The court emphasized the need for contractual provisions to aid in getting work done timely and properly, highlighting the violation of Article 14 of the Constitution of India due to the railway's grossly arbitrary actions.

1. The petitioner is a contractor who had been issued a work order by the NF Railways for construction of approach road to 21 railway level crossings. Pursuant to his tender having been accepted by railways letter dated 14.12.2006, he was asked to start work and complete by 13.3.2007. He was also advised to sign contract agreement within seven days and deposit performance guarantee. For various reasons not relevant for the present, neither contract agreement was signed nor performance guarantee given nor work completed.

Petitioner then, citing difficulties, sought for extension of time. By railways letter dated 21.6.2007 (Annexure-3), time was extended to complete the work by 30.9.2007. The petitioner submitted performance guarantee on 16.7.2007 even though the time granted had been extended upto 30.9.2007 by letter dated 21.6.2007 on 13.8.2007 that is one and a half months before the time was to expire, by the impugned order as communicated by letter dated 13.8.2007 (Annexure-7), the work order and the contract was terminated. This was preceded by a seven days notice issued on 12.7.2007 which was about three weeks from the date the extension was granted and a 48 hours notice was issued on 8.8.2007 which is almost two months prior to the expiry of time directing for completing the work at early date and show progress. Petitioner challenges this and submits that this would show a predetermined mind of the respondents to cancel the contract even before the period was over on ground of urgency to get the work done which was a facade which would appear from subsequent conduct wherein till date no fresh tender has been finalized even after six months of termination of petitioners tender which would not have been the case if the work had to be completed urgently. This is further compounded by the fact that on both occasions on retender, petitioner tendered and petitioner was in the first retender, the only tenderer and in the second retender, was the lowest by over Rs. 10 lacs still the work is not being given to the petitioner which should not have been the case if the work was of really urgent nature so as to justify premature termination.

The factual position is not disputed in the counter affidavits filed by the respondent- railways. Their only defence to their action is that petitioners work was slow and there was urgent need to get the work completed. This empowered them to cancel the contract. They had a right to cancel and they cancelled. The general terms and conditions then provided that a defaulting contractor cannot be given contract in fresh tenders and, therefore, petitioner was not considered again on retender. Railways did all this acting strictly by the Rules and the technicalities associated with it.

2. To the questions whether the plea that work was urgent and there being delay, there was necessity to cancel and make fresh settlements which fact was not born out from the conduct. The respondents submit that progress not satisfactory, the work getting delay, they exercised their contractual rights.

3. The fact remains that on 21.6.2007, the period to complete work was extended upto 30.9.2007. Therefore, once the respondents granted petitioner time upto 30th of September, 2007, they ought to have waited for the day and then taken action instead of starting to precipitate the action immediately after 21.6.2007 when three months extension was granted by issuing a seven days notice on 12.7.2007. On 12.7.2007, admittedly, petitioner had more than two months time at hand but a seven days notice was being issued. Again on 8.8.2007, a 48 hours notice was issued when petitioner still had more than one and half months time left. The petitioner appears to be correct in submitting that as is well known after June, 2007, there were unprecedented floods in the State due to unprecedented heavy rains. The railway crossings are village roads which become unaccessible and work cannot be carried out still substantial work was