The central legal point established in the judgment is that the contract obtained by suppression of facts and false statements constitutes fraud, and the cancellation of such a contract is legally correct.

1. The petitioner, who is the registered Contractor under the respondent has filed this Writ Petition challenging the order of cancellation of the contract dated 18.9.2009. According to the petitioner, the respondent Municipality passed a Resolution as early as on 27.7.2009 stating that as there was six incomplete pending works, no new work should be allotted to the petitioner. The petitioner challenged the above said Resolution in the earlier Writ Petition No.16755 of 2009. When the matter came up for hearing, this Court, at the request of the petitioner, passed an order directing the respondent to consider his representation dated 7.8.2009 and pass orders on merits. Pursuant to the order, according to the petitioner, the respondent gave a detailed reply to the representation of the petitioner by their letter dated 9.9.2009 giving details of the six pending works, for which the petitioner also sent a further reply (though stated in the affidavit, not produced in the typed set and no date is being mentioned). Thereafter, the present impugned order has been passed on 18.9.2009, which according to the petitioner is not in accordance with law, as the provision stated in the Notice is not correct and it is only as against the disqualification of a Member and not for cancellation of the Contract and also no notice has been issued prior to the issuance of the impugned order. Therefore, he challenges the impugned order in this Writ Petition.

2. A detailed counter affidavit has been filed by the respondent. They only stated that the petitioner was doing contract work only from 1.2.2007 and the petitioner firm is a partnership firm consisting of Mrs.Selvi Thangaraj, P.Selvaraj and V.Anbu, which itself has been constituted only on 18.12.2006 and therefore, the allegation in the petitioners affidavit that they have been doing contract work for the past 20 years is a blatant lie and is a misleading statement averred in the affidavit thereby they have committed illegality in filing a false affidavit. However, as per the proceedings of the Municipal Commissioner dated 1.2.2007, though the petitioner was appointed as Contractor of the respondent Municipality with a condition that they have to renew their registration every year, as far as the earlier Writ Petition is concerned, the petitioners request to consider his representation was totally replied by the order dated 9.9.2009 itself. As already six contract work is pending by the petitioner without completion, the respondent passed a Resolution No.149 dated 27.7.2009 not to entrust any fresh work till completion of all pending works. Subsequently, according to the respondent, they came to understand and know that Mrs.Selvi Thangaraj is the wife of Vice Chairman of the respondent Municipality and the other partners are close blood relatives of the Vice Chairman of the Municipality. Further, out of the three partners, Mrs.Selvi Thangaraj alone produced the Solvency Certificate and the other two partners have not produced the Solvency Certificates. Suppressing all these things, the petitioner has applied and got registration as Class I Contractor with the respondent Municipality. According to the respondent, it is the violation of the provisions of the Tamil Nadu District Municipalities Act, 1920 and Engineering Manual for Urban Local Bodies in Tamil Nadu.

3. Further, the respondent would specifically state that there is a specific ban that the Government servants, their close relatives, Councilors, Mayors, etc., and their close relatives cannot participate in any tender. In the application itself, the petitioner gave a letter of consent, in which they would state that they certainly confirmed that none of the family members are holding any office in the Municipality. They have signed the same, suppressing the fact that the husband of one of the partner is the Vice Chairman of the Municipality the contract has been bagged by the petitioner firm. Therefore, the award of the contr