IN THE HIGH COURT OF GAUHATI, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH), (ITANAGAR BENCH)
ROBIN PHUKAN, J.
M/s. Mahams Enterprises, Represented By Its Constituted Attorney Sri Yagindar Yadav and Anr. – Petitioners
Versus
The State Of A.P., represented by the Secretary, Deptt. Of UD and Housing, Govt. Of AP, Itanagar and Ors. – Respondents
WP(C) No.501 Of 2015
Decided On : 04-08-2022
Constitution of India, 1949 – Article 226 – Power of High Court to issue Certain Writs – Authority to make Payment – Learned counsel for respondent had rightly pointed this out during argument substance carefully gone through case law ratio laid down therein also bolstered his submission – Held, Court record that work done by petitioner was measured amount due was already paid petitioner was altogether paid petitioner reply to affidavit-in-opposition submitted by respondent denied same denial simpliciter is found to be not sound convincing –Writ petition and accordingly, the same stands dismissed.
JUDGMENT :
1. Heard Mr. A. Dasgupta, learned counsel for the petitioner and also heard Mr. P. Taffo, learned standing counsel (Urban Development Department) for respondent Nos. 2, 3, 4, & 6 and also heard Mr. Y. Riram, learned Junior Government Advocate for respondent Nos. 1 & 5.
2. In this writ petition, under Article 226 of the Constitution of India, the petitioner has put to challenge the order dated 30.03.2015, issued by the respondent No.3 rescinding the contract of construction of Guest House and Staff Quarter at Khonsa, and also for issuing direction to the respondent authority for measuring the work done and the additional work done by him and to direct the respondent authority to make payment for the same.
3. The factual background leading to filing of the present petition is briefly stated as under:-
“On 30.03.2012, the respondent No.3 issued one Notice Inviting Tender (NIT) for construction of a Guest House at Khonsa, at the cost of Rs. 1,98,36000.00/-. The petitioner had participated in the said bidding process and he was declared successful and the work was allotted to him on an agreed cost of Rs. 2,04,75,504.00/-(Two Crore four lakhs seventy five thousand five hundred four only) and a letter, dated 12.07.2012, was issued by the respondent No.3 to him, conveying acceptance of his bid and asked him to sign formal agreement within 7 days. Accordingly, the petitioner No.2 signed the formal agreement on 12.07.2012, which is registered vide registration No. 554 containing the terms and conditions of the contract and the scope of the work of construction of Guest House and Staff quarter, Type-1 (4 Nos.). The stipulated period of time of completion of the work was 18 months. But the petitioner had failed to carry out the execution of the work within the stipulated period of 18 months as there was existing building in the said construction site, which was required to be dismantled and to be developed and erection of boundary wall, protection wall and approach road etc, were also included in the same work and due to heavy rain in the month of April 2012 to October 2012, and April 2013 to October 2013, which affected the progress of the work and also because of non release of running bills at appropriate time and withholding of substantial amount from running bills which caused financial hardship to the petitioner No.2, and the same caused delay in execution of the work. Though the date of completion of the project was 21.01.2014, yet, the drawing of Type-1 Staff Quarter was handed over to him on 17.12.2013. Thereafter, on 19.03.2014, the respondent No.3, vide his order dated 25.03.2014, asked the petitioner No.2 for extension of time for completion of work from their competent authority and vide his letter dated 03.04.2014, he directed the petitioner No.2 to stop construction work till extension of time and accordingly, on 28.04.2014, he had file an application seeking for extension of time for 11 months. However, the respondent No.3, had extended the time till 30.09.2014 vide letter dated 08.08.2014. It is the contention of the petitioner that due to nonpayment of money in time and additional works allotted, the execution of the work got delayed and despite, respondent No.3,knowing the same fully well, in a most illegal manner rescinded the contract vide letter dated 10.10.2014, without giving an opportunity of being heard. Thereafter, the respondent No.3, vide order dated 30.03.2015, terminated the contract and forfeited the bill and other dues such as the Performance Security, Bid Security, and deducted the same from the running bills. Thereafter, the respondent No.3 again allotted the work to petitioner No.2 for carrying out the remaining work and executed a fresh agreement with him. But, due to nonpayment of dues the work could not be completed and then the respondent no.3 again terminated the contract with him. Thereafter, the respondent No.3 got the work done by another person. Being aggrieved by the action of the r
UMC Technologies Private Limited Vs. Food Corporation of India and Ors.
SupremeToday
The court upheld the administrative decision to terminate a contract for delay in completion due to the petitioner's failure to adhere to the agreement terms.
Failure to comply with the terms of a construction agreement can justify termination and forfeiture of deposits, and courts should exercise restraint in interfering with administrative decisions.
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.
Judicial review in contractual matters is permitted if state actions are arbitrary, but existing arbitration clauses must be respected as alternate dispute resolutions.
The main legal point established in the judgment is that the conclusion of a contract can occur upon the award of work, and non-compliance with tender and contract terms can justify contract terminat....
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