. Therefore, I am of the opinion that much reliance can’t be placed on the said communication as contended by the respondent Corporation. 14. I also notice that the Government issued Ext.P9 with specific reference to the directions contained in W.P(C)No.3022/2015. A reading of the afore judgment would make it clear that this Court directed the Government to consider the rival contentions/entitlements/liability in their entirety taking note of the factual and legal issues. Considering the aforementioned, the findings in Ext.P9 can only be one rendered by the Government with respect to the liability of the petitioner for the default in installments as well as the entitlement to get back the security deposit. 15. Furthermore, if the contention raised by the respondent Corporation is to be accepted, then it has to be held that the extension of the humanitarian grounds can only be for the claim of realization of security deposit and not for realization of the defaulted installments. As already noticed, the security deposit is furnished for safeguarding the defaulted installments also. 16. Therefore, I hold that the respondent Corporation is not entitled to initiate revenue recovery proceedings for realization of the defaulted installments, in the light of the findings contained in Ext.P9. I also notice that as regards the Ponnurunni overbridge, the subject matter of W.P(C)No.7129 of 2018, admittedly, no amount towards risk/cost is sought to be demanded from the petitioner. When that be so, it is only just and proper that the same yardstick is applied as regards the dispute involved in the other case also. 17. In the light of the afore, the attempt of the respondent Corporation to adjust the amount of Rs.4,60,571/- as per the impugned order at Ext.P9 in W.P(C)No.7129 of 2018 is also to be declared illegal and arbitrary.
17. In the light of the afore, the attempt of the respondent Corporation to adjust the amount of Rs.4,60,571/- as per the impugned order at Ext.P9 in W.P(C)No.7129 of 2018 is also to be declared illegal and arbitrary. In the result, these writ petitions are disposed of as under: i. W.P(C)No.39941 of 2018 is allowed by setting aside Exts.P16 and P17 issued by the 5 th respondent. ii. W.P(C)No.7129 of 2018 is allowed by setting aside Ext.P9 order issued by the 3 rd respondent, to the extent an amount of Rs.4,60,571/- is sought to be adjusted towards the alleged liability payable by the petitioner.