MARYMATHA CONSTRUCTION COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner in W.P.(C) No.40495 of 2017 is the appellant before us. The writ petition was filed seeking a direction to the third respondent to accept a bank guarantee, in lieu of a treasury deposit, towards 50% of the performance guarantee amounts that were required to be paid in connection with the work awarded to the appellant herein. Following an earlier judgment of this court in Joseph Velupuzhakkal v. State of Kerala and Others, 2017 5 KHC 406, the learned single Judge held that, providing a bank guarantee for the 50% amount would suffice, in lieu of the requirement of providing a treasury deposit for a like amount, for satisfying the condition in the contract with regard to the performance guarantee. The appellant herein had sought the benefit in his case based on the security of Running Account Bills that he had offered in connection with the project and the Single Judge, while granting him the benefit, made it clear that while the respondent was directed to accept the bank guarantee for 50% of the amount, in lieu of the treasury deposit and by way of performance guarantee, if the State Government succeeded in the writ appeal preferred against the judgment in Joseph Velupuzhakkal v. State of Kerala and Others , the writ petitioner would be obliged to provide the treasury fixed deposit before the respondent.

(2.) In the writ appeal, the appellant's contention is essentially that, while the writ appeal, preferred by the State against the judgment of the learned single Judge referred above, culminated in Annexure-A1 judgment of this court dated 31.1.2018 in W.A.No.2378 of 2017 whereby a Division Bench of this court found that the condition in the contract which insisted on the tenderer furnishing 50% of the performance guarantee by treasury fixed deposit was a mandatory one, that had to be complied with by all tenderers, it went on to find that, in the peculiar factual situation in that case, where the contractor had furnished a bank guarantee and also completed a part of the work, the contractor should be allowed to complete the work on the basis of the bank guarantee already furnished by him. It is the case of the appellant herein that, in as much as he was also granted the benefit of the judgment of the learned single Judge in Joseph Velupuzhakkal v. State of Kerala and Others , while accepting the legal proposition with regard to the necessity of a tenderer furnishing treasury fixed deposit towards his obligation for furnishing 50% of the performance guarantee, he could also be granted the benefit of Annexure-A1 judgment to the extent of permitting him to continue the work on the basis of the bank guarantee already furnished by him. It is his submission that almost 50% of the work towards construction of the Medical College Hospital at Palakkad has been completed.

(3.) We have heard the learned Senior Counsel Sri.S.Ramesh Babu duly assisted by Adv.P.Shanes Methar, for the appellant and the learned Senior Government Pleader Sri.Aravinda Kumar Babu for the respondents.