JUDGMENT : S.C. Mohapatra. J. 1. Aggrieved by rescission of a works contract on 6-2-1987 in the midst of its execution, the Petitioner submitted a representation for reconsideration of the said order on 30-3-1987 and waiting for 16 days this writ application has been filed on 15-4-1987 for a declaration that the action is unconstitutional and for directing the State Government and its officers to entrust the balance work to the Petitioner after extending the period of contract. 2. The contract relates to construction of twenty numbers of' double storied flats which was time bound to be completed by 24.7-1986 within six months of the date of commencement on 24-1-1986. 3. Case of the Petitioner is that opposite parties were satisfied that the work could not have been completed within distipulated time and the circumstances were beyond his control as is revealed from Annexure-10. In spite of it they acted arbitrarily arid unreasonably in rescinding the contract. The same has prejudiced the Petitioner. Public interest is also affected as the same would cost more to the State exchequer. 4. Case of the opposite parties is that the rescission of the contract was in accordance with the terms of agreement when the Petitioner did not execute the work diligently and the progress was slow. The Petitioner stopped the execution in middle of July when there was 50% more of the work was to be executed. After due consideration at various stages, the contract was rescinded. 5. Normally, the application having related to interference with contractual obligations, we would have left the Petitioner to agitate the grievance in the common law forum. However, the rescission being alleged to be out come of arbitrariness of the officers of the State Government unreasonable and unjust, we heard the parties at length. Opportunity was given to the Petitioner to bring further facts to record by amendment of the writ application and the opposite parties also filed counter affidavit. 6. Mr. P. Palit, the learned Counsel for the Petitioner submitted that opposite party No. 4 did not supply the materials in time, to the Petitioner.
Opportunity was given to the Petitioner to bring further facts to record by amendment of the writ application and the opposite parties also filed counter affidavit. 6. Mr. P. Palit, the learned Counsel for the Petitioner submitted that opposite party No. 4 did not supply the materials in time, to the Petitioner. The Assistant Engineer requested the Petitioner for applying to extend the time and when Petitioner applied for the same believing on the representation of the Assistant Engineer and waited with the infrastructure to complete the work, the impugned order was communicated to him.' The action is, thus, arbitrary and opposite parties are bound by the principle of promissory estoppel. Mr. Palit submitted that the State Government would suffer loss in case the work is entrusted to another on account of price escalation but entrustment to the Petitioner to complete the work not involve any extra cost. 7. On the submission of Mr. Palit, the following points arise for consideration: (a) Whether arbitrariness in rescinding the contract by officers of the State Government ought to be examined in writ jurisdiction or the matter should be left to be agitated in common law forum, (b) Whether the rescission of the contract in this case is arbitrary, unreasonable or unjust. (c) Whether principle of promissory estoppel is attracted on the .facts of this case; and (d) Whether State Government would have to pay more if balance work is executed by another. 8. In Radhakrishna Agarwal and Others Vs. State of Bihar and Others it has been held: ....at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all. At this stage, no doubt, the State Act purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act.
No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statutes steps in and confers some special statutory power or obligation on the state in the contractual field which is a part from contract, (Emphasis supplied) 9. When the provisions of the statute can intervene the contractual field, constitutional obligation stands on a higher pedestral. The instrumentalities of the State are to be fair reasonable and just in their actions. Arbitrariness gives rise to favouritism, nepotism and corruption. This would be antethesis of equality clause enshrined in the fundamental rights, Chapter of the Constitution. Whether the action was fair, reasonable or just would however, depend upon facts and circumstances of each case. As has been held in the decision of the Supreme Court reported in M/s. Radha Krishna Agarwal and Ors. v. State of Bihar and Ors. (supra), where evidence is required to be taken for determination of the question, the matter should not be decided in writ jurisdiction and the aggrieved party should be left to approach the common law forum where all questions can be gone into effectively . The decisions relied upon by Mr. Palit reported in Harminder Singh Arora Vs. Union of India (UOI) and Others Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, and Central Group and Ors. v. Calcutta Metropolitan Development Authority and Ors.' 1982 (II) C. H. N. 90, of Calcutta High Court are not inconsistent with the aforesaid principle which were decided on the facts and circumstances of each of the cases. Mr. R. K. Patra, the learned Additional Government Advocate for the opposite parties relied upon the decisions reported in M/s. Radha Krishna Agarwal and Ors. v. State of Bihar and othersl (supra), Divisional Forest Officer Vs. Bishwanath Tea Co. Ltd., and Life Insurance Corporation of India Vs. Escorts Ltd. and Others. I have already referred to the decision in M/s. Radha Krishna Agarwal and Ors. v. State of Bihar and othersl (supra). The other two decisions are also based on the same principle. 10.
v. State of Bihar and othersl (supra), Divisional Forest Officer Vs. Bishwanath Tea Co. Ltd., and Life Insurance Corporation of India Vs. Escorts Ltd. and Others. I have already referred to the decision in M/s. Radha Krishna Agarwal and Ors. v. State of Bihar and othersl (supra). The other two decisions are also based on the same principle. 10. It is, therefore, to be considered whether the action in rescinding the contract was unreasonable, unjust and arbitrary. Petitioner is an experienced contractor since 1963 and is registered as 'A' class contractor under the State Government since 1969 which is being renewed from time to time now valid till 1989. Offer of the Petitioner to execute the work was accepted by the Chief Engineer, Buildings II Orissa, in his letter dated 2-1-1986. Agreement No. 551-F. 2/CE of 1985-86 having been executed, Petitioner received detailed work order and necessary instructions from the Assistant Engineer and commenced the execution. Appreciable progress in the execution not being felt, the Assistant Engineer intimated the Petitioner on 4-2-1986 that the collection of materials for raft foundation has not been completed. On 5-2-1986, the Assistant Engineer further intimated the Petitioner that no vat has been constructed for curing the bricks and no shed has been constructed for keeping Government materials. The required quantity of materials such as metals and chips were also not collected for raft foundation. On 10-2-1986, the Petitioner sent a reply that he had already collected die materials such as chips, metals, sand and bricks at site. No cement having been supplied construction of vat, level pillars, storage godown and temporary shades could not be able to be constructed. As there was no term in the items of agreement, he intimated that arrangement is being made by him for pumps which is to be paid to him. Two months after a letter was issued to the Petitioner on 23-4-1986 to show cause for the slow progress. On 6-5-1986 and 11-6-1986 letters were issued to the Petitioner impressing upon him to accelerate the progress of the work. On 14-8-1986. it was intimated to the Petitioner that approximately 50% of the work only was completed although the entire work was to be completed by 23rd July. 1986. Again another letter was issued to the Petitioner on 23-8-1986. On 5-9-1986 (Annexure-5) Petitioner was intimated by the Assistant Engineer that since second week of July.
On 14-8-1986. it was intimated to the Petitioner that approximately 50% of the work only was completed although the entire work was to be completed by 23rd July. 1986. Again another letter was issued to the Petitioner on 23-8-1986. On 5-9-1986 (Annexure-5) Petitioner was intimated by the Assistant Engineer that since second week of July. 1986 the work had been completely stopped and that the period for completion of the work had been spent but no application for extension of time had been made. The Petitioner was requested to submit application for extension of time. The Executive Engineer sent the proposal on 23-10-1986 to the Superintending Engineer for rescission of the contract. While the matter was pending consideration at that stage, Petitioner applied for extension on 24-11-1986. The same was, however, returned back to him as the cause of delay had not been stated. On 8th January, 1987, the Chief Engineer approved the proposal for rescission of the contract and on that basis the letter dated 6-2.1987 (Anneure-8) was issued to the Petitioner by the Executive Engineer,In the said letter dated 6-2-1987, Petitioner was requested to attend the final measurement on 16.2-1987. Petitioner having made a grievance that the measurement made by the Assistant Engineer was not acceptable and the work should be measured in presence of the Executive Engineer, on 21-3-1987 he was intimated to attend the final measurement on 4.4-1987. Petitioner submitted a representation to the Executive Engineer on 30-3-1987 for considering the question of allowing him to complete the work. 11. Petitioner having experience of 23 years with eyes wide open and having chance to visualise the situation under which he is to work offered to work. It is a common knowledge that in Orissa months of June and July come within rainy season. It is not the case of the Petitioner that rainfall in 1986 was abnormal. Keeping in mind that the work was time bound, since February, 1986 the officers were bringing to the notice of the Petitioner that the progress of the work was slow. Excepting assertion no material has been produced before us that the Department did not supply the materials in time. Not a single scrap of paper has been produced where the Petitioner requested the Department to make arrangement for dewatering. As in February, 1986, Petitioner could have arranged dewatering when the area was submerged.
Excepting assertion no material has been produced before us that the Department did not supply the materials in time. Not a single scrap of paper has been produced where the Petitioner requested the Department to make arrangement for dewatering. As in February, 1986, Petitioner could have arranged dewatering when the area was submerged. There is no whisper that he made an endeavour but failed. Even if the Petitioner was not responsible for the delay, he could have intimated the cause of delay much ahead of the scheduled date of completion praying for extension of time. The letters of the officers show that from middle of July Petitioner did not proceed with the work at all. It is not the case of the Petitioner that he was prohibited to work. Even after request to file the application for extension he took more than two months for filing the same. The cause of this delay has not been explained. In such circumstances, when the proposal of rescission was' considered at different stages in the background of the aforesaid facts taking into consideration facts and circumstances for and against it cannot be said that rescission of contract was unreasonable, unjust or arbitrary. 12. Coming to the question of promissory estoppel, it is seen from the letter of the Assistant Engineer dated 5-9-1986 that he only made a request to the Petitioner. There was no promise in the letter which would lead the Petitioner to believe that if application is made the same would be granted. The Assistant Engineer was also not to grant extension. The principle of promissory estoppel is not applicable to this case. 13. In the result, the writ application has no merit which is accordingly dismissed. No costs. H.L. Agrawal, C.J. 14. I agree. Final Result : Dismissed