The court affirmed that the principles of natural justice apply in contractual matters involving the State, but adequate opportunity for representation must be established to avoid arbitrariness.

JUDGMENT AND ORDER

1. These two writ petitions being connected and involving the same subject matter in issue, are being disposed of by this common judgment and order. In WP(C) No. 362 of 2023, the writ petitioner has assailed the cancellation of the works awarded to it in respect of the Upper Khri Stage I and Upper Khri Stage II Hydro Electric Project of 15 MW and 10 MW respectively, on the ground given by the respondents, that the project though technically viable, was commercially un-viable. The petitioner has based its claim on the fact that after the bidding process for the said project, a Letter of Intent had been issued in their favour on 11.01.2013, and that a Letter of Allotment was also issued on 26.03.2013, which culminated in the execution of two Preliminary Agreements both dated 09.05.2014 in respect of the projects. The petitioner’s stand is that the said closure of the project was contrary to the terms of the Preliminary Agreements and that instead of the issue being resolved, the respondents on 12.09.2023 announced the revival of the said projects with new partnership and under a new format. As such, directions had been prayed for, to restrain the respondents from issuing any tenders, bidding documents, work orders etc., in respect of the said Hydro Electric Project.

2. In the second writ petition i.e. WP(C) 18 of 2024, the petitioner has put a challenge to the impugned termination order dated 22.12.2023, which was issued during the pendency of WP (C) No. 362 of 2023, by which both the Preliminary Agreements dated 09.05.2014 stood terminated. The petitioner has thus, sought for withdrawal and quashment of the impugned termination order dated 22.12.2023.

3. Mr. D. Das, learned Senior counsel assisted by Mr. K. Talukdar, learned counsel on behalf of the petitioner has taken this Court through the sequence of events and submitted that for the said Hydro Electric Project, after the bidding process and execution of two separate Preliminary Agreements, which required the survey and investigation of the project sites and preparation of a Detailed Project Report (DPR), by the petitioner within a certain timeframe, the petitioner had completed the same as required and had submitted the DPR. However, he submits the project did not take off as the respondents raised various queries and sought clarifications, which delayed the execution of the project, even though the petitioner had co- operated throughout the deliberations which took place and had also complied with the additional requirements of the respondents. He then submits that without any notice to the petitioner, the respondents unilaterally decided to cancel the project during a meeting held of 20.04.2022, on the ground that the projects were technically viable but financially un-viable due to high cost. The petitioner he submits, had incurred substantial cost which was invested in the preparation of the DPR, and thus suffered irreparable loss, with the arbitrary termination or cancellation which should have taken place only after due notice.

4. The termination order dated 22.12.2023, it is contended cannot be termed as a mere communication as sought to be made out by the respondents, as the said order has referred to various clauses of the Preliminary Agreements, with allegations that the petitioner was in breach of the same thereby resulting in the termination. Learned Senior counsel submits that termination has civil consequences and therefore prior notice is an essential requirement. The last paragraph of the termination order dated 22.12.2023, he argues shows that the said Preliminary Agreements were subsisting as it is stated therein, that the termination order was issued in accordance with the Preliminary Agreements. As such, he submits what is clearly apparent from the facts of the case is the contradictory nature or stance, that has been adopted by the respondents, inasmuch as, in the impugned termination order though it is stated the Preliminary Agreements