The need for compliance with the principles of natural justice in administrative actions that result in civil consequences.

O R D E R

This Writ Petition has been filed challenging the order dated

19.08.2020 passed by the second respondent, thereby cancelling the purchase order and liquidated damages to the tune of Rs.7,11,706/- was levied.

2. The Petitioner is one of the regular bidder for various electrical item tenders floated by the respondents. In the year 2019, the purchase orders were placed by the respondents for various circles with the petitioner, by way of floating tenders for procurement of 500 sets of Transformer Centre Set (TC Set) O & M works in the year 2018 dated 22.10.2018. The petitioner/Company had bid for the tender and it was declared as a successful bidder for the tender work and the respondents placed the purchase orders on the basis of the tender. As per the agreement, delay in supply to the respondents deducing liquidated tenders was agreed in the purchase order. However, as per the purchase orders, the second respondent failed to make payment in time and there was an abnormal delay. That apart, there was due from the respondents to the petitioner. Therefore, the petitioner did not have sufficient funds to pay for purchase of goods to make requirements made in the purchase orders. Though the petitioner duly informed the same to the second respondent, there was no sufficient funds for payment to the second respondent. Therefore, the second respondent cancelled the purchase order and levied liquidated damages.

3. The learned Senior Counsel appearing for the petitioner submitted that the petitioner was not given an opportunity of hearing before claiming damages and levy of liquidated damages. Therefore, the cancellation of purchase order is in excess of jurisdiction and it is clear violation of principles of natural justice. The second respondent had cancelled the purchase order in an arbitrary manner, that too without issuing a show cause notice to the petitioner. If at all the petitioner was given an opportunity, he would have explained for non complying the purchase orders only due to the delay on the part of the second respondent in making payment to the petitioner for the past supplies made by the petitioner. Though the parties agreed on the terms and conditions of the purchase order dated 04.03.2019 in Clause 10.3(i), the payments towards the supplies made by the petitioner/Company would be made within reasonable time and such payments were unreasonably delayed due to no fault on the part of the petitioner. In support of his contentions, the learned Senior Counsel for the petitioner relied upon the judgement of this Court in Messrs Chempast Sanmer Limited -vs- the Secretary (Order dated 01.09.2022 in W.P.Nos.32152, 34628, 34629 of 2012 and batch).

4. The second respondent filed counter affidavit and the learned Standing Counsel for the respondents submitted that the materials were not supplied as per the purchase orders. The supplier turned up in person and assured the second respondent that 50% of the material will be supplied in 30 days and another 50% withinin two months. However, the materials were not supplied as assured by the petitioner. Therefore, the second respondent cancelled the purchase order by order dated 19.08.2020 and the petitioner was imposed penalties based on terms and conditions stipulated in the purchase order. In fact, the petitioner had given reply dated 19.09.2020 that the balance amount of Rs.17,90,630/- is yet to be paid by the second respondent against the various purchase orders and requested to withdraw the cancellation of purchase order. On receipt of the same, the second respondent duly replied that the recoveries have been claimed based on the clause relating to liquidated damages for the purchase order. Therefore, the request made by the petit