IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN THURSDAY, THE 25TH MARCH 2010 / 4TH CHAITHRA 1932 WP(C).No. 12281 of 2007(K) ---------------------------------------- PETITIONER(S): ------------------------ SHAJU ISSAC, AGED 49, S/O ISSAC, P.W.D. CONTRACTOR, CHALUNILATHU HOUSE, PIRAMADOM P.O., PAMPAKKUDA, ERNAKULAM DISTRICT. BY ADV. SRI.ABRAHAM JOHN, SRI.T.KURIAKOSE PETER. RESPONDENT(S): -------------------------- 1. SUPERINTENDENTING ENGINEER, OFFICE OF THE SUPERINTENDENTING ENGINEER, PWD (ROAD AND BRIDGES), CENTRAL CIRCLE, ALUVA. 2. EXECUTIVE ENGINEER, PWD ROADS DIVISION, MUVATTUPUZHA. 3. STATE REPRESENTED BY SECRETARY TO THE GOVERNMENT, PWD (ROADS AND BRIDGES) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. R1 TO R3 BY GOVERNMENT PLEADER SMT.SMITHA SUKUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 12281/2007-K APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE AGREEMENT DATED 26/04/1995 EXECUTED BETWEEN THE PETITIONER AND R1. EXT.P2: COPY OF THE LETTER DATED 07/11/2001 ISSUED BY R1 TO R2. EXT.P3: COPY OF THE LETTER DATED 26/10/2002 ISSUED BY R1 TO R2. EXT.P4: COPY OF THE ORDER DATED 3/12/2002 PASSED BY R1. EXT.P5: COPY OF THE CLOSURE AGREEMENT DATED 09/12/2002. EXT.P6: COPY OF THE LETTER DATED 08/09/2005 ISSUED BY R2 TO CHIEF ENGINEER, THIRUVANANTHAPURAM. EXT.P7: COPY OF THE MINUTES DATED 02/01/2007 OF ARB. COMMITTEE. EXT.P8: COPY OF THE REPORT OF R2 DATED 23/10/2006. EXT.P9: COPY OF THE DEMAND NOTICE DATED 03/03/2007 BY R1. RESPONDENT'S EXHIBITS: EXT.R1(a): COPY OF THE G.O.(RT)NO.247/07/PWD DATED 19/02/2007. EXT.R1(b): COPY OF THE LETTER DATED 12/06/2007 ADDRESSED TO THE PETITIONER. //TRUE COPY// P.S. TO JUDGE rs. THOTTATHIL B.RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).No.12281 of 2007-K = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 25th day of March, 2010. Judgment 1.The petitioner carried out a Government contract. He did not complete the work. There is a closure agreement. In terms thereof and in terms of the initial agreement, loss sustained by the Government to be mulcted on the contractor as risk and costs is to be assessed, quantified and fixed by an adjudicating authority which consists of officers named by office in terms of the agreement. Therefore, the concensus between the parties is for an adjudicating authority of that constitution, deciding the matter. Following that, there could be even revenue recovery proceedings in terms of the agreement. 2.In the case in hand, what has happened is that the arbitration committee, without deciding on the issue, forwarded the matter to the WPC12281/07 -: 2 :- Government, acting on the statement of the Government Secretary that the arbitration committee does not have the power to impose risk and costs and decide on the quantum of risk and costs. The Government, thereafter, even without hearing the petitioner, issued Ext.R1(a) Government Order quantifying the risk and costs. That Government Order does not disclose any reason or the manner of arriving at that quantum. Not only that, the Government cannot be the authority when the parties have agreed that the arbitration committee has to decide the issue. Following the Government Order, the impugned communications have been issued by the agreement authority, namely, the Superintending Engineer requiring the petitioner to make payments. Evidently, those demands cannot stand unless they are supported by a decision of the arbitration committee in terms of the agreement between the parties. 3.Under the above circumstances, the impugned WPC12281/07 -: 3 :- demand and orders Exts.R1(a) and R1(b) are quashed and the arbitration committee is directed to take up the case, hear the petitioner and issue an order on the question as to whether the petitioner is liable for risk and costs and if so, the amount. That shall be done in terms of the agreement between the parties, including the closure agreement. Let this exercise be carried out at the earliest. The petitioner is directed to appear before the Secretary to Government, Public Works Department to have a date fixed for the proceedings. The writ petition ordered accordingly. THOTTATHIL B.RADHAKRISHNAN, JUDGE. Sha/0604