Rescission of a contract requires mutual agreement; unilateral termination is invalid. The court ruled that the previous contract was rescinded, allowing the Petitioners to recover certain withheld amounts.

Order :

1. This Civil Revision is directed against the Award dated 22.11.2016 passed by Chhattisgarh Madhyastham Adhikaram, Raipur ('Adhikaran' for brevity) in Reference Case No.9/2014, rejecting the claim of the Petitioners for refund of security amount, cost of maintenance, damages and interest etc.

2. The aforesaid challenge has been made on the following factual background of the case:-

(i) In September, 2008 the State of Chhattisgarh had floated Notice Inviting Tender for construction and maintenance of 11 Rural Roads under Pradhan Mantri Gram Sadak Yojana, Package No. CG-15-82 of District Rajnandgaon for the year 2008-09. As per the tender, the total amount of contract value was Rs. 843.32 Lakh and the contract period was for 12 months for completion of work till 14.10.2009.

(ii) The original Petitioner Late Anil Kumar Jaiswal being the lowest bidder was awarded the contract and the Agreement was executed between the parties on 1.10.2008 and the accepted value of work was Rs. 659.88 Lakh. The price of the contract was further revised to Rs. 570.61 Lakh. The extension was granted for completion of work till 15.1.2010 on account of naxal problem in executing the work.

(iii) The Petitioners completed 9 out of 11 roads, as one road i.e., Chhuikhadan to Budhanbhat, was already completed by the Public Works Department. However, the road relating to 'Tendubhata to Sarodhi' could not be completed on account of naxal problem. Hence, the Petitioners requested the Respondents for the foreclosure of the contract in light of clause 55.1 of the Agreement. The Executive Engineer wrote a letter to the Superintending Engineer for the foreclosure of the contract under clause 55.1, pursuant to which the Superintending Engineer in turn also wrote a letter (Annexure P-3/4) to the Chief Executive Officer for the foreclosure of the contract under clause 55.1 of the Agreement.

(iv) On 26.5.2010 (Ex. P-3), permission was granted by the Chief Executive Officer for the foreclosure of the contract for package No.15-82 as per Clause 55.1 of the Agreement with certain conditions that the Petitioners will complete the construction of the said road under a separate piece-rated work agreement as the main agreement was agreed to be foreclosed.

(v) Ultimately, on 28.5.2010 (Ex. P-3/2) the work was completed by the Petitioners and Work Completion Certificate was issued by the Executive Engineer-cum- Member Secretary, PUI-5, Pradhan Mantri Gram Sadak Yojna. Thereafter, the Petitioners requested for finalization of the final bill amounting to Rs.7,80,917/- which could not be finalized by the Respondents, but the Respondents issued notice to the Petitioners for recovery of Rs.28.211 Lakh towards imposed liquidated damages and penalties by deducting the payment of the final bill and also withheld the security deposit. On 8.10.2012 (Ex. P-7), the Petitioners raised their objection against the said recovery. However, on 27.4.2013 (Ex. P-1), the Chief Engineer, Pradhan Mantri Gram Sadak Yojna, rejected the claim of the Petitioner under clause 24 (Dispute Redressal Forum) of the Agreement.

(vi) Eventually, the aforesaid reference case under Section 7-A of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 was filed by the Petitioners before the Adhikaran claiming amount of Rs.81,569 Lakh under different heads. Respondents filed their Written Statement before the said Tribunal stating inter-alia that the Petitioners are not entitled for the said claim. However, the Respondents accepted the letter dated 26.5.2010 whereby permission was granted for the foreclosure of the contract for package No.15-82 as per clause 55.1 of the Agreement and only pleaded that the Petitioners are responsible for completing the work with a delay of 8 months.

(vii) However, the Adhikaran, by the impugned Award dated 22.11.2016, after hearing the parties, rejected the claim of the Petitioners holding that the Petitioners have failed to complete the work of one road i.e., Tendubhata to Sarodhi,