{"id":204169,"date":"2009-04-02T00:00:00","date_gmt":"2009-04-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chandragiri-construction-vs-state-of-kerala-on-2-april-2009"},"modified":"2017-06-03T13:48:31","modified_gmt":"2017-06-03T08:18:31","slug":"chandragiri-construction-vs-state-of-kerala-on-2-april-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chandragiri-construction-vs-state-of-kerala-on-2-april-2009","title":{"rendered":"Chandragiri Construction &#8230; vs State Of Kerala on 2 April, 2009"},"content":{"rendered":"<div class=\"docsource_main\">Kerala High Court<\/div>\n<div class=\"doc_title\">Chandragiri Construction &#8230; vs State Of Kerala on 2 April, 2009<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C).No. 15440 of 2007(K)\n\n\n1. CHANDRAGIRI CONSTRUCTION COMPANY,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. STATE OF KERALA, REP. BY THE PRINCIPAL\n                       ...       Respondent\n\n2. THE PROJECT DIRECTOR, KERALA PWD,\n\n3. THE CHIEF ENGINEER (PROJECTS),\n\n4. THE SUPERINTENDING ENGINEER,\n\n5. THE EXECUTIVE ENGINEER, KERALA PWD,\n\n6. THE EXECUTIVE ENGINEER,\n\n7. THE EXECUTIVE ENGINEER,\n\n8. SRI.JOSEPH UMMEN, FINANCE CONTROLLER,\n\n9. THE FEDERAL BANK LTD., M.G.ROAD BRANCH,\n\n                For Petitioner  :SRI.K.BABU THOMAS\n\n                For Respondent  :SRI.A.ANTONY\n\nThe Hon'ble MR. Justice HARUN-UL-RASHID\n\n Dated :02\/04\/2009\n\n O R D E R\n                           HARUN-UL-RASHID, J.\n                       ----------------------------------------\n                       W.P.(C) No. 15440 of 2007\n                       ----------------------------------------\n                  Dated this the 2nd day of April, 2009\n\n                                  JUDGMENT\n<\/pre>\n<p>       Ext.P10 letter dated 16.5.2007 issued by the 1st respondent is<\/p>\n<p>under challenge.    The dispute relates to            Contract i.e KSTP-RMC-34-<\/p>\n<p>periodical maintenance of Kumali-Pooppara Road (part-I) km 0\/000 to km-<\/p>\n<p>35\/400 under agreement No.28\/KSTP\/PWD\/2004-2005 dated 29.12.2004<\/p>\n<p>valued at Rs. 15,46,63,065\/-\n<\/p>\n<p>       2.     Ext.P10 was issued by the 1st respondent to the Senior<\/p>\n<p>Manager, Federal Bank Limited, Kasaragod, stating that the contractor<\/p>\n<p>(petitioner) has failed to perform           his contractual        duties and the<\/p>\n<p>Government of Kerala        is      demands         payment       of a sum of Rs.<\/p>\n<p>1,09,28,300\/-(Rupees One Crore Nine Lakhs Twenty Eight Thousand<\/p>\n<p>Three hundred only) under the unconditional Guarantee issued                by the<\/p>\n<p>bank. It is also directed the bank in Ext.P10               that payment should be<\/p>\n<p>made immediately by way of DD\/TT to the S.B account maintained by the<\/p>\n<p>Chief Executive KSTP with         State Bank of Travancore Vellayambalam<\/p>\n<p>Thiruvananthapuram, . This writ petition is filed seeking to quash Ext.P10<\/p>\n<p>order<\/p>\n<p>       3.    The 1st respondent awarded 4 contracts including RMC 34<\/p>\n<p>relating to periodical maintenance of Kumali-Pooppara Road. It is the<\/p>\n<p>petitioner&#8217;s case that he had already carried out and completed the work<\/p>\n<p><span class=\"hidden_text\">W.P.(C) No. 15440 of 2007               -2-<\/span><\/p>\n<p>valued Rs. 600 lakhs as on 1.5.2007, that unpaid value works carried<\/p>\n<p>under Ext.P1 agreement as on 1.5.2007 is more than Rs. 200 lakhs for<\/p>\n<p>which the bill is under preparation by the officials. It is the stand of the<\/p>\n<p>petitioner that it was due to the default of the respondents to effect timely<\/p>\n<p>payments,     the progress of the work in Ext.P1 was         stalled   and the<\/p>\n<p>respondents are liable for the same. The Petitioner further alleged that the<\/p>\n<p>1st respondent is resorting to illegal invocation of bank guarantees and in<\/p>\n<p>that event the petitioner will be put to severe hardships and the credit<\/p>\n<p>facilities enjoyed by him for long from the bank would be discontinued.<\/p>\n<p>        4.    This writ petition is filed among other reliefs for a direction to<\/p>\n<p>respondents 1 to 4 interdicting them from encashing Ext.P12 demand<\/p>\n<p>drafts    issued pursuant to Ext.P10 and to return the same to the 9th<\/p>\n<p>respondent.\n<\/p>\n<p>        5.    In the counter affidavit filed by the 2nd respondent on behalf<\/p>\n<p>of respondents 2 to 8, the averments in the writ petition are denied as<\/p>\n<p>incorrect. It is contended interalia that the averment of the petitioner that<\/p>\n<p>the value of work worth Rs.200 lakhs remained unpaid is not correct<\/p>\n<p>Ext.P4 copy of statement of bills are also denied by the 2nd respondent. In<\/p>\n<p>the counter affidavit filed by the 2nd respondent and the exhibits produced<\/p>\n<p>which are produced as Exts.R2(a) to R2(k) shows the details of actual<\/p>\n<p>payments due to the petitioner regarding RMC 10 RMC 25 RMC 40 and<\/p>\n<p>RMC 34. it is also submitted          that as per the contract agreement the<\/p>\n<p>petitioner has been given opportunities to raise various issues regarding<\/p>\n<p><span class=\"hidden_text\">W.P.(C) No. 15440 of 2007            -3-<\/span><\/p>\n<p>extension of time, extra rate etc through adjudication and then arbitration.<\/p>\n<p>The contractor has not raised any objection so far, as per contract clause<\/p>\n<p>for the actions as pointed by the petitioner. Therefore it is a violation of<\/p>\n<p>agreement.     The contractor has to seek remedy in the first instance<\/p>\n<p>through the mechanisms provided by the contract before referring the<\/p>\n<p>matters on claiming extension of time. It is also submitted that the<\/p>\n<p>petitioner furnished 2 bank guarantees amounting to Rs.1,09,28,300\/-. The<\/p>\n<p>averment of the petitioner that Rs. 712.28 lakhs is withheld is false. No<\/p>\n<p>amount is due with respect to the work for which the Bank Gurantee is<\/p>\n<p>issued. The claim for Rs.712.28 lakh is fictitious and no claim is pending<\/p>\n<p>with the respondent so far. The RMC-10, 25 ,40 and RMC-34 are separate<\/p>\n<p>contract agreements tendered separately. There is failure on the part of<\/p>\n<p>the petitioner in performing the contract under RMC-34. As per the contract<\/p>\n<p>the contract period was 23 months for completing 34.5 Km whereas till date<\/p>\n<p>the contractor has completed only 15 Km i.e 15 Km within 30 months.<\/p>\n<p>This shows that the contractor can complete only 0.43 Km per month and<\/p>\n<p>will take another 3 to 4 years to complete the project.        Hence the<\/p>\n<p>performance of the Contractor was evaluated as &#8220;non performing&#8221; and as<\/p>\n<p>per the conditions of Bank Guarantee, the respondent concerned         was<\/p>\n<p>forced to invoke the Bank Gurantee and it is not illegal and there is no<\/p>\n<p>malafides or fraud on the part of the respondents. It is also submitted by<\/p>\n<p>the 2nd respondent that due to the non performance of the petitioner<\/p>\n<p>Government is suffering huge loss on account of escalation in price, idling<\/p>\n<p><span class=\"hidden_text\">W.P.(C) No. 15440 of 2007             -4-<\/span><\/p>\n<p>of supervision staff, cost of rearrangement of works with other agencies<\/p>\n<p>and that in view of the subsequent events as stated above the contract was<\/p>\n<p>terminated on 10.12..2007 .\n<\/p>\n<p>      6.      It is submitted at the Bar that the petitioner had already<\/p>\n<p>approached the Arbitrator in the matter of performance of works regarding<\/p>\n<p>KSTP-RMC 34 and the matter is now pending before the Arbitrator, The<\/p>\n<p>grievance    raised in this writ petition are    based      on the terms of<\/p>\n<p>Ext.P1agreement executed between petitioner and the 1st respondent.<\/p>\n<p>I am of the view that the questions regarding the      evaluation of the work<\/p>\n<p>done , unpaid bills and the invocation of the Bank guarantee are to be<\/p>\n<p>agitated before the Arbitrator. The petitioner is free to move the Arbitrator<\/p>\n<p>for appropriate reliefs.   This writ petition is disposed of .The Arbitrator<\/p>\n<p>shall pass final orders within a period of six months from today.<\/p>\n<p>                                     (HARUN-UL-RASHID, JUDGE)<br \/>\nes.\n<\/p>\n<p> HARUN-UL-RASHID, J.\n<\/p>\n<p>   &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;\n<\/p>\n<p>W.P.(C) No. 15540 of 2007\n<\/p>\n<p>  &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-\n<\/p>\n<\/p>\n<p>        JUDGMENT<\/p>\n<p>     26th March, 2009<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kerala High Court Chandragiri Construction &#8230; vs State Of Kerala on 2 April, 2009 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C).No. 15440 of 2007(K) 1. CHANDRAGIRI CONSTRUCTION COMPANY, &#8230; Petitioner Vs 1. STATE OF KERALA, REP. BY THE PRINCIPAL &#8230; Respondent 2. THE PROJECT DIRECTOR, KERALA PWD, 3. THE CHIEF ENGINEER (PROJECTS), 4. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-204169","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Chandragiri Construction ... vs State Of Kerala on 2 April, 2009 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chandragiri-construction-vs-state-of-kerala-on-2-april-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chandragiri Construction ... vs State Of Kerala on 2 April, 2009 - Free Judgements of Supreme Court &amp; 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