Panchayat:Repo18/Law Manual Page0539

for discussion and shall take further action thereon in accordance with the decision of the Committee.

4. Power of Panchayat to cancel Contracts.

- The Panchayat shall be vested with the power to cancel a contract after issuing notice to the Contractor if the Contractor acts in contravention to the terms of the contract and the President shall take steps to recover from the Contractor, the loss that the Panchayat may sustain on this account and the President shall have the sole responsibility in this respect.

5. Supplementary agreement to be executed in the event of increase in contractual expense.-

A supplementary agreement shall be executed for making any modification in the contract which involves an increase in the expense over and above ten per cent that in the original contract and in the case of such supplementary agreement, the provisions contained in Rule 3 and Rule 4 mentioned above shall be followed.

6. Method of executing Contracts.-

(1) Any contract entered into by the Secretary on behalf of the Panchayat shall be made in the same manner and method applicable to him, had it been done for himself. (2) Every contract shall be affixed with the common seal of the Panchayat. (3) If the expenditure involves more than one thousand rupees in the case of execution of a work or procuring of goods or of rendering a service, the Contract therefor shall be in writing and the details in respect of the work that shall be executed, the particulars of the goods that shall be supplied, the standard of quality thereof, the details as to the manner in which and the period upto which the service shall be rendered, the date on which the work shall be completed, the last date for supply of the goods etc., as the case may be, shall be clearly stated therein. (4) The common seal of the Panchahyat shall be kept by the Secretary and it shall not be affixed in any contract or other document otherwise than in his presence. (5) No Contract entered into otherwise than in accordance with the provisions of this rule shall be binding on the Panchayat.

7. Exempting from some defects.

If the units cannot be ascertained precisely in the case of a contract for the execution of work at unit rate, it shall not be treated as having contravened the aforesaid rules only for the reason that the work had eventually exceeded the financial limit.

8. Giving security for contracts

. After accepting tenders but before supplying goods or before rendering services, as the case may be, the Secretary shall, with the approval of the President in writing, get from the Contractor sufficient security in accordance with the terms of the contract for the full compliance of the terms and conditions of the contract to be executed. If this provision is not complied with and consequently the Panchayat sustains any loss, such loss shall be realised equally from the President and the Secretary.

Explanatory Note (This does not form part of the Notification but is intended to indicate its general purport.) Clause (ix) of Section 254 of the Kerala Panchayat Raj Act, 1994 (13 of 1994) empowers the Government to make rules in respect of the contract for works that are executed by the Panchayat. This Notification is intended to achieve the above object.