IMPORTANT POINT
The court upheld the validity of contract termination due to non-completion of work, affirming that claims for liquidated damages should be pursued in civil court.

JUDGMENT :

ROBIN PHUKAN, J.

Heard Mr. P.J. Saikia, learned Senior Counsel, assisted by Ms. M. Nirola, learned counsel for the petitioners. Also heard Mr. M. Kato, learned Dy.S.G.I. for the respondent Nos. 1, 2, 3 and 4 and heard Ms. S. Basar, learned Government Advocate, for the respondent No. 5.

2. In this petition, the petitioners M/s Sahabuddin Siddique and Sri Sahabuddin Siddique, have prayed for following reliefs:

(i) To direct the respondent authorities to release all the pending bills for the works executed by the petitioners, after carrying out a joint verification by the BRO authority and the petitioners, and pay the bill amount directly to the bank account of the petitioners, without imposing any liquidated damages, compensation etc.

(ii) To direct the respondent authorities to refund/releasethe withheld amount of Rs. 4,47,32,154/-, being deducted for liquidated damages including other deductions.

(iii) To direct the respondent No. 3 to refund the amount of Rs. 2,41,65,000/- covered by the Bank Guarantee No. 6343NDDG00019222 and Bank Guarantee No. 6343NDDG00007722, in connection with the aforementioned project.

(iv) To direct the respondent No. 3 to issue work completion certificate to the petitioners for the said project to the extent of 49% of accessible available scope of work executed by the petitioners.

3. The background facts, leading to filing of the present petition, are briefly stated as under:

“The petitioner No. 1, M/s Sahabuddin Siddique had been approved as subcontractor under the respondent No. 6, Valecha Engineering Ltd. (VEL), by the respondent No. 3, vide its letter dated 10.12.2021, to the extent of 49% value of contract work for a sum of Rs. 39,46,95,000/-, for ‘Construction and Upgradation of Tato-Mechuka Road (design chainage from km 23.800 to km 33.100 and existing chainage from km 24.800 to km 36.000)(PKG-II) in the State of Arunachal Pradesh’. The petitioners had submitted bank guarantee for a sum of Rs. 2,41,65,000/- for the aforementioned project as per Memorandum of Understanding (MoU), dated 15.06.2021, executed between the respondent No. 6 and the petitioner No. 1. Thereafter, the petitioners had started execution of the work, being approved as subcontractor. But, the work could not be completed in time due to bad weather condition, heavy rainfall, various travel restrictions etc. Thereafter, the respondent authorities in the BRO, had illegally deducted various amounts of money from the bills already submitted before them as deductions and compensations for reasons solely attributable to the respondent No. 6. But, despite all the aforesaid problems, the petitioners had carried out and completed 49% of the work. Thereafter, on 07.12.2023, the petitioners filed a representation before the respondent authorities to issue completion certificate, and also to release bank guarantee and to release the liquidated damages deducted by the respondent authorities as well as the amounts withheld by the respondent No. 6, and further requested to settle the pending bills for the work executed by the petitioners without imposing any liquidated damage. However, nothing has been done by the respondent authorities on account of termination of the contract with the respondent No. 6. Being aggrieved, the petitioners have approached this Court.”

4. The respondent Nos. 1 to 4 have filed their affidavit-in-opposition denying the averments made in the petition. It is stated that the work for construction and upgradation of Tato-Mechuka Road (design chainage from km 23.800 to km 33.100 and existing chainage from km 24.800 to km 36.000) to 2 lane with hard shoulders, under project Brahmank in the State of Arunachal Pradesh, on Engineering Procedure and Construction (EPC) Mode, was awarded to the respondent No. 6, being the L1 bidder, and that the respondent Nos. 1 to 4 are not aware of any Memorandum of Understanding between the petitioners and the respondent No. 6, and the petitioners were approved as subcontracto