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2019 Supreme(Gau) 910
IN THE HIGH COURT OF GAUHATI
Arup Kumar Goswami, Manish Choudhury, JJ.
National Highways and Infrastructure Development Corporation Ltd. and Others – Appellant
Versus
M/s. T.K. Engineering Consortium Pvt. Ltd. – Respondent
Writ Appeal No. 171 of 2019
Decided On : 23-09-2019
P. Anand, Adv., S. Sarma, Adv., G. Mahajan, Adv., S.S. Dey, Adv., D.J. Kapil, Adv.
Headnote:
Constitution of India – Article 226 – Remedy in Case of Termination of Contract Agreement – This intra-court appeal is filed by the National Highways and Infrastructure Development Corporation Ltd. (NHIDCL) and its functionaries against the common judgment and order, passed by the learned Single Judge in WP(C) 3452 and WP(C) 3723 – Counsel for Appellant submits that in a matter of the present nature, where the NHIDC had terminated the contract by taking recourse to Clause 23.1.2 of the Contract Agreement as the petitioner(respondent herein) had miserably failed to perform the work despite issuance of many notices including notice issued for slow progress of work and intimation for damages under Clause 10.3.2 of the Contract Agreement, Cure Notice under Clause 23.1.1, notice indicating intention to Terminate the Contract under Clause 23.1.2 prior to the one dated 24.04.2019, etc., the remedy of the petitioner, if any, was only in respect of damages by following the procedure prescribed for dispute resolution under Article 26 of the Contract Agreement and, therefore, the learned Single Judge was not correct in entertaining the writ petition – Held, A detailed dispute resolution mechanism is laid out under Clause 26.1 of the Contract Agreement – Having regard to the decisions noted above, Court is inclined to take a view that this is not a fit case to invoke the discretionary remedy under Article 226 of the Constitution of India – The learned Single Judge had also relegated the parties to the forum of conciliation as provided in the Contract Agreement – The direction of the learned Single Judge providing that the Deputy Commissioner, shall be the conciliator is, according to Court is, not in accordance with the provisions as contained in Clause 26.1 – In Court considered view, the direction of the learned Single Judge to continue the status quo order passed earlier during conciliation proceeding does not promote public interest – The appellants, by virtue of such order, have been restrained from inviting fresh tender – That some time will be required to again award the work after inviting fresh tender cannot be a ground to halt the entire process during the conciliation proceeding – As the Contract Agreement is a determinable one, the contractor would have adequate remedy by way of damages, if the contractor is able to establish that Termination Notice is illegal and wrongful – In view of the above discussions, Court is of the opinion that the impugned order of the learned Single Judge cannot be sustained in law and, accordingly, the same is set aside – The appeal is allowed – Court is make it clear that our observations made herein will not prejudice the case of either of the parties before the dispute resolution forum – Appeal Allowed
JUDGMENT :
A. K. Goswami, J.
This intra-court appeal is filed by the National Highways and Infrastructure Development Corporation Ltd. (NHIDCL) and its functionaries against the common judgment and order dated 11.06.2019, passed by the learned Single Judge in WP(C) 3452/2019 and WP(C) 3723/2019.
2. On the request of the learned counsel appearing for the parties, the appeal is heard for the purpose of disposal at the admission stage.
3. We have heard Ms. P. Anand, learned Additional Solicitor General of India, assisted by Ms. S. Sharma, Mr. G. Mahajan and Ms. D. Saikia, Advocates, appearing for the appellants. Also heard Mr. S. S. Dey, learned senior counsel, assisted by Mr. D. J. Kapil and Mr. J. Likha, Advocates, appearing for respondent No. 1 as well as Mr. A. Chamuah, learned counsel for respondent No. 3.
4. In response to a Global Notice Inviting Tender issued by the NHIDCL for construction of the civil work of "Four Laning of NF-37 from Nagaon to Rangagora (Km. 278.600 to Km. 297.000) in Nagaon District in the State of Assam under SARDP-NE, Phase A on EPC Mode", the writ petitioner submitted its bid on 16.11.2015. Having declared to be the selected bidder, a Letter of Acceptance was issued on 23.12.2015 at its bid amount of Rs. 159,20,00,000/-. A contract agreement was entered into by and between the Ministry of Road, Transport and Highways, Government of India and the petitioner on 02.02.2016. The petitioner furnished its Performance Security on 04.01.2016. A Supplementary Agreement was executed on 27.12.2017 in between the parties whereby the Project Milestone I (10%) and Project Milestone II (30%) was revised from 18.11.2016 and 21.07.2017 to 30.10.2018 and 28.02.2018, respectively.
5. On 24.04.2019, the General Manager (T), NHIDCL, issued a Notice for Intention to Terminate the Contract to the authorized signatory of the petitioner company as per Clause 23.1.2 of the Contract Agreement. The petitioner submitted a representation dated 02.05.2019 to the General Manager (T), NHIDCL, requesting to withdraw the Notice for Intention to Terminate the Contract in the interest of the project on the grounds stated therein. Coming to learn that certain instructions had been issued to take over the site from the petitioner without any further notice, the petitioner had approached this court by filing a writ petition, which was registered as WP(C) 3452/2019. In the said writ proceeding, this court passed the following order on 27.05.2019:
"Heard Mr. S. S. Dey, learned Senior Counsel assisted by Mr. D. J. Kapil, learned counsel for the petitioner and Mr. R. K. Talukdar, learned Standing Counsel, National Highways and Infrastructure Development Corporation Ltd. (NHIDCL).
Matter relates to proposal for termination of contract awarded to the petitioner regarding four laning of National Highway 37 from Nagaon bypass end to Rangagara.
In this connection, notice for termination was issued to the petitioner on 24.04.2019 giving liberty to the petitioner to make a representation within 15 days.
Petitioner has submitted representation dated 02.05.2019 responding to such notice. It is apprehended that without taking a decision on the representation submitted by the petitioner, termination order may be issued.
On a query by the Court, Mr. Dey submits that it is because of inability of NHIDCL to hand over continuous right of way throughout the stretch of work site that desired progress could not be made. This has been brought to the notice of NHIDCL authorities every now and then. But without appreciating the difficulties faced by the petitioner, impugned notice has been issued.
Mr. Talukdar, learned Standing Counsel prays for 15 days time to obtain instruction. Let the instruction be placed before the Court on the next date. In the meanwhile, the contract awarded to the petitioner should not be terminated.
However, petitioner shall expedite execution.
