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2024 Supreme(Ker) 1692
IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A. ABDUL HAKHIM, J.
M.A. James S/o Antony – Appellant
Versus
State of Kerala – Respondent
W.P. (C) No. 12595 of 2019, W.P. (C) No. 18018 of 2023
Decided On : 21-06-2024
For the Appellants : Kurian George Kannanthanam, Babu Joseph Kuruvathazha
For the Respondents: G. Baijuraj, M.G. Sreejith, M. Kabani Dinesh, Bimal K. NATH
Termination of contracts requires adherence to procedural fairness, necessitating a hearing for all parties involved to address concerns adequately.
Headnote:(A) Kerala Land Development Corporation Act, 1965 - Violation of contractual obligations - The petitioner’s contract for infrastructural development was terminated without proper hearing or adequately addressing concerns raised in stop memos; the court found order cryptic and warranted fresh consideration at a higher decisional level. (Paras 1, 3, 8, 10)
(B) Contractual Procedure - The necessity for adherence to procedural fairness in contract termination by relevant authorities was emphasized, ensuring both parties are afforded a hearing before a decision is made. (Paras 8, 10)
Facts of the case:
The petitioner was awarded a contract for significant developmental work. Following the issuance of stop memos, the work was terminated invoking clause 10 of the agreement without proper explanation or hearing.
Findings of Court:
The termination order was deemed inadequate and unsupported by sufficient reasoning, hence, a directive was issued for reconsideration at the Secretary level of the Government, allowing for a fair hearing.
Issues: Whether the termination of the contract was executed lawfully and in accordance with procedural fairness, considering the allegations against the officers involved.
Ratio Decidendi: A termination order must clearly address the parties’ concerns and provide an opportunity for hearing; the cryptic nature of the order invalidates the termination and necessitates further review.
Result: Writ petitions allowed; the termination order set aside with instructions for reconsideration.
JUDGMENT :
M.A. ABDUL HAKHIM, J.
1. In these two writ petitions, the petitioner is the same. He was awarded a contract by name Infrastructural Development Works at Kaipuzhakkari Padasekharam at Neendoor Panchayat of Kottayam District as per Ext.P1 agreement dated 16.07.2018 for an amount of Rs.1,44,61,461.71. The work involved the deepening of the pond. The site was handed over on 17.11.2018 and the work was started on 21.11.2018. During the pendency of the work, certain stop memos were issued against the petitioner and hence the petitioner filed W.P.(C)No.12595/2019 producing those Stop Memos as Exts.P5 & P6 and seeking direction to the respondents 1 to 4 either to permit the petitioner to carryout the work as per the Ext.P1 agreement or, in the alternative, discharge the petitioner from Ext.P1 agreement on executing the closure agreement.
2. The 2nd, and 3rd respondents have filed Counter Affidavits dated 19.11.2019 and 31.05.2020 in the matter. The petitioner has filed Reply affidavits to those Counter Affidavits.
3. During the pendency of W.P.(C)No.12595/2019, Order dated 25.04.2023 was passed terminating the work at the risk and cost of the petitioner invoking Clause 10 of the Ext.P1 Agreement. Hence the petitioner filed W.P.(c) No.18018/2023 challenging the said Order dated 25.04.2023 passed by the 2nd respondent, Construction Engineer, Kerala Land Development Corporation Limited which is produced as Ext.P10.
4. The respondents have not chosen to file a counter affidavit in W.P.(C)No.18018/2023.
5. Heard; Sri. Babu Joseph Kuruvathazha, the learned counsel for the petitioner, Sri. Bimal K. Nath, the learned Senior Government Pleader, Smt. Kabani Dinesh M. appearing for the Kerala Land Development Corporation Ltd. and its officers.
6. The learned counsel for the petitioner invited my attention to various documents to convince me that there is no fault on the part of the petitioner to complete the work; that on account of the illegal Stop Memos issued by the respondents, he could not complete the contract work; that the default was on the part of the officers for not taking the initial level, for which he is not in anyway responsible and that though it is stated that a level was taken on 21.12.2018, no such level was taken and there was no need to take level on on 21.12.2018 as the level taken on 17.11.2018 was available there.
7. The learned counsel appearing for the Corporation and the learned Government Pleader submitted that the matter requires deeper consideration, it involves so many technical issues and the termination was done only because of the faults attributable to the petitioner alone.
8. On going through the extensive pleadings and the other details available in these writ petitions, I do not think that the matter could be decided by this Court on its merits. However, on perusing the Ext.P10 Termination order, I find that it is cryptic and does not refer to any of the contentions of the petitioner. The learned counsel for the petitioner pointed out that it was passed without hearing the petitioner. Hence the matter requires reconsideration.
9. I find from the records that there are allegations against the officers of the Corporation in the matter. Though clause 10 of the Ext.P1 Agreement provides that the termination is to be done by the Construction Engineer of the Corporation, in the facts and circumstances of the case, I deem consideration of the matter at the Secretary level of the Government.
10. Accordingly, I dispose of these writ petitions setting aside Ext.P10 order produced in W.P(c) No18018/2023 and directing the Secretary to Government, Department of Agriculture, who is the first respondent in W.P. (C)No.12595/2019, to consider the matter afresh, after giving an opportunity of hearing to the petitioner as well as the Kerala Land Development Corporation Ltd., within a period of three months from the date of receipt of a copy of this judgment.
