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2018 DIGILAW 1575 (PAT)

State of Bihar v. Baba Hans Construction Pvt. Ltd.

2018-10-04

ASHUTOSH KUMAR, M.R.SHAH

body2018
JUDGMENT : MUKESH R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Single Judge dated 23.08.2018 passed in C.W.J.C. No. 15400 of 2018, by which the learned Single Judge in exercise of powers under Article 226 of the Constitution of India, has allowed the petition preferred by the original writ petitioner-contractor respondent, herein, and has quashed and set aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and security deposit and the Department to complete the remaining work at the risk and cost of the original writ petitioner, show cause notice dated 30.07.2018 by which the original writ petitioner was directed to show cause as to why it be not blacklisted for a period of ten years and the order of blacklisting the original writ petitioner contractor for a period of 10 years dated 06.08.2018, the original respondents-State of Bihar and others have preferred the present Letters Patent Appeal under Clause 10 of the Letters Patent. 2. The facts leading to the present Letters Patent Appeal, in nutshell, are as under; 2.1. The respondent herein-Contractor (hereinafter referred to as the 'original writ petitioner') is a registered Class-I contractor engaged in construction of canals, service road, building etc. That the appellants herein (hereinafter referred to as the 'original respondents') and the Water Resources Department floated a tender for construction of canals and its distribution system of Durgawati Reservoir Project (NIT) No. 01/2016-17. The estimated cost of the project was of Rs. 40.54 crores. The work was to be completed within a period of 12 months of the agreement. The original writ petitioner being the successful bidder, at a contract price of Rs. 36,49,00,200/-, was issued a letter of acceptance by the Executive Engineer and a formal agreement was executed between the original writ petitioner and original respondent No.9, the Executive Engineer, Durgawati Works Division, Chenari, Rohtas on 09.07.2016 vide Agreement No. 01SBD/2016-17. As per the said agreement and the work order, the work was to be completed within a period of 12 months from the date of agreement i.e. 08.07.2017. The original writ petitioner also deposited the performance security including additional performance security of Rs. 2,09,82,000/- It appears that the original writ petitioner could not complete the work within a period of 12 months as per the conditions of the contract. The original writ petitioner also deposited the performance security including additional performance security of Rs. 2,09,82,000/- It appears that the original writ petitioner could not complete the work within a period of 12 months as per the conditions of the contract. Thereafter, a request was made by the original writ petitioner to extend the time which was granted up to 30.03.2018. However, despite the time to complete the work was extended, the original writ petitioner could not complete the work even in the extended period. According to the Department, numbers of notices were given to the original writ petitioner-contractor to complete the work. However, the original writ petitioner did not complete the work and approximately 46% of the work was completed. Therefore, after issuing the notice, it was found that there was no valid reason for the contractor in not completing the work even within the extended period of time i.e. 30.06.2018 (last extension) and therefore, after giving an opportunity of hearing to the original writ petitioner-contractor, vide order dated 23.07.2018, the appellants-Department rescinded the contract, forfeited the earnest money and security deposit and also bank guarantee which was submitted as performance bank guarantee. 2.2. Feeling aggrieved and dissatisfied with the order dated 23.07.2018, rescinding the contract, forfeiting the earnest money and security deposit, directing that remaining work shall be completed at the risk and cost of the original writ petitioner, the original writ petitioner-contractor preferred the writ petition being C.W.J.C. No. 15400 of 2018 before the learned Single Judge. During pendency of the petition, a show cause notice was issued on 30.07.2018 by which the original writ petitioner was called upon to show cause as to why it be not blacklisted for ten years and thereafter, a final order for blacklisting the original writ petitioner-contractor came to be passed vide order dated 06.08.2018. Thereafter, the original writ petitioner amended the writ petition and also challenged the show cause notice dated 30.07.2018 as well as the final order dated 06.08.2018 blacklisting the original writ petitioner contractor for a period of ten years. 2.3. That it was the case on behalf of the original writ petitioner-contractor that the order rescinding the contract, forfeiting the earnest money and security deposit was illegal and arbitrary and without considering the reply to the show cause notice filed by the original writ petitioner. 2.3. That it was the case on behalf of the original writ petitioner-contractor that the order rescinding the contract, forfeiting the earnest money and security deposit was illegal and arbitrary and without considering the reply to the show cause notice filed by the original writ petitioner. It was submitted that there were numbers of valid reasons due to which the original writ petitioner contractor could not initially start the work and therefore, could not complete the work despite the time to execute the work was extended. It was submitted that delay was not attributable at all to the original writ petitioner-contractor. It was further submitted that if some further time is given to the original writ petitioner, the original writ petitioner-contractor is still ready and willing to complete the work even as per the original rate. It was also submitted that the order of blacklisting the original writ petitioner-contractor for a period of ten years was arbitrary and illegal and the same was passed in haste without giving any sufficient opportunity to the original writ petitioner-contractor. 3. On the other hand, it was the specific case on behalf of the original respondents-appellants herein, that despite the fact that twice the extension was granted to complete the work, the original writ petitioner-contractor did not complete the work even within the extended period of time and therefore, the Department was justified in rescinding the contract as per the terms and conditions of the agreement. It was further submitted that number of notices were served upon the original writ petitioner calling upon the original writ petitioner to complete the work, however, the original writ petitioner did not complete the work even within the extended period of time and, therefore, the department was justified in rescinding the contract, forfeiting the earnest money and the security deposit as per the terms and conditions of the agreement. It was also submitted that the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and the security deposit and directing to complete the work at the risk and cost of the original writ petitioner contractor was absolutely as per the terms and conditions of the agreement between the parties. It was further submitted that it was the original writ petitioner-contractor who was responsible for the delay in not executing the work within the prescribed time. It was further submitted that it was the original writ petitioner-contractor who was responsible for the delay in not executing the work within the prescribed time. It was submitted that as such the dispute between the parties was required to be resolved through the arbitration only as per the clause 25 of the agreement. It was further submitted that it is only the Arbitral Tribunal who would decide who was responsible for delay. Therefore, it was requested not to entertain the petition in exercise of powers under Article 226 of the Constitution of India, more particularly, when the dispute is in the nature of contractual and as agreed between the parties the dispute is required to be resolved through Arbitration only. Therefore, it was requested to dismiss the petition. 3.1. By the impugned judgment and order, the learned single Judge has held that despite the other alternate remedy available, there is no bar to exercise the powers under Article 226 of the Constitution of India by the High Court and therefore, the learned single Judge has entertained the petition and by the impugned judgment and order has quashed and set aside the order rescinding the contract, forfeiting the earnest money and security deposit and also the action of en-cashing the bank guarantee. The learned Single Judge has revoked the performance bank guarantee by observing that the agreement is set aside on account of delay and as the authorities themselves have extended the period of contract realising the fact that there were certain hindrances and hurdles in implementation of the work order, thus, the respondents were also responsible for the delay which is the foundation of the action of rescinding the contract. The learned Single Judge has also observed that the respondents are precluded from passing any such order until the issue of delay is adjudicated and deliberated by an independent forum i.e. the Tribunal. Therefore, until such time the issue of delay is adjudicated by the Tribunal, the original respondents-appellants, herein, cannot proceed against the original writ petitioner-contractor for either cancellation of contract or blacklisting. Consequently after observing as above, the learned Single Judge has quashed and set aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and security deposit. Therefore, until such time the issue of delay is adjudicated by the Tribunal, the original respondents-appellants, herein, cannot proceed against the original writ petitioner-contractor for either cancellation of contract or blacklisting. Consequently after observing as above, the learned Single Judge has quashed and set aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and security deposit. Thereafter, the learned Single Judge has observed that the Department may permit the original writ petitioner-contractor to complete the balance work, since the original writ petitioner-contractor is ready to complete the remaining work as about 80% of work was completed and is ready to complete the remaining work at the present rate itself for which the original writ petitioner has prayed to be allowed at least nine months' working time to complete the remaining work. For the aforesaid, the learned Single Judge has relied upon some observation made by another learned Single Judge in the case of B.K. Enterprises, Dhanpura, Ara v. The State of Bihar & Ors. reported in 2008 (1) PLJR 473 . Not only that even the learned Single Judge has also directed to return the amount, which was recovered by way of invoking the performance bank guarantee/security deposit, to the bank. 3.2. Feeling aggrieved and dissatisfied with the order dated 23.08.2018 quashing and setting aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and security deposit and the department to complete the remaining work at the risk and cost of the original writ petitioner-contractor and quashing and setting aside the order dated 06.08.2018 blacklisting the original writ petitioner for a period of ten years, the original respondents-State of Bihar and others have preferred the present Letters Patent Appeal under Clause 10 of the Letters Patent. 4. Shri Lalit Kishore, learned Advocate General has appeared on behalf of the appellants-original respondents and Mr. Y.V. Giri, learned Senior Advocate has appeared on behalf of the respondent-original writ petitioner-contractor. 4.1. 4. Shri Lalit Kishore, learned Advocate General has appeared on behalf of the appellants-original respondents and Mr. Y.V. Giri, learned Senior Advocate has appeared on behalf of the respondent-original writ petitioner-contractor. 4.1. Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants original respondents has vehemently submitted that the impugned judgment and order passed by the learned Single Judge entertaining the writ petition, quashing and setting aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and the security deposit and quashing and setting the order of blacklisting, is bad in law and/or not sustainable under the law and therefore, the same deserves to be set aside. 4.2. Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants original respondents has submitted that as such, the learned Single Judge has materially erred in quashing and setting aside the order dated 23.07.2018 in exercise of powers conferred under Article 226 of the Constitution of India. 4.3. Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants original respondents has further submitted that the learned Single Judge has materially erred in entertaining the petition under Article 226 of the Constitution of India, despite the specific clause in the contract viz. Clause 25 of Agreement and arbitration Clause, which stipulates that in case dispute arises between the parties, the dispute is required to be resolved through the Arbitration only. It is further submitted that the learned Single Judge, even otherwise, has materially erred in entertaining the petition with respect to dispute which was contractual in nature. In support of his above submission, Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants-original respondents, has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Joshi Technologies International Inc. v. Union of India and others reported in (2015) 7 SCC 728 (Paragraph-69). 4.4. It is further submitted that even otherwise, the impugned judgment and order passed by the learned Single Judge is not sustainable at law. It is also submitted that as such, the learned Single Judge has not at all given any finding on the order dated 23.07.2018, rescinding the contract, forfeiting the earnest money and security deposit and subsequently, the order dated 06.08.2018 blacklisting the original writ petitioner-contractor for a period of 10 years. It is also submitted that as such, the learned Single Judge has not at all given any finding on the order dated 23.07.2018, rescinding the contract, forfeiting the earnest money and security deposit and subsequently, the order dated 06.08.2018 blacklisting the original writ petitioner-contractor for a period of 10 years. It is also submitted that the impugned judgment and order as such, is a non-speaking and non-reasoned order as no findings are given by the learned Single Judge on merits on the order rescinding the contract and subsequently the order dated 06.08.2018 blacklisting the original writ petitioner contract for a period of 10 years. 4.5. Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants original respondents, has further submitted that as such, the impugned judgment and order though contained in 34 paragraphs, it can be said that the impugned judgment and order is in two paragraphs only i.e. paragraphs 32 and 33. It is further submitted that till paragraph-31, the learned Single Judge has considered the submissions and reproduced the decisions relied upon by the learned counsel appearing on behalf of the respective parties and that too without giving any finding on the order which was set aside, the learned Single Judge has quashed and set aside the orders rescinding the contract and blacklisting the original writ petitioner-contract for a period of 10 years. It is submitted that therefore, the impugned judgment and order deserve to be quashed and set aside. 4.6. Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants original respondents, has submitted that the learned Single Judge has materially erred in relying upon the decisions of the Hon'ble Supreme Court in the case of Whirlpool Corporation v. Registrar of Trade Marks reported in (1998) 8 SCC 1 , Popcorn Entertainment and another v. City Industrial Development Corpn. and another reported in (2007) 9 SCC 593 and overruling the objection on behalf of the original respondents not to exercise the powers under Article 226 of the Constitution of India in view of Clause 25 of the Agreement/Arbitration Clause. It is further submitted that the learned Single Judge materially erred in relying upon the decision of the Hon'ble Supreme Court in the case of Union of India and others v. Tantia Construction Private Limited reported in (2011) 5 SCC 697 . 4.7. It is further submitted that the learned Single Judge materially erred in relying upon the decision of the Hon'ble Supreme Court in the case of Union of India and others v. Tantia Construction Private Limited reported in (2011) 5 SCC 697 . 4.7. It is further submitted by Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants-original respondents that the learned Single Judge has materially erred in not properly appreciating the fact that the order dated 23.07.2018 was absolutely in consonance with the provisions of the agreement between the parties. It is further submitted that the learned Single Judge has materially erred in not properly appreciating the fact that despite thrice extension was granted to the original writ petitioner contractor on the request made by the contractor, the original writ petitioner contractor did not complete the work and, therefore, there was a breach of terms and conditions of the agreement. It is further submitted that the learned Single Judge has materially erred in not properly appreciating the content of order dated 23.07.2018 passed after giving sufficient opportunity to the original writ petitioner-contractor. It is further submitted that the learned Single Judge has materially erred in observing that the original respondents were also responsible for the delay, as the Department itself granted/extended the time to complete the work. 4.8. It is further submitted by Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants-original respondents that even the learned Single Judge has also specifically observed that the issue of delay is required to be adjudicated and deliberated by an independent forum i.e. Tribunal. It is submitted that despite the above, the learned Single Judge has allowed the petition and has quashed and set aside the order rescinding the contract by observing that unless the issue of delay is adjudicated and deliberated by an independent forum i.e. Tribunal, the original respondents-appellants ought not to have proceeded against the original writ petitioner-contractor for either cancellation of the contract or blacklisting. It is further submitted that the aforesaid observation is not sustainable at law and the same can be contrary to the terms and conditions of the agreement between the parties. 4.9. It is further submitted that the aforesaid observation is not sustainable at law and the same can be contrary to the terms and conditions of the agreement between the parties. 4.9. It is further submitted by the Shri Lalit Kishore, learned Advocate General appearing on behalf of the appellants-original respondents that the learned Single Judge has materially erred in directing the Department to permit the original writ petitioner contractor to complete the balance work by granting further nine months' time. It is submitted that in the aforesaid, the learned Single Judge has materially erred in relied upon some observation made by the another learned Single Judge in the case of M/s B.K. Enterprises, Dhanpura, Ara (supra). It is further submitted that even otherwise, as the performance bank guarantee/security was forfeited and the bank guarantee was invoked thereafter, the learned Single Judge is not justified in restoring the same/returning the same to the bank and the same is also unsustainable and the same also deserves to be quashed and set aside. 5. Making above submissions and relying upon the aforesaid decisions, it is requested to allow the present Letters Patent Appeal and quash and set aside the impugned judgment and order passed by the learned Single Judge. 6. The present Letters Patent Appeal has, vehemently, opposed by Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner-contractor. It is further submitted that in the facts and circumstances of the case, the learned Single Judge has not committed any error in allowing the writ petition, quashing and setting aside the order dated 23.07.2018 rescinding the contract, forfeiting the earnest money and security deposit and also quashing and setting aside the order of blacklisting for a period of ten years. It is also submitted that the impugned judgment and order passed by the learned Single Judge is after considering the submissions on merit made by the learned senior counsel appearing on behalf of the original writ petitioner-contractor. It is further submitted that therefore, the impugned judgment is not required to be interfered with by this Court. 6.1. It is further submitted by Mr. It is further submitted that therefore, the impugned judgment is not required to be interfered with by this Court. 6.1. It is further submitted by Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner that the learned Single Judge relying upon the decisions of the Hon'ble Supreme Court in the case of Whirlpool Corporation (supra), Union of India and others (supra) has rightly observed and held that in the fact situation an alternative remedy may not a bar to entertain the petition under Article 226 of the Constitution of India. 6.2. It is further submitted by Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner that as such, the remedy provided as per Clause 25 of Agreement and Arbitration Clause cannot be said to be adequate remedy available even as per Clause, the dispute, if any, between the parties is required to be resolved through the Managing Director. It is further submitted that the department cannot be a Judge in his own cause and decide the dispute between the parties, more particularly, who is also responsible for the delay. 6.3. Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner-contractor has also made submissions on merits and submitted that initially the land was not acquired and, therefore, the possession of the land was not given for sufficient long time and the original writ petitioner-contractor could not start the work. It is further submitted and pointed out that the Department itself granted twice extension after having appreciated the difficulties. It is also submitted that therefore, when the cause for rescinding the contract was delay on the part of the original writ petitioner-contractor in not completing the work, the learned Single Judge has rightly quashed and set aside the order rescinding the contract by rightly observing that the issue of delay is adjudicated by the Tribunal and the original respondents-appellants could not have proceeded against either for cancellation or blacklisting the contractor. 6.4. Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner has made submissions on merit and submitted that the delay in not completing the work within the time prescribed cannot be attributed to the petitioner alone. 6.4. Mr. Y.V. Giri, learned Senior Advocate appearing on behalf the original writ petitioner has made submissions on merit and submitted that the delay in not completing the work within the time prescribed cannot be attributed to the petitioner alone. It is further submitted on behalf the original writ petitioner that therefore, the order of blacklisting the original writ petitioner contractor was absolutely illegal and so arbitrary as no sufficient time was granted to the original writ petitioner-contractor to make submissions and the learned Single Judge has rightly quashed and set aside the order of blacklisting for a period of 10 years. 6.5. Making above submissions, it is requested to dismiss the present Letters Patent Appeal by relying upon the following decisions; (i) M/s J.G. Engineers Pvt. Ltd. v. Union of India and Others reported in AIR 2011 SC 2477 ; (ii) State of Karnataka v. Shree Rameshwara Rice Mills, Thirthahalli reported in (1987) 2 SCC 160 ; (iii) Southern Electricity Supply v. Seetaram Rice Mill reported in (2012)2 SCC 108 . 7. Heard learned counsel appearing on behalf of the respective parties at length. Perused and considered the impugned judgment and order passed by the learned Single Judge by which in exercise of powers under Article 226 of the Constitution of India, the learned Single Judge has quashed and set aside the order passed by the appellants-original respondents rescinding the contract, forfeiting the earnest money and security deposit and has also quashed and set aside the consequential order to complete the remaining work at the risk and cost of the original writ petitioner-contractor. The learned Single Judge has also quashed and set aside the order of blacklisting the original writ petitioner contractor for a period of 10 years. 8. Having heard learned counsel appearing on behalf of the respective parties and considering the impugned judgment and order passed by the learned Single Judge, at this stage, it is required to be noted that though the impugned judgment and order contained in 34 paragraphs, however, till paragraph 31, the learned Single Judge has narrated the submissions made by the learned counsel appearing on behalf of the respective parties and the judgments relied upon by the learned counsel appearing on behalf of the respective parties. Thereafter, the learned Single Judge has concluded the order and given the finding in only one paragraph viz. paragraph-32. Thereafter, the learned Single Judge has concluded the order and given the finding in only one paragraph viz. paragraph-32. For the sake of convenience, paragraphs 32 to 34 are reproduced herein below and read as under; "32. Having consciously considered the rival submissions of the parties, it is not in dispute that it is only on account of delay that the impugned action has been taken against the petitioner. It is also a fact that the authorities have themselves extended the period of contract realising the fact that there were certain hindrances and hurdles in implementation of the work order. Thus, the respondents were also responsible for the delay which is the foundation for the action of rescinding the contract, forfeiture of earnest money and security deposit and executing the remaining work at the risk and cost of the petitioner as well as the consequential action and the order of blacklisting which rests on the adjudication of the delay aspect. Hence, in my opinion, the respondents are precluded from passing any such orders until the issue of delay is adjudicated and deliberated by an independent forum i.e. the Tribunal. Until such time the issue of delay is adjudicated by the Tribunal, the respondents cannot proceed against the petitioner for either cancellation of contract or blacklisting. 33. In the result, the entire action of the respondents beginning from the order dated 23.07.2018, as contained in Annexure-17 rescinding the contract, forfeiting the earnest money and security deposit and Department to complete the remaining work at the risk and cost of the petitioner, show cause notice dated 30.07.2018, as contained in Annexure-18 by which the petitioner has been asked an explanation within a week as to why he be not blacklisted for a period of 10 years and the order of blacklisting the petitioner for a period of 10 years dated 06.08.2018 as contained in Annexure-23, are all held illegal and are, accordingly, set aside. All the question and liability which will come on the petitioner will be subject matter of arbitration proceeding before the Tribunal. All the question and liability which will come on the petitioner will be subject matter of arbitration proceeding before the Tribunal. However, since the specific averment has been made by the petitioner that he is ready to complete the remaining work, as about 80% of the work has been completed and he is ready to complete the remaining work at the present rate itself for which he has prayed to be allowed at-least nine months' working time to complete the work, the respondent authorities in the light of the order passed in the case of M/s B.K. Enterprises, Dhanpura, Ara (supra) and considering the public interest and the financial consequences may permit the petitioner to complete the balance work. 34. The performance guarantee/security deposit invoked by the Department and the Demand Draft No. 716452 dated 06.08.2018 prepared by the Branch Manager, State Bank of India, Kadam Kuan Branch (Patna) in favour of the Executive Engineer, Durgawati Works Division, Chenari for an amount of Rs. 1,59,28,000/- deposited in the custody of the Registrar General on 09.08.2018 in pursuance to the order dated 08.08.2018, passed by this Court in the present writ application, be handed over to the Bank-Respondent No.10 through his counsel, would be treated to be cancelled and proceeds deposited in the same said account of the petitioner." 9. Considering the observations/findings recorded by the learned Single Judge in the aforesaid paragraphs, more particularly, paragraph 32, which can be said to be the only paragraph having some reasons/findings, for the reasons stated herein below, the impugned judgment and order passed by the learned Single Judge cannot be sustained. 9.1. It is required to be noted that the dispute between the parties was contractual in nature and both the parties were/are governed by the agreement/contract entered into/executed between the parties which specifically contain Arbitration Clause with respect to dispute arises out of the contract between the parties. 9.1. It is required to be noted that the dispute between the parties was contractual in nature and both the parties were/are governed by the agreement/contract entered into/executed between the parties which specifically contain Arbitration Clause with respect to dispute arises out of the contract between the parties. Therefore, as such, any dispute between the parties, more particularly, whether the delay in execution of the work was attributable to whom and whether the action of the appellants-Department in rescinding the contract on the ground that the contractor-original writ petitioner, despite the sufficient opportunity was given, failed to complete the work as per the work order and, therefore, failed to fulfil their contractual obligation, all questions are required to be considered and adjudicated by the Arbitral Tribunal considering the Clause 25 of the Contract/Agreement between the parties. While entertaining the petition under Article 226 of the Constitution of India, challenging the order/decision of the Appellants-Department in rescinding the contract and overruling the objection on behalf of the Department not to entertain the petition under Article 226 of the Constitution of India, challenging the action of the Department-Appellants in rescinding the contract, the learned Single Judge has noted the decision of the Hon'ble Supreme Court in the case of Whirlpool Corporation (supra) as well as Tantia Construction Private Limited (supra) and another decision of the Hon'ble Supreme Court in the case of Sri Seetaram Rice Mill (supra). However, it is required to be noted that as such, thereafter there is no finding recorded by the learned Single Judge and/or no reasons are assigned by the learned Single Judge for entertaining the petition, under Article 226 of the Constitution of India, challenging the decision of the appellants-Department in rescinding the contract, forfeiting the earnest money and the security deposit etc. 9.2. As observed herein above, except the reasoning in paragraph 32, thereafter no other reasons are assigned. 9.2. As observed herein above, except the reasoning in paragraph 32, thereafter no other reasons are assigned. Even otherwise, considering the decisions of the Hon'ble Supreme Court in the case of Whirlpool Corporation (supra); in the case of Tantia Construction Private Limited (supra); and in the case of Sri Seetaram Rice Mill (supra) and the facts of the case on hand, more particularly, it is the specific case on behalf of the appellants-Department, so stated in the counter as well as considering the material on record, it appears that after the notices were given to the contractor-original writ petitioner to complete the work, the contractor failed to complete the work even within the extended period of time and after giving show cause notice, the appellants-Department took a decision to rescind the contract and to forfeit the earnest money as well as security deposit and thereafter took a decision to complete the remaining work at the risk and cost of the contractor-original writ petitioner. Therefore, the aforesaid decisions are basically based on the premise that the decision, which was impugned, was in breach of principles of natural justice and it was held that in such a situation, the petition under Article 226 of the Constitution of India may be entertained. It is further required to be noted that even in the present case, the dispute between the parties was arising out of the contract and the dispute was contractual in nature. Therefore, as such the learned Single Judge has materially erred in entertaining the petition under Article 226 of the Constitution of India, challenging the order rescinding the contract, forfeiting the earnest money and security deposit. 9.3. It is also required to be noted that even the learned Single Judge has specifically observed in paragraph-32 that the issue of delay is to be adjudicated and deliberated by the Tribunal (Arbitral Tribunal). However, the learned Single Judge has observed that till the issue of delay is adjudicated and deliberated by the Tribunal (Arbitral Tribunal), the Department-appellants, herein, could not have proceeded against the contractor-original writ petitioner for either cancellation of contract or blacklisting. The aforesaid reasoning is absolutely unsustainable and cannot be accepted. However, the learned Single Judge has observed that till the issue of delay is adjudicated and deliberated by the Tribunal (Arbitral Tribunal), the Department-appellants, herein, could not have proceeded against the contractor-original writ petitioner for either cancellation of contract or blacklisting. The aforesaid reasoning is absolutely unsustainable and cannot be accepted. Once the Department takes a decision to rescind the contract on the ground that the contractor failed to perform the work as per the contract which was after giving opportunity to the contractor, thereafter when the decision was/is taken to rescind the contract, the same is required to be referred to the Tribunal (Arbitral Tribunal) and the Arbitral Tribunal will take a decision and consider the defence of the original writ petitioner-contractor that the delay was not attributable to the contractor but delay in completing the work is attributable to the Department and if thereafter the Arbitrator comes to the conclusion on the basis of the evidence led that the contractor was not at fault and delay was attributable to the Department and/or delay was beyond the control of contractor, necessary consequences shall follow. Once the Department takes a decision to rescind the contract on the ground that the contractor failed to complete the work within the time prescribed under the contract, in that case, it can be the defence of the contractor that the delay was not attributable to it/him and thereafter when the dispute is referred to the Arbitrator/Arbitral Tribunal, the Tribunal is required to take a decision and consider the case on the basis of the evidence led. However, to say, till the Tribunal adjudicates the issue of delay, the Department cannot proceed against the contractor for either cancellation of the contract and blacklisting, is not sustainable. 9.4. There is one another reason why the impugned judgment and order passed by the learned Single Judge quashing and setting aside the order rescinding the contract is not sustainable. It is required to be noted that as such, there is no finding given by the learned Single Judge that the delay was attributable to the Department and the contractor was not at all responsible for the delay. The learned Single Judge has observed that as the authorities themselves have extended the period of contract, the Department was also responsible for the delay which is the foundation for the action of rescinding the contract. The learned Single Judge has observed that as the authorities themselves have extended the period of contract, the Department was also responsible for the delay which is the foundation for the action of rescinding the contract. The aforesaid reasoning is not sustainable at all. Merely because, considering the representation made by the contractor, the Department has extended the period of contract, it cannot be said that the Department was also responsible for the delay. 9.5. It is also required to be noted that as such, there is no specific finding recorded by the learned Single Judge that the order rescinding the contract and blacklisting the contractor was in breach of principles of natural justice and/or no sufficient opportunity was given to the original writ petitioner-contractor. 9.6. It is required to be noted that even in paragraph-33, the learned Single Judge has specifically held that all the questions and liability, which will come on the original writ petitioner-contractor, will be the subject matter of the arbitration proceeding before the learned Tribunal. Despite making above observations, the learned Single Judge has quashed and set aside the order rescinding the contract, forfeiting the earnest money and security deposit and order of blacklisting the original writ petitioner-contractor in exercise of powers under Article 226 of the Constitution of India. 10. Learned counsel appearing on behalf of the original writ petitioner-contractor has made submissions on merits on the aspect of delay and in support of his submissions that the delay was attributable to the Department as there were number of hurdles for which the contractor-original writ petitioner could not start the work. However, the delay was attributable to whom is required to be considered and adjudicated by the Arbitral Tribunal on the basis of the evidence that may be led. Therefore, we refrain from entering into such disputed questions of fact which as such, as per the contract, is required to be adjudicated by the learned Arbitral Tribunal. 11. At the cost of repetition, it is observed that as such, in the impugned judgment and order, the learned Single Judge has not at all given any reasons and/or finding on legality and validity of the order passed by the Department rescinding the contract etc. and has set aside the order rescinding the contract etc. 11. At the cost of repetition, it is observed that as such, in the impugned judgment and order, the learned Single Judge has not at all given any reasons and/or finding on legality and validity of the order passed by the Department rescinding the contract etc. and has set aside the order rescinding the contract etc. and even the order of blacklisting by observing that as the foundation of the order rescinding the contract is delay and as the issue of delay is required to be adjudicated and deliberated by the Arbitral Tribunal and till the Arbitral Tribunal adjudicates such dispute, the Department is precluded from proceeding against the contractor for either cancellation of contract or blacklisting. As observed herein above, the same is not sustainable at all. 12. While passing the impugned judgment and order, the learned Single Judge has also observed that as the contractor-original writ petitioner has stated that he is ready to complete the remaining work, as 80% work is completed and he is ready to complete the remaining work at the present rate itself, the Department may permit the original writ petitioner-contractor to complete the balance work by giving further nine months' time, the aforesaid is also not sustainable. As such, it is for the Department to consider whether to grant further time and/or extend the time or not? In the present case, even earlier twice the time was extended and even thereafter also, the original writ petitioner-contractor failed to complete the work within the extended period of time (as per the Department). Even otherwise, such a relief/order/direction could not have been granted by learned Single Judge in exercise of powers under Article 226 of the Constitution of India. 13. Even the direction issued by the learned Single Judge in paragraph-34 to return the bank guarantee which was already en-cashed also could not have been issued and that too in exercise of powers under Article 226 of the Constitution of India. 14. Now, so far as submission on behalf of the original writ petitioner-contractor that considering the Clause 25 of the Contract/Agreement, the Arbitral Tribunal was consist of the Managing Director of the Corporation and therefore, considering the provisions of Arbitration Act (as amended), he cannot be the Arbitrator and therefore, such a remedy cannot be said to be an efficacious remedy is concerned, the aforesaid has no substance. The aforesaid is required to be considered while appointing an Arbitrator under Section 11 of the Act. It is required to be noted that as such, the original writ petitioner-contractor is a party to the contract and has agreed that in case any dispute arises with respect to the contract between the parties, the same is required to be resolved through arbitration. 15. In view of the above and for the reasons stated above, the impugned judgment and order passed by the learned Single Judge is not sustainable and the same deserves to be quashed and set aside. 16. In view of the above and for the reasons stated above, the present Letters Patent Appeal succeeds. The impugned judgment and order passed by the learned Single Judge dated 23.08.2018 passed in C.W.J.C. No. 15400 of 2018 is, hereby, quashed and set aside. However, it is observed that this Court has not expressed anything on merits in favour of either party and the dispute between the parties is required to be adjudicated by the Arbitral Tribunal, as per the Clause 25 of the Contract.