Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(RAJ) 529

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
DINESH MEHTA, J
PMP Infratech Private Limited – Appellant
Versus
Rajasthan State Mines and Minerals Limited – Respondent
S.B. Civil Writ Petition No. 200/2024 | S.B. Civil Writ Petition No. 416/2024 | S.B. Civil Writ Petition No. 1805/2024

Advocates:
For the Appellants/Petitioners: Mr. M.S. Singhvi, Sr. Counsel, Mr. Abhishek Mehta, Mr. Vikas Balia Sr. Counsel, Mr. Falgun Buch, Mr. R.N. Mathur, Sr. Counsel, Mr. Dinesh Kumar Godara, Dr. Sachin Acharya, Sr. Counsel, Mr. Devendra Singh Pidiyar, Mr. Gotam Bhadadra, Mr. Prateek Gattani, Mr. Gopal Krishna Chhangani
For the Respondents: Mr. Ravi Bhansali, Sr. Counsel, Mr. Suniel Purohit, Mr. Udit Mathur, Mr. Mohd. Amaan

A terminated contract cannot be revived by the awardee or any authority not being the Appellate Authority, emphasizing the need for transparency in administrative decisions.

Headnote:(A) Rajasthan Transparency in Public Procurement Act, 2010 - Contractual obligations - Termination of contract - The court held that a contract once cancelled by the awardee cannot be revived by the awardee or any authority not being the Appellate Authority. The Chairman of Rajasthan State Mines and Minerals Limited lacked jurisdiction to order revival of a terminated contract, and the administrative order to keep the termination in abeyance was deemed illegal. (Paras 92 and 93)

(B) Judicial Review - The High Court emphasized that the State must act transparently and fairly in contractual matters, and arbitrary actions are subject to judicial review under Article 226 of the Constitution. (Paras 48 and 91)

Facts of the case:
The Rajasthan State Mines and Minerals Limited terminated its contract with United Coal Carrier due to unsatisfactory performance and subsequently issued a letter of acceptance to PMP Infratech Pvt. Ltd. However, the Chairman intervened and kept both the termination and acceptance in abeyance, prompting the writ petitions.

Findings of Court:
The court quashed the order keeping the termination in abeyance, asserting that a terminated contract cannot be revived without proper legal authority.

Issues: Whether a terminated contract can be revived by the awardee or any authority not being the Appellate Authority, and whether an administrative order can keep the termination in abeyance.

Ratio Decidendi: The court ruled that a terminated contract cannot be revived, and the authority of the Chairman to intervene was questioned, highlighting the need for transparency and fairness in administrative decisions.

Result: The writ petition filed by PMP Infratech Pvt. Ltd. was allowed, and the impugned order was quashed, directing the initiation of a fresh tender process.

Table of Content
1. the court considers questions of contract revival and authority. (Para 1 , 2 , 3)
2. details regarding the contract process and its cancellation. (Para 4 , 5 , 6 , 7 , 8)
3. pmp infratech's acceptance of the offer and subsequent developments. (Para 9 , 10 , 11 , 12)
4. challenges raised by the parties regarding the contract. (Para 13 , 14 , 15 , 16)
5. court's observations on the procedural fairness and contract terms. (Para 19 , 20 , 21 , 22)
6. arguments regarding the authority and transparency of decisions. (Para 23 , 24 , 25 , 26 , 27 , 28)
7. court's view on the legitimacy of the administrative orders. (Para 29 , 30 , 31 , 32)
8. arguments from the respondents regarding the contract's legitimacy. (Para 35 , 36 , 37 , 38)
9. counterarguments regarding the reasons for contract failure. (Para 39 , 40 , 41 , 42)
10. discussion on the court's authority and contract interpretations. (Para 43 , 44 , 45 , 46)
11. court's stance on judicial review and its necessity. (Para 47 , 48 , 49)
12. judicial principles guiding the review of administrative decisions. (Para 50 , 51 , 52 , 53 , 54)
13. examination of the chairman's authority and its implications. (Para 55 , 56 , 57 , 58)
14. court's interpretation of the revival of terminated contracts. (Para 60 , 61 , 62 , 63 , 64)
15. discussion on the necessity of transparency in contract awards. (Para 65 , 66 , 67 , 68)
16. judicial restraint in contract disputes and its implications. (Para 69 , 70 , 71 , 72)
17. evolving judicial approach towards contract disputes. (Para 73 , 74 , 75 , 76 , 77)
18. court's stance on the necessity of intervention in contracts. (Para 78 , 79 , 80 , 81)
19. judicial review of administrative decisions in contract matters. (Para 82 , 83 , 84 , 85)
20. authority and procedural correctness in contract termination. (Para 86 , 87 , 88 , 89)
21. final conclusions on contract revival and administrative authority. (Para 90 , 91 , 92)
22. final judgment and directions for future actions. (Para 93 , 94 , 95 , 96 , 97 , 98)

CAV Judgment

1. In these writ petitions, following questions have arisen for consideration of this Court:

(i) Whether the contract once cancelled by the awardee can be revived?

(ii) Whether the Chairman or any authority not being the Appellate Authority or the Court can order revival of an already terminated contract?

(iii) Whether by way of an administrative order, the termination of contract can be kept in abeyance?

2. The above questions are different than usual questions and the same have perhaps come up for consideration of this Court for the first time. Before dilating upon these questions, it would be appropriate to unfold the factual canvass, from which these questions have cropped up.

3. The respondent – Rajasthan State Mines & Minerals Ltd. (hereinafter referred to as ‘the RSMML’) is a Public Sector Enterprises of Government of Rajasthan - the State is having pervasive control over it and the Chief Secretary of the State is its Chairman. Being Public Sector Enterprises, the grant of contract by it is governed by an enactment known as Rajasthan Transparency in Public Procurement Act, 2010 (hereinafter referred to as ‘the RTPP Act’).

4. RSMML issued a notice dated 23.03.2023 inviting e-bids from the eligible entities for the contract of “Loading of limestone gitti of various sizes into tippers/dumpers from crusher hopper (s) and/ or different stacks lying at company’s Sanu mines, District Jaisalmer, its transportation from mines to railway siding at Sanu railway station and its unloading, stacking, watch & ward and mechanized loading of limestone gitti into railway wagons using front end loaders etc.” (hereinafter referred to as ‘the Loading & Transportation Contract or ‘the Contract’’).

5. On 30.06.2023, the technical bids were opened and immediately thereafter, financial bids out of the bidders, who were technically found fit were opened. The result of the financial bids were as under:-

(i) United Coal Carrier – (hereinafter referred to as ‘UCC’ or ‘

Click Here to Read the rest of this document

2024 Supreme(Online)(RAJ) 529

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)DINESH MEHTA, JPMP Infratech Private Limited – AppellantVersusRajasthan State Mines and Minerals Limited – RespondentS.B. Civil Writ Petition No. 200/2024 | S.B. Civil Writ Petition No. 416/2024 | S.B. Civil Writ Petition No. 1805/2024

A terminated contract cannot be revived by the awardee or any authority not being the Appellate Authority, emphasizing the need for transparency in administrative decisions.

Cases Referred (3)

HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
DINESH MEHTA, J
PMP Infratech Private Limited – Appellant
Versus
Rajasthan State Mines and Minerals Limited – Respondent
S.B. Civil Writ Petition No. 200/2024 | S.B. Civil Writ Petition No. 416/2024 | S.B. Civil Writ Petition No. 1805/2024