The termination of a government contract without affording an opportunity to be heard violates principles of natural justice.

JUDGMENT

This writ petition is submitted by the petitioner, an A-Class Government Contractor, who is aggrieved by the Ext.P46 order passed by the 3^rd respondent herein, by which, the contract entered into by the petitioner has been terminated, it was ordered not to renew the license for five years and to rearrange the work at the risk and cost of the Contractor. The dispute is relating to the work undertaken by the petitioner, ie., Improvement of Nedungolam Bhoothakkulam Road and Nedungolam Bridge – Chirakara Road Km 5/900. Ext.P1 is the work order.

2. The dispute, which ultimately led to the termination of the contract, relates to the alleged failure on the part of the petitioner in completing the work within the period specified. As part of initiation of the proceedings against the petitioner, after a series of notices, Ext.P44 final notice was issued, requiring the petitioner to commence the work within a period of ten days from the date of receipt of the said notice. Ext.P44 was issued on 01.07.2025 and later the same was followed by Ext.P46 order by which, the contract was terminated, performance guarantee forfeited, the risk and cost liability as per clause 2116.2.1 of PWD Manual was determined, the petitioner was barred from bidding for any work for a minimum period of five years, ordered not to renew the license and also ordered to rearrange the work at the risk and cost of the petitioner. Various contentions have been raised by the petitioner, which, according to him, prevented the timely execution of the contract and, according to the petitioner, the same was due to reasons beyond his control. It is contended that, even though these aspects were highlighted before the authorities concerned by way of several communications, none of those communications were considered at any point of time and instead, Ext.P46 was passed without providing any opportunity for being heard.

3. In response to the contentions raised by the learned counsel for the petitioner, the learned Government Pleader submitted that, as regards Ext.P44, it was the culmination of a series of notices issued to the petitioner. In Ext.P44 itself it was highlighted that, it is the final notice and in case the work is not commenced within the specified time, the proceedings for termination of the contract at the risk and cost of the petitioner would be taken and the work would be rearranged. The same was not responded by the petitioner and it was in those circumstances Ext.P46 was passed.

4. However, on going through the contents of the Ext.P44 and Ext.P46, it can be seen that, the directions issued in Ext.P46, go beyond the proposals made in Ext.P44. To be precise, Ext.P44 contains termination of the contract at the risk and cost of the petitioner and the rearrangement of the work. However, when it comes to Ext.P46, it contains debarring of the petitioner for five years in entering into any contract and also imposes a prohibition in getting the license renewed as well. This is beyond the proposals made in Ext.P44. Ext.P46 would further indicate that before taking such drastic steps, no personal hearing was offered to the petitioner as well. In such circumstances, I am of the view that, Ext.P46 cannot be permitted to be implemented, as it was issued in violation of the principle of natural justice.

In such circumstances, this writ petition is disposed of, directing that, Ext.P46 shall be treated as a notice to which the petitioner shall submit a detailed objection within a period of two weeks from the date of receipt of a copy of this judgment. Upon submission of the same, the 3^rd respondent shall take final decision on the same in accordance with law, after giving the petitioner an opportuni