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2007 DIGILAW 818 (GAU)

Adisons Constructions Ltd. v. Union of India

2007-12-14

TINLIANTHANG VAIPHEI

body2007
JUDGMENT T. Vaiphei, J. 1. This bunch of writ petitions, which are inter-connected, were taken up together for hearing and are being disposed of by this common judgment. 2. In WP (C) No. 217 (SH) 2007 and WP (C) No. 218 (SH) 2007, the Petitioner is challenging the validity of the cancellation of the contract works for construction of "Provision of OTM ACCN for ARC at Shillong" and "Provision of OTM ACCN for 58 GTD Happy Valley at Shillong". Whereas WP (C) No. 217 (SH) 2007 and WP (C) No. 218 (SH) 2007 pertain to fresh tenders issued by the Respondent-authorities in connection with the aforesaid work orders. 3. The Petitioner was awarded by the Respondent-authorities the work order for the construction work titled as "Provision of OTM ACCN for ARC at Shillong". The period of completion of this construction work in terms of the tender notice dated 24.4.2003 was stipulated for 24 months from the date of handing over the site. However, in terms of the work order issued on 25.9.2004, the Respondent-authorities divided the construction work in three phases. The date of commencement of Phase-I and Phase-III was scheduled for 11.10.2004 whereas the dates of completion for Phase-I and Phase-II were fixed for 10.07.2005 and 10.10.2006 respectively. The date for commencement of Phase-II was fixed at 11.10.2005 and the date of completion was scheduled for 10.10.2006. In respect of the construction work titled "Provision of OTM ACCN for 58 GTD Happy Valley at Shillong", the construction work was divided in two phases. The Petitioner was also awarded this work. The date of commencement of Phase-I was scheduled for 4.10.2004 and the date of completion thereof was fixed for 3.7.2005, whereas the date of commencement of Phase-II was scheduled for 4.10.2004, the date of its completion was fixed at 3.10.2006. In terms of the work order dated 23.09.2004, the Respondent-authorities were to hand over open and clear sites for Phase-I to the Petitioner on 3.10.2004, while the date of handing over the site for Phase-II was stipulated at 3.10.2004. Except for some variations here and there, the basic facts in two cases are substantially one and the same. To cut short the discussion and to simplify the controversy involved in the two cases, it would be convenient to first deal with the facts in WP (C) No. 217 (SH) 2007. 4. Except for some variations here and there, the basic facts in two cases are substantially one and the same. To cut short the discussion and to simplify the controversy involved in the two cases, it would be convenient to first deal with the facts in WP (C) No. 217 (SH) 2007. 4. The case of the Petitioner is that the Respondent-authorities ought to have handed over open and clear sites to it much before the commencement of the work to facilitate mobilization of labours, machinery and materials and for erection of sheds for such mobilization, but the Respondent-authorities could not hand over open and free sites before the date for commencement of the work order. As a result, it could not erect the required sheds for mobilization of men and materials. This led it to request the Garrison Engineer by the letter dated 16.12.2004 for allotment of suitable places for raising labour sheds for the work allotted in Phase-I and to vacate the building standing over the site. This letter was not even replied to, whereupon it on 21.01.2005 requested the Garrison Engineer to hand over the ARC headquarter building to expedite the construction work, which also remained unreplied. According to the Petitioner, even after taking over possession of the sites on piecemeal basis, the approval of the layout of building or buildings by the concerned authority were necessary before actual commencement of construction work. Similarly, it was also necessary to provide electricity and water connection to the sheds by the Respondent-authorities before commencement of actual construction work, but the sheds were provided to it only on 20.03.2005 i.e. after a period of five months. It is alleged by the Petitioner that some delay was caused in the matter of according approval by the concerned authorities on the materials to be used in construction work: for example, on 28.3.2005, sand and stone chips were approved: on 19.3.2005, pest control was approved: on 12.5.2005, the concerned authorities forwarded the materials for M-30 design mix to IIT, Guwahati: on 22.07.2005, the Respondent-authorities forwarded OPC-43 Grade Cement to Assam Engineering College for testing and approval etc., all of which prevented the Petitioner from starting the construction work in time. 5. 5. It is also the case of the Petitioner that at the time of signing the contract agreement with the Respondent-authorities, the construction sites were shown as "open area", but after starting the work, the work site was suddenly declared as "restricted area". This necessitated the Petitioner to obtain security passes for its officers and all other persons engaged in the construction work, for which it had to make an application on 11.05.2005. It is further pleaded by the Petitioner that in the course of execution of the work order, the Chief Engineer, Shillong Zone (the Respondent No. 2) served a show cause notice dated 16.4.2005 upon it complaining that there was non-progress in the construction works. The Petitioner by its reply dated 6.5.2005 denied that there was slow progress in the construction work and pointed out any delay so occasioned was due to circumstances beyond its control. However, on receipt of the reply, the Respondent-authorities verbally assured the Petitioner of full co-operation with the result that the Petitioner was allowed to continue the construction works. It is also pleaded by the Petitioner that the progress of the construction work was hampered from 2.6.2005 to 31.8.2005 due to prolonged abnormal rain in Shillong and that there was student unrest in Meghalaya from 21.6.2005 to 01.8.2005 wherein night curfews were imposed by the Khasi Students Union, which halted the movement of construction materials which, in turn, forced the Petitioner to stop construction. That apart, according to the Petitioner, a good area of site could not be handed over to it by the Respondent-authorities which was also one of the factors impeding the progress of the work. To sort out these problems, a joint meeting between the Petitioner and the Respondent-authorities was convened on 31.8.2006 in the office of the Respondent No. 2, wherein it was agreed that the Petitioner would complete 50% of the construction work by 31.12.2006, failing which the Respondents would be at liberty to cancel the contract agreement. It is alleged by the Petitioner that just after this meeting, the Respondents issued some more work orders connection with the contract in question on 23.11.2006 requiring it to complete the said work on 10.7.2005 and 10.10.2006. Moreover, according to the Petitioner, it was only on 29.11.2006 vide the letter at Annexure J, the Respondent-authorities forwarded OPC-43 of "ACC" Cement to the Assam Engineering College for testing and approval. Moreover, according to the Petitioner, it was only on 29.11.2006 vide the letter at Annexure J, the Respondent-authorities forwarded OPC-43 of "ACC" Cement to the Assam Engineering College for testing and approval. The Petitioner further states that while it was progressing with the construction works, all of a sudden, it received on 15.12.2006 an order dated 7.12.2006 through Registered Post from the Respondent No. 2 terminating the contract works with effect from 9.12.2006. In the result, the Petitioner was barred from continuing the construction work in question. 6. It is contended by the Petitioner that as per minutes dated 31.08.2006, he was given time till 31.12.2006 for completion of 50% of the total work and that as on 7.12.2006, it had completed 44.39% of the total construction work and that he had reasoned to believe that the termination of the contract work was arbitrary in nature and attracts the provision of Part-III of the Constitution of India. According to the Petitioner, the termination order dated 7.12.2006 is vague for a simple reason that the Respondent-authorities did not give any reason for terminating the contract nor did they indicate therein as under what provision of Condition 54 of the General Condition of Contracts the contract was terminated. It is also contended by the Petitioner that in terms of the definition of the word "site" in Sub-clause (d) of Clause 1 of the General Condition of Contracts (I.A.F.W.-2249) in respect of Military Engineer Services, handing over the site does not mean a part of the site and as such the Respondents were under the obligation to hand over the entire site to it, and not an piecemeal basis, much before the commencement of the work and that at the time of filing the writ petition, at least 30% of the total sites was yet to be handed over to it, it is also pleaded by the Petitioner that the Respondent-authorities did not provide necessary steps for erection of various sheds for labours, materials and machinery much before the actual commencement of the works and also have failed to provide electricity and water connection in time to those sheds. According to the Petitioner, the subsequent declaration of the works site as restricted areas by the Respondents also hampered the progress of the work inasmuch as the construction materials as well as the labourers could not be brought into the sites for a considerable period of time. The termination of the contract without considering the reasons for the delay in executing the work, contends the Petitioner, is, therefore, arbitrary and is liable to be set aside. It is also contended by the Petitioner that inasmuch as many other contractors facing similar situations had been given time and at the same time denying the same to its discriminatory and is violative of its fundamental rights guaranteed under Articles 14 and 21 of the Constitution of India. It is, therefore, contended by the Petitioner that the impugned letter/order is illegal, arbitrary and is liable to be set aside. 7. In the affidavit-in-opposition filed by the Respondents, it is denied that there was delay in handing over the site and asserted that the site was ready to be handed over to the Petitioner on 11.10.2004 for commencement of work as mentioned in works order. The Petitioner did not commence the work despite request made by them in their letters dated 19.11.2004 and 9.12.2004. It is pointed out by the answering Respondents that most of the building situated on the site were physically vacated and handed over to the Petitioner on 20.1.2004 for the works covered by Phase-I and Phase-III, which was con-finned by the Petitioner itself in its letter dated 24.1.2005 by stating that such building have been demolished by it and that inspite of this, it miserably failed to make any progress and even after the lapse of 24 months, the progress of the work in these buildings was varying between 15% and 70% and not even a single building out of sixteen buildings could be completed by it. It is further asserted by the Respondents that in view of this mismanagement and poor progress of work in respect of Phase-I and Phase-III, it could not start the work under Phase-II and, in fact, it never asked for vacation of the balance buildings, whereas they handed over the balance buildings for Phase-II for demolition on 16.5.2006. It is further asserted by the Respondents that in view of this mismanagement and poor progress of work in respect of Phase-I and Phase-III, it could not start the work under Phase-II and, in fact, it never asked for vacation of the balance buildings, whereas they handed over the balance buildings for Phase-II for demolition on 16.5.2006. It is pointed out by the Respondents that the Petitioner could not complete even the lay out of the proposed buildings at the site even after the lapse of about 7 months. It is also pointed out by the Respondents that the Petitioner retained certain buildings to be demolished for storage of materials and machinery etc. with the result that these buildings had not been demolished till date, which, according to them, amounts to violation of the Contract Conditions. 8. It is also asserted by the Respondents that there is no provision in the contract agreement for handing over the site before commencing of the work. It is denied that any difficulties were ever faced by the Petitioner in the mobilization of men, materials and machinery to the work site and that by retaining and using the buildings handed over to store its materials and machinery, it saved its expenses for construction of the sheds. It is also pointed out by the Respondents that as per the provisions of the Contract i.e. Sub Condition No. 3 on serial page No. 118(R) of Contract Agreement, the space for contractor's shed is marked on the site plan forming part of contract over which the Petitioner was to build the shed for storage of materials and temporary workshop, but no space was to be provided for accommodation of labours. It is also asserted by the Respondents that the Petitioner did not even attend the site for commencement of the work till 16.12.2004 despite notices given by them to this effect and that the request for vacation of building existing on the site was made for the first time by the Petitioner in its letter dated 16.12.2004, whereas the site with vacant buildings for Phase-I and Phase-III was ready from the date of commencement of work i.e. 11.10.2004 and the same was handed over immediately on 20.12.2004 vide handing taking over notes dated 11.10.2004 (Annexure-2). 9. 9. It is also claimed by the Respondents that the fact that the Petitioner had not commenced procurement of materials required for the work till 31.01.2005 is evident from its letter dated 31.01.2005. It is also pointed out by the Respondents that the buildings existing at sites were handed over to the Petitioner, but it was not in a position to commence the work due to non-mobilization of resources and manpower prior to 4.3.2005 as evident from the GE letter No. 8904/161/E8 dated 4.3.2005, wherein the Garrison Engineer revealed that no construction materials had been procured and that labour and technical staff employed by the Petitioner were also insufficient to achieve the required rate of progress. It is also asserted by the Respondents that when the Petitioner could not even brought construction materials for construction of buildings on 95% of the site already handed over to him, its request for vacation of ARC Headquarter was merely a face saving device to conceal its lapses. According to the Respondents, the poor management of resources by the Petitioner is evident from the letter dated 11.07.2005 of the Garrison Engineer (the Respondent No. 4), wherein it had been advised to procure materials and manpower as well as technical staff to speed up the progress of the work as it had only done the excavation for Administration Block building till 27.4.2005. It is pointed out by the Respondents that the progress of the work made by the Petitioner upto 11.7.2005 was only 2% as compared to the stipulated progress of 40% at this stage. The Respondents also denied that there was no delay on their part in approving of layout of buildings and the construction materials submitted by the Petitioner and asserted that the same was done expeditiously. It is also claimed by the Respondents that the electrical and water connection were to be provided by them at the electric and water point marked in the site plan wherefrom the Petitioner was to make connection upto to the required point of site. It is also claimed by the Respondents that the electrical and water connection were to be provided by them at the electric and water point marked in the site plan wherefrom the Petitioner was to make connection upto to the required point of site. In so far as the approval of construction materials is concerned, the case of Respondents is that the sample of fine and coarse aggregate submitted by Petitioner initially was rejected as it failed to comply with the specification in contract agreement and the second sample submitted by the Petitioner was approved on 21.4.2005, the delay for which is attributable to the late submission of sample and non-installation of site lab by it till 6.6.2005 in terms of special condition 33 at serial page No. 136 (R) and 137 (R) of the contract agreement for testing such materials at the work site, which is evident from its letter dated 6.6.2005. As for the approval of pest control firm, the same was done immediately. The Respondents also vehemently denied that there was any delay in approving design mix concrete M-30 grade from IIT, Guwahati. 10. In so far as the allegations of the Petitioner that the work site was suddenly changed from "open area" to "a restricted area", it is pointed out by the Respondents that the work site of the contract is located in a Unrestricted Area vide Special Condition No. 4 at serial page No. 118(R), there is no such word as "open area" in the contract agreement and that such restrictions, which are inherent due to the location of the work site, were likely to be faced by the Petitioner as mentioned in this special condition, but the relaxation for the movement of men, materials, T&P etc. and working at the site were done through the unit area to facilitate the progress of the work. In fact, according to the Respondents, in terms of Special Condition No. 2 at serial page No. 118(R) of the contract agreement, the Petitioner was to collect the requisite information regarding working conditions, site conditions and other aspects from other contractors working in that area and, in any case, no such complaint was ever made by it to their knowledge. In fact, according to the Respondents, in terms of Special Condition No. 2 at serial page No. 118(R) of the contract agreement, the Petitioner was to collect the requisite information regarding working conditions, site conditions and other aspects from other contractors working in that area and, in any case, no such complaint was ever made by it to their knowledge. It is asserted by the Respondents that the fact that the Petitioner had not practically deployed/employed any manpower (representative, engineer, workman skilled/unskilled) for execution of work till 11.5.2005 is evident from the fact that it applied for issue of posses vide its letter dated 11.5.2005 at Annexure-26. It is also asserted by the Respondents that though rain is a normal and expected phenomenon in Shillong, there was deficiency in rainfall during the last two years compared to previous years and that the disturbance by student organization, if any, in Meghalaya was for a short period which did not result in complete stoppage of movement of men and materials of this area which could compel the stoppage of the work. The Respondents also claimed that inspite of all efforts made by them, the Petitioner was not progressing with the work at the desired pace and the progress of the work on 30.08.2006 was only 27.50% which promoted the Respondents to give opportunity to the Petitioner to improve the progress of the work upto 50% by 31.12.2006, but the progress achieved by it upto 30.11.2006 was only 1.94% for this period of three months leading to a total progress of 29.44%. Thus, the Respondents flatly denying the claim of the Petitioner that the rate of progress of work at the time of cancellation of the work order was 44.39%. It is asserted by the Respondents that with this pace of work, the Petitioner would be able to complete the construction work only by 20.11.2012 and they are not in a position to wait for completion of the work till that time. When the rate of progress made by the Petitioner was extremely slow and there was no tangible improvement in the progress of work despite all persuasions and requests, the Respondents had to face severe criticism from the user units and the higher authorities: the work under consideration is urgently required by the troops and is considered as an executive necessity. When the rate of progress made by the Petitioner was extremely slow and there was no tangible improvement in the progress of work despite all persuasions and requests, the Respondents had to face severe criticism from the user units and the higher authorities: the work under consideration is urgently required by the troops and is considered as an executive necessity. It was under the aforesaid circumstances, the work order has to be cancelled. 11. As indicated earlier, the facts as pleaded in WP (C) No. 218 (SH) 2007 and in this case are more or less one and the same. The reasons for the delay highlighted by the Petitioner in both the cases and the reply made by the Respondent authorities in connection therewith are also more or less same. I have also carefully gone through the rejoinder-affidavit filed by the Petitioner in both the cases which need not be reproduced for the sake of gravity inasmuch as both the writ petitions can be decided on a narrow compass. A perusal of both the impugned letters dated 7.12.2006 which is at Annexure-H to WP (C) No. 217 (SH) 2007 and Annexure-G to WP (C) No. 218 (SH) 2007 respectively will show that the reason which prompted the Respondent-authorities in cancelling the work order was due to delay, absence of diligence and slow progress in the execution of the works. Clause 54 of the general condition of contract for lump sum contract of the Military Engineer Services, deals with cancellation of contract in part or in full for contractor's default, which provides that if the contractor (a) makes default in commencing the works within a reasonable time from the date of handing over the site, and continues in that state after a reasonable notice from GE, or, (b) in the opinion of the GE at any time, whether before or after the date or extended date for completion, makes default in proceeding with the works, with due diligence and continues in that state after a reasonable notice from G.E., or, (c) fails to comply with any of the terms and conditions of the contract or after reasonable notice in writing with orders properly issued thereunder, or, (d) fails to complete the works, work order and items of works, with individual dates for completion and clear the site on or before the date of completion. The Accepting Officer may, without prejudice to any other right or remedy which shall have accrued or shall accrue thereafter to Government, cancel the contract as a whole or only such Work Order (s) or items of Work in default from the Contract. The aforesaid provision undoubtedly empowers the Respondent No. 2 for cancelling the work orders issued to the Petitioner under the circumstances mentioned therein. In my opinion, the provision applicable in the instant case appears to be Clause 54(d) whereunder it is provided that failure to complete the works, work order and items of works, with individual dates for completion and clear the site on or before the date of completion, enable the Accepting Officer to cancel the High Court. In the instant case, rightly or wrongly, the Petitioner could not complete the work order in question within the dates for completion stipulated in the work order. 12. It is contended by the learned Counsel for the Petitioner that when the Respondents, by the resolution dated 31.08.2006, had already extended the time for completion of 50% of the work upto 31.12.2006, and had also issued other connected work orders on 23.11.2006, there was no earthly reason to cancel the work order on 7.12.2006 without giving an opportunity of hearing to the Petitioner; this amounts to violation of the principles of natural justice. It is also submitted by the learned Counsel that the Respondents, being public authorities, cannot supplement their decision with reason by filing an affidavit-in-opposition; the reasons given in this affidavit are conspicuous by their absence in the impugned order. The learned Counsel further submits that when the date of commencement and completion of the various phases of the work order were already repudiated by the Respondents themselves by extending the same till 31.12.2006 in terms of the said resolution, they cannot now take the plea that the Petitioner did not perform the work in time, or that time was of the essence of the contract and that such action of the Respondents cannot but be termed as arbitrary and unreasonable. It is also strenuously urged by the learned Counsel that the contract work was meant for defence purpose and, therefore, a sovereign function and, as such, the Respondents cannot act in violation of Article 14 of the Constitution. It is also strenuously urged by the learned Counsel that the contract work was meant for defence purpose and, therefore, a sovereign function and, as such, the Respondents cannot act in violation of Article 14 of the Constitution. It is the further contention of the learned Counsel for the Petitioner that the cancellation of the work order, the act of issuing fresh NIT on 17.3.2007 i.e. after 3 long months and of opening the tender on 20.08.2007 after 8 months from the date of cancellation of the impugned materials and equipments have in the meantime escalated. The learned Counsel for the Petitioner points out that the Respondents did not cancel the contracts of similarly situated persons and gave them time to complete their works, and such hostile and discriminatory treatment meted out to the Petitioner is violative of Article 14 of the Constitution. In any view of the matter, concludes the learned Counsel, the impugned order dated 7.12.2006, without indicating the reason for cancellation of the contract, is hit by the vice of Wednesbury unreasonableness, and cannot, therefore, be sustained in law. 13. On the other hand, Mr. S.C. Shyam, the learned CGC, appearing for the Respondents, relying on the affidavit-in-opposition, submits that the writ petition is not maintainable since disputed questions of fact are involved and also that the issues raised by the Petitioner in the writ petition is in the realm of contract. Assuming without admitting that there is breach of contractual agreement also, writ petition is not the proper remedy to ventilate the grievances of the Petitioner he should be relegated to a civil court either for enforcement of contractual agreement or for specific performance of contract or for damages. Drawing my attention to Clause 70 of General Conditions of Contracts for Lump Sum Contracts in Military Engineer Services providing arbitration clause, the learned CGC submits that this writ petition is barred by the alternative remedy envisaged therein. He also contends that the Petitioner, on the facts and circumstances of the case, is guilty of inordinate delay in carrying out the contract whereas speedy execution of the work is an executive necessity and that when he could execute only 29.44% of the work as assessed by the Board Officers following the cancellation, there was no alternative but to cancel the work order: at that pace of construction, he could complete the work only on 20.11.2012. According to the learned CGC, there was absolutely no delay in handing over the sites to the Petitioner. 14. The remedy available to an aggrieved person under Article 226 of the Constitution is an extraordinary remedy, and is not intended to be used for the purpose of declaring the private rights of the parties. In case of enforcement of contractual rights and obligations, the normal remedy of filing a civil suit is available to the aggrieved party and, therefore, a High Court will not exercise its prerogative writ jurisdiction to enforce such contractual liabilities. No doubt, the contractual liability of the States and Union of India is recognized by the Constitution. Article 298 expressly enacts that the executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose. Article 299(1) prescribes the mode of execution of contracts. Article 300 declares that appropriate proceedings can be instituted against the Union or State. But then the moot point is whether a writ petition under Article 226 of the Constitution is maintainable for the enforcement of contractual rights and liabilities. In the leading case of Radha Krishna Agarwal v. State of Bihar AIR 1977 Pat. 65 , which their Lordships of the Apex Court approved in the same case reported in (1977) 3 SCC 457 , the Patna High Court divided cases involving breach of contract into three groups: (i) Where a Petitioner makes a grievance of breach of promise on the part of the State in cases where on assurance or promise made by the State and where he has acted to his prejudice and predicament on the basis of such assurance or promise, yet the agreement falls short of a contract within the meaning of Article 299 of the Constitution, it is held that such obligations are enforceable under Article 226 of the Constitution by invoking the doctrine of promissory estoppel. (ii) Where the contract entered into between the person aggrieved and State is in exercise of a statutory power under certain Act or Rules framed thereunder, and breach of such contract on the part of the State is alleged by the Petitioner, the rights and obligations arising out of the exercise of such statutory power has been held to be enforceable by a writ court. (iii) Where the contract entered into between the State and the person aggrieved is not statutory but purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the Petitioner complains about such breach of contract by the State. This category of cases is held to be breach of contract, pure and simple. An aggrieved party in such cases, may approach a civil court, and a remedy under Article 226 of the Constitution is not appropriate. 15. In addition to the three categories of contract cases highlighted above, there is Anr. type of contracts, which, according to the decision of the full bench of the Patna High Court in Pancham Singh v. State reported in AIR 1991 Pat. 168 , should be regarded as the fourth categories of cases, and the same is best described by reproducing the entire paragraph of the judgment: 23. The judgments of the Supreme Court referred to above have repeatedly impressed that every action of the executive government must be informed with reason which is part of the rule of law and its bare minimal requirement. In the present case the work order and the agreement in favour of the Petitioner has been cancelled without assigning any reason, on a ground which did not exist on the date the impugned order was issued. The step for the cancellation of the contract is said to have been taken with an object to save the public exchequer. But rule of law as interpreted by courts required the State Government to inform the Petitioner that the drawing, design and the estimated cost were likely to be changed on the basis of fresh datas to be received. As such, it has to be held that action of the State does not satisfy the test of reasonableness and fair play. But rule of law as interpreted by courts required the State Government to inform the Petitioner that the drawing, design and the estimated cost were likely to be changed on the basis of fresh datas to be received. As such, it has to be held that action of the State does not satisfy the test of reasonableness and fair play. In my view, apart from three categories mentioned by the Supreme Court in the judgment of Radhakrishna Agarwal AIR 1977 SC 1496 (supra), under the changed circumstances, there should be a fourth category of cases: Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual but such contract has been cancelled on a ground, de hors any of the terms of the contract, and which is per se violative of Article 14 of the Constitution. 16. Furthermore, in addition to the four categories of cases referred to above, there is yet Anr. case involving contractual disputes. It is a settled proposition of law that if the parties to a dispute had agreed to settle their dispute by arbitration and there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless of course, both the parties to the dispute agree on Anr. mode of dispute resolution. The legal position is summed up by the Apex Court in State of U.P. v. Bridge and Roof Co. (India) Ltd. in the following manner: Further, the contract in question contains a clause providing inter alia for settlement of disputes by reference to arbitration. The arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy--in this case, provided in the contract itself--is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226. 17. There is Anr. limitation of writ jurisdiction. Undoubtedly, Article 226 is couched in comprehensive phraseology and it ex facie confers very wide powers on High Courts to reach injustice wherever it is found. 17. There is Anr. limitation of writ jurisdiction. Undoubtedly, Article 226 is couched in comprehensive phraseology and it ex facie confers very wide powers on High Courts to reach injustice wherever it is found. But to have jurisdiction is one thing; to exercise jurisdiction is Anr. This extraordinary power is not to be used on all and sundry occasions. Before exercising its prerogative powers and extraordinary jurisdiction under Article 226, a High Court is required to consider several aspects, some of which are already indicated earlier. One more aspect to be considered is where the writ petition involves disputed questions of fact. It must be noted that since the proceedings under Article226 are summary in nature, disputed questions of fact should not normally be allowed to be agitated and the High Court should not proceed to determine such questions. In other words, a writ jurisdiction can be invoked only for enforcement of established rights and not for establishing rights, no right can be determined or adjudicated in the exercise of extraordinary jurisdiction under Article226. In this context, the observations of the Apex Court in State of Bihar v. Jan Plastics and Chemicals Ltd. (2002) 1 SCC 216 are instructive: 7. In our view, it is apparent that the order passed by the High Court is, on the face of it, illegal and erroneous. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be a ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply or road permits by the Appellants would justify breach of contract by the Respondent would depend upon facts and evidence and is not required to be decided or dealt within a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in a properly instituted civil, suit rather than by a court exercising prerogative of issuing writs. 18. It is true that in a petition under Article 226 the High Court has the jurisdiction to try issues both of fact and law. 18. It is true that in a petition under Article 226 the High Court has the jurisdiction to try issues both of fact and law. However, when a petition raises questions of fact of a complex nature, which may require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. However, there is a rider to this proposition of law. Merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body. For example, where disputed questions of fact pertaining to the interpretation/meaning of documents or part (s) thereof are involved, the court can very well go into the same and decide the objections, if the facts permit See ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. (2004) 3 SCC 552. 19. From the foregoing discussion, the following proposition of laws may be culled out: (a) Where a Petitioner makes a grievance of breach of promise on the part of the State in cases where on assurance or promise made by the State and where he has acted to his prejudice and predicament on the basis of such assurance or promise, yet the agreement falls short of a contract within the meaning of Article 299 of the Constitution, it is held that such obligations are enforceable under Article 226 of the Constitution by invoking the doctrine of promissory estoppel. (b) Where the contract entered into between the person aggrieved and State is in exercise of a statutory power under certain Act or Rules framed thereunder, and breach of such contract on the part of the State is alleged by the Petitioner, the rights and obligations arising out of the exercise of such statutory power has been held to be enforceable by a writ court. (c) Where the contract entered into between the State and the person on aggrieved is not statutory but purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the Petitioner complains about such breach of contract by the State. (c) Where the contract entered into between the State and the person on aggrieved is not statutory but purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the Petitioner complains about such breach of contract by the State. This category of cases is held to be breach of contract, pure and simple. An aggrieved party in such cases, may approach a civil court, and a remedy under Article 226 of the Constitution is not appropriate. (d) Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual but such contract has been cancelled on a ground, de hors any of the terms of the contract, and which is per se violative of Article 14 of the Constitution, applications under Article226 of the constitution will be maintainable. (e) When the contract itself provides for a mode of settlement of disputes arising out of a contract, a writ court will decline to interfere and will relegate the parties to take recourse to such alternative remedy. (f) Where a writ petition raises questions of fact of complex nature requiring adduction of oral evidence, and on that account, the writ court is of the view that the dispute may not appropriately be tried by it, the writ court will decline to try the petition. However, where the disputed questions of fact relate to the interpretation/meaning of documents or part (s) thereof, facts permitting, the writ court can very well go into the same and decide the disputes. 20. It is against the aforesaid established legal principles that I propose to examine the various contentions advanced on behalf of the rival parties in this writ petition. The basic point raised by the Petitioner is on the question of the delay in handing over the work sites, of approving the construction materials, of the restriction on the entry of men and materials on the work sites and of the existence of circumstances beyond its control, which cumulatively resulted in not completing the works contract in time. The averments made by the Petitioner to that effect have been denied or controverted by the Respondents. The averments made by the Petitioner to that effect have been denied or controverted by the Respondents. In so far as the question of handing over of the work sites are concerned, Annexure-2 to the affidavit-in-opposition, which is the site order, clearly shows that the entire sites for Phase-I and Phase-III were handed over to the Petitioner on 11.10.2004 for execution of the work. The fact that the sites were taken over by the Petitioner from the Respondents on that date is demonstrated by the signing of the site order by the Deputy Managing Director of its company. Confronted with this document, the genuineness whereof has not been challenged by the Petitioner, the learned Counsel for the Petitioner contends that the Petitioner's representative had to sign the same under duress and that this normally happened when contractors like the Petitioner had no bargaining power. The question whether the site order was signed by the representative of the Petitioner under duress or not is undoubtedly a disputed question of fact, which, in the nature of things, cannot be established by the materials available on this record. Moreover, such question is to be investigated and determined only on the basis of oral evidence to be adduced by in a full-dressed trial. In other words, it is for the Petitioner to lead oral evidence to establish that the site order was signed by its representative under duress. Once the Respondents have asserted that the sites in respect of Phase-I and Phase-Ill had been handed over the Petitioner on 11.10.2004, which is supported by documentary evidence like Annexure-2 to the counter-affidavit, a prima facie case has been made out in their favour. The burden of proving that such sites were not handed over to the Petitioner on 11.10.2004 or that the site order evidencing such handing over was signed by its representative under duress is, therefore, upon the Petitioner by adducing oral evidence. In my opinion, this becomes complicated questions of fact, which cannot be decided in a summary proceeding like Article 226 of the Constitution. Moreover, the question whether there was delay in handing over the sites or not is essentially a dispute involving breach of contract. In my opinion, this becomes complicated questions of fact, which cannot be decided in a summary proceeding like Article 226 of the Constitution. Moreover, the question whether there was delay in handing over the sites or not is essentially a dispute involving breach of contract. Similarly, whether there was restriction on movement of men and materials on the works sites which occasioned the delay in the progress of the work or whether there were long bandhs, night curfews imposed by student organizations leading to absolute halt in the vehicular movements or whether there were incessant rains causing vehicular movement problems during the relevant period, in the teeth of denial by the Respondents, are also seriously disputed questions of fact, which cannot be decided by a writ court. As noted earlier, these are matters which can be proved by parties only by leading appropriate oral and documentary evidence. 21. In the instant case both the parties have agreed to settle their dispute by arbitration, and such an agreement is found in Clause 70 of general conditions of contracts for lump sum contracts in the matter of Military Engineer Services, the relevant portion whereof is in the following terms: 70. Arbitration: All disputes, between the parties to the contract (other than those for which the decision of the CWE or any other person is by the contract expressed to be final and binding) shall, after written notice by either party to the contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Provided that in the event of abandonment of the Works or cancellation of the contract under condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalized by the Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies. The aforesaid arbitration clause evidently empowers the arbitrator (s) to decide both questions of fact as well as questions of law. On the authority of Bridge and Roof Co. The aforesaid arbitration clause evidently empowers the arbitrator (s) to decide both questions of fact as well as questions of law. On the authority of Bridge and Roof Co. (India) Ltd. (supra), when this clause itself provides for a mode of settlement of the dispute between the Petitioner and the Respondents arising out of the work order in question, there is hardly any reason why they should not take recourse to the remedy of arbitration and instead approach this Court under Article 226 of the Constitution. An equally efficacious alternative remedy in the form of arbitration has been incorporated by the parties in the agreement for settlement of all kinds of disputes between them. When an effective alternative remedy is available, the parties must take recourse to this remedy and not approach this Court. In my judgment, all the disputes raised by the Petitioner in the writ petition are matters which can be decided by an arbitrator (s) appointed in accordance with Clause 70 referred to above. 22. The next question to be determined is whether the impugned action of the Respondent authority is arbitrary, contrary to the principles of natural justice and, therefore, violative of Article 14 of the Constitution. While examining this question, one cannot overlook the distinction between the two stages of a contract, namely, (a) at the threshold of the contract; and (b) after the contract has been entered into between the parties: whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. Where exercising contractual powers also, the Government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on their part. In my considered view, as already noted earlier, it is only when the contract entered into between the State and the person aggrieved is non-statutory and purely contractual, but such contract has been cancelled on a ground, de hors any of the terms of the contract, and which is per se violative of Article 14 of the Constitution, applications under Article226 of the Constitution would be maintainable. No question can arise of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act under the terms of an agreement between the parties, perform any act. The limitation imposed by rules of natural justice cannot operate upon powers which are governed by the terms of an agreement exclusively. The only question which normally arise in such cases is whether the impugned action is or is not in accordance with the terms of the agreement See Asstt. Excise Commissioner v. Isaac Peter (1994) 4 SCC 104 . 23. In the instant case, the cancellation of the contract has been made by the Respondent authorities in terms of, or, at any rate, purportedly in exercise of their powers under Clause 54 of the General Conditions of Contract. For better appreciation of the controversy, the provisions of this clause may be reproduced: 54. Cancellation of Contract in part or in full for Contractor's Default--If the Contractor-- (a) Makes default in commencing the Work within a reasonable time from the date of the handing over the site, and continues in that state after a reasonable notice from GE. or (b) In the opinion of the GE, at any time, whether before or after the date or extended date for completion, makes default in proceeding with the works, with due diligence and continues in that state after a reasonable notice from GE. or (c) Fails to comply with any of the terms and conditions of the contract or after reasonable notice in writing with orders properly issued thereunder, or (d) Fails to complete the works, work order and items of works, with individual dates for completion and clear the site on or before the date of completion. The Accepting Officer may, without prejudice to any other right or remedy which shall have accrued or shall accrue thereafter to Government, cancel the contract as a whole or only such Work Order (s) or items of work in default from the contract.... 24. It may also be apposite to notice the contents of the impugned letter dated 7.12.2006 issued by the Chief Engineer, Shillong Zone, which are in the following terms: Dear Sir (s) 1. Reference this office letter No. 89226/SHL/R/171/EB dated 18 Nov. 2006. 2. 24. It may also be apposite to notice the contents of the impugned letter dated 7.12.2006 issued by the Chief Engineer, Shillong Zone, which are in the following terms: Dear Sir (s) 1. Reference this office letter No. 89226/SHL/R/171/EB dated 18 Nov. 2006. 2. In spite of several notices, you have failed to proceed the work with due diligence, thereafter, last and final notice was served to you vide above referred letter to put in your best effort to accelerate the progress of the work and was also intimated that if the present state of affair continues for a further period of two weeks, I shall be constrained to consider cancellation of the contract without any further notice. In spite of the last and final notice referred above you have failed to proceed into the work with due diligence. 3. Therefore, I Accepting Officer of the contract on behalf of the Govt. acting under the power vested in me in the terms of condition 54 of the General Condition of Contracts (IAFW-2249) and without prejudice to any other right or remedy which shall have accrued or shall accrue hereafter to the Govt. under the terms of the above said contract hereby cancel your contract on account of your default and the said contract shall stand cancelled with effect from 9 Dec. 2006. 4. Please note that the works as desired in the contract 1(c) of the General conditions of contracts will now be got completed by me through other agency at your risk and cost. 5. You are accordingly requested to report to GE, Shillong at his office in person or through an accredited representative at 1000 hrs on 15 Dec. 2006, when an inventory of complete/incomplete items of work and materials, if any left by your at site will be made and recorded jointly in the event of your failure to keep up this appointment, inventory will nevertheless be prepared not withstanding your absence and the same shall be fully binding on you. 6. This is without prejudice to any other right or remedy shall have accrued or accrue hereafter to the Government. Yours faithfully Sd/- (J.S. Mitra) Brig Chief Engineer For Chief Engineer. 25. 6. This is without prejudice to any other right or remedy shall have accrued or accrue hereafter to the Government. Yours faithfully Sd/- (J.S. Mitra) Brig Chief Engineer For Chief Engineer. 25. A perusal of the impugned letter plainly, there can hardly be any doubt on this score, shows that the work order was cancelled as the Petitioner had failed to proceed with the work with due diligence and also had failed to accelerate the progress of the work, for which it had been warned time and again and that the cancellation of the work was made by the Chief Engineer acting under the power vested in him by the provisions of Clause 54 of the General Conditions of Contract. It is true that no specific provision of Clause 54, which comprises of four sub-clauses, was mentioned by the Chief Engineer upon which the action was taken by him. However, to my mind, Sub-clause (c), or, at any rate Sub-clause (d), of Clause 54 undoubtedly confers such power of cancellation upon the Respondent authorities. The law is well-settled, without reference to cases, that if an authority has a power under the law, merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitate the exercise of power so long as the power does exist and can be traced to a source available in law. Whether the power of cancellation has been exercised correctly or not, is not a matter which can be adjudicated upon in a writ petition as already noted earlier. The Petitioner, to ventilate his grievances, has the alternative remedy of arbitration under Clause 70 of the General Conditions of Contract. Had the contract in question been cancelled on the grounds, de hors the terms and conditions of the contract, this may conceivably attract the vide of Article 14 of the Constitution, which may warrant the interference of this Court under Article 226 of the constitution. In my judgment, that is not, unfortunately, the case here notwithstanding the submissions to the contrary made by the learned Counsel for the Petitioner with unusual vehemence. The camouflage of Article14 can hardly conceal the real intention motivating the writ petition, namely, to enforce the terms and conditions of the contract entered into by it with the Respondent authorities. 26. In my judgment, that is not, unfortunately, the case here notwithstanding the submissions to the contrary made by the learned Counsel for the Petitioner with unusual vehemence. The camouflage of Article14 can hardly conceal the real intention motivating the writ petition, namely, to enforce the terms and conditions of the contract entered into by it with the Respondent authorities. 26. For what has been stated above, WP (C) No. 217(SH) of 2007 is not maintainable, and is hereby dismissed. However, on the peculiar facts of the case, the parties are directed to bear their respective costs. In WP (C) No. 218(SH) 2007, the facts of the case are also substantially similar to WP (C) No. 217(SH) of 2007. It is also about cancellation of the other work relating to Provision of OTM ACCN for 58 GTD Happy Valley at Shillong. A number of contentions has been raised by the Petitioner concerning the delay in handing over the work sites, etc., in the circumstances substantially similar to the one projected in WP (C) No. 199 (SH) 2007. In my opinion, my findings in the earlier writ petition will govern this writ petition as well. Consequently, this writ petition is also not maintainable, and is, accordingly dismissed by directing the parties to bear their respective costs. Both the writ petitions in WP (C) No. 199 (SH) 2007 and WP (C) No. 200(SH) 2007 are directed against the two NITs dated 17.3.2007 for the work titled "Provision of OTM ACCN for ARC at Shillong" and "Provision of OTM ACCN for 58 GTD at Happy Valley, Shillong" respectively. The impugned NITs were issued consequent upon the cancellation of the work orders allotted to the Petitioner, which are the subject-matter of WP (C) No. 217 (SH) of 2007 and WP (C) No. 218 (SH) 2007, and are already decided herein above. The Petitioner is praying for directing the Respondent authorities to refrain from acting upon the impugned NITs and from opening the tenders on 20.8.2007. Since I have declined to interfere with the impugned cancellation of the connected work orders in WP (C) No. 217 (SH) 2007 and WP (C) No. 218 (SH) 2007, these two writ petitions must also meet the same fate. Consequently, WP (C) No. 199 (ASH) 2007 and WP (C) No. 200 (SH) 2007 are hereby dismissed. There shall be no order as to costs. Interim orders, if any, stand vacated. Consequently, WP (C) No. 199 (ASH) 2007 and WP (C) No. 200 (SH) 2007 are hereby dismissed. There shall be no order as to costs. Interim orders, if any, stand vacated. Petition dismissed