Babu S vs State Of Kerala And Ors

The petitioner, who is a Government Contractor with Class-A grading, is before this Court seeking to direct respondents 1 to 3 to admeasure Ext.P1

work completed by him and to effect payment of amounts for the same and to allow him to participate in the proposed re-tender proceedings.

The petitioner states that he was the successful bidder and was entrusted with the work of “NABARD assisted Scheme under RIDF â€" XVIII

â€" improvements and Side Protection Works to Nedinjil Ela Thodu from upstream of KWA Pump House to Vellayani lake in Kalliyoor Panchayatâ€.

The petitioner executed Ext.P1 agreement. He deposited Rs.50,000/- in cash and Rs.1,00,000/- worth National Savings Certificates as security. Under

Ext.P1, the petitioner had to execute 18 items of work, with an estimated cost of Rs.44,79,163/-.

Though the petitioner commenced work, after four months, local people under the leadership of Nemom Block Member objected and resisted the

work. They demanded realignment of the route. The petitioner was compelled to stop the work immediately. The petitioner informed the issue to

respondents 2 and 3 and requested to take necessary remedial action. The petitioner had availed a loan of Rs.25 lakhs from the 4th respondent, to

execute the work. There was a delay in payment of bills for the work executed by the petitioner.

The petitioner repeatedly required respondents 2 and 3 to take necessary action to subdue people's protest so that the petitioner can carry on with

the work. Ext.P3 series of representations were submitted by the petitioner in this regard. The petitioner submits that he could not proceed with the

work due to the obstructions from local people. The petitioner was not at fault in any manner. The 2nd respondent has cleared only Rs.11,72,440/- of

his bill amount. Balance amounts are outstanding. In the meanwhile, the 2nd respondent has taken steps to re-tender the work by forfeiting the

security deposit given by the petitioner. It is under such circumstances that the petitioner has approached this Court.

The 2nd respondent opposed the writ petition filing counter affidavit. The 2nd respondent stated that the resistance on the part of the local people

was confined to only a small area. The remaining portions were free from issues. A few coconut trees standing were not an obstruction to execute

the work. In spite of the availability of hindrance free site, the petitioner did not continue execution of the work. The Department sent repeated

reminders to the petitioner to proceed with the remaining work. He did not respond to. On the other hand, the petitioner extended lame excuses. It

was under such circumstances that respondents 1 to 3, on 20.09.2014, decided to terminate the contract with the petitioner at the risk and cost of the

contractor.

The learned counsel for the petitioner argued that the petitioner could not have proceeded with the work due to the obstructions and resistance of

the local people. The respondents were informed of the same. The respondents did not do anything to get the obstructions removed. Therefore, non-

completion of the work is not due to the fault of the petitioner. The learned counsel for the petitioner further submitted that the proposed recovery of

the cost from the petitioner is unsustainable. The respondents can recover only adjudicated amounts. Relying on a Division Bench judgment of this

Court in Ponnappan K.A. v. DFO, Chalakudy and others [1984 KLJ 853], the learned counsel for the petitioner argued that only a determined amount

can be recovered from the petitioner. What is sought to be realised is not liquidated damages.

Relying on the judgment of this Court in State of Kerala v. Universal Marine Agencies [1980 KLT 187], the learned counsel for the petitioner

argued that as long as there is no adjudication of damages caused by the petitioner due to the alleged violation of contract, there cannot be any

recovery. The action of the respondents in forfeiting the security deposit made by the petitioner is highly arbitrary and illegal.

I have heard the learned counsel for the petitioner and learned Government Pleader representing respondents 1 to 3.

It is evident from the pleading that there was some objection from local people regarding construction in a specific area of the Thodu. In the

remaining portions, there was no obstruction at all. The respondents have stated that the petitioner was required to go ahead with the work. Letters

were sent to the petitioner by the Department. The petitioner, however, did not resume work. Taking into consideration the importance of the work

and seriousness of the matter, the respondents decided to terminate the contract and re-tender the work. 10. Part bill submitted by the petitioner for

Rs.13,76,122/- has already been settled and paid to the petitioner. The petitioner received the amount for the work done on 12.12.2013. It has also

come out that a final notice was sent to the petitioner to resume and complete the work on 25.04.2014. Still, the petitioner did not resume the work. In

the circumstances, this Court do not find any illegality or arbitrariness in the decision of the respondents to terminate the contract and re-tender the

work.

The termination of the contract at the risk and cost of the contractor is for the failure of the Contractor to execute the work. Termination at risk

and cost, is a part of the terms of contract. When a contract is terminated at the risk and cost of the existing contractor, the loss due to the termination

will be calculated after re-tendering of the work and after calculating the actual loss suffered by the Government due to re-tender. Such amounts

which would be evident from the records will ordinarily be indisputable. The petitioner therefore cannot take a stand that recovery can be made only

after adjudication of the dues by a competent court. The petitioner has agreed and signed the contract which contains a risk and cost clause. The

judgments relied on by the petitioner would not be of any help to the petitioner.

In the circumstances, this Court finds no reason to interfere with the re-tender proceedings proposed by respondents 1 to 3. If the petitioner has

any claim for outstanding amounts to him from respondents 1 to 3, the petitioner will be at liberty to resort to appropriate legal proceedings.

With the above observations, the writ petition is dismissed.