Liabilities imposed post-termination in contracts must be properly quantified and cannot be unilaterally decided without due process.

J U D G M E N T

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Heard learned counsel for the petitioner, learned Standing Counsel appearing for respondents 1 and 2 and the learned Government Pleader appearing for the third respondent.

2. Petitioner was a transport contractor, who was issued Exts.P3 and P4 work orders for transportation of food grains from West Hill and Thikodi to Meenangadi depots of respondents 1 and 2. Alleging certain irregularities on the part of the petitioner, he was issued Ext.P5 show cause notice and finally, the work orders were terminated by Ext.P8 order dated 03.11.2010. Immediately thereafter, fresh work order was issued to another contractor. The termination by Ext.P8 order was at the risk and cost of the petitioner. Now, Exts.P13 and P14 have been issued to the petitioner, informing forfeiture of the security deposit of W.P.(C) No.29754/2011 `12,65,000/- and ordering recovery of balance amount of `29,05,983.76. It is challenging Exts.P13 and P14, the writ petition is filed.

3. Although various contentions have been raised by the learned counsel for the petitioner challenging Exts.P5, P8, P13 and P14, I am not inclined to entertain any challenge against Exts.P5 and P8 at this distance of time.

4. However, in so far as Exts.P13 and P14 are concerned, though in terms of the contract between the parties and Ext.P8 order the termination is at his risk and cost, what is demanded in Exts.P13 and P14 is the alleged actual additional expense incurred by the respondents in making alternate arrangements as a consequence of Ext.P8 order. This involves quantification of the liability and it could not have been unilaterally done by the respondents.

5. In that view of the matter, I am inclined to think that Exts.P13 and P14 ordering forfeiture and requiring the petitioner to remit balance amount is premature and that W.P.(C) No.29754/2011 these communications should be treated as show cause notices enabling the petitioner to file his objections in the matter. Therefore, I dispose of the writ petition with the following directions:-

That Exts.P13 and P14 will be treated as show cause notices and it will be open to the petitioner to file his objections in the matter, which the petitioner shall do as expeditiously as possible and at any rate, within four weeks from today. On receipt of the objections to Exts.P13 and P14 as above, first respondent shall issue notice to the petitioner, hear him and take a fresh decision in the matter.

Needless to say that till such time, further coercive action based on the impugned orders shall be kept in abeyance.