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Karnataka HC orders KSTDC to pay fine of Rs 2 lakh to contractor for delay

Karnataka HC has ordered KSTDC to pay the pending bill of Rs 34,85,179 with an interest of 12 per cent to a Class I Contractor and also a fine of Rs 2,00,000 for delay in clearing the bills

Karnataka High Court

Karnataka High Court

Press Trust of India Bengaluru

The High Court of Karnataka has ordered the Karnataka State Tourism Development Corporation (KSTDC) to pay the pending bill of Rs.34,85,179 with an interest of 12 per cent to a Class I Contractor and also a fine of Rs.2,00,000 for delay in clearing the bills.

The contractor had completed the building in 2014 and was paid Rs.1,46,56,901 during the course of construction. But the last bill of Rs.34,85,179 was still not paid till he approached the HC in 2018. The HC judgement came on September 3, 2022.

"This is a fit case for levy of exemplary costs for the ill-treatment meted out to the scrupulous citizen who had done the work for the State entities. A message should loudly go to the quarters that be, that the courts would not tolerate indolence on the part of the public bodies when interest of the citizen is put to peril," the HC said.

 

The HC said, the KSTDC should be made to pay a cost. This court is of the considered opinion that the second respondent-Corporation should be saddled with a cost of Rs.2,00,000 payable to the petitioner in addition to interest at a reasonable rate for the delay in making payment in terms of undisputed bills.

M Chiranjeevi, a Class I Contractor approached the HC against the Department of Tourism and KSTDC. He was seeking the corporation to pay his bills. He had won a contract to construct a building for the Corporation and after completion of the same his bills were not cleared. A year after the completion of the project, he was told that there were four deficiencies in the construction which he should address first.

In the HC, the KSTDC argued that there was an arbitration clause in the contract and a writ petition should not be entertained. The HC said that normally "Writ Courts do not grant indulgence in matters involving contract and non-payment of contractors' bills. But courts nowadays have been observing a kind of callousness and 'come what may attitude' on the part (of) some public functionaries."

Justice Krishan S Dixit in his judgement said that judges have to keep themselves aware of what was happening around. The building constructed by the contractor was inaugurated on April 10, 2017 in the presence of the then district in-charge minister, transport minister, the vice-chairman of the Vidhana Sabha and MPs and MLAs not even one raising a little finger about the quality of the work the court said.

The MD of the KSTDC had written about the completion of the work and handing over the structure to the Corporation. The last bill was certified by the architect appointed by the Corporation in November 2017.

The HC dismissed the contention of the KSTDC that this case cannot be considered by the HC. "There are sufficient elements of public law. A contract to which the State is a party does not create an island completely immune from judicial review under Article 226 and 227," it said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sep 10 2022 | 4:23 PM IST

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