IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
SANJAY KUMAR MEDHI, J.
MONSUR AHMED S/O NAYEEM UDIN AHMED – Petitioner
Versus
THE STATE OF ASSAM – Respondent
W.P. (C) No. 2243 of 2021
Decided On : 30-11-2022
Constitution of India, 1949 – Article 226 – Power of High Courts to issue certain writs – Termination of Contract –Two connected causes of action have propelled petitioner to approach this Court under Article 226 of Constitution of India – Petitioner, who is a contractor is aggrieved by two aspects – First being termination of a contract earlier allotted to him – Second being action to settle balance part of work with private respondent – Held, Court is opinion that while first challenge pertaining to termination of contract is not liable to be interfered with second aspect of allotting balance work to respondent no. 6 would require certain intervention from this Court as it involves huge amount of public money work in question is undoubtedly of immense public importance – Court cannot play role of primary authority – Glaring anomalies in said allotment, as would reveal from fact finding enquiry of Additional Chief Engineer appropriate action be taken against erring officials more particularly respondent against whom specific allegations have been made which are also substantiated in Enquiry Report – Writ petition accordingly stands disposed of.
JUDGMENT :
SANJAY KUMAR MEDHI, J.
1. Two connected causes of action have propelled the petitioner to approach this Court under Article 226 of the Constitution of India. The petitioner, who is a contractor, is aggrieved by two aspects, the first being termination of a contract earlier allotted to him and the second being the action to settle the balance part of the work with the private respondent. Apart from contending that the impugned action is unreasonable and arbitrary, the petitioner has alleged mala-fide which, according to the petitioner, vitiates the entire action.
2. Before delving into the issues which have arisen for determination, it would be convenient, if the facts of the case are narrated in brief.
3. Pursuant to a Notice Inviting Tender (NIT), the petitioner, who is a registered PWD contractor, vide order dated 24.01.2019, was allotted the Work of Construction and Maintenance of Anipur-Zamuang NEC Road to Dakhin Rampur in the district of Karimganj. The work was under PMGSY. It is the case of the petitioner that though the work was started and substantial progress was achieved, due to the onslaught of the Covid-19 pandemic, the progress was hampered. According to the petitioner, such unprecedented conditions were “Acts of God” which were beyond the control of the petitioner. The petitioner claimed to have submitted a number of representations which were, however, not paid any heed to. On 09.12.2020, an order was passed terminating the contract work which, according to the petitioner, was without any notice. The petitioner alleges that such unilateral termination was brought to the notice of the Superintending Engineer, who had issued a letter dated 12.01.2021 instructing the Executive Engineer to allow the petitioner to continue with the work. The petitioner claims to have continued with the work.
4. The grievance of the petitioner, as indicated above, is not limited to the aforesaid aspect of the matter of termination of the contract allotted to him. The petitioner also alleges gross illegality as well as mala-fide in the manner of allotting the work to the respondent no. 6 vide an order dated 20.02.2021.
5. The grounds of challenge formulated by the petitioner are disputed by the respondents. The respondent authorities have strictly denied that there have been any illegality or even irregularity in the process of termination of the contract by contending that the termination was done by following the due process of law. Further, the allegations of mala-fide for allotting the balance work are categorically denied and in any case, it has been submitted that overwhelming public interest was the need of the hour to complete the work which was construction and maintenance of a road under the PMGSY.
6. I have heard Shri K.N. Choudhury, learned Senior Counsel assisted by Shri D.J. Das, learned counsel for the petitioner. I have also heard Shri P. Nayak, learned Standing Counsel, PWD for the respondent nos. 1 to 3, Shri HRA Choudhury, learned Senior Counsel assisted by Shri AT Sarkar, learned counsel for the respondent no. 5 and Shri I. Choudhury, learned Senior Counsel assisted by Shri JMA Choudhury, learned counsel for the respondent no. 6. The counsel for the Department has also placed before this Court the records of the case.
7. Shri K.N. Choudhury, learned Senior Counsel for the petitioner has, at the outset, raised the issue of jurisdiction on the part of the authority to pass such termination order. According to the petitioner, the Chief Engineer of the Department, who had issued the order of allotment, is the authority who is vested with the power to terminate the contract. However, in the instant case, the termination order has been issued by the Executive Engineer of the Department and therefore, the impugned order is unsustainable in law.
8. The learned Senior Counsel submits that even on factual grounds, the impugned order of termination is wholly unjustified and unreasonable. By referring to the relevant document
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SupremeToday
The court emphasized that public authority's arbitrary termination of a contract without following due procedures violates principles of fairness and justness, meriting judicial intervention.
The court affirmed that principles of natural justice do not apply to non-statutory, purely contractual disputes where parties must adhere to the terms of their contract.
A party failing to comply with contractual terms may be subject to termination even if claiming force majeure circumstances.
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