The duty of authorities to pass a reasoned order after considering the contents of the reply and the need for compliance with the principles of natural justice.

JUDGMENT :

VINEET SARAN, CJ.

The petitioner, which is a construction company, had entered into a contract with Orissa Water Supply and Sewerage Board (OWSSB)-opp. parties nos.2 and 3, for performance of contract works in respect of Design, Construction, Testing and Commissioning Gravity Sewers in Sewage Districts I & II of Bhubaneswar City, in connection with the work “Comprehensive Sewerage System of Bhubaneswar City under 12th Finance Commission Award”. Admittedly, the contract was initially for a period of two years, which was to commence on 01.02.2008 and to end on 31.01.2010. However, the same was extended from time to time and, lastly, on 21.04.2014, it was extended for a period of five months i.e. up to 21.09.2014. This extension, as well as the previous extensions, were given after considering the fact that certain facilities were required to be provided by the opp. parties, which were not provided by them to the petitioner. The last extension order dated 21.04.2014 would itself make it clear that even though there was delay, no penalty was imposed at the time of grant of extension, meaning thereby that the delay was not on account of the petitioner.

2. Prior to expiry of the extended period, the petitioner had applied for further extension on 14.08.2014, which application remained pending, and the petitioner was permitted to continue with the work beyond the extended period of 21.09.2014. Then on 25.07.2015, a show cause notice was issued by the opp. party no.3-Project Engineer to the petitioner, requiring it to show cause as to why appropriate action to rescind the contract be not taken. A detailed reply dated 13.08.2015 was submitted by the petitioner within time, followed by another reply dated 20.08.2015 and then by order dated 16.11.2015, the contract has been rescinded on the ground of the petitioner having failed to achieve the target. By the said order, the entire security deposit has been forfeited and 20% of the value of the left over work was to be realized from the petitioner. Initially, a petition was filed by the petitioner challenging the notice of show cause dated 25.07.2015. However, during pendency of this writ petition, the impugned order was passed on 16.11.2015, which has been challenged by way of amendment.

3. We have heard Shri S.K. Sarangi, learned counsel for the petitioner, Shri B.P. Pradhan, learned Addl. Govt. Advocate for State-opp. party no.1 and also Shri P.K. Bhuyan, learned counsel for the contesting opp. parties nos. 2 and 3 (OWSSB) and perused the record. Pleadings between the parties have been exchanged and on consent of the learned counsel for the parties, we are disposing of this petition at the admission stage.

4. Though this matter has a chequered history of contract having been initially awarded in 2008, which was to be completed within a period of two years, but what we notice is that time and again extension had been granted to the petitioner, which was lastly extended up to 21.09.2014. However, it is not disputed by the learned counsel for the opp. parties, and is also clear from the language of the show cause notice dated 25.07.2015, that the petitioner continued to work even after 21.09.2014. Shri P.K. Bhuyan, learned counsel for opp. parties nos. 2 and 3 has admitted that the payment for the work done after 21.09.2014 was also made to the petitioner. The notice of show cause dated 25.07.2015 also makes it clear that the performance of the petitioner after 21.09.2014 was also taken into consideration, and the petitioner was required to show cause as to why the contract be not rescinded under the provisions of the agreement, meaning thereby that the contract continued to be in operation. Two replies had been filed by the petitioner within the stipulated time of thirty days as provided in the show cause notice, which gave detailed reasons for not being able to complete the work in time and also seeking further extension of time. However, all that has been stated in the impugned o