The unilateral cancellation of a contract by a state agency without following due process and principles of natural justice is unjust, especially when prior approvals were granted.

JUDGMENT :

Mr. Vinod S. Bhardwaj, J.

CM-7830-CWP-2017 in CWP-79-2017

Allowed as prayed for subject to all just exceptions.

The rejoinder to the written statement filed on behalf of respondents No.4, 6 and 7 is ordered to be taken on record. Registry is directed to tag the same at appropriate place of the paper book and page mark the same.

MAIN CASES

Raising identical questions of law, both these writ petitions are being decided by a common judgment. For the facility of reference, the facts are extracted from CWP-11213 of 2015 titled as Babita Khair Versus State of Haryana and others.

Challenge in the abovesaid petition is to the order dated 13.10.2014 vide which respondent No.3- Haryana State Cooperative Supply and Marketing Federation (hereinafter referred to as ‘HAFED’), whereby allotment dated 7.05.2011 and agreement dated 08.09.2011 of godown for 6670 metric tonne capacity under the PEG Scheme, 2008 (10 year guarantee) has been cancelled without complying with the principles of natural justice.

FACTS OF THE PETITION

Briefly summarized, the facts of the case are that the HAFED- respondent No.3 was declared as a Nodal Agency for construction of Food Grain Godowns in Haryana under the 10 year guarantee scheme. Sealed tenders were invited under a two bid system from the interested tenderers who owned land or held land on lease for a minimum period of 13 years with permission to construct godown or willing to acquire land by ownerships/lease within 90 days from acceptance of tenders for construction of godowns for FCI storage to be managed and supervised by HAFED for a guaranteed lease of ten years on build, own and operate/lease basis for storage of food grains at different districts in the State of Haryana.

Being a willing bidder, the petitioner got executed a lease deed in her favour for land measuring 27 kanals 14 marlas for a period of fifteen years, registered in the office of Joint Sub-Registrar, Matlauda, Panipat vide Registration No.1028 dated 16.09.2010 alongwith the permission from the land owner for construction of godown and office place, as per requirements of respondent No.3-HAFED, at the rate of Rs.15,000/- per acre per year. The petitioner thereafter submitted the bid, which was opened on 17.09.2010. The relevant documents including the drawings, layout, copy of aks-sijra and site plan were also submitted as required. The specifications in which the godown was to be constructed had been laid down in Schedule-I to the notice inviting tenders. It was averred that in case the construction specifications were not covered by the FCI and CWC, then relevant IS Code 607 of 1971 for construction of godown was to be followed. It is averred that a District Level Committee (hereinafter referred to as ‘DLC’) comprising of the Naib Tehsildar, Matlauda; Manager FCI; DFSC, Panipat and District Manager HAFED as members carried out physical inspection of the site. He contends that there was an underground gas pipeline passing at some distance from the land where the petitioner proposed to construct the godown and that the sign boards of the said gas pipeline were clearly visible. A report dated 09.11.2010 (Annexure P-6) was submitted by the DLC wherein they specifically approved that the land in question was suitable for construction of godowns. There were various siting parameters on which the DLC was to submit its report about suitability of land.

On receipt of the recommendations of the DLC reporting about the suitability of the site, the petitioner was informed vide letter dated 17.05.2011 that the tender bid of the petitioner was accepted by HAFED. It was also communicated to the petitioner that her offer had been accepted at the rate of Rs.3.69/- per quintal per month without preservation for construction of 6670 metric tonne capacity godown under the PEG Scheme. The petitioner was directed to execute an agreement, as drafted by the respondents, and to submit the layout plan and drawings of the godown to be constructed. On receipt of