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CDJ 2026 Ker HC 1474 print Preview print Next print
Court : High Court of Kerala
Case No : RFA NO. 502 OF 2018
Judges: THE HONOURABLE MR. JUSTICE SATHISH NINAN & THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
Parties : State Of Kerala, Rep.By The Chief Secretary,Government Of Kerala,Government Secretariat,Thiruvananthapuram & Another Versus D. Sundaresan, [Died; Lrs Impleaded] & Others
Appearing Advocates : For the Appellants: Ahamed Fazil, Government Pleader, K.P. Jayachandran, Addl. Advocate General Shri.P.A.Mohammed Shah, Addl.Advocate General. For the Respondents: Santha Varghese, K.L. Varghese (Sr.), Rahul Varghese, Ranjith Varghese, Advocates.
Date of Judgment : 18-09-2026
Head Note :-
Cases Referred:
General Manager, Northern Railway And Another v. Sarvesh Chopra [2002 (4) SCC 45]
K.N Sathyapalan (Dead) By Lrs. v. State Of Kerala And Another [2007 (13) SCC 43]
State of Kerala v. P.P.Thomas (2024 KHC OnLine 801)

Comparative Citation:
2026 KER 71685,
Summary :-
1. Statutes / Acts / Rules / Orders / Regulations, and Sections Mentioned:
- Government Order

2. Catch Words:
- damages
- delay
- escalation
- supplementary agreements
- economic duress
- extension of time

3. Summary:
The plaintiff entered a construction contract for NH‑47 bypass, quoting a price 27 % below the probable amount. The defendants, a State department, failed to supply materials, approve designs, shift electric posts and water pipelines, and control public encroachments, causing the project to extend from 18 to 52 months. The trial court held the defendants responsible for the delay and awarded the plaintiff damages, enhanced rates, and a refund of the security deposit, rejecting the defendants’ reliance on supplementary agreements executed under protest. The appellants challenged the trial court’s findings on delay, valuation, and the effect of the supplemental agreements, but the appellate court affirmed the trial court’s decree, finding no merit in the objections. The expert commissioner’s 35 % rate enhancement was upheld as reasonable. Consequently, the appeal was dismissed.

4. Conclusion:
Appeal Dismissed
Judgment :-

Sathish Ninan, J.

1. The suit for money, under the head of damages and retention amounts, was decreed by the trial court. The defendants-State and the Department are in appeal.

2. A contract was entered into between the plaintiff and the defendants with regard to construction of NH-47 bye-pass. The work involved various stages viz. formation of road, cross-drainage, construction of pavements and black topping.

3. The agreement entered into on 26.03.1998. The plaintiff's quoted amount was 27% below the probable amount of contract(PAC) which was based on 1996 PWD schedule of rates. The time for completion was 18 months from the date of issuance of the work order. The work order was issued on 30.03.1998. The period was to expire by 30.09.1999.

4. It is alleged that the defendants failed to provide various construction materials including cement, steel etc. which were to be provided by the defendants. The various heads of claims in the suit are:-

                  (i) Damages sustained due to escalation of price.

                  (ii) Cost of cement procured from open market.

                  (iii) Cost of rubble illegally recovered from the plaintiff.

                  (iv) Refund of security deposit.

                  The plaintiff alleges that, due to the delay on various counts solely attributable to the defendants, the period of completion got extended to 52 months, resulting in price/cost escalation. Accordingly, the suit was filed.

5. The defendants, while denying the allegations, contended that the plaintiff was responsible for the delay and that he is not entitled for the plaint claim.

6. The trial court held the defendants to be responsible for the delay. Relying on Exts.C1 and C1(a) the reports of the Commissioner and the expert, granted a decree in favour of the plaintiff.

7. We have heard Sri.Ahamed Fazil, learned Government Pleader for the appellants, and Sri.Ranjith Varghese, the learned counsel on behalf of the respondent-plaintiff.

8. The learned Special Government Pleader challenged the finding of the trial court holding the defendants responsible for the delay in completion of the work. He also challenged the mode of valuation adopted by the expert commissioner. He pointed out that though the plaintiff's quote was 27% below the estimated rate, the expert commissioner failed to make such deduction while arriving at the cost of construction. He also argued that the plaintiff had voluntarily entered into supplementary agreements undertaking not to claim enhanced amounts, and claims in deviation thereof is not liable to be entertained.

9. Sri.Ranjith Varghese, the learned counsel for the respondent-plaintiff very ably controverted the arguments of the appellants, drawing our attention to the relevant Exhibits and also the precedents, dealing with each of the points precisely. We need to mention here that, an orderly compilation of Exhibits and precedents were made available to us, which did assist us to marshal the facts, evidence and law in this voluminous matter.

10. The plaintiff alleges the following instances of delay as attributable to the defendants:-

                  (i) Delay in supply of departmental materials like cement and steel.

                  (ii) Delay in providing design approvals and incorporation of additional works.

                  (iii) Delay in shifting of electrical posts.

                  (iv) Delay due to non-shifting of Kerala Water Authority pipelines.

                  (v) Failure to abate hindrances by local public.

                  As per the prevailing Government Order, the Department was to supply materials like cement. As per Ext.A11 communication dated 21.10.1998, the Chief Engineer to the Chief Secretary, sought for exemption in the said regard. Ext.A16 letter dated 24.12.1998 from the Executive Engineer to the Superintending Engineer evidences that the work was being delayed for want of cement. The plaintiff had issued Ext.A19 letter dated 14.01.1999 informing the Department regarding the delay being caused on account of non-supply of departmental materials. Subsequently, as is evident from Ext.A26 communication dated 20.02.1999 issued by the plaintiff to the Department, the plaintiff was constrained to procure cement from the local market. The above evidences failure on the part of the Department to provide materials, resulting in delay in carrying out the work.

11. Ext.A32 is the letter dated 05.05.1995 issued by the Executive Engineer to the Superintending Engineer. It reveals revision in the nature of work and estimate. Such additional works are seen included three months prior to the date of completion. The plaintiff cannot be held responsible for the delay caused thereby.

12. To carry out the construction work, KSEB electric posts at the site needed to be shifted. Ext.A7 dated 18.07.1998, Ext.A47 dated 03.03.2000, Ext.A50 dated 15.05.2000, Ext.A60 dated 16.06.2000, Ext.A58 dated 19.06.2000 are letters issued by the plaintiff to the defendants in the said regard. There occurred delay on the part of the Department to ensure such removal. Under Ext.A61 dated 01.09.2000 the plaintiff was granted extension of time on account of the non-shifting of the electric posts. As is evident from Ext.A90 letter dated 24.10.2001, even as on that date, the posts remained unshifted. The plaintiff cannot be held responsible for such delay.

13. Yet another ground on which delay was caused was, due to non-shifting of pipelines of the Kerala Water Authority. Ext.A49 letter dated 02.05.2000 and Ext.A50 letter dated 15.05.2000 evidence that the Department was duly required to have realignment of the pipelines, lest, there would be repeated bursting of the same. Ext.A53 letter dated 01.08.2000 issued by the plaintiff to the Department reveals that no steps were taken to ensure such shifting. As is evident from Ext.A64 letter dated 07.11.2000 issued by the plaintiff, re-alignment of the pipelines was yet to be carried out even as on that date. Suffice to notice that the plaintiff cannot be held responsible for the delay.

14. When the construction work was in progress, there were obstructions from the local public. The plaintiff approached this Court in OP 30564/1999 seeking police protection for carrying out the work. There was encroachment into the site by private parties, and as is evident from Ext.A55 letter dated 28.06.2000 issued by the plaintiff, the issue was cleared only on 19.06.2000 ie. after delay of eight months. As is evident from Exts.A89, A93 and A96 letters of October and November 2021, there had been various obstructions by encroachers. Ext.A105 is the letter dated 20.04.2002 whereby, the Executive Engineer requested the Assistant Commissioner of Police for grant of police protection for completion of the work. It is evident from the above that, consequent to such obstructions, which were not attributable to the plaintiff, there occurred delay in completion of the work.

15. Coupled with the facts as above, it is also relevant to note that the Department had granted extension of time for completion without imposing any fine or penalty. This also sufficiently indicate that, the plaintiff was not responsible for the delay in completion of the project.

16. To deny the claim for additional amounts/damages consequent on the delay, the trump card of the defendants are the supplementary agreements Exts.A62, 103, 111, 119 executed by the plaintiff. It is the definite case of the plaintiff that, he was coerced into entering into the supplementary agreements, threatening non-payment of the pending bills. DW1 has admitted that unless supplementary agreements were executed, the pending bills would not have been paid. Ext.A61 is the minutes of the meeting dated 01.09.2000 wherein, while granting extension of time, payment was made conditional on execution of supplemental agreements. On 08.09.2000, as per Ext.A62 letter the plaintiff had informed the Department that he had no other option but to enter into the agreement to enable receipt of the bills and that the clause in the agreements negativing the right for enhanced rate is arbitrary and illegal.

17. In K.N Sathyapalan (Dead) By Lrs. v. State Of Kerala And Another [2007 (13) SCC 43] the Apex Court held that the mere execution of supplemental agreement by the contractor to claim compensation or extra expenditure cannot, in the circumstances as in the instant case, negative the right of the plaintiff to claim enhanced amounts/damages. It is also relevant to note that the supplementary agreements were executed under due protest, which is revealed from Ext.A62 communication by the plaintiff to the defendants. As held by the Apex Court in General Manager, Northern Railway And Another v. Sarvesh Chopra [2002 (4) SCC 45], the plaintiff having duly objected to the terms of the supplementary agreement, he cannot be pinned down to the same. In State of Kerala v. P.P.Thomas (2024 KHC OnLine 801), this Court has held that agreements executed under the shadow of economic duress cannot be used as a shield against a claim for enhanced rate.

18. In the light of the above discussions, we find that the contention of the defendants that the plaintiff is not entitled for enhanced rates in the light of the supplemental agreements executed by them cannot stand.

19. Having found that the plaintiff is not responsible for the delay and that he is entitled for enhanced rate/damages, we proceed to consider the issue of, quantum. As was noticed first above, the tender was on the basis of 1996 PWD schedule of rates and the plaintiff had quoted 27% less than the PAC. The argument of the learned Senior Government Pleader is that, adhering to the plaintiff’s quote, 27% tender deduction ought to have been made, while fixing the rate; the commissioner failed to make such deduction and hence the report cannot be relied upon.

20. The expert commissioner appointed by the trial court was a retired Superintending Engineer. He was examined as PW2. The expert commissioner has, for the delayed work granted 35% enhancement over the estimated rate without taking into account the tender deductions, finding it to be the escalation. The plaintiff pointed out that, for certain additional work executed, even the Department had applied such rates, indicating the price escalation. This is evident from Ext.A39 letter dated 11.06.2009 by Chief Engineer to Superintending Engineer. The defendants did not file any objection to the expert report. Further no challenge was made or any explanation was sought for from the expert commissioner in the said regard while he was examined as PW2. The work was completed only in the year 2002 (31.07.2002). The rate upon which the tender was floated was the 1996 PWD rates. Having due consideration to the percentage of yearly increase in rates normally being reckoned while revising PWD schedule of rates, and taking into consideration the delay that has occurred for the completion, we find that the calculation made by the expert commissioner is just and reasonable. The same was rightly accepted by the trial court. Therefore, we find that the quantum of damages awarded by the trial court, warrants no interference.

21. With regard to the value of rubbles, evidently there has been a mistake on the part of the Department in having chosen to claim it from the plaintiff, apparently on a misconception of facts. The appellants could hardly even attempt to contend otherwise. The security deposit retained is liable to be returned.

22. No materials sufficient enough to displace the conclusions of the trial court could be brought to our notice. The judgment and decree of the trial court is only to be affirmed.

In the result, the appeal fails and is dismissed. In the circumstances of the case it is ordered that the parties shall bear their respective costs in the appeal.

 
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