Kerala High Court: State Cannot in the Guise of Period of Limitation evade its Responsibility to Pay a Contractor

Kerala High Court: State Cannot in the Guise of Period of Limitation evade its Responsibility to Pay a Contractor

The Kerala High Court by its single judge Justice Shaji P Chaly observed that, State Government, in the guise of the period of limitation, cannot evade its responsibility to pay the amount due to the petitioners’ father, who undertook the contract work when the previous contractor had failed to carry out the contract.

The writ petition was filed by petitioner- Vishnu and Another to sought direction to the respondents- State of Kerala and others to disburse an amount of Rs.7,50,758 to the petitioners in connection with the contract work carried out by their father; and for a further writ of mandamus commanding the respondents to pay 12 per cent of interest on the amount due to the petitioners from the date of submission of the bill to the date of payment.

The Government had employed petitioner’s father for constructing a protection wall on the banks of Karamana river. However, the Government tried to pay its dues to a previous contractor by adjusting it against the liabilities against the petitioner’s father. This led to the petitioner's father filing a suit and an appeal.

In the appeal, a prohibitory injunction was passed restraining the state from deducting any money owed to the previous contractor from the amount owed to the petitioners' father for the contract executed between the government and the petitioner’s father.

The respondent submitted that the claim raised by the petitioner was barred by law of limitation.

The question that emerged for consideration was whether the State Government is entitled to invoke the ground of limitation against the dues remaining to be paid to a contractor. In this regard the Court observed, “insofar as a money claim is concerned, only a period of 3 years is available for the recovery of the amounts for a private person. However, the State Government has got a period of 30 years, by virtue of Article 112 of the Limitation Act, 1963 to recover any amounts, when the period of limitation would begin to run under the Act against a like suit by a private person.”

The Court after analyzing the principles of law evolved by the various decisions passed by the Supreme Court made it clear that the State Government, in the guise of the period of limitation, cannot evade its responsibility to pay the amount due to the petitioner’s father, who undertook the contract work when the previous contractor Sri. K. Muraleedharan failed to carry out the contract.

Moreover, the Court was of the view that when a civil court passed an order of prohibitory injunction restraining the State and its officials by permanent prohibitory injunction from adjusting the amount due to the petitioner’s father, there was an onerous responsibility to the State to pay the amount to the petitioners.

“Above all, in a welfare State, the State has the duty and obligation to protect the interests of its citizens, rather than finding ways and means to defeat their interests and means of livelihood. The scheme of part III of the Constitution of India dealing with ‘fundamental rights’ speaks eloquently of the responsibilities of the State to safeguard the well-being and prosperity of the citizens without fail. Therefore, when a citizen was engaged by the Government to carry out one of its activities, it had every duty to reward the person as agreed upon in the contract, even without asking for it,” the judge stated.

Considering the Constitutional obligations, the Court opined that it becomes a continuing cause of action, till the liability is discharged by the State. The judge reckoned that a citizen of India is duty bound to discharge any obligation towards the State for a period of thirty years; which also could be seen only as a principle evolved on the theory of a welfare State obligating citizens to discharge their liabilities and responsibilities for the welfare of the State as mandated under part 1V-A of the Constitution of India.

Further the Court reiterated that Article 300A of the Constitution of India makes it clear that no person shall be deprived of his property save by authority of law. Therefore, when the contract work was executed to the satisfaction of the respondents, the money became due to the petitioners’ father; and therefore, the said amount cannot be adjusted against the dues from the previous contractor Sri. K. Muraleedharan in some other works by exercising the power of eminent domain vested with the Government, which when done can only be viewed as an arbitrary and illegal action.

In view of the above, the Court directed the State to pay the amount due to the petitioners.