IMPORTANT POINT
The main legal point established is that termination of a contract must adhere to the contractual provisions and the principle of natural justice. Additionally, the availability of alternative remedies does not preclude seeking relief under Article 226 in specific circumstances.

JUDGMENT :

Heard Mr. D.P. Borah, learned counsel for the petitioner. Also heard Mr. A. Barkataki, learned Standing Counsel for the Railway.

2. By filing this petition under Article 226 of the Constitution of India, the petitioner is challenging inter-alia, the letter dated 04.05.2016 issued by the Senior Coaching Deport Officer, whereby the work of “Pad locking of coaches at Guwahati and Kamakhya station, stick line Guwahati & Kamakhya, pit line Guwhati, New Guwahati and Kamakhya for a period of 2 years” has been rescined.

3. The case of the petitioner is that the petitioner was allotted the work of Pad locking of coaches at Guwahati and Kamakhya station, vide contract agreement dated 25.09.2014 for a period from 26.05.2014 to 24.05.2016. Accordingly, the petitioner commenced the subject work. However, later on, the said work was terminated for which, the present writ petition has been filed.

4. Mr. D. P. Borah, learned counsel for the petitioner submits that the work has been terminated without issuing the 7 days notice as required under the provisions of the subject contract. He accordingly submits that the termination order is in gross-contravention of the provisions of the natural justice and hence, the same warrants judicial intervention of this Court under Article 226 of the Constitution of India.

5. Mr. A. Barkataki, learned Standing Counsel for the Railway Department though conceeded that the requisite 7 days notice which has to be preceded before issuing the 48 hours notice was not issued in the subject matter, however, he submits that the same could have been taken before the authority of the Railway in terms of Clause-64 relating to settlement of dispute as provided under the contract agreement.

6. Heard the parties and perused the materials available on record.

7. It appears that the petitioner was awarded the work of Pad locking of coaches at Guwahati and Kamakhya station, in terms of the contract agreement dated 25.09.2014. It further appears that vide letter dated 14.12.2014, the Railway authorities has issued a ‘7 days notice’ in accordance with Clause-62 of the Standard General Conditions of Contract to the petitioner to commence work/to make good the progress failing, which action as provided in Clause-62 of the SGC i.e. to terminate the contract shall be issued. Pursuant to the aforesaid ‘7 days notice’, the petitioner vide letter dated 21.12.2015 responded to the Railway authorities stating that they have resumed the work of pad locking services at different places like Guwahati and Kamakhaya station w.e.f. 21.12.2015. It further appears that the Railway authorities vide letter dated 23.12.2015 allowed the petitioner to resume the work with immediate effect as per the terms and conditions of the contract.

8. Surprisingly, thereafter, on 23.04.2016, it appears that the Railway authorities has issued ‘48 hours notice’ in terms of the Clause-62 of the GCC based on the ‘7 days notice’ issued on 14.12.2015 to the petitioner to resume work else on expiry of the said period, termination of the contract shall be issued. Thereafter, vide letter dated 04.05.2016, the Railway authorities terminated the subject work allotted to the petitioner.

9. In order to appreciate the rival contentions of the parties, pertinent to refer to Clause63 of the contract agreement :-

63. Determination of contract owing to default of contractor: - (1) If the Contractor should: -

(i) Becomes bankrupt or insolvent, or

(ii) Make an arrangement with of assignment, in favour of his creditors, or agree to carry out the contract under a Committee of Inspection of his creditors, or

iii) Being a Company or Corporation, go into liquidation (other than a voluntary (liquidation for the purposes of amalgamation or reconstruction), or

iv) Have an execution levied on his goods or property on the works, or

(v) Assign the contract or any part thereof otherwise than as provided in Clause 7 of (these conditions, or

(vi) Abandon the contract, or

(vii) Persistentl