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Kerala High Court Allows Petition Directing District Collector To Rectify Mistake in Declining Amount To Petitioner

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Facts of the Case

Petitioner M.A. Ameer is an A-Class Contractor of the Kerala Public Works Department, had filed a writ petition seeking to quash letter and to direct the 4th Respondent- District Collector to take immediate steps for rectification of mistake in declining the amount and to release ₹23, 38,367/- to the Petitioner, as recommended by the Executive Engineer in the letter within a time to be stipulated by this Court. The Petitioner also sought interest at 15% per annum on the said amount.

The Petitioner undertook the work of “Improvement of Adoor Mandakol Road” for the PWD. The original scope of the work provided “construction of carriageway with 20 mm. thick premixed open grade chipping carpet”. Subsequently, the scope of work was modified from “premixed open grade chipping carpet” to “Bituminous Macadam and Bituminous Concrete”. The Government sanctioned the change and the work was accordingly completed by the Petitioner. The final bill was settled on 27.09.2017.

The petitioner states that ₹5,00,00,000/- was deposited for the project work. However, the final bill was only for ₹4,80,86,314/-. The balance amount of ₹19, 13,686/- was returned to the accounts of the 4th Respondent-District Collector. When the Petitioner’s auditor scrutinised his accounts, the auditor noted that there was a deficit in the amount due to the Petitioner on account of oversight and more amount was due to the Petitioner from the Respondents. Therefore, on 01.10.2019, the Petitioner submitted a request to the Executive Engineer to re-examine the bills.

Petitioner’s Arguments

The learned counsel for the Petitioner argued that the denial of payment of ₹23, 38,367/- by the District Collector was unlawful and unjustifiable. Being a mutual mistake, the non-return of the said amount tantamount to deprivation of legitimate dues to the Petitioner. The Petitioner had completed the work making considerable savings to the Respondents. The Petitioner quoted a very competitive rate of 23.78% below the estimated rate. The work was done to the satisfaction of the Respondents. When the audit of accounts disclosed the mistake and the Executive Engineer certified the same, it would be highly arbitrary and unjust on the part of the 4th Respondent to decline the amount to the Petitioner for the sole reason that the project was of the year 2014-15.

The learned counsel for the Petitioner also relied on the Judgment of the Apex Court in Madras Port Trust v. Hymanshu International by its Proprietor V. Venkatadri (Dead) by LRs [(1979) 4 SCC 176] and urged that the Respondents could not resort to the plea of limitation to defeat just claim of a citizen.

Respondent’s Arguments

The learned Government Pleader representing the Respondents strongly opposed the writ petition. The learned Government Pleader argued that the work was completed on 29.03.2017. The claim in the writ petition is in respect of the differential cost allegedly deducted in part bills which were submitted on 31.05.2016, 07.02.2017 and 30.03.2017. The project was closed long back in 2017 and there is no fund or amount available as the project was closed.

Court’s Observation and Decision

The Court observed that the further contention of the learned Government Pleader was that the issue involves disputed questions of fact and hence the Court should not interfere in the matter. It was not in dispute that the Petitioner quoted the work at a competitive rate of 23.78% below the estimated rate and the work was satisfactorily completed. Amounts were deducted from the bills of the Petitioner as differential cost on an erroneous assumption that Bitumen and emulsion were supplied by the Department. The fact that the Department had not supplied Bitumen and emulsion to the Petitioner is not in dispute. In fact, Clause 28 of agreement specifically states that no departmental materials shall be supplied to the Contractor by the Department.

The Court also observed that the concerned Executive Engineer, after perusing the records including the M-Book, came to the conclusion that erroneous deductions were made from the bills of the Petitioner. When amounts were erroneously deducted from the payment to the Petitioner, it was the duty of the State to make refund. The deduction of amounts was without the authority of law. The State has no right to the money and it is refundable to the Contractor.

In the facts of the case, the writ petition was partly allowed. The Respondents were directed to take immediate steps for rectification of the mistake and to release the amount of ₹23, 38,367/- to the Petitioner as recommended by the Executive Engineer in the letter, within a period of two months.

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