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Judgment
Kh. Nobin Singh, J
[1] Heard Shri Th. Khagemba, learned counsel appearing for the petitioners; Shri K. Jagat, learned Government Advocate appearing for the State respondents and Shri R.K. Deepak, learned counsel appearing for the Chief Engineer, PHED.
[2] Since the issues involved in these writ petitions and the facts thereof are identical, the same are being disposed of by this common judgment and order.
[3.1] By these writ petitions, the petitioners have prayed for issuing a writ of mandamus or any other appropriate writ to direct the respondents to refund their entitled security deposits for a total amount of Rs.1,23,71,211/-(Rupees one crore twenty-three lakhs seventy-one thousand two hundred and eleven) only [Rs. 34,50,176/-; Rs. 33,99,825/-; Rs. 16,94,794/- and Rs. 38,26,416/- respectively] payable to the petitioners with interest @ 18% per annum.
[3.2] Facts and circumstances as narrated in these writ petitions are that the petitioners are the contractors engaged in construction/ repair works and in particular, with regard to various such works as allotted/ assigned by the Public Health Engineering Department, Manipur. The petitioners do earn their livelihood by engaging themselves in such contract works and in particular, the works assigned by the PHED, Manipur. After the works having been completed by them, the petitioners have been paid their respective final bills by the PHE Department but the security deposits were not refunded to them.
[3.3.] The Chief Engineer, PHED addressed a letter dated 21-05-2014 to all the Executive Engineers, PHED to submit the statements of liabilities for purpose of refund of security deposits. The said letter was written by the Chief Engineer, PHED pursuant to a notice dated 15-05-2014 being issued by the petitioners.
[3.4] As regards the refund of security deposits and performance guarantees, Section 22 of the CPWD Works Manual, 2012 provides the manner as to how the refund of security deposits is to be made and Section 22(1) reads as under:
"(1) In the case of works executed against agreements in Forms CPWD 7 & 8 the refund of security deposit to a contractor on the completion of works is regulated by Clause 17 thereof. This clause envisages the issue of a completion certificate in terms of Clause 8 of the Contract. Such completion certificate shall be issued by the authority in a manner detailed under section 30."
[3.5] Clause 17 of the General Conditions of Contract for Public Works Department, Government of Manipur deals with the payment of security deposits and therefore, it is the duty of the respondents to refund the entitled security deposits in time which they failed to do so. In one of the writ petition being WP(C) No.496 of 2014, this Court was pleased to dispose of it by directing the respondents therein to examine and verify the amount of the petitioners therein and make payment according to the date of completion of the work.
[3.6] Being aggrieved by the inaction on the part of the respondents, the instant writ petitions have been filed by the petitioners on the inter-alia grounds that the security deposit is a concept which is totally different from the concept of undisputed bills; that the State Government need not wait for availability of funds as regards the payment of security deposit because the same had been deducted from them while paying the running bills; that the petitioners have completed the works in time, as per the conditions prescribed by the PHED, without any complaint from any quarter and that the non-refund of security deposits without any reason is in violation of the rights as enshrined under Article 300A, 14 and 21 of the Constitution of India. By way of an illustration, the petitioners have referred to a letter dated 28-03-2017 which was addressed to the Branch Manager, SBI, M.G. Avenue by which the Bank was requested to honor the cheque submitted by the Executive Engineer concerned and a sum of Rs. 40,66,283/-(rupees forty lakhs sixty six thousand two hundred and eighty three) was released by the SBI.
[4] In the affidavit filed on behalf of the respondents, it has been stated that as a matter of practice, the CPWD Manuals, 2012 is followed by the PHED in matters relating to payment of bills. The amounts towards security deposits deducted at the level of the Executive Engineers, are to be deposited in a specified account through treasury challans and the proposal for refund of security deposits shall be submitted by the Executive Engineers along with the originals of the said treasury challans. The proposals submitted by the Executive Engineers vide letter dated 30-12-2014 were returned by the Chief Engineer vide its letter dated 12-01-2015 for want of the original treasury challans and in the absence thereof, the Chief Engineer cannot act upon it. There is no discrimination as regards the refund of the security deposits and the letter dated 28-03-2017 was addressed to the Manager, SBI, MG Avenue by the Under Secretary (PHED) because the original treasury challans were submitted by the concerned Executive Engineer.
[5] From the aforesaid pleadings, it is seen that the averments made in the writ petitions that despite the final bills having been paid, the security deposits have not yet been refunded to the petitioners, are not denied by the respondents. All that the respondents have submitted, is that the refund of security deposits could not be made, as the original treasury challans were not submitted by the Executive Engineers along with their proposals for refund of security deposits. The Executive Engineers are public servants who have been authorized by the State Government to collect security deposits which are to be deposited in the account through treasury challans. It is the State Government which has authorized the Executive Engineers to collect the security deposits and therefore, it is the duty and responsibility of the State Government to ensure that its instructions are duly implemented by all concerned. It is the State Government which is duty bound to take action against the Executive Engineers when they failed to discharge their duties in accordance with law. There is no material on record to show that the State Government has ever taken any action against any of such Executive Engineers for their failure to comply with the instructions. It is not a simple matter because it involves a huge amount, in terms of more than a crore of rupees, which is nothing but public money. The fact that no action has been taken against any of the delinquent Executive Engineers by the State Government, shows that some high officials in the department appear to be hand in glove with them and are equally to be blamed for creating such an embarrassed situation for it. These high officials cannot shirk away from their responsibilities without any accountability.
[6] It may be noted that the amount deposited by the petitioners towards security, is not public money in true sense of the term and it belongs to them. These amounts have been collected by the State Government from the petitioners through its Executive Engineers in the manner as stated hereinabove while paying the running bills. Such amount collected by way of security deposits is to be and can be kept by the State Government till the completion of the work in terms of the agreement entered into between the State Government and the petitioners. Such security deposit is to be refunded immediately after the work is over. Since the work having being completed admittedly to the satisfaction of the State Government, the security deposit ought to have been refunded along the payments made by it towards final bill. The State Government has failed to do that. According to the State Government, it is the fault of the Executive Engineers, because of which the security deposits could not be refunded but it cannot be attributed to the petitioners. It is a matter of internal affairs between the State Government and its employees. The petitioners cannot be penalized for no fault of theirs. The controversy has arisen because the State Government has failed to take appropriate action in time. The State Government cannot take advantage of its own mistake. The State Government cannot wash off its hands taking an unjustified plea that the original challans are not submitted by the Executive Engineers. Since the problem is its own creation, the State Government has to solve it. The State Government being an institution, ought to act fairly and reasonably within the bounds of the Constitution of India and cannot withhold the security deposits after the work is over. There is no justification at all on the part of the State Government to withhold the security deposits. Failure on the part of the State Government to refund the security deposit is highly unreasonable, malafide and illegal being violative Article 14, 19 and 21 of the Constitution of India.
[7] In view of the above and for the reasons stated hereinabove, all the four writ petitions mentioned above are allowed with the direction that the respondents and in particular, the Principal Secretary/ Commissioner/ Secretary (PHED), Government of Manipur and the Chief Engineer (PHED), Manipur shall refund to the petitioners their security deposits for a total amount of Rs.1,23,71,211/-(Rupees one crore twenty-three lakhs seventy-one thousand two hundred and eleven) only within three months from the date of receipt of a copy of this judgment and order with interest @ Rs. 6% for the period from the date of completion of the works till the expiry of said three months or till the payment of the said amount whichever is earlier. There shall be no order as to costs.