BY AD v. P.SHANES METHAR

BY ADVS. PIRAPPANCODE V.S.SUDHIR SRI.SUJITH MATHEW, SENIOR GOVERNMENT PLEADER (IRRIGATION) THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 05.12.2023, THE COURT ON 05.01.2024 DELIVERED THE FOLLOWING: W.A.No.481/2023 2 A.MUHAMED MUSTAQUE & SHOBA ANNAMMA EAPEN, JJ. ------------------------------------------------ W.A.No.481 of 2023 ------------------------------------------------ Dated this the 5th day of January, 2024 J U D G M E N T A.Muhamed Mustaque, J. This writ appeal was filed by a contractor. The appellant approached this Court in W.P.(C) No.10484/2022 alleging undue delay in disbursing Exts.P5 and P6 bills. The learned Single Judge initially passed an interim order for release of 50% of the bill amount and thereafter, disposed of the writ petition with a direction to the first respondent to disburse the balance amount subject to the amount being sanctioned and made available by the second respondent. Not satisfied with the direction, the writ appeal has been preferred.

2. The brief facts of the case are as follows: The appellant-contractor entered into an agreement with the first respondent-Kerala Irrigation W.A.No.481/2023 3 Infrastructure Development Corporation to undertake construction of the Regulator-cum- bridge across Kuttiyadi River in Kozhikode District for an amount of Rs.61,13,34,133/- on 07.09.2020. The project is funded by the second respondent-Kerala Infrastructure Investment Fund Board(KIIFB). This project is part of the project conceived under the tripartite agreement executed among the first respondent, second respondent and the water resource department of the Government. The first respondent will execute the project and the second respondent will fund for the project. There is no dispute to the fact that administrative sanction was accorded for the work which was agreed between the appellant and first respondent.

3. The original agreement between the appellant- contractor and the first respondent was revised and a supplementary agreement was executed between them. Ext.P4 is the supplementary agreement. According to the appellant-contractor, they completed the work and submitted Exts.P5 and P6 bills. W.A.No.481/2023 4

4. There appears to be a dispute between the first respondent and the second respondent. This resulted in delay of the payment to the appellant- contractor. Based on the interim direction of this Court, the second respondent submits that they have released the bills submitted in accordance with the work approved by the technical committee. However, remainder of the bills were not honoured. According to the second respondent, it was not a work approved by the technical committee and the supplementary agreement was entered into by the first respondent and the appellant contractor without the approval from the second respondent.

5. This Court on 10.3.2023, noting that the apparent dispute between the respondents, being the State Instrumentalities, directed the Chief Secretary to the Government of Kerala to intervene in the matter for resolution. Accordingly, the Chief Secretary convened a meeting involving all parties and made following recommendations: i. Appropriate action will be taken against the W.A.No.481/2023 5 responsible officers who made serious mistakes while tendering the work. ii.The contractor has not completed the bund work in time. Further no insurance was availed by the contractor as stipulated in the norms. The lapses have resulted in the claims for additional payment from Government. iii.The competent authority may examine the clauses in the agreement.

6. The first respondent filed a detailed affidavit before this Court. In the counter affidavit it is stated that, as of now only 25% of the work has been completed and payment has been released for all executed items as per the revised estimate No.II, which was conditionally approved by the second respondent-KIIFB. It is further stated that the second respondent is competent to verify and scrutinize the bills, and only after satisfaction of the bills, sanction will be accorded by the second respondent and the bills submitted by the appellant can be honoured.

7. It is apparent that there exists a dispute as to the approval of the work undertaken by the appellant by the second respondent. It is to be noted W.A.No.481/2023 6 that the contract is entered between the appellant- contractor and the first respondent. The second respondent has no privity of contract with the appellant-contractor. The appellant approached this Court alleging delay based on Exts.P5 and P6 bills. As seen from Exts.P5 and P6, sanction has been accorded by the first respondent for release of the amount. The appellant cannot demand that their bills should be honoured by the second respondent.

8. In view of the fact that there is no dispute regarding Exts.P5 and P6 bills as the officials of the first respondent have certified for release of the bills, the first respondent is bound to honour the bills. They cannot wriggle out from their liability citing that funding agency had not approved the work undertaken by the appellant. A Division Bench of this Court by judgment in W.A.No.1178/2015, dated 8/7/2016, held that payment due to a contractor cannot be withheld due to inter se dispute between the awarder of the contract and third party at whose instance the work has been awarded. Those are the disputes which W.A.No.481/2023 7 will have to be resolved by such agencies in appropriate manner. As of now, the Exts.P5 and P6 bills have been certified for release of the fund. In that sense, the first respondent is bound to honour the bills. The writ appeal is allowed directing the first respondent to honour Exts.P5 and P6 bills after deducting the amount already paid, within two months from today. No costs. Sd/- A.MUHAMED MUSTAQUE, JUDGE Sd/- SHOBA ANNAMMA EAPEN, JUDGE W.A.No.481/2023 8 APPENDIX OF WA 481/2023 PETITIONER'S ANNEXURES: ANNEXURE A ANNEXURE B ANNEXURE C ANNEXURE D ANNEXURE E ANNEXURE F ANNEXURE G ANNEXURE H TRUE COPY OF REVIEW PETITION NO.1012/22 WITH EXHIBITS. COPY OF COUNTER AFFIDAVIT FILED BY THE 1ST RESPONDENT IN RP 1012/22 WITH EXHIBITS. TRUE COPY OF REPLY AFFIDAVIT FILED BY THE REVIEW PETITIONER TO THE COUNTER OF THE 1ST RESPONDENT IN RP 1012/22. CERTIFIED COPY OF THE ORDER IN RP.NO.1012 OF 2022 DATED 1.2.2023. TRUE COPY OF THE INSURANCE POLICY DATED 27.12.2022. A TRUE COPY OF THE LETTER DATED 23.6.2023 ISSUED BY THE PROJECT ENGINEER, KOZHIKODE. A TRUE COPY OF THE LETTER OF THE APPELLANT DATED 30.6.2023. A TRUE COPY OF THE E-MAIL DATED 5.7.2023 ISSUED FROM THE INSURANCE COMPANY. RESPONDENTS' ANNEXURES: ANNEXURE R1(A) TRUE COPY OF THE TRIPARTITE AGREEMENT DATED

18.07.2017. ANNEXURE R1(B) TRUE COPY OF THE G.O.(RT)NO.2686/2020/FIN DATED 06.04.2020. ANNEXURE R1(C) TRUE COPY OF THE JUDGMENT DATED 12.10.2022 IN W.P.(C)NO.30560/2022 OF THIS HONOURABLE COURT. EXHIBIT R2(A) TRUE COPY OF THE LETTER NO: WRD022-04-TIW- PIP-01 DATED 14/07/2023. W.A.No.481/2023 9 EXHIBIT R2(B) THE TRUE COPY OF THE LETTER DATED 04/09/2023 SENT BY THE CHIEF EXECUTIVE OFFICER KIIFB TO SECRETARY ,WATER RESOURCES DEPARTMENT.