RAJESH MOHANTY Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this Writ Petition, the Petitioner has prayed for issuance of a writ of certiorari quashing the letter dated 8.10.2009 issued by the Executive Engineer, BBSR Central Division No. III, BBSR, Opp. Party No. 2, rescinding the contract for construction of boundary wall for Disaster Management Battalion of CISF & for writ of mandamus commanding the Opp. Parties to comply with their part of obligation on the terms & conditions of the contract dated 5.4.2007.

(2.) THE Petitioner was the successful bidder with regard to the tender dtd 17.11.2007 for construction of boundary wall for Disaster Management Battalion (4th Reserve Bn.) for CISF at Mundali, Dist. CTC. He was offered complete work at the cost of Rs. 1,03,27,772 which was 26.43% above the estimated cost of Rs. 81,68,985. The terms & conditions of the contract work were as per the standard format covered under the general conditions of the contract for the Central PWD Works. The Petitioner deposited Rs. 5,16,389 for the performance guarantee in the form of fixed deposit having its validity upto 12.1.2011. The same was accepted by the Opp. Parties. The agreement entered into contained various clauses imposing reciprocal obligation on both the parties, Copy of the said agreement is Annexure 2/1. As per the said agreement, the work was to be completed within 9 months & if there was a delay on account of other factors, the time stipulated was to be extended. Similarly, Clause 11 of the said agreement also called upon the contractor to complete the work in conformity with the drawings supplied by the Opp. Parties. Accordingly, the Petitioner approached the authorities for supply of drawings & giving vacant possession of the site. The authorities asked the Petitioner to commence the work on the site which was partially available & they only supplied the tentative drawings. Finding no other way, the Petitioner started the work to avoid the delay & in course of undertaking the work, the Petitioner faced a lot of inconvenience for non -availability of the total site & the final drawings. On 14.5.2008, the Petitioner wrote a letter to Opp. Party No. 2 stating about his difficulties. He further alleged that a portion of site was hilly area & there was no provision in the agreement to lay the wall on the hilly slope. In the said letter, he also stated about the revised price of the work due to hike in price of the materials. While the matter stood thus, Opp. Party No. 2 vide his letter dated 28.3.2009 extended the period of work to 31.5.2009. On 18.5.2009, Opp. Party No. 2 requested the Petitioner to expedite the work. As the work was not progressing due to non -availability of the map & drawings & non -handing over of the site, further vide Letter dated 30.6.2009 Opp. Party No. 2 extended the time to complete the work till 31.7.2009. In pursuance of the said extension of time, Petitioner further requested the Opp. Parties to reconsider the market price & enhance the rate. He also demanded vide letter dated 16.7.2009 for payment of the pending dues & pointed out all the deficiencies of the Opp. Parties for which the work could not progress. While the matter stood thus, on 20.7.2009 Opp. Parties gave a reply to the Petitioner that the department was not liable for the delay. However, they further extended the period for execution of the work till 31.8.2009. When all the correspondences were going on, on 8.10.2009 Opp. Parties issued a letter cancelling the contract by invoking Clause -3 of the agreement vide Annexure 2. In the said letter, Opp. Parties clearly stated that the contract was rescinded & earnest money deposit, security deposit & performance guarantee amount shall stand forfeited & further called upon the Petitioner to attend on 14.10.2009 for joint measurement. The Petitioner has challenged the said cancellation of the contract as illegal, arbitrary & contrary to the terms & conditions of the agreement & has prayed for quashing of the same.

(3.) FROM the above narration of facts, it appears that there is a dispute between the parties regarding completion of the work as per the agreement dated 5.4.2007. It is also the admitted fact that there is an arbitration clause in the said agreement. In the case of Smt. Kalpaha Kothari v. Smt. Sudha Yadav and Ors. with M/s. Parasnath Builders Pvt. Ltd. v. Smt. Sudha Yadav and Ors. reported in : AIR 2002 SC 404, the Apex Court held as follows: