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2020 Supreme(Pat) 441

IN THE HIGH COURT OF JUDICATURE AT PATNA
MOHIT KUMAR SHAH, J.
M/s BSPCL Infrastructure Ltd. – Appellant
Versus
The State of Bihar - Respondent
Civil Writ Jurisdiction Case No.7192 of 2020
Decided on : 14-09-2020

Advocates:
Advocate Appeared:
For the Appellant :Mr. Y.V. Giri, Mr.Pranav Kumar, Advocate
For the Respondent: Mr. Anjani Kumar, Adv

Headnote:

Constitution of India – Article 226 – Termination of work contract and forfeiture of Bank Guarantee – Writ petition is definitely maintainable. (Para 6)

Government Contract – Termination of work contract and forfeiture of Bank Guarantee – Issues raised by petitioner company in its show cause reply especially ones pertaining to respondents having not made available unencumbered and encroachment free land to petitioner company and further not even a kilometre of land having been acquired for said purpose so as to enable petitioner to commence work in question, have neither been dealt with nor considered by respondents in impugned order – No cogent, clear and succinct reasons have been furnished in support of decision to rescind contract in question which is an indispensable component of a decision making process – Order stands vitiated – Impugned order quashed – All consequential actions taken in pursuance to order also stand quashed – However, liberty reserved to respondent Department to proceed afresh, in accordance with law. (Paras 11)

JUDGMENT :

The present writ petition has been filed seeking the following reliefs:-

“(i) To issue a writ/order/direction in the nature of certiorari for quashing the letter no. 695 dated 02.07.2020 issued under the signature of Executive Engineer, Flood Control Division, Katihar, whereunder the agreement no. 01 SBD/2018-19 dated 31.08.2018 for the work of construction of New Embankment Kuttighat-Bagdov Mahananda Lef Embankment (46.02 km), Nagar Right Embankment (20.10 KM), Kuttighat Jhawa Mahananda Right Embankment (66.23 KM), Ratwa Lef Embankment (32.92 KM) & Ratwa Right Embankment (33.10 KM) with 10 (Ten) Nos. A.F.S. & Brick on Edge Soling over the Top of the Embankment under Mahananda River Flood Management Scheme Phase-II has been terminated in terms of clause 14 (I) & (II) and Clause 3(VIII) of the clauses of the contract and further directed to forfeit the Bank Guarantee deposited against the mobilization advance.

(ii) To issue a writ/order/direction in the nature of certiorari for quashing the letter no. 594 dated 03.06.20920 issued under the signature of Executive Engineer, Flood Control Division, Katihar, whereunder the agreement no. 01 SBD/2018-19 dated 31.08.2018 for the work of construction of New Embankment Kuttighat-Bagdov Mahananda Lef Embankment (46.02 km), Nagar Right Embankment (20.10 KM), Kuttighat Jhawa Mahanand Right Embankment (66.23 KM), Ratwa Lef Embankment (32.92 KM) & Ratwa Right Embankment (33.10 KM) with 10 (Ten) Nos. A.F.S. & Brick on Edge Soiling over the Top of the Embankment under Mahananda River Flood Management Scheme Phase-II has been terminated in terms of clause 14 (I) & (II) and Clause 3(VIII) of the clauses of the contract.

(iii) To issue a writ/order/direction in the nature of mandamus commanding the respondents to make available the land required for the project encumbrance free in terms of clause 40 of the clauses of contract and allow the petitioner to complete the work in terms of Agreement dated 31.08.2018 bearing agreement no. 01 SBD/2018-19.

(iv) To issue a writ/order/direction in terms of mandamus commanding the respondents not to encash the performance bank guarantee no. 41931BGI4193IBGIS180067 dated 28.08.2018 amounting to Rs. 8,73,42,100.00 (Rupees Eight Crore Seventy Three Lac Forty Two Thousand One Hundred) and mobilization bank guarantee no. 0654018BG0000108 dated 31.10.2018 amount to Rs. 5,00,00,000.00 (Rupees Five Crores), mobilization bank guarantee no. 0654018BG0000109 dated 31.10.2018 amounting to Rs. 5,00,00,000.00 (Rupees Five Crores) and mobilization bank guarantee no. 0654018BG0000110 dated 31.10.2018 amounting to Rs. 5,00,00,000.00 (Rupees Five Crores) mobilization bank guarantee no. 0654018BG0000111 dated 31.10.2018 amounting to Rs. 6,83,55,200.00 (Rupees Six Crores Eighty Three Lac Fify Five Thousand Two Hundred), which has not been encashed by the respondents till today and the same is unreasonable and without basis for the very termination of the Agreement.”

2. Shorn of the details, it would suffice to state that the Water Resources Department, Government of Bihar, came out with an advertisement/notice for the work of construction of new embankment on the bank of Mahananda river. The period of completion of work, as mentioned in the NIT was 32 months and the date fixed for opening the technical bid was 03.08.2018. The petitioner had applied for the aforesaid work and was declared to be the lowest bidder in the technical bid, whereafter the petitioner was awarded the contract and the petitioner had entered into an agreement with the Executive Engineer, Flood Control Division, Katihar on 31.08.2018. It is the case of the petitioner that as per clause-40 of the Special Conditions of Contract, site for execution of work was to be made available as soon as the work was awarded, however, till the cancellation of the tender in question, no unencumbered and encroachment free land was made available to the petitioner company so as to enable it to start the work. It is the f

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