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2024 Supreme(MP) 81

IN THE HIGH COURT OF MADHYA PRADESH
Ravi Malimath, CJ, and Vishal Mishra, J.
Gannon Dunkerley Co. Ltd. v. M. P. Road Development Corporation Ltd. & Others
Writ Petition No. 2601 of 2023 (Jabalpur);
Decided on 8.1.2024

Advocates Appeared:
R.K. Verma with Sahil Sonkusale for petitioner; Prashant Singh, Advocate General with Anvesh Shrivastava for respondents No. 1 to 3/State; Devashish Sakalkar for intervenor.

Headnote:

(1) Constitution of India -- Art. 226 -- Civil P. C., 1908 -- O. 1 R. 10 -- intervention -- writ petition by contractor against termination of contract and subsequent recovery -- application for intervention by sub-contractor -- held -- there is no locus of sub-contractor to intervene in writ petition -- whatever dispute or claims he is raising is against petitioner, not against answering respondents -- it is an inter se settlement between petitioner and intervenor -- application rejected. [Para 2]

(2) Constitution of India -- Art. 226 -- contract -- writ petition by contractor against termination of contract and subsequent recovery -- scope of interference in contract matters is very limited -- in-house mechanism invoked by petitioner has been answered by authorities -- now only remedy available to petitioner is to invoke dispute resolution mechanism contained in arbitration clause -- no relief can be extended to petitioner in petition under Art. 226 against termination of contract and subsequent recovery. 2023 SCC Online SC 671 followed. 2019 SCC Online SC 1158 referred to. [Paras 9 & 11]

¼1½ Hkkjr dk lafo/kku & vuqPNsn 226 & flfoy çfØ;k lafgrk] 1908 & vkŒ 1 fuŒ 10 & e/;{ksi & lafonk dh lekfIr vkSj ikfj.kkfed olwyh ds fo:) Bsdsnkj dh fjV ;kfpdk & miBsdsnkj }kjk e/;{ksi ds fy, vkosnu & vfHkfu/kkZfjr & miBsdsnkj dks fjV ;kfpdk esa e/;{ksi dj lquokbZ dk dksbZ vf/kdkj ugha & og tks Hkh fookn ;k nkos dj jgk gS og ;kph ds fo:) gSa] mÙkjnkrk çR;FkhZx.k ds fo:) ugha & ;g ;kph vkSj e/;{ksid ds e/; ijLij dk le>kSrk gS & vkosnu ukeatwjA ¼iSjk 2½
¼2½ Hkkjr dk lafo/kku & vuqPNsn 226 & lafonk & lafonk dh lekfIr vkSj ikfj.kkfed olwyh ds fo:) Bsdsnkj dh fjV ;kfpdk & lafonk ds ekeyksa esa gLr{ksi dh O;kfIr vR;f/kd lkhfer gS & ;kph }kjk vkfJr vkarfjd ra= dk çkfèkdkjhx.k }kjk mÙkj ns fn;k x;k gS & vc ;kph dks miyC/k ,dek= mipkj ek/;LFke~ [kaM esa varfoZ"V fookn lek/kku ra= dk vkJ; ysuk gS & lafonk dh lekfIr vkSj ikfj.kkfed olwyh ds fo:) vuqPNsn 226 ds v/khu ;kfpdk esa ;kph dks dksbZ vuqrks"k ugha fn;k tk ldrkA 2023 ,llhlh v‚uykbu ,llh 671 vuqlfjrA 2019 ,llhlh v‚uykbu ,llh 1158 fufnZ"VA ¼iSjk 9 ,oa 11½

ORDER

1. Heard on I.A. No. 13792 of 2023 : an application under Order 1 rule 10 of the CPC seeking intervention in the writ petition on the ground that he is a sub-contractor.

2. There is no locus of the sub-contractor to intervene into the writ petition on the ground that whatever dispute or claims he is raising is against the petitioner and not the answering respondents. It is an interse settlement between the petitioner and the intervenor. Therefore, the intervenor is having no locus to intervene in this writ petition itself.

3. Therefore I.A. No.13792 of 2023, being not maintainable as the intervenor is having no locus to participate in the proceedings, is rejected.

4. This petition has been filed seeking following reliefs --

"(i) Hon'ble Court may be pleased to quash and set aside the order of recovery dated 24.1.2023 (Annexure P/1) passed by the respondent No.2.

(ii) Hon'ble Court further be pleased to quash the recovery of sum of Rs.85.42 crores imposed on the petitioner unilaterally and the respondents be restrained from ef ecting any recoveries from the petitioner through coercive means unless the dispute between the parties is finally adjudicated by an independent authority/arbitrator.

(iii) Hon'ble Court be pleased to restrain the respondents from effecting any recovery from the petitioner in pursuance to the impugned order dated 24.1.2023 (Annexure P/1) from the bank guarantee BG No.09020005619 dated 16.3.2019 for Rs.7,54,92,483/- lying with the respondents or through any coercive means against the petitioner unless the dispute between the parties is finally adjudicated by an independent authority/arbitrator.

(iv) Any other suitable relief deemed fit in the facts and circumstances of the case may also kindly be granted together with the cost of this petition. "

5. It is the case of the petitioner that petitioner is a registered Public Ltd. Company constituted under the Companies Act, 1956. The work of rehabilitation and upgradation of Barela to Mandla section of NH-12-A from the existing kilometer 22/8 to 89/6 on Engineering, Procurement, Construct (EPC) basis in accordance with the terms and conditions setforth in the contract NIT was issued by respondent No.1 wherein the petitioner submitted the bid. The petitioner's bid was accepted and a letter of acceptance dated 27.7.2015 was issued. In terms of the LOA, a contract was also executed between the parties. Cost of the work was Rs.251.64 crores and the time period for completion was 18 months. That vide letter dated 24.1.2023, it was informed that the petitioner failed to perform contractual obligations despite sufficient opportunities being granted and have committed material breach and default of the provisions of the contract agreement and accordingly the contract agreement stood terminated and a recovery is directed to be made from the petitioner. The same is put to challenge by filing a writ petition on the ground that there is a procedure for in house dispute resolution mechanism and the petitioner had invoked the same. As the same is pending consideration without deciding the dispute raised by the petitioner, no orders for recovery could have been passed. Placing reliance upon the judgments passed by the Hon'ble Supreme Court in the case of Tulsi Narayan Garg v. M.P. Road Development Authority : 2019 SCC Online SC 1158 the petitioner has filed the present petition.

6. Initially, this Court granted interim relief to the petitioner on 1.2.2023. Thereafter, on an application I.A. No.2537 of 2023 seeking a direction to the respondents to remove the seal of the premises of the petitioner and to permit the petitioner to remove the articles of his ownership as well as that of his subcontractors, an order dated 20.3.2023 was passed. The Court has rejected the application. But, on a concession given by the Advocate General that as there are certain perishable items, the respondents may look into the same and may release the same on terms and conditions. Anoth

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