Back
2025 Supreme(Online)(Ker) 56528
IN THE HIGH COURT OF KERALA AT ERNAKULAM
MR. ZIYAD RAHMAN A.A.TH, J
SURABHI EARTH MOVERS – Appellant
Versus
THE GENERAL MANAGER SOUTHERN RAILWAY – Respondent
WP(C) NO. 37741 OF 2023 | WP(C) NO. 39049 OF 2023
For the Appellants/Petitioners: SRI.S.SHANAVAS KHAN, SMT.S.INDU, SMT.KALA G.NAMBIAR
For the Respondents: SMT.MINI GOPINATH
Contract termination must consider practical challenges faced by contractors, especially related to local conditions affecting performance.
Headnote:(A) Contract Law - Nature of Work - Termination of Contract - Conducting work during peak monsoon season in a flood-affected area raised practical difficulties affecting contract performance - Petitioner's timely communication regarding difficulties was dismissed without adequate consideration; decision to terminate less than two months post-contract award deemed unjustifiable. (Paras 10-13)
(B) Urgency of Works - Importance of Safety - While timely completion is essential for safety, considerations regarding local conditions must be taken into account when assessing performance capabilities. (Paras 10, 11)
Facts of the case:
Termination of a contract for railway work due to inability to commence work during monsoon season highlighted by the petitioner. The decision was taken hastily within two months of contract execution.
Findings of Court:
The termination was unjustified as the contractors’ raised concerns about unique geographical challenges which were not adequately analyzed.
Issues: Whether the practical difficulties raised by the petitioner were sufficient to warrant reconsideration of the termination.
Ratio Decidendi: The court found the termination decision was not based on sound judgement as it disregarded the unique local challenges affecting performance.
Result: The order of termination is quashed and directions given to allow the petitioner to continue the work.
| Table of Content |
|---|
| 1. contract termination and re-tender issues. (Para 1 , 2) |
| 2. communication of difficulties in commencing work. (Para 3 , 4 , 5) |
| 3. importance of local conditions in contract execution. (Para 10 , 11 , 12 , 13) |
| 4. court's decision on contract reinstatement. (Para 14) |
JUDGMENT
[WP(C) Nos.37741/2023, 39049/2023]
Both these writ petitions are filed by the same petitioner, being aggrieved by termination of a contract and the consequential re-tender of the work. W.P(C) No.37741/2023 is filed challenging the order of termination and W.P(C) No.39049/2023 is filed challenging the notification issued by the respondents by which the work is re-tendered.
2. Earlier, in response to a tender floated by the 3rd respondent in W.P(C) No.37741 of 2023 (4th respondent in W.P(C) No. No.39049 of 2023), for carrying out the work of ‘Standardisation of Formation in Alappuzha P way Section’, the petitioner submitted tenders. Being the lowest bidder, the petitioner’s tender was accepted and Ext.P1 is the letter of acceptance dated 06.06.2023. As per the terms of contract, the petitioner had to complete the work within a period of 24 months. The petitioner furnished the performance guarantee required as per the terms and conditions. The work of the petitioner included standardisation of formation of the railway tracks passing through Thakazhi to Puthannar.
3. According to the petitioner, due to the peculiar nature of the terrain, and also the fact that the track was passing through the paddy lands, which would normally remain immersed under water during rainy season, the petitioner found it impossible to carry out the work during rainy season. Therefore, immediately after entering into the contract, the petitioner submitted Ext.P2 request on 20.06.2023, pointing out that, due to the monsoon time, it would not be possible to start the work, as the major portion of the work involved is earthwork. According to the petitioner it would be possible to execute only after the monsoon time.
4. In response to Ext.P2, Ext.P3 communication was issued by the 3rd respondent in W.P(C) No.37741 of 2023 (4th respondent in W.P(C) No. No.39049 of 2023), rejecting the said request and requiring the petitioner to show adequate progress in the work within seven days, in accordance with Clause 62 of the Standard General Conditions of Contract. The petitioner submitted Ext.P4 communication expressing the practical difficulties in starting the work at the relevant point of time. Thereafter, Ext.P5 notice was issued by the 3rd respondent in W.P(C) No.37741 of 2023 (4th respondent in W.P(C) No. No.39049 of 2023) giving the petitioner 48 hours, intimating that, unless the work is commenced, the agreement will be terminated, security deposit shall be forfeited and the performance guarantee shall be encashed. Ext.P5 was followed by Ext.P6 communication, terminating the contract.
5. The petitioner challenged Ext.P6 by filing W.P(C) No.27086/2023, which resulted in Ext.P7 judgment, directing the 2nd respondent herein to reconsider the matter, by taking into account Ext.P4 submitted by the petitioner. The decision was to be taken after giving the petitioner an opportunity for being heard. Accordingly, a hearing was conducted, in which the petitioner submitted Ext.P8, further explaining the difficulties faced by the petitioner, to commence the work. However, rejecting the same, Ext.P9 order was passed by confirming the order of termination of contract.
6. Challenging Ext.P9 the petitioner submitted W.P(C) No.37741/2023. This Court admitted the said writ petition and granted interim order directing the respondents to maintain status quo with respect to the security deposit and other contractual obligations of the petitioner. During the pendency of the said writ petition, a fresh notification was published, as evidenced by Ext.P11, for re-tendering the work. In such circumstances, W.P(C) No.39049/2023 was filed challenging the same. An interim order was passed in the said writ peti
