IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 5TH JULY 2010 / 14TH ASHADHA 1932 WP(C).No. 9810 of 2010(A) ------------------------------- PETITIONER: -------------- K.GOPI, KALAPPURACKAL HOUSE, VARAPPETTY P.O., ERNAKULAM DISTRICT. BY MR.JOMY GEORGE, ADVOCATE. MR.M.J.BENNY, ADVOCATE. MR.SEBASTIAN THOMAS, ADVOCATE. RESPONDENTS: ------------------ 1. THE SECRETARY, VARAPPETTY GRAMA PANCHAYATH, VARAPPETTY, MUVATTUPUZHA. 2. THE ASSISTANT ENGINEER, L.S.G.(WATER RESOURCES) DEPARTMENT, NELLIKUZHY. 3. VARAPETTY GRAMA PANCHAYATH, REP. BY ITS SECRETARY, VARAPETTY, MUVATTUPUZHA. 4. STATE OF KERALA, REP. BY ITS SECRETARY, LOCAL SELF GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY MR.A.C.DEVY, ADVOCATE, FOR R1 & R3. MS.N. SUDHA DEVI, GOVERNMENT PLEADER. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 9810/2010 A P P E N D I X PETITIONER'S EXHIBITS: EXT. P1 : COPY OF SELECTION NOTICE DTD. NIL ISSUED BY R2 TO THE PETITIONER. EXT. P2 : COPY OF AGREEMENT DTD. 5.2.08. EXT. P3 : COPY OF GOVT. ORDER DTD. 15.1.08. EXT. P4 : COPY OF LETTER GIVEN BY R2 TO 1ST AND 3RD RESPONDENT ON 29.1.08. EXT. P5 : COPY OF RESOLUTION PASSED BY R3 ON 4.2.08. EXT. P6 : COPY OF CLARIFICATION DTD. 15.3.08 ISSUED BY GOVT. EXT. P7 : COPY OF CLARIFICATION DTD. 22.3.08 ISSUED BY GOVT. EXT. P8 : COPY OF REPRESENTATION FILED BY PETITIONER BEFORE R1 ON 28.10.09. EXT. P9 : COPY OF REPRESENTATION FILED BY PETITIONER BEFORE R1 ON 1.12.09. EXT. P10 : COPY OF REPRESENTATION FILED BY PETITIONER BEFORE R4 ON 25.1.10. EXT. P11 : COPY OF RESOLUTION DTD. 26.12.09 PASSED BY R3. EXT. P12 : COPY OF JUDGMENT DTD. 15.2.10 IN WPC. 4774/10 PASSED BY THIS HON'BLE COURT. EXT. P13 : COPY OF RESOLUTION DTD. 8.3.10 PASSED BY R3. EXT. P14 : COPY OF LETTER SENT BY R1 ON 11.3.10 TO R2. EXT. P15 : COPY OF LETTER DTD. 16.3.10 ISSUED BY R2 TO R1. EXT. P16 : COPY OF LETTER DTD. 18.3.10 SENT BY R1 TO PETITIONER. RESPONDENT'S EXHIBITS: NIL. // True Copy // P.A. to Judge. smp T.R.RAMACHANDRAN NAIR,J. ------------------------------------- W.P.(C)No.9810 of 2010 --------------------------------- DATED THIS THE 5th DAY OF JULY, 2010 JUDGMENT The petitioner is a contractor who was entrusted with the construction of a Community Hall at Varappetty Kavala in Varappetty Grama Panchayat. The estimate amount of the work was Rs.27,15,694/-. It is submitted that the tender was submitted on 29.1.2008. Exhibit P1 is the true copy of the notice and Exhibit P2 is the true copy of the agreement dated 5.2.2008. The work was completed to the full satisfaction of the Panchayat. 2. The petitioner seeks for a direction to the respondent to pay the final bills in the revised rates with regard to the cost of cement and steel as permitted by Exhibit P3 Government Order. 3. Exhibit P3 Government Order is dated 15.1.2008. The same was passed by the Government in the light of the fact that there is an increase in the cost of the materials like cement and steel over and above the rates included in the 2007 Schedule of Rates of the Public Works Department. Two conditions have been imposed therein. One is that the market rate of cement as fixed W.P.(C)No.9810/10 -2- by the Malabar Cements Ltd., Palakkad and market rate of steel as fixed by the Steel Authority of India Ltd.(SAIL) as on the date of tender would be adopted by the Local Governments for the purpose of estimates. Paragraph 2 of the Government Order reads as follows: “In respect of works for which estimates have already been prepared and or the works tendered but the contract not yet finalised, Local Governments are permitted to meet the difference of cost between the 2007 PWD Schedule of Rates of cement and steel and the market rates as indicated above or meet the tender excess which is lower.” 4. The Panchayat is prepared to implement the same in the case of the petitioner. It is brought to notice that the said Government Order has been incorporated in the agreement Exhibit P2 as paragraph 32. Even though the Panchayat was agreeable for the same, the 2nd respondent submitted a letter to the 1st respondent expressing certain doubts in the matter, as per Exhibit P4. Against the same the Panchayat sought a clarification from the Government which was answered as per Exhibit P6. The Government clarified that in the light of the Government Order Exhibit P3, no separate permission is required. Exhibit P7 is a clarification issued in respect of another Panchayat. The W.P.(C)No.9810/10 -3- petitioner again submitted Exhibit P8 to P10 representations. But still the 2nd respondent is not prepared to sanction the bills. Exhibit P11 is a resolution thereafter forwarded by the Panchayat to the Government. Ultimately, the petitioner had approached this Court by filing W.P.(C)No.4774/10 which was disposed of by Exhibit P12 judgment. The first respondent therein was directed to dispose of the representation. Exhibit P13 is a further resolution taken by the Panchayat and that resolution is followed by Exhibit P14 forwarding letter. Finally, the 2nd respondent has taken the view in Exhibit P15 that the petitioner is not entitled for the said benefit. This is under challenge in this Writ Petition. 5. Respondents have filed separate counter affidavits. In the counter affidavit filed by the first respondent, it is admitted that the Government Order Exhibit P3 was made part of the agreement to make the increase in cost of materials over and above the rates included in the Schedule of Rates and there was no tender excess. It is the case of the Panchayat also that as per the agreement also on the basis of Exhibit P3 G.O, which forms part of the agreement, the petitioner is entitled for the excess amount for cement and steel used in the project as claimed in the W.P.(C)No.9810/10 -4- Writ Petition. 6. The 2nd respondent in paragraph 6 of the counter affidavit has stated that since the petitioner has not quoted the above or below estimate rate, it is considered as 0% and hence he is entitled only to the estimate rate only and he cannot be given the market rate of steel and cement on the date of tender, because he agreed to do the work at the estimate rate. Therefore, what is pointed out by the 2nd respondent is that since the petitioner had agreed to do the work on the estimated rate, he is not entitled to have the benefit of Exhibit P3 G.O. 7. Plainly, this interpretation cannot be accepted for more reasons than one. As rightly pointed out by the learned counsel for the petitioner, herein the Government itself in reply to the clarification has replied as per Exhibit P6 that Exhibit P3 Government Order is applicable in the case of the petitioner and no further clarification is necessary. Why the second respondent was not willing to abide by the directions issued by the Government is still not clear. There cannot be any doubt that the clarification as evident from Exhibit P6 ought to have been accepted by the 2nd respondent. W.P.(C)No.9810/10 -5- 8. That the Government Order Exhibit P3 is part of the agreement cannot be disputed, as is evident from paragraph 32 of Exhibit P2, which obliges the Panchayat to grant the benefits out of it. Therefore the excess, if any for steel and cement is governed by the said Government Order and the contract. Paragraph 2 of Exhibit P3 G.O. clearly specifies that even in respect of works tendered, but contract not yet finalised, the Panchayats are permitted to meet the difference of cost between the 2007 PWD Schedule of Rates of cement and steel and the market rate as indicated in the order. It is true that there is a further clause that while working out the same, they will have to ascertain whether the rates as fixed above or the tender excess is lower. That does not mean that in a case where there is tender is at the estimate rate, the clause is not applicable. Merely because the petitioner had accepted the estimate value of the tender and agreed to do the work, he cannot be put in a disadvantage. What is to be noticed is that the Government has revised the cost of materials including cement and steel as per Exhibit P3 Government Order. In cases where the estimates are yet to be prepared, such rates will have to be put as part of the W.P.(C)No.9810/10 -6- estimate. In cases where the agreements have not been finalised, then also the Local Governments will have to implement the same. That does not mean that in a case where the contractor has accepted the estimate value for finalisation of tender, he cannot be granted the benefit. The said stand taken in paragraph 6 of the counter affidavit by the 2nd respondent cannot be accepted, as it is unreasonable. The 2nd respondent cannot go behind the Government Order also. In that view of the matter, the Writ Petition is allowed. It is declared that the petitioner is entitled to the benefit of Exhibit P3 Government Order. The 2nd respondent will therefore sanction the bills in terms of the above findings and the Panchayat will make the payment within a period of one month from the date of receipt of a copy of this judgment. The claim for interest raised by the petitioner is left open. No costs. T.R.RAMACHANDRAN NAIR, JUDGE. dsn