IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 29878 of 2002(F)
1. GEO-TECH CONSTRUCTION COMPANY PVT.LTD.,
... Petitioner
Vs
1. KERALA STATE CONSTRUCTION CORPORATION,
... Respondent
2. GENERAL MANAGER,
For Petitioner :SRI.M.K.DAMODARAN (SR.)
For Respondent :SRI.M.V.THAMBAN
The Hon'ble MR. Justice P.N.RAVINDRAN
Dated :11/04/2008
O R D E R
P.N.Ravindran, J.
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O.P.No.29878 of 2002
===============
Dated this the 11th day of April, 2008.
JUDGMENT
The petitioner is a company incorporated under the
Companies Act, 1956.
2. In the year 1998, the State Government decided to make
Sultan Canal having a length of 3.85 kms, which connects
Kuppam river in the south and Palakode river in the north,
navigable. The work envisaged dredging of the entire length of
the canal and side protection for a length of 1100 mts. using RCC
piles and slabs. By G.O.(Rt)No.16/98/CSIND dated 6.8.1998, the
State Government granted revised administrative sanction for the
work and entrusted the work to the Kerala State Construction
Corporation, hereinafter referred to as the “Corporation” for
short, with permission to get the work executed through sub
contractors. The Corporation thereupon entered into an
agreement dated 2.9.1998 with the Superintending Engineer,
Irrigation Circle, Kozhikode. The site of the work was handed
OP 29878/02 -: 2 :-
over to the Corporation on 24.9.1998 and the work had to be
completed within five months therefrom. The Corporation sub-
contracted the work to the petitioner.
3. While the work was in progress, it was found necessary
to carry out some additional works and the Chief Engineer
sanctioned a revised estimate of Rs.3,25,73,061/- vide order
dated 30.7.2004. As the Corporation could not complete the
work in time, the Superintending Engineer, Irrigation Circle,
Kozhikode granted extension of time upto 15.5.2000 imposing a
fine of Rs.1,30,333/-. In the meanwhile the State Government
decided to take up Phase II of the work of improving the Sultan
Canal and by G.O.(Rt) No.3/2000/CSIND dated 27.1.2000 the
State Government granted administrative sanction for the said
work. Thereupon Phase II of the work was awarded to the
Corporation. The Corporation sub-contracted the said work also
to the petitioner.
4. The petitioner has in this original petition contended that
it has completed the work in both the phases and that as per
Ext.P6 bill prepared by the officers of the Corporation Rs.50.55
lakhs is due to it in respect of Phase I and Rs.23.76 lakhs is due
OP 29878/02 -: 3 :-
to it in respect of Phase II. The petitioner has also claimed
interest on the said amounts at 18% per annum. The petitioner
relies on Ext.P11 certificate dated 31.1.2006 issued by the
Superintending Engineer, Irrigation Circle, Kozhikode wherein the
said officer had certified that Phase I of the work awarded to the
Corporation as per the agreement dated 2.9.1998 has been
carried out according to the specifications and completed
satisfactorily. Ext.P11 further states that no noticeable defects
were found during inspection. The petitioner also relies on
Ext.P12 certificate dated 24.3.2001 issued by the Regional
Manager of the Corporation at Kannur to the effect that the work
awarded to the petitioner has been completed within the agreed
time of completion. The grievance put forward by the petitioner
in this original petition is that though the work awarded to it by
the Corporation has been completed, the money due and payable
for the work done has not been disbursed. The petitioner has in
this original petition prayed for the following reliefs:
“i. Issue a writ of mandamus or other
appropriate writ order or direction directing
respondents to pay to the petitioner the amounts due
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under Ext.P1 to P4 and demanded under Ext.P6
forthwith along with interest at the rate of 18% per
annum from the date of Exts.P1 to P4.
ii) Issue a writ of mandamus or other
appropriate writ order or direction directing
respondents not to effect any payment to any
contractor without first paying the dues of the
petitioner covered by Exts.P1 to P4 and demanded
under Ext.P6.”
5. In the counter affidavit filed on behalf of respondents 1
and 2 it is contended that the petitioner has not completed the
work and therefore, the work had to be rearranged and got done
through other contractors. It is also submitted that the final
settlement of accounts between the parties can be had only after
the work is completed and the expenditure involved and the loss
sustained by the Corporation are assessed. As regards Phase I of
the work, it is submitted that the petitioner did not complete the
work within the agreed time frame of 152 days from 10.8.1998.
As regards Phase II, it is submitted that the petitioner did not
complete the work before 15.12.2000. The counter affidavit
proceeds to state that the petitioner has committed breach of the
contract and that final settlement of the accounts can be arrived
OP 29878/02 -: 5 :-
at only after the loss sustained by the Corporation for re-
arranging the work through other contractors is estimated and
assessed. The Corporation also contends that this original
petition filed under Article 226 of the Constitution seeking
payment for the work done is not maintainable.
6. When the original petition came up for hearing on
14.3.2004, this Court on noticing that there is conflict between
the counter affidavit filed on behalf of the Corporation and the
completion certificate evidenced by Ext.P12, passed the following
order:
“Secretary to Govt., Dept. of Irrigation,
Trivandrum, is made addl. respondent. Since there
is direct conflict between the counter affidavit filed by
the General Manager of the first respondent, which is
a Govt. Corporation and the completion certificate,
Ext.P12, issued by the Regional Manager, Kannur of
same company, I direct the addl. respondent
(Secretary to Govt.) to conduct enquiry and file a
counter affidavit in this court within ten days from
now stating as to who and what is correct. If the
Secretary finds that there is foul play or manipulation
by any official of the Govt. Corporation, he will order
vigilance enquiry and report the matter to this
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Court.”
7. Pursuant to the said direction, the Director of Inland
Navigation, issued Ext.P13 letter to the General Manager of the
Corporation and the Managing Director of the petitioner
company calling upon them to appear before him on 18.6.2007
for a personal hearing. Ext.P14 discloses that there was also a
joint inspection of the work site on 28.6.2007.
8. As directed by this Court in the order passed on
14.3.2007, referred to above, the Principal Secretary to
Government, Water Resources Department filed an affidavit
dated 6.9.2007 stating that the Chief Technical Examiner has
after conducting an enquiry submitted a report recommending
vigilance enquiry. A copy of the report is produced as Ext.R1(a)
along with the said affidavit. It is also stated that in the light of
the opinion of the Chief Technical Examiner, the Government
have already ordered a vigilance enquiry in the matter and that it
is underway. On an application filed by the petitioner as
I.A.No.3212 of 2008, I had by order passed on 7.3.2008 directed
the third respondent to produce the report submitted by the
Director of Inland Navigation pursuant to the inspection
OP 29878/02 -: 7 :-
conducted by him on 28.6.2007. Though the report submitted by
the Director of Inland Navigation has been placed on record along
with a memo dated 14.3.2008 filed by the learned Government
Pleader Sri.K.Sandesh Raja, the learned Government Pleader
appearing for the third respondent submitted that the
Government have not accepted the said report and that in view
of the report submitted by the Chief Technical Examiner, no
reliance can be placed on the said report.
9. I heard Sri.M.K.Damodaran, the learned senior counsel
appearing for the petitioner, Sri.M.V.Thamban, the learned
counsel appearing for respondents 1 and 2 and Sri.K.Sandesh
Raja, the learned Government Pleader appearing for the third
respondent. Sri.M.K.Damodaran, the learned Senior Counsel
appearing for the petitioner contended with reference to Exts.P11
and P12 and the report submitted by the Director of Inland
Navigation pursuant to the joint inspection held on 28.6.2007
that the work has been completed in all respects and therefore
the Corporation is not justified in withholding payment. The
learned senior counsel for the petitioner submitted that at least
as regards Phase I, the Corporation cannot have any objection for
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the reason that Ext.P11 certificate is issued by the agreement
authority, namely, the Superintending Engineer. The learned
senior counsel submitted that the Superintending Engineer,
Irrigation Circle, Kozhikode has in Ext.P11, certified that Phase I
of the work has been carried out according to the specifications
and has been completed satisfactorily and that no noticeable
defects were found on inspection. The learned Senior Counsel for
the petitioner also relied on the report submitted by the Director
of Inland Navigation to contend that the findings therein entitle
the petitioner to claim the reliefs sought in this original petition.
10. Sri.M.V.Thamban and Sri.K.Sandesh Raja, the learned
counsel appearing for the respondents submitted that in the light
of the findings in the report submitted by the Chief Technical
Examiner and the State Government’s decision to order a
vigilance enquiry into the matter, the petitioner is not entitled to
any relief in this original petition. They also contended that the
contract in the case on hand is not a statutory contract and
therefore this original petition filed under Article 226 of the
Constitution seeking payment for the work is not maintainable.
The learned counsel appearing for the respondents also
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submitted that in view of the report submitted by the Chief
Technical Examiner, no reliance can be placed on the report
submitted by the Director of Inland Navigation.
11. I have considered the rivalcontentions. The Chief
Technical Examiner has in his report dated 22.9.2007 [Ext.R3(a)]
observed as follows:
“2. The completion certificate issued by the
Regional Manager, KSCC, Kannur is also not found
bonafide as explained in paras 1,2,3,4,75.
3. As explained in para 6 it is noted that
proportionate amount has not been transferred to
M/s. Geo Tech by KSCC for the work executed.
4. The Chief Engineer has already reported that
the work in total has not yet been completed which
was found to be true in site inspection as explained in
para 2.2.
5. In view of all the above facts, a detailed
Vigilance Enquiry into the execution of the above
work as advised by the Hon’ble High Court may be
considered to bring out any foul play or manipulation
and also to fix the responsibility.”
12. The report submitted by the Chief Technical Examiner
discloses that it was prepared after enquiry and site inspection.
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The Chief Technical Examiner has in paragraph 2 thereof noticed
irregularities in the execution of the work. He has also expressed
a doubt as to whether canal would be navigable. He has also
noticed overlapping of the dredging work. The Chief Technical
Examiner has reported that the work in total has not been
completed and that the report in that regard submitted by the
Chief Engineer is true. The Chief Technical Examiner has in view
of his observations and findings recommended a detailed
vigilance enquiry into the execution of the work awarded by the
Corporation to the petitioner. This Court had in the order passed
on 14.3.2007 directed that if the Secretary to Government finds
that there is foul play or manipulation by any official of the
Government/ Corporation, he will order vigilance enquiry into the
matter. The State Government has accordingly ordered a
vigilance enquiry and it is in progress. In that view of the matter
and having regard to the findings in Ext.R3(a) report submitted
by the Chief Technical Examiner, I am of the considered opinion
that at this stage, no relief can be granted to the petitioner. It is
certainly not in public interest to direct payment for the work
done, when there is serious dispute between the parties as
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regards the question whether the work has been completed and if
so, whether it was done in terms of the agreement. The work
was awarded by the State Government to the Corporation and by
the Corporation in turn to the petitioner to render Sultan Canal
navigable. Therefore, the work in question is of considerable
public importance. In these circumstances, I hold that the
petitioner is not entitled to any relief in this original petition.
However, I am of the opinion that the vigilance enquiry cannot be
unduly delayed. I had during the course of hearing ascertained
from the learned Government Pleader the time frame required for
completing the vigilance enquiry. Sri.K.Sandesh Raja, the learned
Government Pleader appearing for the third respondent
submitted that the State Government would require a minimum
period of one year to complete the vigilance enquiry. Having
regard to the fact that the work is of considerable public
importance and the fact that any delay in completing the
vigilance investigation will be detrimental to public interest, I
direct the State Government to take such steps as are necessary
to complete the vigilance enquiry within six months from today.
I make it clear that I have not pronounced upon the entitlement
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of the petitioner to receive payment for the work done. It will be
open to the petitioner to initiate other appropriate proceedings
seeking for payment for the work done after the vigilance enquiry
is completed.
Subject to the above observations, this original petition is
dismissed. No costs.
P.N.Ravindran,
Judge.
ess 2/4