IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN FRIDAY, THE 11TH APRIL 2008 / 22ND CHAITHRA 1930 OP.No. 29878 of 2002(F) --------------------------------- PETITIONER: ------------------- GEO-TECH CONSTRUCTION COMPANY PVT.LTD., KSHB OFFICE COMPLEX, PANAMPILLY NAGAR, COCHIN, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV. SRI.M.K.DAMODARAN (SR.) SRI.P.K.VIJAYAMOHANAN SRI.GILBERT GEORGE CORREYA RESPONDENTS: ------------------------ 1. KERALA STATE CONSTRUCTION CORPORATION, CARMEL CENTRE, BANERJI ROAD, COCHIN-18, REPRESENTED BY ITS GENERAL MANAGER. 2. GENERAL MANAGER, KERALA STATE CONSTRUCTION CORPORATION, CARMEL CENTRE, BANERJI ROAD, COCHIN-18. ADDL . R3 IMPLEADED. 3. THE SECRETARY TO GOVERNMENT DEPARTMENT OF IRRIGATION, THIRUVANANTHAPURAM ADDL. R3 IS IMPLEADED AS PER ORDER DT. 14.3.07 IN OP. BY ADV. SRI.M.V.THAMBAN - R1 & R2 GOVERNMENT PLEADER SRI.SANDESH RAJA - ADDL. R3 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 14/03/2008, THE COURT ON 11/04/2008 DELIVERED THE FOLLOWING: OP. 29878/2002 APPENDIX PETITIONERS EXHIBITS EXT.P1:- COPY OF THE FINAL BILL PREPARED BY THE RESPONDENT. EXT.P2:- COPY OF THE BILL PREPARED BY THE RESPONDENTS TOWARDS THE TEMPORARY FOOT BRIDGE CONSTRUCTION. EXT.P3:-COPY OF THE WORK BILL ISSUED BY THE RESPONDENTS TO THE PETITIONER FOR THE DEMOLITION WORK OF CONCRETE BRIDGES. EXT.P4:- COPY OF THE BILL PREPARED BY THE RESPONDENTS TOWRDS THE CONSTRUCTION WORK OF PHASE II SULTAN CANAL. EXT.P5:- COPY OF THE MINUTES OF THE MEETING HELD ON 8.8.01. EXT.P6:- COPY OF THE LETTER DT. 11.9.02 ISSUED BY THE 2ND RESPONDENT. EXT.P7:-COPY OF THE AGREEMENT FOR THIS WORK. EXT.P8:-COPY OF THE LETTER DT. 28.5.02 NO.GLPL/W3(i)/ KSCC CSC/2002/718. EXT.P9:- COPY OF THE REPORT OF KSCC FOR THE YEAR 1999. EXT.P10:- COPY OF THE ABSTRACT COPY OF THE REPORT OF KSCC FOR THE YEAR 2000. EXT.P11:- COPY OF THE COMPLETION CERTIFICATE ISSUED BY THE SUPERINTENDING ENGINEER, DT. 31.1.2006. EXT.P12:- COPY OF THE CERTIFICATE DT. 24.3.01 ISSUED BY THE IST RESPONDENT. EXT.P14:- COPY OF THE NOTICE NO.D6-231/INDT/06 (/VOL.III) DT. 11.6.07. EXT.P4:- COPY OF THE NOTICE NO.D6-231/INDT/06 (VOL.VIII) DT. 22.6.07. RESPONDENT'S EXHIBITS EXT.R3(a):- COPY OF THE ENQUIRY REPORT OF CTE. /TRUE COPY/ P.S. TO JUDGE tss P.N.Ravindran, J. ============= 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 OP 29878/02 -: 4 :- 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 OP 29878/02 -: 6 :- 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 OP 29878/02 -: 8 :- 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 OP 29878/02 -: 9 :- 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. OP 29878/02 -: 10 :- 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 OP 29878/02 -: 11 :- 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 OP 29878/02 -: 12 :- 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