Contract cancellations must adhere to principles of natural justice, necessitating fair procedures and proportionality in administrative actions affecting contractors.

ORDER 15.9.2021

Sujoy Paul,J.

This petition filed under Article 226 of the Constitution assails the order dated 11/1/2021 (Annexure P/10) passed by respondent No.2 whereby the contract was cancelled and the petitioner was put on ‘holiday listing’ for a period of two years with effect from 4/1/2021. This will deprive the petitioner from submitting his bid in future tenders during the holiday listing period. At the outset it is worth noting that learned counsel for the parties agreed that effect of ‘holiday listing’ and ‘black listing’ is one and the same.

2. Shorn of unnecessary details, the relevant facts as stated by the petitioner are that the petitioner Firm is involved in business of infrastructure development in oil and gas pipe line projects for past several years. The respondents issued notice inviting tenders (NIT) on 11/10/2014 calling the contractor for laying MDPE pipe line net work and PNG connections (Lar mild connectivity) in Ujjain city for supplying natural gas to domestic, commercial and industrial consumers for engagement of services on certain terms and conditions. The petitioner submitted his bid and succeeded in getting the contract. The work order dated 15/11/2014 is filed as Annexure P/4. The said contract was revised on 21/2/2018 through revised work orders dated 21/2/2018 and 3/6/2018 which are filed as Annexure P/5 and P/6.

3. The stand of petitioner is that right from 2014 when first work order was issued, petitioner deployed sufficient work force to fulfill the contractual obligation. Despite maximum efforts on the part of petitioner, the project work could not be completed because necessary work front was not provided by the respondents to the petitioner. The petitioner preferred several representations (Annexure P/7) to the respondents for the purpose of providing work front to the petitioner so that he can complete the work on its part. The petitioner averred that 82.50% work (total 824 out of total 1000 connections) were completed by the petitioner. Rest of the work could not be completed for want of work front in regard to completion of contract. Petitioner was all along ready and willing to complete the entire contractual work of 1000 connections within stipulated time. Petitioner is even ready today to complete the same in a very short span of time because only 176 connections remains due which could be completed on receipt of registration from respondents. Shri Prateek Maheshwari, learned counsel for petitioner during the course of argument, repeatedly urged that given the opportunity, the petitioner can still complete the remaining work within short span of time and petitioner should be given an opportunity by the respondents to complete the same.

4. The respondents issued a show cause notice dated 10/9/2020 to the petitioner. In turn, petitioner submitted his detailed reply on 14/9/2020 (Annexure P/9). In turn, respondents passed the impugned order dated 11/1/2021 terminating the contract and placing the petitioner on 'holiday listing'. In this order, it is mentioned that no reply has been filed by the petitioner to the show cause notice whereas the clear stand of petitioner is that reply to the show cause notice was indeed filed and duly acknowledged by the respondents. In the return they have accepted that the finding in the impugned order that no reply has been filed by the petitioner is a typographical error on their part.

Petitioner’s contention about maintainability:-

5. The parties are at loggerheads on the question of maintainability of this petition against the respondent company