Order Initially, the writ petition was filed seeking a direction upon the Respondent no.2 to consider the grievances raised in letter dated 04.09.2013 of the petitioner and to refer the matter to External Independent Monitor for monitoring the execution of the contract in terms of Integrity Pact appended to the General Terms and Conditions governing the Transporting and Loading contract. Subsequently, the contract awarded to the petitioner was terminated on 16.10.2013 and therefore, the petitioner moved I.A. No. 7997 of 2013 seeking permission to amend the writ petition for incorporating a prayer challenging the termination of contract dated 16.10.2013. After the termination of the contract, orders dated 15.01.2014 and 02/03.06.2014 were passed whereby security deposit furnished by the petitioner in relation to other contracts were sought to be appropriated/ withheld and therefore, orders dated 15.01.2014 and 02/03.06.2014 were also sought to be challenged by filing I.A. Nos. 685 and 3001 of 2014. Vide order dated 30.07.2014, the amendments sought by the petitioner were allowed and the petitioner was permitted to file amended writ petition incorporating challenges to orders dated 16.10.2013, 15.01.2014 and 02/03.06.2014. 2. The petitioner, a partnership firm submitted its tender in pursuance of tender enquiry dated 23.11.2009 for the work of hiring of HEMM for removal of Over Burden from query of Section 1 of Rajrapa Open Cast Project with average load of 1.02 km and execution, loading and transportion of WIII grade coal from Rajrapa Open Cast Project to Rajrapa Washery load distance of 34 km. The petitioner was declared a successful bidder and it was awarded the work by work-order dated 21.06.2010 for a period of eight years for a total value of Rs.14181.48 lacs. The General Terms and Conditions governing the contract of Transporting and Loading contained “Integrity Pact” which provided appointment of an External Independent Monitor for monitoring the tender process and the execution of the contract. For execution of work alloted to it, the petitioner needed more than 10,000 Ltrs of HSD everyday however, in view of letter dated 17.01.2013 issued by the Ministry of Petroleum and Natural Gas, Government of India, the Indian Oil Corporation issued letter dated 08.03.2013 and stopped HSD supply to bulk consumers. This seriously affected the execution of work by the petitioner. This seriously affected the execution of work by the petitioner. The petitioner made representation to respondent no.1, the Chairman-cum-Managing Director for supply of diesel at the stipulated rate of Rs.33.69 paise for Rajrapa Project and at the rate of Rs.39.66 paise for Hesagarha Project. The respondent no.3 vide letter dated 11.04.2013 intimated the petitioner that the respondent-CCL is ready to supply HSD at the rate of Rs. 69.21 paise per Ltr however, compensation for price variation was fixed at Rs. 50.33 per Ltr from 16.02.2013. In terms of Clause 37.0 of the STC, the petitioner was entitled for escalation at the rate of Rs. 69.21 Ltr and therefore, vide letter dated 15.04.2013, the petitioner sought confirmation of the provision for escalation however, vide letter dated 17.04.2013 the respondent no.3 directed the petitioner to resume work for removal of Over Burden, failing which the contract would be terminated and damages would be recovered from the petitioner besides, invoking the bank guarantee. Challenging the letter dated 11.04.2013, the petitioner approached this Court in W.P.(C) No. 2920 of 2013 which was permitted to be withdrawn with liberty to file suit and/or to invoke Arbitration Clause. The petitioner vide letter dated 04.09.2013 requested the respondent no.2 to refer the matter for arbitration to External Independent Monitor and vide letter dated 23.09.2013, the Chairman of Transparency International Limited also requested the respondent no.2 to designate a Monitor to look into the complaint of the petitioner however, vide letter dated 25.09.2013, the respondent no.3 declined to entertain the request for referring the matter to an External Independent Monitor for adjudication. Vide letter dated 16.10.2013, the contract was terminated during the pendency of the present writ petition and vide letters dated 15.01.2014 and 02/03.06.2014 security, deposited in relation to other contracts were sought to be appropriated. 3. A counter-affidavit to the amended writ petition has been filed on behalf of the respondents questioning the maintainability of the writ petition on the ground that the dispute arises out of a contract which involves several disputed questions of fact. Moreover, the petitioner has already approached the civil court by filing Money Suit No. 05 of 2012. It is stated that since the petitioner has abandoned the work and the contract has already been terminated, the dispute cannot be referred to an External Independent Monitor. Moreover, the petitioner has already approached the civil court by filing Money Suit No. 05 of 2012. It is stated that since the petitioner has abandoned the work and the contract has already been terminated, the dispute cannot be referred to an External Independent Monitor. On the request of the petitioner a Committee was constituted which reported that an amount of Rs.7,96,476.05 has to be recovered on account of land rent, electricity consumption, etc. In terms of Clause 6.2 of Section 3 of General Terms and Conditions of the Contract, the contractor is liable to pay penalty upto 10% of the contract value. The contract value in the present case is Rs. 14181.48 Lacs and the amount forfeited till date is Rs.3,40,66,632.46/only and therefore, for realising the penalty two bank guarantees amounting to Rs. 1,17,13,950.00/and Rs. 1,10,86,950.00/have been encahsed in terms of Clause 9(g) of Section 3 of the General Terms and Conditions. It is further stated that under Clause 9.1 of the Special Terms and Conditions of the Agreement, the contractor was required to arrange all materials, source, spares, bills, tackles, etc. at its own cost and thus, it was responsibility of the petitioner to arrange HSD for executing the work. The additional cost of diesel which is realised towards handling charges cannot be a basis for claiming escalation. At the request of the petitioner, the respondents agreed to supply diesel for which handling charges have to be paid by the petitioner. The formula of escalation is not applicable for the handling charges as it cannot be construed as increase in the price of diesel rather, it is the cost involved for providing diesel at the site. Moreover, the petitioner is bound by the Terms and Conditions of the Contract. 4. Heard the learned counsel appearing for the parties and perused the documents on record. 5. Mr. Moreover, the petitioner is bound by the Terms and Conditions of the Contract. 4. Heard the learned counsel appearing for the parties and perused the documents on record. 5. Mr. Sanjeev Sahay, the learned counsel appearing for the petitioner submitted that to ensure transparency in the process of tender and execution of work an Integrity Pact has been signed by the parties however, inspite of repeated request by the petitioner and a prayer made in the writ petition seeking appointment of an External Independent Monitor, the respondents have illegally chosen not to appoint an External Independent Monitor and after terminating the contract during the pendency of the writ petition a plea has been taken that the Independent Monitor could have been appointed only during the currency of the contract. The stand taken by the respondents is not only illegal and arbitrary, it clearly is a pointer to the corruption in the coal company which, the respondents apprehend, would be detected if the Independent Monitor is appointed. The action on the part of the respondents in not appointing an External Independent Monitor cannot be sanctioned in law. Referring to a communication dated 05.08.2013 from the Central Vigilance Commission, the learned counsel for the petitioner submits that this is a fit case for appointment of External Independent Monitor for unearthing the corruption which has engulfed the coal companies. Challenging the termination of contract vide letter dated 16.10.2013, the learned counsel for the petitioner has submitted that the termination order is not only arbitrary and illegal, it is liable to be quashed on the ground of impossibility of performance. Referring to communication dated 17.01.2013 issued by Ministry of Petroleum and Natural Gas, Government of India, the learned counsel appearing for the petitioner has submitted that the supply to the bulk consumers was stopped by the Indian Oil Corporation and such a situation was not contemplated in the contract and since performance of the contract became impossible for the reasons beyond the control of the petitioner therefore, the contract could not have been terminated. It is submitted that the subsequent imposition of penalty and invocation of bank guarantee are illegal. Assailing the letters dated 15.01.2014 and 02/03.06.2014, the learned counsel for the petitioner has submitted that the damages sought to be recovered from the petitioner cannot be recovered without calculation and determination of damages by the civil court. It is submitted that the subsequent imposition of penalty and invocation of bank guarantee are illegal. Assailing the letters dated 15.01.2014 and 02/03.06.2014, the learned counsel for the petitioner has submitted that the damages sought to be recovered from the petitioner cannot be recovered without calculation and determination of damages by the civil court. The respondents on their own cannot calculate and determine the quantum of damages to be recovered from the petitioner. He refers to the judgment of Hon'ble Supreme Court in “The Union of India Vs. Raman Iron Foundary”, reported in (1974) 2 SCC 231 . 6. Per contra, Mr. A.K. Das, the learned counsel appearing for the respondents reiterated the stand taken in the counter-affidavit and submitted that the petitioner abandoned the contract midway and therefore, after issuing notices dated 11.04.2013 and 17.04.2013, the contract was terminated vide letter dated 16.10.2013. The contract contains a provision for predetermined damages and therefore, the cases cited by the counsel for the petitioner are distinguishable on facts. Relying on judgment of the Hon'ble Supreme Court in “Rajasthan State Industrial Development and Investment Corporation and Anr. Vs. Diamond & Gem Development Corporation Limited and Anr.”, reported in (2013) 5 SCC 470 , the learned counsel for the respondents has submitted that the dispute in the present case arises out of a contract and it involves serious disputed questions of fact which cannot be adjudicated in the writ proceeding and therefore, the writ petition is liable to be dismissed. 7. Before adverting to the challenges made by the petitioner to order dated 16.10.2013 terminating the contract and orders dated 15.01.2014 and 02/03.06.2014, I proceed to examine whether the respondents are right in declining the request for appointment of an External Independent Monitor or not. 8. The documents brought on record indicate that along with signing the agreement, an Integrity Pact was also signed by the Central Coalfields Limited (CCL) undertaking to appoint an External Independent Monitor who would be monitoring the tender process and execution of the contract in terms of the commitment of the Principal and the Contractor. The Integrity Pact was to expire 12 months after the last payment made to the Contractor. I find that various Clauses in the Integrity Pact are primarily aimed at ensuring corruption/ influence free tender process and the execution of the work awarded to the contractor. The Integrity Pact was to expire 12 months after the last payment made to the Contractor. I find that various Clauses in the Integrity Pact are primarily aimed at ensuring corruption/ influence free tender process and the execution of the work awarded to the contractor. The Integrity Pact is not intended at resolution of a dispute arising out of contract. The petitioner-contractor has challenged the action of the respondent-CCL being arbitrary, illegal and contrary to law. Though the plea taken by the respondent-CCL that after the termination of contract there is no question of appointment of an External Independent Monitor cannot be accepted however, the petitioner-contractor has not been able to demonstrate that an External Independent Monitor is required to be appointed for resolution of dispute between the parties. The letters written from Transparency International India are of no consequence. 9. The next issue is appointment of an Arbitrator. Clause 12 of the contract provides for “Settlement of Disputes”. Clause 12 of the contract is extracted below: “It is incumbent upon the contractor to avoid litigation and disputes during the course of execution. However, if such disputes take place between the contractor and the department, effort shall be made first to settle the disputes at the company level. The contractor should make request in writing to the Engineer-in-Charge for settlement of such disputes/claims within 30 (thirty) days of arising of the cause of dispute/claim failing which no disputes claims of the contractor shall be entertained by the company. If differences still persist, the settlement of the dispute with Govt. Agencies shall be dealt with as per the Guidelines issued by the Ministry of Finance, Govt. of India in this regard. In case of parties other than Govt. Agencies, the redressal of the dispute may be sought in the Court of Law.” 10. The petitioner-contractor vide letter dated 04.09.2013 requested the respondent for referring the matter to an Arbitrator for settlement of dispute however, the said request was declined stating that there is no provision in the agreement for appointment of an Arbitrator. It is true that under Clause 12 of the Agreement which deals with settlement of dispute a mechanism for resolution of disputes has been provided and there is no provision for referring the dispute to an Arbitrator, the refusal simplicitor by the respondents is not justified. It is true that under Clause 12 of the Agreement which deals with settlement of dispute a mechanism for resolution of disputes has been provided and there is no provision for referring the dispute to an Arbitrator, the refusal simplicitor by the respondents is not justified. The respondents were required to take efforts for settlement of the disputes at the company level and they were also required to give opportunity to the petitioner-contractor to make a written request to the Engineer-in-Charge for settlement of disputes/ claims. However, since the petitioner-contractor has moved the Court of Civil Judge, Sr. Division, Hazaribagh in Money Suit No. 05 of 2012 seeking a declaration that the contractor/ plaintiff is entitled to be compensated for the breach of terms of the Agreement dated 12.07.2010 and for calculation and payment of amount recoverable on account of diesel escalation, wages escalation, lack of amenities, facilities, securities, etc. no purpose would be served by referring the matter for settlement of disputes in terms of Clause 12 of the contract and therefore, I refrain from issuing any direction in this regard. 11. Referring to letter dated 08.03.2013 of the Indian Oil Corporation Limited and letter dated 02.04.2013 from Modi Fuels, the learned counsel for the petitioner has submitted that the supervening circumstance created due to ban imposed by the Indian Oil Corporation Limited was not contemplated in the Agreement and since an agency of the government has created a circumstance which would have penal consequences, the performance of contract has become impossible and therefore, the termination of the contract is penal in nature. After the termination of the contract, the respondents are not justified in imposing penalty upon the petitioner and invoking the bank guarantees. It is further submitted that in terms of Clause 37.0 the respondent-CCL is liable to compensate the contractor for increase in the price of diesel. 12. Per contra, the respondent-CCL has taken a plea that the provisions under Clause 37.0 is not applicable in the present case. The price of diesel has in fact not increased and the increase in the total cost of diesel at which the respondent-CCL agreed to supply diesel to the contractor, is the amount of handling charges levied by CCL. 12. Per contra, the respondent-CCL has taken a plea that the provisions under Clause 37.0 is not applicable in the present case. The price of diesel has in fact not increased and the increase in the total cost of diesel at which the respondent-CCL agreed to supply diesel to the contractor, is the amount of handling charges levied by CCL. A complete mechanism is devised in Clause 37.0 for calculation of price variation and the said Clause also provides that in cases in which the contract period is less than six months, the price variation is not at all admissible. It is thus, submitted that the claim of the petitioner seeking escalation on account of alleged increase in the cost of diesel cannot be accepted. 13. Reliance of the petitioner-contractor on letter dated 08.03.2013 of the Indian Oil Corporation Limited and letter dated 02.04.2013 from Modi Fuels pleading supervening circumstance rendering the performance of the contract dated 12.07.2010 impossible, would now be a subject matter of Money Suit No. 05 of 2012. Any finding given on this aspect would prejudice the case of the parties in the civil court and therefore, I refrain from deciding the issue whether the petitioner-contractor is entitled for payment of price variation on account of alleged increase in diesel price or not. Moreover, the issue involves disputed questions of fact which can be properly examined by the civil court. 14. The termination of contract vide order dated 16.10.2013 has been challenged on the ground of violation of principles of natural justice. The learned counsel for the petitioner has submitted that without affording an opportunity of hearing, by a cryptic order, the Agreement dated 12.07.2010 has been terminated by the respondent-CCL and therefore, the termination order dated 16.10.2013 is liable to be interfered with by this Court. From the materials on record, it appears that vide letter dated 17.04.2013 the petitioner contractor was directed to commence the work, as unilateral stoppage of work by the petitioner-contractor had created crisis like situation. Though the letter dated 16.10.2013 terminating the contract does not reflect any reason, it can be seen from letter dated 16.10.2013 that the decision was taken by the Board of Director of CCL. Under the Agreement, the respondent-CCL is entitled to terminate the contract for breach of the terms of the contract. Though the letter dated 16.10.2013 terminating the contract does not reflect any reason, it can be seen from letter dated 16.10.2013 that the decision was taken by the Board of Director of CCL. Under the Agreement, the respondent-CCL is entitled to terminate the contract for breach of the terms of the contract. Whether the so-called breach committed by the petitioner-contractor, occasioned due to supervening circumstance as pleaded by the petitioner-contractor on account of ban imposed by the Indian Oil Corporation Limited vide letter dated 08.03.2013, warranted termination of contract or not, is again an issue before the civil court and therefore, I am not inclined to interfere with the order of termination of contract dated 16.10.2013. 15. Relying on judgment of the Hon'ble Supreme Court in “The Union of India Vs. Raman Iron Foundary”, reported in (1974) 2 SCC 231 and other cases, the learned counsel for the petitioner has submitted that without adjudicating the “amount due” after cancellation/ termination of the contract, the respondent-CCL is not justified in issuing letters dated 15.01.2014 and 02/03.06.2014 whereby the petitioner-contractor is directed to deposit a sum of Rs.24,03,062.97/and a communication has been made to the General Manager, Kuju Area for withholding an amount of Rs. 10,77,48,167.54/from another running contract of the petitioner. The learned counsel for the petitioner has submitted that the letters dated 15.01.2014 and 02/03.06.2014 allegedly issued in terms of Clause 9.2 of the Contract is contrary to the law laid down by the Hon'ble Supreme Court. Stressing on the words “amount due”, it is submitted that the expression used in Clause 9.2 has been interpreted by the Hon'ble Supreme Court to mean that unless the amount is accepted by the other party or it is determined by a civil court, it cannot be recovered. It is further submitted that in the pending Money Suit, the respondent-CCL has already filed a counter claim and therefore, the amount as sought to be recovered in the present proceeding is barred in law. 16. Per contra, Mr. A.K. Das, the learned counsel for the respondent-CCL has submitted that the contract itself provides for predetermined damages, in terms thereof letters dated 15.01.2014 and 02/03.06.2014 have been issued and therefore, there is no illegality in recovering the predetermined damages from the contractor. 17. There cannot be a dispute that the parties to a contract are bound by the terms and conditions in the contract. 17. There cannot be a dispute that the parties to a contract are bound by the terms and conditions in the contract. Under the contract, the respondent-CCL is empowered to impose penalty for breach of terms of the contract, subject to limitations provided thereunder. I do not find any substance in the contention that, since the respondent-CCL has submitted a counter claim in Money Suit No. 05 of 2012, it is precluded from recovering the amount due on account of penalty/damages. From perusal of letter dated 15.01.2014, it appears that an amount of Rs. 8,84,056.52/has been sought to be recovered on account of penalty against less execution of agreed quantity of coal and OB. Similarly, electricity consumption charges amounting to Rs. 50,225.20/and an amount of Rs. 14,68,71,781.25/on account of land rent has been charged. The charges on account of electricity consumption, land rent, etc. are matters of record and in my view for recovering charges mentioned in letter dated 15.01.2014, the respondent-CCL was not required to approach a civil court for determination of money due and payable to it. 18. Insofar as Communication dated 02/03.06.2014 directing the General Manager, Kuju Area to withhold the amount of Rs. 10,77,48,167.54 is concerned, I find that no reason has been given by the respondent-CCL for withholding the said amount. The respondent CCL has taken a plea that in the event of termination or suspension of contract, the security deposit and other dues for the contract in question or any other work done by the Contractor is liable to be forfeited. The only restriction under the contract is that the amount so forfeited shall not exceed 10% of the contract value. 19. The respondent-CCL has purportedly acted under Clauses 9(g) and 9.2, which are extracted below: 9(g) “The work shall, throughout the stipulated period of contract, be carried out with all due diligence on the part of the contractor. In the event of termination or suspension of the contract, on account of default on the part of the contractor, as narrated hereinbefore, the security deposit and their dues of this work or any other work done under this company shall be forfeited and brought under the absolute disposal of the company provided, that the amount so forfeited shall not exceed 10% of the contract value. 9.2 “On cancellation of the contract or on termination of the contractor, the Engineer in charge shall have powers: a. to carry out the incomplete work by any means at the risk of the contractor. b. to determine the amount to be recovered from the contractor for completing the remaining work or in the event the remaining work is not to be completed the loss/ damage suffered, if any, by the company after giving credit for the value of the work executed by the contractor up to the time of cancellation less on account payments made till date and value of contractor's materials, plant, equipment, etc. taken possession of after cancellation. c. to recover the amount determined as above, if any, from any moneys due to the contractor or any account or under any other contract and in the event of any shortfall, the contractor shall be called upon to pay the same on demand. The need for determination of the amount of recovery of any extra cost/expenditure or of any loss/damage suffered by the company shall not however arise in the case of termination of the contract of death/demise of the contractor as stated in 9.1(d).” 20. A perusal of Clause 9(g) does not indicate that it contains predetermined liquidated damage. It only provides that the damages to be imposed upon the contractor would not exceed 10% of the total contract value. When this restriction is read with Clause 9.2, I find that the respondent-CCL is required to furnish the details of calculation, if the amount of damages can be calculated on the basis of the admitted facts and in every other cases the amount of damage has to be determined by an authority/Court. 21. Moreover, a perusal of letter dated 02/03.06.2014 does not indicate any reason for withholding the amount payable to the petitioner. Even if it is assumed that the amount of Rs. 10,77,48,167.54/has been withheld on account of penalty imposed upon the petitioner-contractor for breach of terms of the contract, admittedly the respondent-CCL has not quantified the amount of penalty. The respondent-CCL has not brought on record any communication to the petitioner-contractor whereby the contractor has been intimated the amount of damages to be recovered from it. 10,77,48,167.54/has been withheld on account of penalty imposed upon the petitioner-contractor for breach of terms of the contract, admittedly the respondent-CCL has not quantified the amount of penalty. The respondent-CCL has not brought on record any communication to the petitioner-contractor whereby the contractor has been intimated the amount of damages to be recovered from it. The plea taken by the respondent-CCL that the amount of damages has not exceeded 10% of the total contract value would not absolve the respondent-CCL to determine the damages to be recovered from the contractor and to communicate the same to the petitioner. It is pertinent to note that in the counter-affidavit the respondent-CCL itself has stated that a Committee was constituted which found that an amount of Rs. 7,96,496.05 was recoverable from the contractor. 22. An authority exercising quasi-judicial function must record reasons for its decision. In the present case, when the petitioner/contractor has challenged the action of the respondent-CCL as being arbitrary and illegal, it was more a reason for the respondent-CCL to record reasons for any action taken against the contractor. In “S.N. Mukherjee Vs. Union of India”, reported in (1990) 4 SCC 594 , the Constitution Bench of Hon'ble Supreme Court has observed as under: “The recording of reasons by an administrative authority serves a solitary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review” 23. In “M.L. Jaggi Vs. Mahanagar Telephones Nigam Ltd. & Ors.”, reported in (1996) 3 SCC 119 , the Hon'ble Supreme Court while dealing with a challenge to the award made by the Arbitrator observed that, “where the only obvious remedy available to the aggrieved person against the award is judicial review under Article 226 of the Constitution, if the reasons are not given, it would be difficult for the High Court to adjudge as to under what circumstances the Arbitrator came to his conclusion and the amount demanded by the department is correct or the amount disputed by the citizen is unjustified.” 24. As noticed above, the letter dated 02/03.06.2014 does not indicate that after calculating the quantum of damages, the amount of Rs. 10,77,48,167.54/has been withheld by the respondent-CCL. As noticed above, the letter dated 02/03.06.2014 does not indicate that after calculating the quantum of damages, the amount of Rs. 10,77,48,167.54/has been withheld by the respondent-CCL. Though, the judgment in “Raman Iron Foundary” has been overruled long back, I find substance in the contention of the counsel for the petitioner that the amount of damages/ penalty must be calculated/ quantified before resorting to Clause 9.2 of the contract. I am of the considered view that the petitioner-contractor cannot be deprived of its right over the amount of Rs. 10,77,48,167.54/without following the procedure in law. For the aforesaid reasons, issuance of letter dated 02/03.06.2014 is found arbitrary and illegal and accordingly, it is quashed. 25. The writ petition is partly allowed in the aforesaid terms.