Government can cancel contracts within lawful scope; absence of irreparable injury negates injunction applications.

1. The order passed by the Additional District Judge, Nagpur in Miscellaneous Civil Appeal No. 306 of 1986 on 27-1-1987 injuncting the defendant No. 1 - the Divisional Social Welfare Officer, Nagpur Division, Nagpur, from accepting fresh tenders up to 31-3-1987 and issuing a further mandate commanding him to place orders with the present Respondent 1, is challenged in this revision.

2. The factual position is more or less admitted as far as the controversy is concerned. The Divisional Social Welfare Officer, Nagpur invited tenders for the supply of Soji, Shira, Udits sweet as well as salty by the notice dt. 4-3-1986. The plaintiff - Best Bread Company, submitted its tender. There were other tenders also including the defendant No. 3 the present petitioner. The tender of the plaintiff came to be accepted and a contract came to be finalised on 30th June, 1986. The work under the contract was to commence from 7th July, 1986. However, by its letter addressed on 4th July, 1986 to the plaintiff, the contract was suspended until further orders. Ultimately, by its letter dated 8-9-1986, the contract came to be cancelled. On the cancellation of this contract, the plaintiff instituted a suit before the Civil Judge, Senior Division at Nagpur vide Civil Suit No. 1984/86. To this suit, the Divisional Social Welfare Officer, Nagpur and the Collector, Nagpur, were added as the co - defendants. The plaintiff has claimed a declaration that he continues to be a contractor for the supply of Udit for centres at Nagpur as per the terms and conditions of the contract executed on 30th June 1986 for the period from July, 1986 to 31st Mar., 1987. He also claimed that the implementation of the contract be enforced as it is binding on both the parties. He has claimed a prohibitory injunction restraining the defendants from inviting fresh tenders for supply of salty and sweet Udit to the children under G.C.D.S. project to the Nutrition Centres at Nagpur.

3. During the pendency of the suit, an application for temporary injunction came to be filed under O.39, R.1 of the Civil P.C. It is alleged in the application that the cancellation of his contract without assigning any reason is illegal. It is also claimed that due to illegal termination of the contract, irreparable injury is likely to be caused to him which could not be compensated in terms of money. A temporary injunction restraining the defendant 1 from inviting and finalising the tenders on 11-11-1986 and directing him to implement the agreement in question till the disposal of the suit was claimed.

4. The defendants 1 and 2 filed their reply to the application for temporary injunction. They denied that the action of the government in cancelling the contract was illegal. It was their contention that under the fresh terms of the contract, the Government had the power to cancel the same and they have exercised this power. The cancellation, according to them, is thus quite legal. It is also their contention that the Government had to take this action on the recommendations of the Committee appointed by the State Government. Their action in no way can be called either illegal or arbitrary.

5. During the pendency of this suit, the institution styled "as Bhartiya Magas Vargiya Zopadpatti Mahila Sarwangin Vikas Sanghatana, Nagpur" filed an application before the trial Court for joining them as a party and permitting them to participate in the proceedings. The trial Court allowed them to join. They, however, did not file their reply to the applic