1. This writ petition is filed questioning the impugned letter of the second respondent port trust dated 18.04.2015 whereunder the petitioner’s contract for ‘Development of West Quay-North (WQ-7 & WQ-8) berth in the inner Harbour of Visakhapatnam Port Trust’ was terminated under relevant clause of the terms of the contract between the petitioner and the second respondent. The impugned letter, inter alia, alleges that petitioner failed to furnish balance 5% of performance bank guarantee amounting to Rs.9,76,50,000/- as per clause 106 and as per memorandum (general descript) the petitioner failed to furnish balance 5% towards performance security. Another ground, which is mentioned, is that the petitioner failed to complete the contract within the time stipulated and in spite of notices and opportunity provided, the second respondent is forced to terminate the contract at the risk and responsibility of the petitioner.

2. This writ petition was filed on 30.06.2015 and came up for admission on 01.07.2015. While supporting the writ petition, learned counsel for the petitioner mentioned that immediately after receiving the impugned letter of termination, they have filed representation dated 27.04.2015 requesting the second respondent to reconsider the matter, in view of that while issuing notice in the writ petition, the second respondent was directed to consider the petitioner’s request dated 27.04.2015 and take appropriate decision in the matter. The second respondent has, thereafter, considered and rejected the request of the petitioner under its further impugned letter dated 23.07.2015, which is also questioned by seeking amendment of the prayer in the writ petition vide WPMP.No.31584 of 2015. The application for amendment of prayer is ordered and the entire writ petition is considered as amended. Since the second respondent has already called for fresh tenders, a request for early hearing of the matter was made, accordingly, the second respondent filed a counter affidavit and I have heard the writ petition on 27.08.2015 and the same is being disposed of by this order.

3. Mr. K. Vivek Reddy, learned counsel for the petitioner, inter alia, submits that the reasons given in the impugned termination letters is clearly arbitrary. Learned counsel submits that the letter of intent was issued to the petitioner on 21.11.2013 and the contract was entered into and work order was issued on 20.12.2013 and that immediately on receipt of letter of intent, the petitioner mobilized men and machinery to carry out sub-soil investigation work and sought permission for soil investigation. The said work was commenced on 24.12.2013 and the work order dated 20.12.2013 stipulated that the work to be completed within 24 months after obtaining labour license. Learned counsel, however, placed reliance upon clause 21.1 of the work order, which contains condition of the contract, which stipulates as follows:

“21.1. The Employer shall give possession of all parts of the Site to the Contractor, free from encumbrances. If possession of a part is not given by the date stated in the Contract Data the Employer is deemed to have delayed the start of the relevant activities and this will be a Compensation Event”.

Learned counsel also placed reliance upon clause 29.1 to contend that if there is delay in handing over the site the period of completion concerned automatically stand extended by such period. The said 29.1 is also extracted hereunder:

“The Engineer in charge (Nodal Officer) or his nominee shall extend the Intended Completion Date if a Compensation Event occurs or a Variation is issued which makes it impossible fro Completion to be achieved by the Intended Completion Date without the Contractor taking steps to accelerate the remaining work and which would cause the Contractor to incur additional cost”.

4. Learned counsel, therefore, submits that the labo