The main legal point established in the judgment is the importance of abiding by the dispute resolution mechanism provided in the Agreement for resolving disputes arising from the contract. The Court emphasized the limited scope of judicial review in contractual matters and the need for parties to resort to the alternative remedy of arbitration.

ORDER

Ninala Jayasurya, J. - This Writ Petition is filed, inter alia, to declare the order of the 4th respondent - Chief Project Manager, East Coast Railways, Waltair, in terminating the contract of 'Major Up-gradation of Visakhapatnam Railway Station of East Coast Railway on Engineering, Procurement and Construction (EPC) mode as arbitrary, illegal, without power or authority and suffers from total non-application of mind and in violation of Article 19 (1) (g) of the Constitution of India and to consequently set aside the same.

BRIEF FACTS:

2. The relevant facts, as per the affidavit filed in support of the Writ Petition, are, in brief, set out as under:

3. The 2nd respondent-The Rail Land Development Authority issued a Request For Proposal (RFP) vide RFP Notice dated 14.06.2022, inviting proposals through e-tendering on single stage two cover bidding system from interested eligible bidders as per the conditions of bid documents for 'Major UP-Gradation of Visakhapatnam Railway Station of East Coast Railway on Engineering, Procurement and Construction (EPC) Mode'. M/s. Braithwaite & Co. Ltd., (A Government of India Undertaking), whose administrative control was taken over by the Ministry of Railways from Ministry of Heavy Industries on 06.08.2010 and M/s. Cognition Projects Pvt. Ltd., formed a consortium called M/s. Braithwaite & Co. Ltd., and M/s. Cognition Projects Pvt. Ltd., (Consortium) - M/s Braithwaite & Co. Ltd., as the lead member of the said consortium, participated in the tender process and emerged as selected bidder. Accordingly, a Letter of Acceptance (LoA) was issued on 14.09.2022 specifying that the period of the construction is 36 months from the Appointed Date. The petitioner in terms of the LoA furnished Performance Security of Rs. 11,66,73,024/- on 07.10.2022 and thereafter the 2nd respondent, on behalf of Her Majesty, the President of India, entered into EPC Agreement No.RLDA/2022/CA-04 with the petitioner Consortium on 15.11.2022.

4. The Agreement value is Rs. 388,91,00,790/-. As per the Agreement, the contract work has to be completed in accordance with the specifications and drawings and conditions of the Contract on or before 29.11.2025 and the works shall be maintained for a period of 18 months from the date of issue of completion certificate. After issuance of Letter of Acceptance, joint site inspections were conducted on 19.09.2022, 16.10.2022 and 18.10.2022 and during the said visits, Railway Officials instructed some major modifications in the already approved Master Plan and the petitioner addressed a letter dated 28.10.2022 for confirmation of the modifications. On 03.11.2022 the respondents addressed a communication, inter alia, stating that the Master Plan prepared also contain provision for Additional two (02) railway tracks and one (1) platform.

5. In view of the same, the scope of the work is revised significantly as the area of the Air Concourse to be built as well as the length of the Foot Over Bridge (FOB) is increased to a considerable magnitude, resulting in enhancement in the cost of construction. It also resulted in preparation of Master Plan afresh and the Revised Master Plan was approved by the respondents on 20.04.2023.

6. In the meanwhile, the respondents issued 15 days Notice on 24.03.2023 for termination of contract alleging failure on the part of the petitioner in achieving the project milestones. The petitioner consortium submitted its reply on 05.04.2023 and the respondents did not take any further action. Subsequently, the 4th respondent issued a Notice dated 06.11.2023 to which the petitioner submitted reply dated 16.11.2023. Thereafter, through the impugned proceedings dated 26.12.2023, 4th respondent terminated the Contract / Agreement. Challenging the same, the present Writ Petition is filed.

PETITIONER'S SUBMISSIONS:

7. Mr. C.V. Mohan Reddy, learned Senior Counsel, made elaborate submissions with reference to various Articles / Terms of the Agreement.

8. Learned Senior Counsel sub