Judgment 1. The present writ application is ostensibly directed against the decision of the Divisional Railway Manager, East Central Railway, Danapur (respondent no.3) dated 7.6.2005 (Annexure I to the counter affidavit), which decision was communicated by the Divisional Engineer (Co-ordination) East Central Railway, Danapur, by his letter dated 16.6.2005 (Annexure 23 to the writ petition). The decision impugned is to the effect that the contract given to the petitioner was being terminated and consequently fresh tenders were to be issued for the remaining works at "risk and cost" of the petitioner. 2. It is the contention of the petitioner that the said decision is vitiated as a matter of law, for having been taken without due notice to the petitioner and having been based on non est facts ignoring material jurisdictional facts and as such the decision is clearly vitiated being perverse, capricous and arbitrary and thus amenable to judicial review by this court in writ jurisdiction. 3. In this writ petition the petitioner is a private limited company doing civil construction and other allied construction works and has its registered office at Patna. Respondent No. 3 is the Divisional Railway Manager, East Central Railway, Danapur, respondent no. 4 is the Divisional Engineer (Co-ordination), East Central Railway, Danapur and respondent no. 5 is the Divisional Engineer (Bridge), East Central Railway, Danapur. 4. On 17.6.2003, the Union of India in the Department of Railway through General Manager, East Central Railway, Hajipur, District-Vaishali, issued a tender notice no. 81/Misc/DNR/ 2003-04 for strengthening of railway bridge nos. 200, 201 and 202 by RCC-Jacketing between Bihta and Koilwar. The petitioner responded to the said on 30.7.2003. After due deliberation letter of acceptance was communicated by letter dated 25.11.2003 by the railways to the petitioner (Annexure 1 to the writ petition). In the said letter, apart from other thing it was stated that the works had to be completed within six months from the date of issue of the said letter, which would be 24.5.2004 but the agreement in this regard would only be executed on 8.07.2004. 5. The petitioner having been awarded the work on 25.11.2003 he was required to mobilize resources and start work as per approved design. 5. The petitioner having been awarded the work on 25.11.2003 he was required to mobilize resources and start work as per approved design. On or about 15.12.2003, the petitioner was given set of approved design but apparently when he started work he found difficulty in executing the same, which was brought to the notice of local authority of the railway and around 15.1.2004 works stopped on account of proposed changes in the approved design. The petitioner made formal request on 13.2.2004 in writing (Annexure A to the counter affidavit of railway) for change in design due to practical difficulty in working as per approved design. Again by letter dated 24.3.2004 (Annexure 2) the petitioner appraised the railway of the progress of work and also requested for being given the changed design, so that work could resume. Ultimately, it is only on 6.4.2004, the changed approved design was handed over to the petitioner by the railway (Annexure 3). It would, thus, be seen that though the petitioner was required to complete the entire work on 24.5.2004 there was inordinate delay on part of the railways in changing the design, which was given to the petitioner only on 6.4.2004. The petitioner by letter dated 14.5.2004 (Annexure 4) requested for extension of time for completion of the work upto 24.11.2004. 6. It appears that, in the meantime, the petitioner made efforts to procure tor steel rod etc. as per specification of railway. The contract stipulated tor steel rod of certain specification only to be procured from reputed manufacturers. Petitioner made enquiry from SAIL (Steel Authority of India Limited) and Tata Steel Limited but they expressed their inability to supply the same as per required specifications. 7. By letter dated 20.5.2004 (Annexure 5) the petitioner informed the railway authority that reputed manufactures are not manufacturing tor steel rod of the design specification. The petitioner had also requested that railway could supply the same from its stock if it had the same. This was so because if tor steel rod required as per design was not available from reputed manufacturers, the work could not progress and if petitioner was still to go ahead there would have to be change in technical specification/design which could only be with the permission of the railway. 8. On 25.5.2004 the originally set date for completion of the work expired. 8. On 25.5.2004 the originally set date for completion of the work expired. By letter dated 15.6.2004 (Annexure 6), the railway requested the petitioner to submit time extension application. The petitioner responded by communication dated 28/29.06.2004 (Annexure 7). The Divisional Engineer (Bridge), East Central Railway of Danapur, communicated the sanction of extension of time for completion of work upto 24.11.2004. 9. it is important to mention here that this extension was granted in terms of clause 17A(iii) of the General Condition of Contract (GCC) but the extension was at the same rate, terms and conditions of the above contract. For convenience clause 17A(iii) is quoted hereunder :- "In the event of any failure or delay by the Railway to handover the Contractor possession of the lands necessary for the execution of the works or to give the necessary notice to commence the works or to provide the necessary drawings or instructions or any other delay caused by the Railway due to any other cause whatsoever, then such failure or delay shall in no way affect or vitiate the contract or alter the character thereof or entitle the contractor to damages or compensation therefor but in such case, the Railway may grant such extension or extensions of the completion date as may be considered reasonable." 10. A reference to this clause would show that the extension was granted not because of any default on the part of the contractor (Petitioner) but because of delay caused by railway itself, which was admitted by railway in the said communication itself. 11. Once having granted extension by letter dated 8.7.04 (Annexure D to the counter affidavit), the railway authority directed the petitioner to complete the work expeditiously. It is pertinent to state here that there was no cognizance of the pending problem with regard to tor steel rod pending consideration of the railway. On 16.7.2004 (Annexure E to the counter affidavit of the railway) the petitioner again brought to the notice of the railway authority the problem with regard to the tor steel rod. etc. It was only on 20.7.2004 (Annexure 9) the petitioner was permitted to use 20 mm tor steel rod instead of 16 mm tor steel rod. 12. On 16.7.2004 (Annexure E to the counter affidavit of the railway) the petitioner again brought to the notice of the railway authority the problem with regard to the tor steel rod. etc. It was only on 20.7.2004 (Annexure 9) the petitioner was permitted to use 20 mm tor steel rod instead of 16 mm tor steel rod. 12. Here it would be seen that on 20.5.2004 the petitioner had undisputedly brought to the notice of railway about nonavailability of required tor steel, which was acknowledged and change was permitted by the railway only on 20.7.2004. 13. It is not disputed that the tender was filed and contract awarded as far back as on 25.11.2003. The work was to be completed within six months but for the reasons as aforesaid being change in design and change in steel rod specification and intervening rains the execution of the work got delayed. In the meantime, steel price and cement price shoot up. Steel price was increased by over 50% and there was substantial increase in cement price. As the contract was a short term contract it had not contemplated any price escalation but due to aforesaid unforeseen circumstances, which was not attributable to the petitioner at all and as indicated above admitted by the railway to be a delay on their part, the petitioner by his letter dated 21.7.2004 (Annexure 10) requested for revision of rates and repeated it by his letter dated 15.9.2004 (Annexure 11). The petitioner by his letter dated 23.9.2004 (Annexure 12) placed his grievance again and also pointed out that also running bills were not being paid, which was causing it considerable problem to meet its commitment. Thereafter the petitioner by his letters dated 27.9.04 and 7.10.2004 (Annexures 13 and 14 respectively) informed the railway that due to nonpayment of running bills and the pending problem of revised price it could not continue with the work. !t seems, in response to that the railway sent a letter dated 15.10.2004 (Annexure 15) stating that the work was urgently required to be completed and in case it was found that it was not possible to complete the work within the extended time i.e. upto 24.11.2004, the petitioner was advised to seek further extension of time, so that the work may be completed. The petitioner responded by his letter dated 25.10.04 (Annexure 16) requesting extension of time upto 15.6.2005 with revision in material price and repeated its request by subsequent letters. The railway responded by its letter dated 5.11.2004 (Annexure 17) stating that the petitioner could seek extension of time so that work is completed but in respect of the request of the petitioner for payment of revised price, it was ciearly stated that the railway was not in a position to either revise the price or supply the material departmentally. This letter is also annexed as Annexure G to the railway counter affidavit. 14. The petitioner by his letter dated 11.11.2004 (Annexure 18) again requested the railway to reconsider its decision but there was no response. After this, the petitioner again wrote to the railway on 22.11.2004 (Annexure-H/1 to the counter affidavit) clearly stating that in the changed scenario it was not possible to complete the work and as such requested for closure of the contract. Again not getting any response, the petitioner repeated his request by letters dated 11.4.05 and 15.4.05 (Annexures 20 and 21 respectively). 15. It appears that the authorities of the railway were cognisant of the difficulty which had been created in the execution of the work and as such on 21.4.05 final measurements were carried out in respect of the work already done apparently to ascertain the work remaining. The railway authorities then apparently considered the matter. Annexure 22 being the internal memo of Divisional Engineer (Bridge), East Central Railway to the Senior Divisional Finance Manager clearly shows that in a tabulated form the railway considered the delay in execution of project and specifically held that there was no fault of the petitioner. They noticed that there was abnormal rise in price of the steel. It was specifically noted that as the petitioner had sought extension on condition of revision of price which was not acceptable there appears to be no option but to close the contract. 16. It was clearly stated therein that any proposal for penalizing the petitioner either by way of forfeiting security deposit or by floating "risk and cost tender" would not be justified and would not stand scrutiny of any arbitration or legal proceedings. 16. It was clearly stated therein that any proposal for penalizing the petitioner either by way of forfeiting security deposit or by floating "risk and cost tender" would not be justified and would not stand scrutiny of any arbitration or legal proceedings. It was also emphasised as the work related to safety and had to be completed, the contract should be closed and fresh tender called for balance without any risk or liability on either party. This apparently was concurred by the Senior Divisional Finance Manager. It appears that the matter was considered at different levels and at all stages there were consistent recommendations that the delay was caused by the railways and in the meantime there was considerable rise in price of steel as such the contract should be closed without any liability of either side. Unfortunately even though all technical experts at the site and officials concerned were of unanimous opinion after considering the factum of delay being attributable to the railway and abnormal rise in price of steel recommended for closure without liability of either party, when the matter was then placed before the respondent no. 3, the Divisional Railway Manager, East Central Railway, Danapur he dissented. His consideration as to the matter has been brought on record by the railway in their counter affidavit as Annexure I and is dated 6.10.2005. The same is quoted hereunder: "The undersigned is not agreeable to approve the proposal in view of the following:- (i) There does not seem to be any justifiable reason as to why the work could not be completed even during the extended period of completion, i.e. 24.11.04. (ii) As per clause 17A(iii) of GCC, 2001, even if there is any delay on the part of Railway to hand over the drawings or any other reason, such delay will not vitiate the contract or entitle the contractor to the compensation but the railway may grant reasonable extension of time for the completion of the work. Again reasonable extension of time upto 24.11.04 was already sanctioned by the competent authority in this case, and therefore, the contractor should have completed the work in all respects by this date. (iii) The contractor had signed the contract and penalty clauses 6(i) & (ii) which are part and parcel of the agreement. Again reasonable extension of time upto 24.11.04 was already sanctioned by the competent authority in this case, and therefore, the contractor should have completed the work in all respects by this date. (iii) The contractor had signed the contract and penalty clauses 6(i) & (ii) which are part and parcel of the agreement. The contractor can, therefore, not raise any dispute regarding the applicability of penalty clause 6(i) & (ii) after having signed the agreement." 17 This decision is challenged and it is consequent to this decision that the impugned communication dated 16.6.05 (Annexure 23 to the writ petition) has been issued. It would, thus, be seen that the contract was not closed rather it was terminated virtually holding the petitioner solely responsible for delay in execution of the work and left to bear the consequences as penalty. 18. This writ petition was then filed. During the pendency of the writ petition, it is now a matter of record that the railway issued fresh tenders several times for the balance work at the "risk and cost" but no one came forward and the work though related to safety remained incomplete merely because the railway was not ready to pay the cost of escalation due to delay caused by it. 19. It is in this undisputed factual background that the petitioner has challenged the decision of the railways. It is submitted that respondent no. 3 when he dissented from the views expressed by all technical officials of the railway totally misdirected himself on basic jurisdictional facts. It is submitted that he ignored all findings which were inconvenient to the railway and played upon the term of the contract which itself had not contemplated the long delay. Had he, before taking the decision to the detriment of the petitioner noticed the petitioner, the petitioner would have shown cause. He would then be bound to consider and inform the decision. This consideration, being absent and no such steps having been taken, the decision stands vitiated. 20. Reliance has been placed on the decision of the Apex Court, apart from others in the case of ABL International Ltd. and Another V/s. Export Credit Guarantee Corporation of India Ltd. & Ors., 2004 3 SCC 553 and paras 33 and 34 in the case of Cholan Roadway Ltd. V/s. G. Thirugnanasambandam since, AIR 2005 SC 570 . 20. Reliance has been placed on the decision of the Apex Court, apart from others in the case of ABL International Ltd. and Another V/s. Export Credit Guarantee Corporation of India Ltd. & Ors., 2004 3 SCC 553 and paras 33 and 34 in the case of Cholan Roadway Ltd. V/s. G. Thirugnanasambandam since, AIR 2005 SC 570 . To this I may add a recent decision of the Apex Court in the case of Noble Resources Ltd. V/s. State of Orissa, since, AIR 2007 SC 119 wherein the law with regards to interference by writ courts in contracted matters has been exhaustively dealt with holding that judicial review is available even in purely contractual matters. 21. On the other hand, Mr. Hemendra Prasad Singh learned counsel appearing for the railways has relied on the decision of the Apex Court in the case of Union of India & Anr. V/s. Ayub Ali, since, 2006 4 PLJR 26 and submitted that the writ petition ordinarily ought not to have been entertained in such a matter. 22. The facts, as noted above, are not in controversy. In my view, once there are no controversial facts to be reconsiled, it is too late in the day to urge that in contractual matter writ jurisdiction of this Court cannot be invoked. It is not in dispute that railway is amenable to writ jurisdiction as it is a State. It is no more matter of dispute that every State action has to be just, fair and non-arbitrary. It cannot be urged that State while acting in public law field is subject to Article 14 of the Constitution and cannot act arbitrarily or discriminately but once it sets down to contractual matter the restriction of Art. 14 of the Constitution would cease to apply and the State can then act in any manner it wants in glaring arbitrary manner and the writ courts are precluded from protecing the right of person. One such case that may be noticed is the case of ABL International Ltd. & Anr. V/s. Export Credit Guarantee Corporation of India Ltd. & Ors. (supra). The case relied on by the respondent of Union of India V/s. Ayub Ali (supra) in the facts and circumstances of this case, is of no assistance. One such case that may be noticed is the case of ABL International Ltd. & Anr. V/s. Export Credit Guarantee Corporation of India Ltd. & Ors. (supra). The case relied on by the respondent of Union of India V/s. Ayub Ali (supra) in the facts and circumstances of this case, is of no assistance. The Apex Court has noted that where disputed question of facts are involved and required adjudication and required factual adjudication normally they should not be adjudicated in the writ petition. That is admittedly not the case here as the facts, are undisputed and clear. 23. In the present case there is hardly any adjudication, that is required. The facts speak for themselves. First, there was inordinate delay on part of railway, as accepted by the railway itself, in getting the designs revised. It is for this reason extension was granted in terms of clause 17A(iii) of the general condition of contract as quoted above by the railway itself extending the contract upto 24.11.2004. Then notwithstanding the request of the petitioner for change of tor steel specification, the permission for use of 20mm tor steel instead of 16mm tor steel was acceded to only on 20.7.2004. 24. A reference to Annexure 22, the letter of Divisional Engineer (Bridge) would show that the railway authorities have themselves found that on no occasion the petitioner was to blame for the delay and as such had considered and recommended for closure of the contract and for issuance of fresh tender without liability on either party i.e. not being on "risk and cost" of the petitioner. These factual findings have not been found to be wrong or incorrect by any authority much less even the respondent no. 3, who ultimately differed with them as per his order dated 7.6.2005, as quoted above. His consideration was totally different. He failed to consider that delay of the nature that happened because of railway itself was not contemplated under the contract. When the contract was entered, it was presumed as required in law that it would work smoothly without undue delay and as such no price escalation cost, which is a common feature in long term contract was incorporated but delays were caused which altered the very fundamental basis of the contract. These delays admitted to be on part of the railway could not be used to penalize the contractor. These delays admitted to be on part of the railway could not be used to penalize the contractor. There being a fundamental breach of underlining premise of the contract regarding it being a short term work, then timely performance of reciprocal responsibility is to be presumed. Breach whereof would make it legitimate for the petitioner to ask for clousre of contract rather than termination thereof with penal consequences on the non guilty-party. This aspect of the matter, which was the most material and relevant aspect was totally lost sight by the respondent no. 3 while dissenting from the correct views of his subordinate. To hold otherwise would be putting premium on delays to detriment of non-defaulting parties. 25. A reference to the decision of Divisional Railway Manager being Annexure I to the counter affidavit of the railways itself and quoted above in extenso shows a complete non-application of mind to the facts necessary for taking the right decision. 26. Mr. Y.V. Giri, learned senior counsel submitted rightly with reference to the case of the Apex Court in Cholan Roadways Limited (supra) and in particular paras 33 and 34 thereof that it is now well settled that a (quasi-judicial) authority must pose unto itself a correct question so as to arrive at a correct finding of fact. A wrong question posed leads to a wrong answer. "....Errors of fact can also be a subject matter of judicial review." 27. In the aforesaid facts and circumstances it cannot be disputed that the delay in executing the work was not solely attributable to the petitioner much less substantially. The railway for themselves admitted delays on their part. In such circumstances to say that the railway is justified in ignoring the dealy it caused and an still enforce the contract would be arbitrary. In other words, first reciprocal obligation of the railway and enforcing the obligation of the other side unilaterally was, in my view, clearly perverse and arbitrary exercise of power. The consideration appears to be not the safety of passengers by getting the bridge repaired urgently but trying to save the money for the railway at the cost of non-defaulting contractor. This court cannot shut eyes to these facts. 28. The consideration appears to be not the safety of passengers by getting the bridge repaired urgently but trying to save the money for the railway at the cost of non-defaulting contractor. This court cannot shut eyes to these facts. 28. I am, therefore, constrained to hold that the termination of the contract and subsequent issuance of fresh tender at the "risk and cost of the petitioner" was not justified in any manner and the decision in this regard as contained in Annexure I to the counter affidavit of the railway and communicated to the petitioner by Annexure 23 are thus vitiated as a matter of law and are liable to be quashed and is quashed as such. 29. In the facts it is only appropriate that the contract ought to be closed and retender for the balance work with no liability to any party as was the recommendation of all concerned except respondent no. 3. This is the only legal option left to the respondents. 30. This writ petition is allowed with the above observation and direction.