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2025 Supreme(Gau) 1569
THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
KARDAK ETE, J.
M/s COMT SKC JV – Appellant
Versus
The Union Of India And Ors – Respondent
WP(C) 2689 of 2025
Decided on : 16-09-2025
Important Points
Subject
Contract Law - Public Procurement
Act Referred
Headnote
(B) Legal Principles - Waiver of contract terms - The court ruled that the requirement for submitting the Joint Venture Agreement was waived by the respondent authorities through their conduct. (Paras 33, 34)
(C) Contractor's Default - The notice for termination was flawed as no prior cure notice was issued, and the conduct of the authorities exhibited a lack of justification for the termination, which was deemed arbitrary and mala fide. (Paras 10, 14, 39, 45)
Facts of the case:
The petitioner entered into an EPC contract for the Development of Sairang Railway Station but faced termination due to alleged delays in submitting a Joint Venture Agreement. The petitioner contended they had submitted the agreement correctly and that the authorities accepted it without protest.
Findings of Court:
The termination notices were found unjustified and arbitrary, leading to an order for the authorities to refund the financial securities deposited by the petitioner.
Issues: The central issue was whether the termination was justified based on alleged defaults and the requirement for documentation.
Ratio Decidendi: The court concluded that the proper procedures were not followed by the respondents during the termination process, leading to a decision against the termination.
Result: Writ Petition allowed and termination quashed.
For the Petitioner:Mr. K. N. Choudhury, Sr. Advocate, Mr. A. Gautam
For the respondents: Mr. G. Goswami, S.C. NFR, Mr. A. K. Dutta, CGSC.
| Table of Content |
|---|
| 1. challenge to termination notice due to compliance issues. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9) |
| 2. arguments on waiver and improper grounds for termination. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 3. court's analysis of compliance and reasoning for unjustified termination. (Para 24 , 25 , 26 , 30 , 34 , 45) |
| 4. writ petition allowed and termination quashed. (Para 46) |
JUDGMENT :
KARDAK ETE, J.
Heard Mr. K. N. Choudhury, learned Senior Counsel assisted by Mr. A.Gautam, learned counsel for the petitioner. Also heard Mr. G. Goswami, learned Standing Counsel, N.F. Railway and Mr. A. K. Dutta, learned Central Government Standing Counsel for the respondents.
2. By filing this writ petition, the petitioner has put to challenge the notice dated 09.04.2025, issued by the respondent No. 3, Chief Engineer/CON, Northeast Frontier Railway (Construction), Guwahati, proposing termination of the contract dated 07.04.2025; the termination notice dated 05.05.2025, whereby the said contract agreement dated 07.04.2025 has been terminated; and also for a direction to allow the petitioner to continue the execution of work allotted under the contract agreement dated 07.04.2025, pursuant to NIT (RFP) dated 27.06.2024 for development of Sairang Railway Station on Engineering, Procurement and Construction (‘EPC’, for short) mode.
3. The petitioner is a Joint Venture having its Office at Gurgaon, Haryana, constituted between M/s COMT Constructions Private Limited, having its registered Office at Vani Vihar, Uttam Nagar, New Delhi, and M/s S.K. Construction, having its Office at Imphal, Manipur. It is registered under the Partnership act, 1932. The constituent partners, M/s COMT Constructions Private Limited and M/s S. K. Construction, jointly participated in the tender process undertaken by the respondent No. 3 for the development of Sairang Railway Station, Mizoram on EPC mode.
4. A Notice Inviting Tender (NIT) (RFP) dated 27.06.2024 was issued for the contract of undertaking the development of Sairang Railway Station on EPC mode with a tender value of Rs. 76,37,76,009.67/- (Rupees seventy six crore thirty seven lakhs seventy six thousand nine and sixty seven paise) only, which was uploaded on 28.06.2024. The petitioner participated in the tender process, which followed a Single-Stage Two-Packet System comprising of Technical and Financial Bid. The bid submitted by the petitioner, along with the rates offered, was found to be the most suitable, whereupon a Letter of Acceptance (LoA) dated 06.11.2024 was issued in its favour, selecting it to undertake the project. The total cost of the project at the accepted rates was Rs. 71,79,49,448.81/-(Rupees seventy one crore seventy nine lakh forty nine thousand four hundred forty eight and eighty one paise) only.
5. The LoA stipulates that the entire work shall be completed within 730 days from the appointed date, as per Article 26.1 of EPC Agreement Document, and authorized the petitioner to commence the work to ensure timely completion of the work as per the terms of the tender documents. Pursuant to the issuance of the LoA, the petitioner submitted a Bank Guarantee dated 28.11.2024 for Rs. 3,58,97,472.44/- (Rupees three crores fifty eight lakhs ninety seven thousand four hundred seventy two and forty four paise) only as Performance Security. It is contended that the petitioner commenced the work at the project site even prior to execution of the contract agreement with the respondent authorities.
6. The petitioner submitted an Earnest Money Deposit of Rs. 38,18,900/- (Rupees thirty lakhs eighteen thousand nine hundred) only, along with the Bank Guarantee, which amounting to a total of Rs. 3,97,16,372.44/- (Rupees three crore ninety seven lakh sixteen thousand three hundred seventy two and forty four paise) only. Considering the urgency expressed by the respondents, the petitioner immediately started mobilizing its machinery, equipment and manpower at the project site for execution of the work a
