Non-compliance with statutory obligations and contractual clauses can justify the termination of a contract.

JUDGMENT

Sabyasachi Bhattacharyya, J. - The Court:

1. The writ petitions, bearing W.P.O. No. 466 of 2019 and W.P.O. No. 559 of 2019, are taken up for hearing together, since the cause of action for both arise from the same sequence of events.

2. The petitioner is the sole proprietor of the firm M/s M N Sultana Enterprise, which succeeded in an e-tender floated by the Kolkata Port Trust (KoPT) on September 18, 2017 and was issued a work order, bearing No. KOPT/KDS/CIV/T/2170/1877, on December 6, 2017 for upkeep of certain offices of the KoPT (respondent no.1) and providing semi-skilled/unskilled labourers with necessary tools and tackles for miscellaneous works at different locations for two years.

3. On March 20, 2019, the Superintending Engineer (Kolkata), Civil Engineering Department, KoPT (respondent no. 2) issued a letter to the petitioner's firm and another concern, intimating that Register for Payment of Contractor's Employees was required to be produced at the time of processing the bill for the work for a certain period and requesting the two concerns to strictly follow all the contractual clauses of the subject contract and KoPT General Conditions of Contract (GCC), including the Payment of Wages Act, 1936, to abide by the provisions of the Payment of Bonus Act, 1965 in respect of bonus to their employees and to ensure timely payments to the labourers/employees involved. The petitioner replied in writing on March 26, 2019, alleging that departmental officers of the KoPT do not accept payments of ESI, EPF, etc. made by the petitioner and asking for a cost analysis or break-up of the rate of such payments against each worker. However, vide letter dated April 10, 2019, respondent no. 2 reiterated his previous stand.

4. On August 8, 2019, the petitioner wrote another letter to respondent no. 2, expressing her inability to pay wages to the labourers and deposit EPF and ESI timely due to the petitioner's allegedly miserable financial condition. The petitioner also asked for clearance of the arrears due to the petitioner from respondent no. 1. The petitioner repeated a similar request vide her letter dated August 29, 2019.

5. Vide notice no. C/2175/382 dated September 2, 2019, respondent no. 2 warned the petitioner of termination of the subject contract if the petitioner failed to regularise all previous dues within seven working days, in which case the balance work would be carried out by engaging another agency at "Risk & Cost" of the subject contract.

6. The petitioner has preferred W.P.O. No. 466 of 2019 against the said notice dated September 2, 2019. A co-ordinate Bench, vide Order dated September 24, 2019, directed the petitioner to meet respondent no. 2 on September 26, 2019 at 11 a.m. in the office of the respondent no. 2 with all documentary evidence of compliance of the labour laws along with the bills for the months subsequent to April, 2019. Respondent no. 2 was to prepare a report, detailing the documents provided by the petitioner, and would be at liberty to look into the earlier bills of the petitioner, affording the petitioner an opportunity to produce any other document that he deemed appropriate.

7. The Chief Engineer, Civil Engineering Department, KoPT issued a further notice, bearing No. Civ/2175/2243, on October 14, 2019, giving the petitioner's proprietorship firm three working days to comply and complete the firm's tender obligations including clearing of all dues, failing which the tender contract would be terminated as per Clause 8.3 of the GCC. It was alleged that the firm's dues remained unpaid and that it was in gross violation of terms of contract with regard to ESI, EPT, EPS, EDLI etc. The petitioner issued an advocate's letter in reply on October 19, 2019, citing the pendency of W.P.O. No. 466 of 2019, alleging that no report had been filed by the Chief Engineer, Civil Engineering Department of the KoPT and that due payments of the petitioner of about Rs. 8 lakh for work done under the work ord