ORDER This writ petition was filed by the petitioner for the following reliefs:- (i) For quashing of the part of the decision of the Standing Empowered Committee dated 25.11.2010 so far as the Standing Empowered Committee concluded (a) termination of the contract by the respondents due to fundamental breach by the petitioner as per the provisions of the contract for package no.BR-3613, (b) contractor?s claim on account of material at site, loss of profit, hire charges for machine and equipments, advance to supplier, site expenses, litigation expenses, prospective loss of profit and interest are not admissible. (ii) For appropriate declarations that (a) the rescinding of the agreement on the basis of admitted fact is on account of employer’s convenience and not on account of fundamental breach of the contractor, (b) in the absence of finalization of rate, final determination of payable amount including variation in quantity, extra item, the action of rescinding and consequential decision of forfeiture of security and bank guarantee is wholly without jurisdiction. (iii) For a direction to the respondents to release the security deposit, bank guarantee forthwith and further direction to the respondents to work out and finalize the rate of extra item, prime coat and variation in quantity and make payment. (iv) For a direction to the respondents to refrain from acting upon the decision of the Standing Empowered Committee so far as realization of liquidated damage in terms of contract data is concerned. (v) For any other relief of consequential reliefs to which the petitioner may be found entitled to in the facts and circumstances of this case. 2. An interlocutory application bearing I.A. No.3009 of 2011 has also been filed on behalf of the petitioner for restraining the respondents from taking any action upon the impugned decision of the Standing Empowered Committee and from raising any claim with respect to agreement in question vide Package No.BR-3613. 3. 2. An interlocutory application bearing I.A. No.3009 of 2011 has also been filed on behalf of the petitioner for restraining the respondents from taking any action upon the impugned decision of the Standing Empowered Committee and from raising any claim with respect to agreement in question vide Package No.BR-3613. 3. The authorities of the Ministry of Rural Development, Government of India selected National Hydroelectric Power Corporation (hereinafter referred to as “NHPC” for the sake of brevity) for the purpose of execution of Bihar Rural Road Project (hereinafter referred to as “the Project” for the sake of brevity) under Pradhan Mantri Gram Sadak Yojna (hereinafter referred to as “PMGSY” for the sake of brevity) and accordingly the NHPC invited tender for construction of rural road at Mahnar (Naya Tola to Bhagwanpur T-04-L-30) in the district of Vaishali under Package No.BR-3613. In response to the aforesaid notice inviting tender several persons submitted their tenders and out of them petitioner’s tender was accepted after all the due processes and intimation to that effect was given to him vide letter dated 18.07.2005 by the Chief Engineer (Contracts) NHPC, whereafter petitioner furnished bank guarantee and additional bank guarantee on 08.09.2005 and 21.03.2006 and agreement with respect to the said Package No.BR-3613 was entered into between the petitioner and the respondent-Chief Engineer of NHPC on 03.11.2005. 4. Learned counsel for the petitioner stated that during the course of execution of the said contract work the petitioner faced insurmountable problem on account of obstructions created by certain land owners, who claimed that their personal lands were being used for construction of road without acquisition. The petitioner also faced problems of non-availability of sufficient quantity of emulsion and G.S.B. Jhama. With respect to these problems the petitioner wrote to the authorities repeatedly on 28.03.2006, 15.12.2006, 21.04.2007, 04.06.2007 and 06.03.2008. In those letters the petitioner also requested payment of dues. 5. Learned counsel for the petitioner submitted that the respondents in their defective estimate did not make any provision for prime coat which was essential for bituminous work and under the dictate of the respondents the petitioner completed the prime coat but neither the quantity of prime coat had been sanctioned nor any payment was made with respect thereto and similarly the petitioner was asked to carry additional construction of Grade-III (WBM), but the respondents failed to approve the variation and to consequently make payments. It was also submitted that the petitioner time and again represented the respondents for approval of the said variation and also for approval of quantity of prime coat and payment thereof, but no payment was ever made to him. 6. Learned counsel for the petitioner averred that in the said circumstances a meeting was convened on 21.05.2009 under the Chairmanship of respondent-Executive Director of NHPC, who agreed to settle the account in relation to earth work by 04.06.2009 and also to settle the balance deviation, but the respondents failed to perform their part of obligation as agreed in the said meeting. It was further averred that in spite of total non-cooperation by respondents, the petitioner not only carried prime coat, Grade-III (WBM) but also completed approximately 8 km of bituminous work of excellent quality notwithstanding the fact that the respondents failed to approve the quantity of base work in the nature of prime coat and arbitrarily denied payment, although the work was completed by the petitioner and measurement was done by the respondents, whereafter bill with respect thereto was raised by the petitioner. 7. Learned counsel for the petitioner claimed that in spite of the aforesaid facts the Chief Engineer, NHPC arbitrarily terminated the contract in question dated 03.11.2005 vide his notice of termination of contract dated 25.09.2009 with effect from the same date forfeiting the security deposit and performance guarantee and directing the petitioner to be present on 15.10.2009 for joint measurement of the work executed by the petitioner. But before the said measurement the respondents invoked the bank guarantee without any notice to the petitioner on 01.10.2009. It was further claimed that the petitioner unaware of the invocation of bank guarantee represented the respondents on 08.10.2009 to consider and review the decision dated 25.09.2009 with respect to termination of contract detailing therein that the delay was directly attributable to the respondents, whereas the petitioner was not at all at fault. 8. Learned counsel for the petitioner argued that the respondents concerned not only arbitrarily terminated the contract but before the actual measurement on 15.10.2009 arbitrarily and unilaterally decided to invoke the bank guarantee without ascertaining the actual liability of the respective parties under the agreement. 8. Learned counsel for the petitioner argued that the respondents concerned not only arbitrarily terminated the contract but before the actual measurement on 15.10.2009 arbitrarily and unilaterally decided to invoke the bank guarantee without ascertaining the actual liability of the respective parties under the agreement. It was further argued that on the one hand petitioner had worked without getting any payment against prime coat, Grade-III (WBM) and part payment against earth work, whereas on the other hand respondents despite repeated requests and assurance failed to approve variation, additional quantity and the quantity of prime coat and in spite of that they took advantage of their own wrong and not only terminated the contract but also invoked the bank guarantee, although there was neither any justification nor any jurisdiction for invocation of bank guarantee when the respondents themselves were under obligation to pay the unpaid bill of the petitioner. 9. In the said circumstances the petitioner filed CWJC No.15016 of 2009 against the aforesaid acts of respondents in which notices were issued to the respondents on 09.11.2009. However, the respondents got notice inviting tender published in the newspaper on 17.02.2010 and hence the petitioner withdrew the writ petition on 23.03.2010 with liberty to pursue his remedy under the agreement, as in its counter affidavit NHPC had averred that the petitioner had alternative remedy in terms of clause 24 of the General Conditions of Contract (hereinafter referred to as “the GCC” for the sake of brevity). 10. Learned counsel for the petitioner further stated that in the aforesaid facts and circumstances, he approached the Bihar Public Works Contract Dispute Arbitration Tribunal but on 29.04.2010 it declined to entertain the claim of the petitioner on the ground that the work contract of the petitioner did not pertain to the State of Bihar. Thereafter the petitioner filed his claim petition under clause 24 of the GCC before the Empowered Standing Committee (hereinafter referred to as “the Committee” for the sake of brevity) through the Chief Engineer detailing therein the entire facts and circumstances with enclosures to substantiate those facts, whereafter the Committee issued notice to the respondents on 23.11.2010 to supply certain documents but no document was supplied. However, the Committee vide order dated 25.11.2010 held that petitioner was responsible for the fundamental breach and as such he was not entitled to any claim and damages, although the Committee itself noted the lapse of the respondents in the matter of finalization of rate for extra item, prime coat and failure of respondents in finalizing the variation in quantity and also failure in the matter of payment for the work done. It was also stated that although 45 days time was granted by the Committee but till date neither any certificate had been issued in terms of clause 53.1 of the GCC nor the respondents worked out the entitlement of the petitioner finalizing the rate and variation in quantity as per the direction of the Committee nor made any such determination. 11. In the aforesaid facts and circumstances the petitioner filed this writ petition challenging the decision of the Committee dated 25.11.2010 as well as the decision of termination of contract and raising the issues of non-payment of unpaid bill, non-finalization of variation in quantity, non-finalization of rate of extra item and non-payment for the work already executed, including extra item, prime coat and forfeiting of security deposit, bank guarantee etc. To the said writ petition, NHPC filed a counter affidavit raising the preliminary objection of maintainability of the writ petition. However, this court heard the preliminary objection of maintainability raised by the respondents on 04.08.2011 and after considering the entire facts and circumstances of the case as well as the settled principles of law involved in such matters held that the writ petition is maintainable. 12. Thereafter a comprehensive counter affidavit dated 31.01.2012 was filed on behalf of the respondents-NHPC and its authorities. Learned counsel for the said respondents on the basis of the said counter affidavit stated that the relation between contracting parties were to be governed by the terms of contract between the parties and when a contract was terminable for the reasons mentioned in the contract even one party had a right to terminate the contract. Learned counsel for the said respondents on the basis of the said counter affidavit stated that the relation between contracting parties were to be governed by the terms of contract between the parties and when a contract was terminable for the reasons mentioned in the contract even one party had a right to terminate the contract. He also stated that as per the GCC the intended completion date for the whole work was 12 months after start of the work and hence the work should have been completed by 12.11.2006 by the petitioner, but he failed to carry out his obligations, although the completion date was extended thrice upto 31.03.2007 at the request of the petitioner. 13. Learned counsel for the respondents submitted that the petitioner even failed to effect the contractors all risk policy as stipulated in the contract which lapsed on 23.02.2009 as per breach of contract under clause 52.2 (a), (e) and (f) of the GCC and hence respondents invoked the bank guarantee on 01.10.2009. Thus he further submitted that the action of respondents was in accordance with law and contractual provisions as held by the Committee also, which was constituted to deliberate upon the dispute between the parties. 14. In this regard learned counsel for the respondents relied upon clause 52.2 (a), (e) and (f) of the GCC with respect to fundamental breaches of contract sufficient for termination and clause 44.1 with respect to liquidated damages as well as on clause 19 (c) of Contract Data to GCC showing maximum limit of liquidated damages for delay in completion of work. Hence he averred that as per the claim sheet attached to letter dated 03.02.2011 (Annexure-1) to I.A. No.3009 of 2011 liquidated damages were charged, as in spite of adjournments granted by the authorities the petitioner did not complete the work and according to clause 24 of the Contract Data attached to the GCC of the agreement 20% of the work not executed was to be deducted and for this both parties to the agreement were bound. 15. Learned counsel for the respondents claimed that the petitioner had completed about 11.78 km having measured quantity 44199.54 sq. 15. Learned counsel for the respondents claimed that the petitioner had completed about 11.78 km having measured quantity 44199.54 sq. metre and the petitioner had been paid running account bill regularly during the period of execution of work and moreover the amount due for prime coat was a meagre amount in comparison to the huge amount of money involved in the contract and the petitioner was required to invest a minimum cash of about Rs.2.20 crores (20% of the contract). He also claimed that no additional construction of WBM-III had been done by the petitioner as according to BOQ the quantity of WBM Gr.III was 6311.25 cum and approximately 6239.805 cum of WBM Gr.III had been executed by the petitioner, which had already been paid. 16. Learned counsel for the respondents argued that details of bills made to the petitioner had been given in Annexure-D to the comprehensive counter affidavit, whereas Annexure-E series to the said affidavit were the letters sent to the petitioner for completion of work and status report of road submitted by the authorities were made Annexure-F series to the comprehensive counter affidavit. 17. Learned counsel for the respondents further argued that as per the minutes of the meeting the measurement of earth work was to commence from 23.05.2009 but the contractor could not provide surveyor at site upto 27.05.2009 and hence joint measurement was started on 28.05.2009 and was completed on 07.08.2009, but thereafter the contractor has not submitted the earth work calculation till date. It was also stated that to ensure completion of work meeting was held on 21.05.2009 to solve the issues and agreed by the petitioner that shifting of materials will be carried out with effect from 23.05.2009 and the petitioner had also agreed to commence construction of culverts from 27.05.2009, whereas the petitioner did not ask for any payment with respect to prime coat and only asked for settlement on account of earth work and completely failed and neglected to abide with the minutes of the said meeting. 18. Learned counsel for the respondents also submitted that the time of completion of work was already fixed in the agreement but in spite of several extensions granted by the authorities the petitioner did not complete the work. 18. Learned counsel for the respondents also submitted that the time of completion of work was already fixed in the agreement but in spite of several extensions granted by the authorities the petitioner did not complete the work. It was further submitted that obstructions created by the persons were duly looked into by the respondents and was sorted out within a week and the said excuse of the petitioner was merely an attempt to cover up his own lapses. With respect to the thickness of the road also letter from N.R.R.D.A. Government of India dated 04.06.2007 was received confirming thickness of PMC of 37.5 mm and the petitioner was accordingly informed and he was asked to complete the work of PMC in the aforesaid thickness. Learned counsel for the respondents also averred that there was sufficient quantity of G.S.B. available near the location of site and as such there was no question of hindrance in execution of G.S.D.B. Jhama metal as alleged. Furthermore, the petitioner did not execute the work of emulsion in the year 2006 but the same had been executed in the year 2007. It was further argued that the petitioner was given maximum opportunity but he did not complete the work. Hence it was prayed that the writ petition of the petitioner being frivolous was fit to be dismissed. 19. It is not in dispute that after due procedure adopted by the authorities, the petitioner was selected for the work included in the notice inviting tender in question and after furnishing of sufficient bank guarantees by the petitioner agreement was executed between the petitioner and the Chief Engineer of NHPC on 03.11.2005 with respect to Package No.BR-3613. 20. However, considering the pleadings of the parties, namely the writ petition, interlocutory application, and rejoinder of the petitioner and preliminary objection, counter affidavit and comprehensive counter affidavit filed on behalf of the respondents it becomes quite apparent that the controversy between the parties lies in a very narrow compass i.e. as to whether the action of the respondents in terminating the contract under clause 52.2 (a), (e) and (f) of the GCC and as to whether forfeiture of security deposit and performance guarantee as well as non-payment of dues by the authorities can be legally justified and as to whether the decision of the Committee dated 25.11.2010 with respect thereto was fit to be quashed. 21. 21. Clause 52 of the GCC is with respect to termination in which clause 52.1 provides that employer may terminate the contract if the contractor causes a fundamental breach of contract. Clause 52.2 describes the fundamental breaches of contract, which are as follows:- (a) the Contractor stops work for 28 days when no stoppage of work is shown on the current Programme and the stoppage has not been authorized by the Engineer; (b) the Contractor is declared as bankrupt or goes into liquidation other than for approved reconstruction or amalgamation; (c) the Engineer gives Notice that failure to correct a particular Defect is a fundamental breach of Contract and the Contractor fails to correct it within a reasonable period of time determined by the Engineer; (d) the Contractor does not maintain a Security, which is required; (e) the Contractor has delayed the completion of the Works by the number of days for which the maximum amount of liquidated damages can be paid, as defined in clause 44.1; (f) the Contractor fails to provide insurance cover as required under clause 13; (g) if the Contractor, in the judgement of the employer, has engaged in the corrupt or fraudulent practice in competing for or in executing the Contract. For the purpose of this clause, “corrupt practise” means the offering, giving, receiving or soliciting of any thing of value to influence the action of a public official in the procurement process or in Contract execution. “Fraudulent Practice” means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Employer and includes collusive practice among Bidders (prior to or after bid submission) designed to establish bid process at artificial non-competitive levels and to deprive the Employer of the benefits of free and open competition. (h) If the Contractor has not completed at least thirty percent of the value of construction Work required to be completed after half of the completion period has elapsed: (i) If the Contractor fails to set up a field laboratory with the prescribed equipment within the period specified in the Contract Data; and (j) Any other fundamental breaches as specified in the Contract Data. 22. Out of the aforesaid breaches, the allegation levelled by the respondents against the petitioner is only with respect to breaches enumerated in sub-clause (a), (e) and (f) of clause 52.2 of the GCC. 22. Out of the aforesaid breaches, the allegation levelled by the respondents against the petitioner is only with respect to breaches enumerated in sub-clause (a), (e) and (f) of clause 52.2 of the GCC. With respect to sub-clause (a) it is relevant to mention here that admittedly the respondents had not finalized the rate of extra item nor any payment for executing extra item had been made and the respondents did not adhere to the condition of the agreement regarding payment of work done as the admitted dues have not been fully paid and hence the said sub-clause (a) of clause 52.2 of the GCC is not attracted. 23. So far sub-clause (e) of clause 52.2 is concerned, the respondents cannot legally impose liquidated damage as they failed to make payment in time for the work done and hence one cannot take advantage of his own wrong. Furthermore, respondents did not take any decision in terms of clause 53.2 of the GCC and the liquidated damages in any event has not exceeded 10% of agreemental value as admittedly the liquidated damage is only Rs.9,25,000.00, whereas agreemental value is Rs.11,29,05,957.00 and maintenance cost is Rs.1,54,000.00 totalling Rs.12,83,05,957.00. Thus sub-clause (e) of clause 52.2 of the GCC cannot be held to be attracted. 24. Similarly sub-clause (f) of clause 52.2 of the GCC is not attracted as respondents have denied payment and rendered the petitioner helpless in the matter of payment for insurance coverage. In the said circumstances, sub-clauses (a), (e) and (f) of clause 52.2 of the GCC not being legally attracted, order dated 25.09.2009 with respect to termination of contract cannot be held to be legal on those grounds. 25. It cannot be disputed that on 21.05.2009 a meeting was convened under the Chairmanship of respondent Executive Director and in the said meeting NHPC agreed to settle the account in relation to earth work by 04.06.2009 and also to settle the balance deviation but the respondents completely failed to show that they performed their part of obligation as agreed in the said meeting within time prescribed or even beyond that period. This fact has also not been categorically denied and in addition to that the specific claim of the petitioner that despite executing work of prime coat as extra item no payment was made nor the rate was finalized, has not been denied by the respondents in their counter affidavit. This fact has also not been categorically denied and in addition to that the specific claim of the petitioner that despite executing work of prime coat as extra item no payment was made nor the rate was finalized, has not been denied by the respondents in their counter affidavit. This clearly amounted to breach of contract on the part of the respondents and their failure to fulfill their obligations. It is evident from the claim sheet that the respondents admitted non-payment of Rs.20,44,493.27 although in the meeting dated 21.05.2009 there was undertaking by the respondents to make payment by 09.06.2009. Once non-payment is held on the part of the respondents despite admitted execution of the work no accountability can be fastened on the petitioner for non-completion of the work in time. 26. Furthermore, the agreement arrived at between the parties in its meeting dated 21.05.2009 clearly amounted to waiver on any delay in the construction work for the above mentioned obvious reasons and the said agreement did not provide for forfeiture of security and bank guarantee. Furthermore, bank guarantee is performance bank guarantee and hence it is attracted only in case of sub-standard performance but there is no case at all of the respondents that the construction by the petitioner was sub-standard. 27. From the claim of the respondents it is also apparent that after rescinding of the work, remaining work was carried out by engaging another contractor on the same price and there was no extra cost incurred by the respondents for completion of the left out work and hence no amount of cost can be fastened on the petitioner even after rescinding is held to be justified. 28. The respondents in their counter affidavit had clearly admitted deviation and extra work and had failed to show that any payment was made by them to the petitioner for the said work carried out by the petitioner. Furthermore, the respondents also could not show that in spite of the understanding and undertaking by the respondents in the meeting held on 21.05.2009 between the parties any payment was made thereafter and as such respondents were clearly at fault and responsible for non-completion of work due to their own non-cooperation, including non-payment of unpaid bills, which was sine qua non for completion of the work. 29. 29. Paragraph-13 of the comprehensive counter affidavit is acknowledgement of the fact that the respondents had made modification in the thickness of PMC and time and again there was change in the thickness as originally the thickness was more, whereafter it was reduced and subsequently the thickness was enhanced to 37.5 mm, which not only shows the arbitrariness on the part of the respondents, but also the cause of delay in the process of construction. The action of the respondents themselves showed that although a time was mentioned in the agreement but the respondents never attached any finality thereto due to their activities and hence time was never essence of the contract in question as no final time was fixed for completion and from time to time the respondents changed the thickness and asked for extra works and subsequently entered into fresh understanding in a meeting between them in the office of the Managing Director on 21.05.2009. Furthermore, the respondents themselves in paragraph-4 of their comprehensive counter affidavit admitted that the date of completion was extended thrice. Annexure-D to the counter affidavit of the respondents shows that running account bills were denied till 2009 and hence it is quite apparent that petitioner continued doing work, which was accepted by the respondents. 30. The Apex Court in case of Hind Construction Contractors vs. The State of Maharashtra, reported in (1979) 2 S.C.R. 1147 had specifically held that if time was not the essence or if the stipulation as to the time fixed for completion had, by reason of the waiver, ceased to be applicable then the only course open to the respondent was to fix some time making it the essence and if within the time so fixed the appellant-petitioner had failed to complete the work, the defendant-respondent could have rescinded the contract. In the instant case the time fixed in the agreement had ceased to be applicable due to act of the respondents themselves, hence it clearly amounted to waiver and in the said circumstances the Apex Court in the aforesaid decision had further held that it will thus appear clear that though time was not the essence of the contract, the respondent did not fix any further period making time the essence directing the petitioner to complete the work within such period; instead it rescinded the contract straightaway by letter. Thus it was held by the Apex Court in the said decision that such recision on the part of the respondent was clearly illegal and wrongful and thereby the respondent committed a breach of contract with the result that there could be no forfeiture of the security deposit etc. 31. In view of the aforesaid facts and circumstances as well as the settled principles of law, the decision of the Standing Empowered Committee dated 25.11.2010 (Annexure-15) as well as the order of the Chief Engineer (1/C BRRP) NHPC dated 25.09.2009 (Annexure-7) terminating the contract are hereby quashed and it is held that the petitioner is entitled to refund of his full security deposit, bank guarantee and liquidated damages recovered from the petitioner and the value of work done and measured but not paid, all as per the claim sheet attached to letter of NHPC dated 03.02.2011 annexed with I.A. No.3009 of 2011 as Annexure-1 thereof, which is the document of respondents themselves, along with interest at the rate of 8% per annum from the date of termination of contract i.e. 25.09.2009. 32. With the aforesaid observations/directions, this writ petition is allowed.