The court affirmed that principles of natural justice do not apply to non-statutory, purely contractual disputes where parties must adhere to the terms of their contract.

1. By this writ petition filed under Article 226 of the Constitution of India petitioner M/s. Utkal Highways through its partners has questioned the propriety and correctness of the order dated 15-4-2004 whereby respondent No.2, the Executive Engineer has terminated the contract dated 11-3-2003 entered into between the Water Resources Department and the petitioner herein to execute the work of construction of Masonry Structures and earth work of main canal from 19 Km. to 26 Km. at the cost of Rs. 128 lakhs, on the ground that the alleged action of respondent No.2 is illegal, arbitrary and bad in law and the same has been passed without affording reasonable opportunity to the petitioner in violation of principles of natural justice.

2. Brief facts leading to filing of this writ petition are that Chief Engineer Mahanadi Godavari Basin, Raipur vide Annexure P/2 invited tenders from the contractors who were registered with Engineer-in-Chief C. G. Water Resources Department Raipur in A-4 to A-5 Class, for construction of 14 Nos. Masonry Structures and earth work of main canal from 19 Km. to 26 Km. of Kharkhara Mohadipat phase-2 at the cost of 127 laks in response to that petitioner firm herein submitted its tender and after scrutiny, the same was accepted. In pursuance of that the petitioner's agreement dated 11-3-2003 was accepted and vide Annexure-P/4 dated 11-3-2003 the work order for the said work was given to the petitioner herein by respondent No.2 in which aforesaid work was to be executed within 11 months including 3 months mansoon period from 1st July to 30th September from the date of issuance of letter. The petitioner started work. However, on 8-5-2003, letter was issued by respondent No. 2 to the petitioner stating that the work has not been executed in conformity with the clause 3.3 of the agreement. The earth work was found satisfactory but for executing Pakka work the material was not collected at the site. It was further mentioned that on 15-4-2003 the petitioner's representative gave assurance to the Chief Engineer at the site at the time of site inspection that by 17-4-2003 the material for Pakka work will start coming at the site, but in spite of that the said work has not been done. Vide letter dated 17-11-2003 respondent No.2 again wrote a letter to the petitioner firm stating that under the agreement dated 11-3-2003 the work is to be completed within a period of 11 months. According to the schedule, which was given along with the agreement by now 85% work ought to have been completed, but so far only 44% work has been done. It was also mentioned in the notice that as per the agreement you were also required to submit report regarding progress of work, but that has not been submitted. Now, only 3 months' time is left whereas, 56% work is still to be completed. Therefore, the petitioner was asked to submit its work schedule for completion of the remaining work within a period of 3 days. The petitioner was also asked to complete the work accordingly, otherwise action will be initiated as per clause 4.3.3 of the agreement and for which the petitioner firm will be responsible. It was further mentioned that this should be treated as last warning. However, in response to the above said notice, no progress was made by the petitioner, therefore, vide letter dated 9-12-2003 the petitioner was informed that in response to the letter dated 17-11-2003 the petitioner was required to submit its schedule of completion of the remaining work within 3 days through the S. D. O. but t