STATE OF MANIPUR Vs. SIMPLEX PROJECT LTD.

JUDGEMENT

(1.) Heard Mr. M. Hemchandra, learned senior counsel assisted by Mr. Juno Rahman, learned counsel for the appellants. Also heard Mr. S. D Singh, learned senior counsel assisted by Mr. T. Momo, learned counsel for the respondent, Mr. N. Kumarjit, learned AG, Manipur assisted by Mr. H. Lenin, learned Addl. AG, Manipur and Mr. P. Vaiphei, Additional Chief Secretary (Works), Government of Manipur.

(2.) The respondents/writ petitioners filed a writ petition being WP(C) No. 32 of 2020 challenging the NIT dated 28-12-2019 issued by the Public Works Department, Government of Manipur. It was the case of the respondents/writ petitioners that the Public Works Department, Government of Manipur had issued an NIT dated 18-2-2010 for constructions of Capital Complex (Civil Secretariat Component at Mantripukhri, Imphal). The respondents being eligible had participate in the bid and was successful in getting the works. The letter of Intent dated 5-10-2010 was issued in favor of the petitioner and the period of execution of works was fixed at 36 (thirty-six) months from the date of execution of the Agreement between the parties. The Agreement was signed on 18-10- 2010 and accordingly, the original period for execution of works was scheduled to expire on 17-10-2013. After fulfilling all the terms and conditions, the respondents proceeded with the works. However, there were some difficulties due to non-availability of drawings, changes in specifications and other connected works due to which the work could not be completed within the prescribed period of 3 (three) years. The respondents therefore made an application for extension of time as provided under the contract. Thereafter, as there was extra works to be executed, the contract value was also increased to the tune of Rs. 350 crores. There was some dispute between the respondents and the appellants with regard to payment of bills and as a result there were communications between the respondents and the appellants. In the meantime, the respondents came across a news item in the local newspaper that coercive action would be taken against the respondents and therefore, being aggrieved, the respondents filed an Arbitration Petition being Art. Pet. (J2) No. 1 of 2018 before this Court and this Court by order dated 8-10-2018 directed status quo be maintained by the parties. During the pendency of the Arbitration Petition, a meeting was held between the parties to resolve the issue amicably and the appellants accordingly withdrew the termination letter dated 27-9-2018 with the condition that work should be completed by February, 2019 and the performance Bank Guarantee be revalidated on or before 6-11-2018. The respondent also wrote a letter dated 11-11-2018 requesting the appellants to grant extension up to 30-06-2019 and also to comply with the terms of the MOU dated 27-10-2018 by releasing the payments and maintaining cash flow in the project for its timely completion. The Arbitration Petition was also disposed of on 12-10-2018 recording the terms of the minutes of the meeting as agreed between the parties and the withdrawal of the termination order.

(3.) It was also alleged in the writ petition that the appellants failed to act as per the MOU dated 27-10-2018 and instead asked the respondents to complete the works of 3 (three) blocks. A Show Cause Notice dated 4-6-2019 was also issued apprehending that the work would not be completed by the respondents within the time agreed. Another Show Cause Notice dated 18-9-2019 was also issued to which the respondents replied on 25-9-2019 stating that the delay was not attributable to them. A further Show Cause Notice dated 17-10-2019 was issued to which the respondents replied on 25-10-2019 highlighting various reasons causing the delay. However, the appellants in arbitrary manner terminated the contract by letter dated 2- 11-2019.