IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 16TH OCTOBER 2009 / 24TH ASWINA 1931 WP(C).No. 27304 of 2007(A) -------------------------- PETITIONER(S): --------------------- THE MALAPPURAM DISTRICT PANCHAYAT, MALAPPURAM, REP.BY ITS SECRETARY. BY ADV. SRI.M.K.ABOOBACKER SRI.MANSOOR.B.H. RESPONDENT(S): ----------------------- 1. P.T.HAMSA, POTHIYIL THOTTIPARAMBIL HOUSE THAZHEKODE P.O., PERINTHALMANNA. 2. THE EXECUTIVE ENGINEER, LOCAL SELF GOVERNMENT DEPARTMENT, P.W.D. ROAD SECTION, MALAPPURAM. 3. THE TRIBUNAL FOR LOCAL SELF GOVERNMENT INSTITUTIONS, THIRUVANANTHAPURAM. ADV. SRI.BINDU SREEKUMAR FOR R1 GOVT.PLEADER SRI.K.SUNILKUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/10/2009, ALONG WITH WPC NO. 33332 OF 2007 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ================ W.P.(C) NO. 27304 & 33332 OF 2007 ========================== Dated this the 16th day of October, 2009 J U D G M E N T The Malappuram District Panchayat is the petitioner in WP (C) No.27304/2007 and the 1st respondent in that writ petition, a contractor of the Panchayat, has filed WP(C) No.33332/07. Both parties are challenging the order passed by the Tribunal for Local Self Government Institutions in RP No.50/06 filed by the contractor. 2. Briefly stated, the facts of the case are that by an agreement dated 21/8/03, the Panchayat had awarded the work of construction of Arakkaparambu-Thazhekkodu Pallippady Road to the contractor, specifying the period of completion as 4 months and 10 days. The agreement also provided that if delay is caused for reasons not attributable to the contractor, contract will be eligible for extension of period by 20% viz., 26 days. Thus the 4 months and 10 days expired on 31/12/2003 and even with the grace period, the prescribed period expired on 26/1/2004. 3. In the meantime, it would appear that the contractor applied for revision of estimate and pending consideration of the WPC 27304 & 33332/07 :2 : proposal for revision, according to the contractor, he was directed to stop the work. The work was not completed within the specified period and supplemental agreements were executed between the parties on 26/3/2005 and 20/3/2006. In Clause 7 of the preliminary agreement of 21/8/2003, for delayed completion of work, penalty was provided to be imposed and it was retaining the said provision that extension of time was granted by supplementary agreements. 4. The work was completed by the contractor only on 15/1/2006. He submitted three bills which was honoured, but however from the third bill Rs.1,24,725/- was recovered towards penalty for delayed completion of work. Thereupon he submitted a representation to the Panchayat, which is produced as Ext.P6 in WP(C) No.33332/2007 requesting for release of the penalty amount recovered, where it is averred that it was on the directions of the Panchayat and the Engineer-in-charge that he had to stop the work till the estimate was revised. In the representation, he also sought refund of the penalty imposed by the BSNL and also contended that one of the reasons for the WPC 27304 & 33332/07 :3 : delay was the delay on the part of the KSEB and BSNL in removing posts and cables. 5. Despite the representation, Panchayat did not concede to his demand and therefore he filed RP NO.50/06 before the Tribunal for Local Self Government Institutions complaining of the recovery of penalty. 6. The Tribunal issued notice to the Panchayat. However, inspite of repeated notices, Panchayat did not produce the original files before the Tribunal, but produced certain photocopies which were declined to be acted upon by the Tribunal. The Tribunal considered the matter and rendered order dated 28th of September, 2006. In the order, the Tribunal rejected the case of the contractor that it was the delay in shifting the cable and telephone posts that resulted in the delay in completing the work. On the other hand, Tribunal found that there was no difficulty for the contractor to complete the work even without shifting the cable and posts. 7. Tribunal also rejected the case of the contractor that the Engineers of the Local Self Government Departments had WPC 27304 & 33332/07 :4 : recommended to waive the penalty and therefore, there was no justification in imposing the penalty. Tribunal finally accepted the case of the contractor that he had to stop the work pending revision of the estimate and that he could commence work only after 8/1/2004 when the revised estimate was approved. On this basis, Tribunal directed that the period of completion should be reworked from 8/1/2004, and if so done, the penalty shall be reassessed taking the date for completion as 18/5/2004. It is aggrieved by this order that both the Panchayat and the contractor have filed these writ petitions. 8. Counsel for the Panchayat attacks the order. According to him, the revision of estimate did not stand in the way of the contractor commencing and completing the work within the time as specified in the principal agreement and as extended by the supplementary agreements. It is submitted that since even in the supplementary agreements, provision for penalty was included and as admittedly there was delay on the part of the contractor in completing the work, Panchayat is entitled to recover the amounts. WPC 27304 & 33332/07 :5 : 9. On the other hand, the contractor contends that he could start the work only after 8/1/2004. It is stated that delay occurred mainly for two reasons which are attributable only to the Panchayat and therefore, there is absolutely no justification for imposing penalty on him. It was contended that the Panchayat did not prove its case by producing the original documents and justify the penalty either in full or in part. 10. I have considered the submissions made. 11. Admittedly, principal agreement of 21/8/03 provided period of completion which expired on 31/12/2003 and even the period including the grace period expired on 26/1/2004. The work was completed only on 15/1/2006. The principal agreement contained a provision for levy of penalty and it was subject to levy of penalty that the time for completion was extended by supplementary agreements executed on 26/3/2005 and 20/3/2006. If that be the case, the contractor cannot avoid penalty, unless on facts it is established that the delay is attributable to the Panchayat. 12. A reading of the order passed by the Tribunal shows WPC 27304 & 33332/07 :6 : that the Tribunal has on facts refused to accept the contention of the contractor that even the Engineer had recommended waiver of penalty. The other contention that it was on account of the delay on the part of the BSNL and KSEB in removing cables and electric posts also were appreciated and have been rejected. In that view of the matter, I do not find any reason to disagree with the view of the Tribunal that the contractor is liable to be penalised. 13. Then the other question is on what basis, the penalty is to be levied. The case of the contractor is that it was on the instruction of the Panchayat and the Engineer that he had to stop the work and could resume the work only after the revised estimate was approved on 8/1/2004. Nothing has been produced by the Panchayat to disprove this case. Although the counsel for the Panchayat now relies on Ext.P3 in WP(C) No.27304/07, a communication issued by the Executive Engineer to the Secretary of the Panchayat on 14/10/2003, suggesting that the work has already been commenced, I am not prepared to rest my conclusion entirely on Ext.P3 and upset the factual finding of the WPC 27304 & 33332/07 :7 : Tribunal. Therefore if the work could be commenced only after 8/1/2004, necessarily, the period of completion also can commence only from that date. If that be so, the direction of the Tribunal requiring the Panchayat to reestimate the penalty to be imposed on the petitioner cannot be faulted. 14. In the light of this, I am not persuaded to interfere with the order passed by the Tribunal. Be that as it may, it is clarified that the Panchayat while reestimating the penalty to be imposed on the contractor, shall do such estimation only with notice to the contractor. Writ petition is disposed of subject to the above. In all other respects, the order of the Tribunal will stand confirmed. ANTONY DOMINIC, JUDGE Rp