IMPORTANT POINT
A terminated contract cannot be revived by administrative order, and the principles of transparency and fairness must be upheld in public procurement processes.

JUDGMENT :

Dinesh Mehta, J.

1. In these writ petitions, following questions have arisen for consideration of this Court :

(i) Whether the contract once cancelled by the awardee can be revived?

(ii) Whether the Chairman or any authority not being the Appellate Authority or the Court can order revival of an already terminated contract?

(iii) Whether by way of an administrative order, the termination of contract can be kept in abeyance?

2. The above questions are different than usual questions and the same have perhaps come up for consideration of this Court for the first time. Before dilating upon these questions, it would be appropriate to unfold the factual canvass, from which these questions have cropped up.

3. The respondent – Rajasthan State Mines & Minerals Ltd. (hereinafter referred to as ‘the RSMML’) is a Public Sector Enterprises of Government of Rajasthan - the State is having pervasive control over it and the Chief Secretary of the State is its Chairman. Being Public Sector Enterprises, the grant of contract by it is governed by an enactment known as Rajasthan Transparency in Public Procurement Act, 2010 (hereinafter referred to as ‘the RTPP Act’).

4. RSMML issued a notice dated 23.03.2023 inviting e-bids from the eligible entities for the contract of “Loading of limestone gitti of various sizes into tippers/dumpers from crusher hopper (s) and/ or different stacks lying at company’s Sanu mines, District Jaisalmer, its transportation from mines to railway siding at Sanu railway station and its unloading, stacking, watch & ward and mechanized loading of limestone gitti into railway wagons using front end loaders etc.” (hereinafter referred to as ‘the Loading & Transportation Contract or ‘the Contract’’).

5. On 30.06.2023, the technical bids were opened and immediately thereafter, financial bids out of the bidders, who were technically found fit were opened. The result of the financial bids were as under:-

(i) United Coal Carrier – (hereinafter referred to as ‘UCC’ or ‘United’) - L1

(ii) JRL Mining Pvt. Ltd – (hereinafter referred to as ‘JRL’) - L2

(iii) PMP Infratech Pvt. Ltd. (hereinafter referred to as ‘PMP’) - L3

(iv) Adhunik Khanan va Parivahan Theka Sahkari Samiti (hereinafter referred to as ‘Adhunik’) - L4

(v) Shri Karni Traders – L5

6. On 17.07.2023 a letter of acceptance came to be issued in favour of United Coal Carrier (‘United’), which in turn accepted to transport the quantity as per the bid document. To complete the facts, it may be noted that the letter of acceptance was later on amended vide Corrigendum dated 20.07.2023. Subsequently a formal contract (agreement dated 16.08.2023) came to be executed between ‘RSMML’ and ‘UCC’ (through Jai Tanot Mata Mining and Transportation Society Ltd).

7. Though the contractor (UCC) was supposed to commence the work on 17.08.2023 - within 30 days from the date of issuance of Letter of Acceptance, but it could not do so, on account of deteriorated law and order situation (as claimed by UCC). As the facts have emerged, RSMML issued reminders requiring the Contractor ‘UCC’ to commence work inter-alia stating that its established market tie-ups with customers like Steal Authority of India and Tata etc., are adversely affected as they are not able to get the coal and consequently, their sale commitment with them are being breached.

8. Though ‘RSMML’ issued various letters and required the contractor to commence the work, but the work could commence on 08.10.2023. However, since satisfactory quantity was not being lifted/transported, a score of letters were sent and lastly, a final notice dated 15.12.2023 came to be issued propsing action under the relevant clauses of the Contract. When the Company - ‘RSMML’ did not see any improvement, Clause 4.86 of the Contract was invoked and by way of order dated 24.12.2023, the contract was terminated and the contractor was blacklisted from participating in future tenders for a period of three years, as per Clause-5.42 of the contract.

9. Simultaneous wi