IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 8TH JUNE 2009 / 18TH JYAISHTA 1931 OP.No. 7292 of 2001(R) -------------------------------- PETITIONER(S): ------------------------ C.A.SKARIA, S/O. LATE NINAN ANDREWS, RESIDING AT CHIRATHALATTU HOUSE, PATHAMUTTAM P.O., KOTTAYAM. BY MR.S.VENKATASUBRAMONIA IYER, SENIOR ADVOCATE BY ADVS.MR.JACOB THOMAS MR.P.C.JOSEPH(JOSE) RESPONDENT(S): ------------------------- 1. THE CHAIRMAN, K.S.E.BOARD, VYDYUTHI BHAVAN, PATTOM PALACE, THIRUVANANTHAPURAM. 2. THE SECRETARY , K.S.E.BOARD, VYDYUTHI BHAVAN, PATTOM PALACE, THIRUVANANTHAPURAM. 3. THE FINANCIAL ADVISOR, K.S.E.BOARD, VYDYUTHI BHAVAN, PATTOM PALACE P.O., THIRUVANANTHAPURAM. 4. THE CHIEF ENGINEER, (CONSTN/ CIVIL), NORTH , K.S.E.BOARD, VYDYUTHI BHAVAN, THRISSUR 4. 5. THE DEPUTY CHIEF ENGINEER, (CIVIL), INVESTIGATION CIRCLE, K.S.E.BOARD, THRISSUR 4. 6. THE EXECUTIVE ENGINEER, CIVIL STATION, K.S.E.BOARD , PERINGALKUTHU, THRISSUR. OP. NO.7292/2001 7. SRI.C.T.VARGHESE, HOUSE NO.231/3, CHINDARMANNIL HOUSE, KARUKADOM, KOTHAMANGALAM P.O., ERNAKULAM DISTRICT. BY ADVS.MR. ASOK M.CHERIYAN, SC, KSEB FOR R1 TO 6 MR.P.FAZIL FOR R7 MR.N.D.PREMACHANDRAN, SC, KSEB FOR R1 TO R4 MR.C.K.KARUNAKARAN, SC FOR KSEB FOR R1 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 08/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON CMP. NO. 11992/2001 IN OP. NO.1292/2001 DISMISSED 08.06.2009 SD/- ANTONY DOMINIC, JUDGE APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE REPRESENTATION DT. 15.3.95 SUBMTITED BY THE PETITIONER , ADDDRESSED TO THE 4TH RESPONDENT. P2:- COPY OF THE COMMUNICATION BEARING NO.CECN-PLBE 4/92. DT. 5.6.97 OF THE 4TH RESPONDENT. P3:- COPY OF THE REPRESENTATION DT. 12.10.96 SUBMITTED BY THE PETITIONER ADDRESSED TO THE 4TH RESPONDENT. P4:- COPY OF THE REPORT BEARING NO.CECN – PLBE 4/92 DT. 19.7.97 OF THE 4TH RESPONDENT SENT TO THE 2ND RESPONDENT. P5:- COPY OF THE MINUTES OF THE REVIEW MEETING ON PLBE PROJECT HELD ON 28.112.97. P6:- COPY OF THE NOTE TO THE BOARD BEARING NO.T.C. 4/CCW/4/93 DT. 14.12.98. P7:-COPY OF THE COMMUNICATION BEARING NO,.CECN PLBE/4/92 DT. 3.2.2000 OF THE 4TH RESPONDENT. P8:- COPY OF THE REPRESENTATION DT. 11.2.2000 SUBMITTED BY THE PETITIONER ADDRESSED TO THE IST RESPONDENT. P9:- COPY OF THE COMMUNICATION BEARING NO.CECN-PLBE 4/92 DT. 25.7.2000 OF THE 4TH RESPONDENT. P10:- COPY OF THE ORDER OF THE BOARD B.O. NO.723/2000 (TRUE COPY 4/CCW/15/94) DT. 23.2.2000 ISSUED BY THE 2ND RESPONDENT. P11:- COPY OF THE REPRESENTATION DT. 16.11.2000, SUBMITTED BY THE PETITIONER ADDRESSED TO THE 4TH RESPONDENT. P12:- COPY OF THE COMMUNICATION BEARING NO,.CECN-PLBE 4/92D DT. 11.1.01 FO THE 4TH RESPONDENT. P13:- COPY OF THE REQUEST MADE BY THE PETITIONER ON 14.1.01 TO THE 4TH RESPONDENT. P14:- COPY OF THE BOARD ORDER NO.B.O. NO.412/95 (TRUE COPY 4/CCW/3/95) DT. 4.3.95. TRUE COPY P.A. TO JUDGE TSS ANTONY DOMINIC, J. ------------------------- O.P. No.7292 of 2001 --------------------------------- Dated, this the 8th day of June, 2009 J U D G M E N T Prayers in this original petition are to quash Exts.P2, P7, P9 & P112. There is a further prayer to direct the respondents to pay an amount of Rs.44.5 lakhs as recommended by the 4th respondent in Ext.P4. Consequential reliefs are also sought for. 2. The petitioner is a contractor. He was awarded the work of construction of a Power House Building, Tailrace Channel, and a Bridge across the Channel, as part of the Peringalkuthu Left Bank Extension Scheme (PLBE Scheme). The tender in respect of the said contract was submitted by the petitioner on 20/01/1993, and after the work was awarded, agreement was executed between the parties on 24/12/1993, with conditions requiring the petitioner to complete the work within 30 months and also, making it clear that the petitioner will not be eligible for any revision of rates. It is submitted that the work site was handed over on 30/12/1993, and that thereupon the preliminary works were started. OP No.7292/2001 -2- 3. Subsequently, petitioner made Ext.P1 representation requesting for revision of rates. By Ext.P2, the 4th respondent informed him that his claim was being taken up with the Board. It is stated that he continued to make representations, and Ext.P4 is a report submitted by the 4th respondent to the 2nd respondent referring to Ext.P3 representation submitted by the petitioner. In Ext.P3, the petitioner has given several reasons for the delay in the completion of the work. In Ext.P4, after considering the reasons for the delay in the completion of the work, and taking note of the 1996 PWD Schedule revision, the Chief Engineer recommended for increase of 13.5% over the agreed rate for the works done up to 30/06/1996, and 35% over the agreed rate for the works done after 01/07/1996. It is also stated that the financial commitment comes to Rs.44.50 lakhs. While making this recommendation, the Chief Engineer has taken note of the fact that according to the terms of the agreement, the contractor is not eligible for any rate enhancement. However, he says that since the delay in the completion of the work was due to the reasons beyond the control of the contractor, the contractor has a just claim for enhancement of the agreed rates. On this basis, the 4th respondent sought the OP No.7292/2001 -3- decision of the 2nd respondent on the recommendation made by him. 4. It would appear that in the meanwhile, the matter was also discussed in the review meeting of the project in question, and Ext.P5 minutes show that the Member (Civil) stated in the meeting that the contractor's appeal for rate revision can be considered in the Rate Revision Committee. Ext.P6 is a note submitted by the 2nd respondent to the Board, as directed by the Chairman. A reading of this note show that after Ext.P4 report was submitted by the 4th respondent, the claim of the petitioner was considered by the FA & CAO of the Board, who objected to the recommendation of the 4th respondent. Thereafter, on the directions of the Member(Civil), the issue was referred to Works Committee, which discussed the issue in the meeting held on 15/01/1998, and found that for reasons not attributable to the petitioner, delay of about 24 months had occurred. It is stated that the Works Committee again discussed the issue on 24/02/1998, and decided to recommend 30% rate enhancement, less cost of departmental materials, for the works carried out after 01/07/1996, and noted that the financial commitment on that account should not exceed 17.75 lakhs. In OP No.7292/2001 -4- Ext.P6, it is stated by the Secretary that, the Chief Engineer had submitted yet another report, which interalia stated that if the work was abandoned, the Board will suffer a loss of Rs.1 lakh per day. Finally, specific comments regarding the delay were obtained from the Chief Engineer, about which also reference has been made by the Secretary in Ext.P6 note. Finally, the Secretary recommended for 30% rate enhancement as recommended by the Works Committee, and quantified the financial commitment at Rs.15,07,131/-. 5. The matter was accordingly considered and by Ext.P7, the petitioner was informed that his request was rejected by the Board “as it is not in accordance with the terms of the agreement”. The petitioner again submitted Ext.P8 and once again his claim was rejected by Ext.P9, referring to Ext.P7. According to the petitioner, in an identical situation, even in spite of similar agreement provisions in the case of another contractor, the Board has given revision of rates by Ext.P10 order. Relying on Ext.P10 and claiming parity in treatment, the petitioner again submitted Ext.P11, and that was also rejected by Ext.P12 communication of the 4th respondent referring to the agreement conditions. It is in the aforesaid OP No.7292/2001 -5- circumstances, the original petition has been filed with the prayers mentioned earlier. 6. In the meanwhile, the period of the agreement, executed on 24/12/1993 had expired and on the basis of extension of time granted by supplementary agreements, the work was completed and the project was commissioned on 20/03/1999. 7. The petitioner submits that the work got delayed only for reasons attributable to the Board and this factual position is seen admitted in Exts.P4 & P6. It is stated that despite this, he executed the work on the specific undertaking of the Board that they will revise the rates. It is stated that this commitment of the Board amounted to a promise and he having acted upon the said promise to his detriment and completed the work, the Board is not entitled to resile from the promise. The petitioner also contends that by Exs.P10 & P14, claims raised by other contractors in identical circumstances, have been allowed and if that be so, there is absolutely no justification for adopting a different standard in so far as his claim is concerned. On these grounds, the petitioner submits that the decision as reflected in the impugned orders is arbitrary and discriminatory. In so far as the agreement conditions held out OP No.7292/2001 -6- against the petitioner are concerned, the learned counsel for the petitioner submits that it was despite the agreement conditions that other contractors have been given the benefit of revision of rates as per Exts.P10 & P14. It is also stated that despite these provisions, the Board and its responsible officers had undertaken to examine his claims on merits and that it was on the basis of the directions issued by the Chairman of the Board that the whole exercise as reflected in the report and note, was undertaken and the matter was placed before the Board. It is stated that in such circumstances, it was not open to the Board to have rejected his claim, relying on the agreement conditions. 8. The learned standing counsel for the Electricity Board, on the other hand, relied on the agreement conditions. According to the learned standing counsel, the agreement which was signed by the petitioner with open eyes and with full knowledge of its provisions, provided in clear terms that the petitioner would not be eligible for revision of rates. It is stated that it was on that condition the principal agreement and the supplementary agreements were executed, and that therefore, it is not open to the petitioner to demand revision of rates. It is stated that for OP No.7292/2001 -7- settlement of the dispute in matters governed by contract, and for enforcement of any contractual claims, the remedy available to the petitioner is to move the Civil Court or if so provided in the agreement itself, by Arbitration. In so far as Exts.P10 & P14 are concerned, the learned standing counsel submits that the case of the petitioner is incomparable with the cases of the contractors mentioned in those orders. In so far as Ext.P10 is concerned, it is also stated that the Board had given a firm commitment before this Court to complete the project within a time frame, and that it was to avoid the proceeding under the Contempt of Courts Act, they had to agree for a rate revision to get the work completed. According to the Board, the cases covered by these orders are incomparable. 9. As far as the issue of maintainability of this original petition is concerned, true, the relationship between the parties is governed by contract, and that the contract cannot be said to be a statutory contract also. In this original petition, though what the petitioner claims is revision of rates and payment on that basis, his claim has been rejected relying only on the provisions of the agreement entered into between the parties and the impugned orders show that his claim has not been considered on merits. OP No.7292/2001 -8- Therefore, what arises for consideration in this original petition is the correctness of the decision rejecting the claim of the petitioner. In case the decision is found to be vitiated for any reason, as a necessary consequence, an examination of the claim raised by the petitioner on merits is the direction that has to be issued. Examination of such an issue, in my view, is permissible by this Court exercising the power of judicial review. This is all more so for the reason that for this purpose, I do not have to interpret any provision of the agreement or adjudicate any disputed questions of fact. Hence, I do not find any merit in the contention regarding the maintainability of the original petition raised by the learned standing counsel for the Board. 10. In so far as Exts.P7, P9 and P12 are concerned, the rejection of the petitioner's claim is only on the basis that as per the agreement conditions the petitioner is not eligible for revision of rates. A reading of Ext.P4 report of the Chief Engineer shows that after taking note of the agreement provision disentitling the petitioner to claim any revision of rates, the Chief Engineer has adverted to the reasons which contributed to the delay in completion of the work. Additional excavation, stoppage of work, OP No.7292/2001 -9- recruitment of labourers affecting progress of the work, necessity of taking additional precautions for excavation than what was expected, are the reasons stated and these reasons, as rightly found are not attributable to the contractor. Thereafter, the Chief Engineer has stated that the Deputy Chief Engineer has recommended to consider the request for revision sought for by the petitioner. Finally, taking into account the 1996 PWD schedule revision, and the holding that the claim of the petitioner is a just one, the Chief Engineer recommended revision by 13.5% over the agreed rate for the works up to 30/06/1996, and 35% over the agreed rate for the works done after 01/07/1996. 11. This issue was again discussed in the review meeting of the project held on 28/11/1997, when the Member(Civil) also has agreed to consider the claim of the petitioner on its merits. It is so stated in Ext.P5. Thereafter, the matter was considered by the FA & CAO, the works committee and the Chief Engineer, and finally, on the directions of the Chairman of the Board, the Secretary made Ext.P6 note to the Board. In his note, the Secretary has recommended 30% rate enhancement and the financial liability has been quantified at Rs.15,07,131/-. OP No.7292/2001 -10- 12. Thus in spite of the existence of the agreement conditions disentitling the petitioner to claim revision of rates, the Deputy Chief Engineer, Chief Engineer, Member(Civil), Works Committee, Secretary and the Chairman, who all are having full knowledge of the agreement conditions, had undertaken the aforesaid exercises, and had agreed to consider the claim of the petitioner for revision of rates on merits. After having undertaken the entire exercise, in my view, it is too late for the Board to now contend that in the agreement there is a provision disentitling the petitioner to claim revision of rates, and therefore, will not consider the request of the petitioner. In my view, such decision is a totally arbitrary one and the Board is bound to consider the claim of the petitioner on merits and take a decision in the matter. Since the merits of the petitioner's claim have not been considered, what is to be done is that the Board should take a fresh decision in the matter examining the entire materials available before it. 13. In the light of the above, I dispose of the original petition with the following directions: I quash Exts.P7, P9 & P12 and direct the 1st respondent to consider the claim of the petitioner for revision of rates, on the basis of OP No.7292/2001 -11- Exts.P4 and P6 reports of the 4th & 2nd respondents and other materials available before it and in the light of the findings in the judgment. While considering the claim of the petitioner, the respondents shall also take into account Exts.P10 & P14 orders. It is clarified that this Court has not examined the merits of the petitioner's claim and it is entirely for the Board to consider the issue. This shall be done as expeditiously as possible, at any rate, within three months of production of a copy of this judgment. The original petition is disposed of as above. (ANTONY DOMINIC, JUDGE) jg