Nature Green, Represented By Its vs. The Mission Director

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WP(C)/36044/2023HC KeralaGSTCNR KLHC01081419202330 July 2024Bench: HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.11 pages
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Facts

The petitioners, Nature Green and Kurinjiyil Builders, are A-Class Contractors who were awarded tenders by the Pampadumpara Grama Panchayat for works under the MGNREGA scheme. The first petitioner, Nature Green, was the lowest bidder and executed an agreement on January 19, 2023, for the supply of construction materials. Subsequently, permission was granted for the second petitioner, Kurinjiyil Builders, to act as a Power of Attorney holder for Nature Green. The petitioners claim to have supplied materials amounting to Rs. 1,10,73,661/-. The Panchayat, in a communication dated October 13, 2023, acknowledged the completion of works and directed payment to the second petitioner. However, payment was withheld due to a technical objection regarding the vendor name in the software and a statement from the Mission Director that the Power of Attorney was granted without consultation.

Held

The Court held that withholding payment to the petitioners could not be justified. It was not disputed that the petitioners had completed the works for which they claimed payment. The Panchayat had also requested the first respondent to make payment to the second petitioner based on the permission granted. The Court noted that an interim order had been passed directing the respondents to make a payment of Rs. 50,00,000/- to the second petitioner and to add the second petitioner as a vendor in the software. Both parties confirmed compliance with this interim direction. Consequently, the Court directed the payment of the balance amount out of the total of Rs. 1,09,66,282/-, as assessed by the Panchayat's Engineer. The respondents were directed to take necessary steps, including adding the second petitioner as a vendor, to ensure payment. If the balance payment was not made within three months, it would carry an interest of 12% per annum.

Key Issues

1. Whether the withholding of payment to the petitioners for the supply of materials under the MGNREGA scheme is justified, considering the completion of works and the Panchayat's communication directing payment to the second petitioner (the Power of Attorney holder). Petitioner's argument: The petitioners argued that payment should not be withheld as they have completed the works, and the Panchayat itself had directed payment to the second petitioner. They relied on the agreement and the subsequent permission granted for the Power of Attorney. Revenue/State's argument: The respondents, including the Mission Director, argued that the Power of Attorney was granted illegally without consulting the Mission Director, and therefore, the execution of the Power of Attorney and the demand for payment from the second petitioner were illegal. The Panchayat also raised a technical objection regarding the vendor name in their software, as no agreement was directly executed with the second petitioner.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
W. P. (C) No. 36044 of 2023 ..1.. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P. TUESDAY, THE 30TH DAY OF JULY 2024 / 8TH SRAVANA, 1946 WP(C) NO. 36044 OF 2023 PETITIONERS: 1 NATURE GREEN, REPRESENTED BY ITS PROPRIETOR EBIN K. JOSE, AGED 35 YEARS, S/O. JOSE, NATURE GREEN, KIZHAKKEDATHU HOUSE VAZHATHOPU, THADIYAMPADU P.O., IDUKKI DISTRICT.=, PIN – 685602. 2 KURINJIYIL BUILDERS, VII/551, NADUVATHETTU BUILDING, VAZHATHOPU, THADIYAMPADU P.O., IDUKKI DISTRICT, REPRESENTED BY ITS MANAGING PARTNER ALLWYN JOSE, AGED 38 YEARS, S/O. JOSE JOSEPH,NADUVATHETTU HOUSE, VAZHATHOPU, THADIYAMPADU P.O., IDUKKI DISTRICT, PIN – 685602. BY ADV. SRI. K.JAYAKUMAR (SR.) ALONG WITH ADVS.M/S.V.H.JASMINE, THASNIMOL T.S., SHIJI P.S., SUMAYYA K.B., RAHMATH C.A. RESPONDENTS: 1 THE MISSION DIRECTOR, MGNREGA, STATE MISSION KERALA, 3RD FLOOR, REVENUE COMPLEX,PUBLIC OFFICE COMPOUND THIRUVANANTHAPURAM, PIN – 695033. 2 THE JOINT PROGRAMME CO-ORDINATOR, DISTRICT PANCHAYAT OFFICE, COLLECTORATE, KUYILIMALA, PAINAV P.O.,IDUKKI, KERALA STATE, PIN – 685603. W. P. (C) No. 36044 of 2023 ..2.. 3 PAMPADUMPARA GRAMA PANCHAYAT, REPRESENTED BY ITS SECRETARY, PAMPADUMPARA PANCHAYAT OFFICE, PAMPADUMPARA P.O, PAMPADUMPARA, IDUKKI DISTRICT, PIN – 685514. 4 THE SECRETARY, PAMPADUMPARA PANCHAYAT, PAMPADUMPARA PANCHAYAT OFFICE, PAMPADUMPARA P.O, PAMPADUMPARA, IDUKKI DISTRICT, PIN – 685514. 5 ASSISTANT ENGINEER, MGNREGA PAMPADUMPARA GRAMA PANCHAYAT PAMPADUMPARA PANCHAYAT OFFICE, PAMPADUMPARA P.O, PAMPADUMPARA, IDUKKI DISTRICT, PIN – 685514. SRI.LIJI.J.VADAKEDOM, SC SMT.DEVI SHRI R. GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W. P. (C) No. 36044 of 2023 ..3.. MOHAMMED NIAS C. P. , J. ===================================== W. P. (C) No. 36044 of 2023 ===================================== Dated this the 30th day of July, 2024

J U D G M E N T The petitioners are stated to be A-Class Contractors. The third respondent Panchayat invited tenders for various works under the Mahatma Gandhi National Rural Employment Guarantee Scheme. The contract was for the supply of construction materials and the first petitioner being the lowest bidder, the Secretary of the Panchayat approved the tender submitted by the first petitioner on 6.1.2023. A communication was also issued by the fourth respondent to the petitioners to execute the agreement within 15 days from the date of notice. Ext.P3 is the agreement so executed on 19.1.2023. Before the supply of materials, through Ext.P7 request dated 15.2.2023 had ..4.. sought permission to give a Power of Attorney to the second petitioner and had also indemnified himself against any loss on account of execution of the contract. This was permitted by the Panchayat, as per a decision dated 28.2.2023 (Ext.P8). The petitioners submit that they had submitted the materials as per the order placed on 4.2.2023 and 24.4.2023, Exts.P5 and P10 respectively. The amount payable to the petitioners for the supply of the above materials is Rs.1,10,73,661/-.

2.

After the supply of materials as stated above, through Ext.P15 dated 13.10.2023, the Panchayat addressed the first respondent stating that the 32 works entrusted to the petitioners have been completed in 16 Wards of the Panchayat and also, directed payment to be made to the second petitioner. The second petitioner had also requested the Secretary and President of the Panchayat on 16.10.2023, to make the payment. This Writ Petition is filed for a direction to the fourth respondent to effect the payment of Rs.1,10,73,661/- (Rupees One Crore Ten Lakhs ..5.. Seventy Three Thousand Six Hundred and Sixty One only) due to the second petitioner on account of the bill amounts shown in Exts.P11 and P13. 3. A counter affidavit has been filed on behalf of the Panchayat, wherein, it is conceded that the petitioners have completed works with respect to 31 road concreting by 18.7.2023, but the supply of materials with respect to individual works have not been carried out. It is also submitted that 32 works were measured out and as per the M Book, the supply was made for an amount of Rs.1,09,66,282/-.

4.

A technical objection was also raised, as the payment could have been made only in favour of the person shown as the vendor in the software. Since no agreement was executed between the Panchayat and the second petitioner, the name of the second petitioner was not shown as the vendor in the software, though permission was granted under Ext.P8 dated 28.2.2023. ..6..

5.

A statement has also been filed on behalf of the first respondent, wherein, it is stated that the Panchayat had executed an agreement with Sri. Ebin K. Jose who was the lowest bidder in the tender process. The Panchayat had permitted the Power of Attorney holder on the request of the first petitioner, without consulting the Mission Director, and therefore, the execution of the Power of Attorney and the demand of payment from the second petitioner were illegal.

6.

I have heard Sri. K. Jayakumar, learned senior counsel instructed by Sri. V.H. Jasmine learned counsel appearing for the petitioners, Sri. Liji J. Vadakedom learned Standing Counsel for the Panchayat and Smt. Devi Shri R., learned Government Pleader appearing for respondents 1 and 2. 7. It is not in dispute that the petitioners had executed works for which they have made their claims based on Exts.P11 and P13 are bills. There is no whisper in the counter filed by the first respondent disputing the fact that the petitioners have ..7.. completed the work. The Panchayat had requested the first respondent, through Ext.P15 dated 13.10.2023, to make payment to the second petitioner based on the permission granted. Under such circumstances, withholding of payment to the petitioners cannot be justified at all.

8.

This Court had passed an interim order on 12.4.2024 directing respondents 3 and 4 to make a payment of Rs.50,00,000/- within one month from the date of the order. Respondents 1 to 5 were also directed to take such steps to see that the second petitioner has paid the above amount, including adding the second petitioner as a vendor in the software.

9.

Both sides submit that the direction has been complied with and the payment was made on 4.6.2024. In view of the above, there will be a direction to pay the balance amount out of the total of Rs.1,09,66,282/-, as found by the accredited Engineer of the Panchayat. Respondents 1 to 5 are directed to take such steps including adding the second petitioner as a vendor in the ..8.. software to ensure that the second petitioner is paid the amount. If the payment is not made within three months from the date of receipt of a copy of the judgment, the amount payable will carry an interest of 12% till the date of actual payment. The Writ Petition is allowed as above. MOHAMMED NIAS C. P. , JUDGE MMG ..9..

Appendix — schedule of exhibits
APPENDIX OF WP(C).NO.36044/2023 PETITIONERS' EXHIBITS: EXHIBIT P1 TRUE COPY OF THE PARTNERSHIP DEED DATED 30.05.2022 EXHIBIT P2 TRUE COPY OF THE COMMUNICATION NO.SC 1 7789 - 22 DATED 06.01.2023 ISSUED BY THE 4TH RESPONDENT TO THE 1ST PETITIONER EXHIBIT P3 THE TRUE COPY OF THE AGREEMENT DATED 19.01.2023 HAVING NO. 5010/22- 23/NGNREGS BETWEEN THE PETITIONER AND THE 4TH RESPONDENT EXHIBIT P4 TRUE COPY OF THE PRICE SCHEDULE FOR THE ABOVE WORK FOR AN AMOUNT OF TWO CRORES NINE LAKHS, FIFTY SIX THOUSAND THREE HUNDRED AND TWENTY EIGHT RUPEES AND HUNDRED AND TWENTY PAISA ONLY (RS. 2,09,56,328.120/) EXHIBIT P5 TRUE COPY OF THE LETTER NO. SC3/5010/22 DATED 04.02.2023 ISSUED BY THE 4TH RESPONDENT EXHIBIT P6 TRUE COPY OF THE LIST OF 15 WORKS ISSUED TO THE 1ST PETITIONER BY THE 4TH RESPONDENT EXHIBIT P7 TRUE COPY OF THE LETTER DATED 15.02.2023 SUBMITTED BY THE 1ST PETITIONER BEFORE THE 3RD RESPONDENT EXHIBIT P8 TRUE COPY OF THE DECISION DATED 28.02.2023 AS DECISION NUMBER 3(1) OF THE 3RD RESPONDENT PANCHAYAT W. P. (C) No. 36044 of 2023 ..10.. EXHIBIT P9 TRUE COPY OF THE POWER OF ATTORNEY EXECUTED BETWEEN THE 1ST PETITIONER AND 2ND PETITIONER AS NO. 9/IV/2023 DATED 08.03.2023 OF THE SRO, THOPRAMKUDY EXHIBIT P10 TRUE COPY OF THE LIST OF 16 WORKS ISSUED BY THE 4TH RESPONDENT DATED 24.04.2023 EXHIBIT P11 TRUE COPY OF THE FIRST STAGE OF BILL SUBMITTED BY THE 2ND PETITIONER DATED 11.05.2023 FOR 15 WORKS EXHIBIT P12 TRUE COPY OF THE FORM GSTR - 3B DATED 20.06.2023 EXHIBIT P13 TRUE COPY OF THE SECOND STAGE OF BILL SUBMITTED BY THE 2ND PETITIONER DATED 04.07.2023 FOR 17 WORKS EXHIBIT P14 TRUE COPY OF THE FORM GSTR - 3B DATED 21.10.2023 EXHIBIT P15 TRUE COPY OF THE LETTER SUBMITTED BY THE PRESIDENT OF THE 3RD RESPONDENT PANCHAYAT TO THE 1ST RESPONDENT DATED 13.10.2023 EXHIBIT P16 TRUE COPY OF THE APPLICATION DATED 16.10.2023 SUBMITTED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT EXHIBIT P17 TRUE COPY OF THE RECEIPT NO. 400544/DPP 124/GENERAL/2023/'4757 DATED 19.10.2023 ISSUED FROM THE 4TH RESPONDENT EXHIBIT P18 TRUE COPY OF THE APPLICATION DATED 16.10.2023 SUBMITTED BY THE 2ND PETITIONER BEFORE THE 1ST RESPONDENT W. P. (C) No. 36044 of 2023 ..11.. EXHIBIT P19 TRUE COPY OF THE PHOTOGRAPH EVIDENCING THAT THE CONCRETE ROAD SANYASI-ODA- NIRMALAPURAM EXHIBIT P20 TRUE COPY OF THE GOVERNMENT ORDER NO. G.O(P)155/75/PW DATED 10.09.1975 EXHIBIT P20(A) THE TYPED COPY OF THE GOVERNMENT ORDER NO. G.O(P)155/75/PW DATED 10.09.1975 EXHIBIT P21 TRUE COPY OF THE NOTICE INVITING TENDER NO. SC1/2024/298 DATED 11.03.2024 ISSUED BY THE 4TH RESPONDENT EXHIBIT P22 TRUE COPY OF THE PRICE SCHEDULE CONTRACT NO. 5 (2) SC1 298/24 MGNREGA MATERIAL SUPPLY 2023-2024 ISSUED BY THE 4TH RESPONDENT RESPONDENTS' EXHIBIT: EXHIBIT R4(A) A COPY OF THE COMMUNICATION NO. SC3/5010/22 DATED 4.2.2023 ALONG WITH THE ACKNOWLEDGEMENT SHOWING THE SERVICE OF THE COMMUNICATION AND ENCLOSING THE SUPPLY ORDERS

Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.