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2022 Supreme(Megh) 316

IN THE HIGH COURT OF MEGHALAYA AT SHILLONG
H. S. THANGKHIEW, J.
M/s SD Construction & Anr. – Appellants
Versus
Union of India & Ors.- Respondents
WP(C) No. 409 of 2022
Decided on : 22-11-2022

Advocates:
Advocate Appeared:
For the Appellant : Mr. K. Paul, Sr. Adv. With Mr. S. Thapa, Adv.
For the Respondent: Dr. N. Mozika, DSG with Mr. B. Shangrit, Adv.

Headnote:(A) Contract Law - Principles of Cancellation - Writ application seeking to prevent premature cancellation of a work contract - Petitioner's claim based on alleged agreements made in prior meetings - Court reviewed conditions of cancellation, including monitored progress and readiness of work - Contracts for Defense Installations necessitate timeliness and adherence to agreements - Court found no illegality in the respondents' actions based on work progress and meeting guidelines. (Paras 1-8)

(B) Mandamus - The petitioner sought a mandamus against cancellation but court found the cancellation aligned with prior agreements and progress expectations, asserting no jurisdiction to interfere. (Paras 2, 9)

Facts of the case:
The writ application was filed by the contractor seeking to prevent the cancellation of their work contract, emphasizing an agreement made during a meeting for project completion extension until 31.12.2022. The respondents indicated dissatisfaction with work progress, citing the need for timely completion of a defense project.

Findings of Court:
The court affirmed the assessment made by the respondents regarding unsatisfactory progress, validating the cancellation of the contract.

Issues: The main issues examined were the legality of the cancellation of the contract and compliance with previously arranged timelines for project completion.

Ratio Decidendi: The court held that the cancellation was not arbitrary or illegal, finding it justified based on the monitoring of work and progress timelines.

Result: Writ petition dismissed.

Table of Content
1. petitioner's claim for contract continuation. (Para 1)
2. duration and monitoring conditions outlined. (Para 2 , 3)
3. assessment of compliance and monitoring failures. (Para 4 , 5 , 6 , 7 , 8)
4. legality of cancellation upheld. (Para 9)
5. no costs awarded; alternative remedies mentioned. (Para 10 , 11)

JUDGMENT :

H.S. THANGKHIEW, J.

1. By way of this writ application the petitioner seeks a mandamus to direct the respondents to not prematurely cancel the contract awarded to the petitioner No. 1, on the ground that the notices which have been impugned herein, run contrary to the arrangements that had been reached by the petitioner and the respondents in the meeting held on 09.06.2022. The grievance of the writ petitioner is that without adhering to the time limit as allowed, the respondents by letter dated 23.09.2022 have cancelled the said contract.

2. Mr. K. Paul, learned Senior counsel assisted by Mr. S. Thapa, learned counsel for the petitioners firstly has drawn the attention of this Court to the letter dated 24.06.2022, wherein it has been recorded and indicated therein, that pursuant to the conference held on 09.06.2022, the writ petitioner was called upon to accelerate the progress of the work, and it was agreed on the request of the writ petitioner, that extension be allowed till 31.12.2022, to complete the work. The learned Senior counsel submits that in spite of this clear assurance and agreement arrived at with the respondents, by the impugned letter dated 23.09.2022, the contract was cancelled. Without going into the other claims, he submits that the cancellation in the face of the letter dated 24.06.2022, is patently illegal and is liable to be set aside.

3. Dr. N. Mozika, learned DSG assisted by Mr. B. Shangrit, learned counsel, has placed reliance on the affidavit filed on behalf of the respondents, to show that that the decision arrived at was due to the fact that in spite of the concession, given to the writ petitioner, the progress of the work remained unsatisfactory. The records have been produced today before this Court and the learned DSG, has drawn the attention of this Court to the Minutes of the meeting held on 09.06.2022, and submits that the decision of the Additional Director General as contained in the Minutes though allowing for a prescribed, realistic time frame, it also inserted a rider that the progress of the work was to be closely monitored on a weekly basis, and any recommendation for cancellation of the subject contract was to be indicated by 10.07.2022, by the Chief Engineer (respondent No. 2). He therefore, submits that due to the tardy progress of the work, and as the matter concerns a Defense Installation, and further that enough concession had been given to the writ petitioner, the respondents were constrained to cancel the subject contract. Reference has also been made by the learned DSG to the letters dated 14.07.2022 and 05.08.2022, to show that the respondents were monitoring the work and that the progress was observed to be dismal, which therefore resulted in the impugned action.

4. I have heard the learned counsel for the parties.

5. From the perusal of the records, it is correct that extension of time up to 31.12.2022, for completion of the contract was granted to the writ petitioner, pursuant to the meeting held on 09.06.2022, but it is also correct that a condition was given therein that the progress of the work was to be closely monitored on a weekly basis, and that the Chief Engineer (respondent No. 2) was to intimate by 10.07.2022, as to the necessary course of action.

6. From the records as produced and also from the affidavit, it is noted that by letter dated 20.06.2022 at Para 3(e), it has been clearly stated that the work was to be completed by 31.12.2022 in all respects, and in case no progress is observed by 10.07.2022, actions as deemed suitable would be initiated for completion of the work. The next letter i.e. dated 05.07.2022 is also on the same lines, whi

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