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2018 DIGILAW 1596 (GAU)

J. A. Brothers v. Union of India

2018-11-09

NELSON SAILO

body2018
JUDGMENT : Nelson Sailo, J. 1. Heard Mr. P. Choudhury, the learned counsel for the petitioner and Mr. M. Choudhury, the learned senior counsel assisted by Mr. P. Goswami, for the respondent No. 2. I have also heard Ms. Zairemsangpuii, the learned CGC, who appears for the respondent No. 1. 2. The facts of the case leading to the filing of the present writ petition may briefly be stated at the outset. 3. The petitioner is a proprietorship firm having its office at Jinendra Tower, Old Daily Market at Dimapur in the State of Nagaland. The respondent No. 1 is the Nodal Ministry entrusted with the responsibilities of protecting the borders of the Country whereas the respondent No. 2 is a Government of India enterprise formed under Section 617 of the Companies Act, 1956. It is a company under the control of the Government of India and is represented by its General Manager. 4. The respondent No. 2 as authorized by the respondent No. 1 floated a Notice Inviting Tender (NIT) on 14.09.2012 for the purpose of construction of 10 Platoon level and 3 Company level Border Out Posts (BOPs) along the Indo-Bangladesh Border in the State of Mizoram on behalf of the Ministry of Home Affairs, Department of Border Management. The estimated cost for construction of the BOP was Rs. 65.24 crores with 18 months as the completion time. An earnest money deposit of Rs. 37,62,000/- was also stipulated. The petitioner responded to the NIT and consequently, vide communication dated 19.11.12 (Annexure P-2), the respondent No. 2 issued a Letter of Intent (LOI) to the petitioner accepting its bid at 2% below the estimated cost i.e. Rs. 63,93,03,809.48/-. Pursuant to the issuance of the LOI, an Agreement was executed on 28.12.2012 between the petitioner and the respondent No. 2. The petitioner also furnished Bank Guarantee No. 00056121FG000017 dated 10.07.2012 for a sum of Rs. 38,76,089/- in lieu of earnest money in favour of respondent No. 2. Three other Bank Guarantees were also furnished by the petitioner. 5. To carry out the business, the respondent No. 2 framed the General Conditions of Contract (GCC) stipulating Labour Safety Provisions, Model Rules, Contractor's Labour Regulations with prescribed Proformas. In addition to the GCC, the respondent No. 2 also framed the Additional Conditions of Contract (ACC) for the same purpose. 6. 5. To carry out the business, the respondent No. 2 framed the General Conditions of Contract (GCC) stipulating Labour Safety Provisions, Model Rules, Contractor's Labour Regulations with prescribed Proformas. In addition to the GCC, the respondent No. 2 also framed the Additional Conditions of Contract (ACC) for the same purpose. 6. According to the petitioner, although the respondent No. 2 issued the LOI on 19.11.2012, the sites were not delivered to the petitioner by the respondent No. 2. The respondent No. 2 however, being concerned with the timely completion of the contract work of the 13 BOPs on 11.04.2014 informed the petitioner that there was hardly any progress in the construction work of BOPs such as, Tablabagh, New Balukesuri, Lokhisuri etc,. Although few labourers were mobilized for jungle clearance work in Tablabagh and New Balukesuri BOP, the same was suspended and no work was being done for the last more than one month. On a review made by the respondent No. 2, the progress of the work in respect of Silkur-II, Jarralsuri and Barapansuri as cited in the said communication was found to be progressing very slowly or found to be still abandoned. Therefore, the petitioner was requested to speed up the work for all the 13 BOPs by deploying the required materials and manpower so that the working season will not be lost. 7. In response to the communication dated 11.04.2014, the petitioner on 18.04.2014 wrote to the respondent No. 2 informing the said authority that out of the 13 BOPs, they were in receipt of only 2 sites initially and they also deputed their Project Manager to render assistance in the demarcation of the land as they were disturbed by the Forest Department for want of clearance. Therefore, the availability of land for construction of the BOPs as communicated on 24.03.2014 and 10.04.2014 were only irrelevant. Under the circumstance, the respondent No. 2 was requested to provide suitable price escalation since after 17 months, the rates quoted were no longer viable. The petitioner also sought for compensation for the charges and interest on all the Bank Guarantees paid including, the cost of establishment, manpower, travel expenses and miscellaneous expenses incurred from the date of issuance of the LOI till the sites are handover to the petitioner. 8. The petitioner also sought for compensation for the charges and interest on all the Bank Guarantees paid including, the cost of establishment, manpower, travel expenses and miscellaneous expenses incurred from the date of issuance of the LOI till the sites are handover to the petitioner. 8. Subsequently on 21.04.2014, the petitioner and the respondent No. 2 jointly signed the Handing/Taking over Certificate for 11 locations for the purpose of erecting the BOPs. Therefore, the petitioner maintained that it could not be blamed for non-completion of the project as the delay was only due to non-handing over the sites by the respondent No. 2. 9. Again on 22.04.2014, the respondent No. 2 asked the petitioner to expedite the work without any further delay and that the progress of the work will be reviewed every month. Further, in the coming three months time, an assessment will be made on the performance of the petitioner to determine further course of action. 10. On 24.04.2014, the Directorate of Election through its Joint Chief Electoral Officer, Aizawl gave a clearance for going ahead with the construction work of the BOPs. 11. On 21.11.2014, a meeting was held between the petitioner and the respondent No. 2 with regard to the construction of the 13 BOPs. As per the Meeting Minutes, the petitioner confirmed the handing over of BOP for Barapansuri site by April, 2015. After visiting the Nalla Jararchuri site, the same was targeted to be complete by the financial year 2014-15. It was also agreed that the respondent No. 2 shall undertake the construction of Bindyasura, Tablabagh, Kalapani and New Balukasuri BOPs on behalf of the petitioner. In so far as the 7 remaining BOPs, since the Mar boat (water transport) was yet to be operational, the petitioner assured to make necessary arrangements so that all the 13 BOPs could be completed by May, 2015. 12. Again on 22.09.2015, a Joint Meeting was held between the petitioner and the respondent No. 2 pertaining to 9 BOPs, wherein the completion time was extended to May, 2016. On account of such extended time, since the validity period of the Bank Guarantee was due to expire on 28.05.2016, the respondent No. 2 wrote to the Branch Manager of Allahabad Bank to extend the validity period of the Bank Guarantee for Rs. On account of such extended time, since the validity period of the Bank Guarantee was due to expire on 28.05.2016, the respondent No. 2 wrote to the Branch Manager of Allahabad Bank to extend the validity period of the Bank Guarantee for Rs. 3,83,59,000/- issued in favour of the respondent No. 2 on behalf of the petitioner for another year i.e. up to 28.05.2017 with three months claim period upto 28.08.2017. The said communication was made on 7.4.2016. It was further stated that if the validity period of the Bank Guarantee was not further extended by the party, the communication may be treated as an encashment notice for invocation of the Bank Guarantee and that the amount may be remitted through Demand Draft in favour of the respondent No. 2 payable at New Delhi. Areminder was issued on 22.04.2016 and thereafter, a similar communication was made by the respondent No. 2 on 14.09.2016 for the Bank Guarantee amounting to Rs. 1,40,64,688/-. 13. On 18.10.2016, the respondent No. 2 informed the petitioner to immediately mobilize materials and labour to complete 9 BOPs and that the progress of the construction work as achieved upto 31.12.2016 will be reviewed at the highest level. The said communication dated 18.10.2016 was preceded by a Meeting held between the petitioner and the respondent No. 2 on 18.10.2016. According to the petitioner, it was decided in the said Meeting that the respondent No. 2 will take a final decision whether to continue with the petitioner or to terminate their contract and forfeit their securities, equipment etc. by 10.01.2017. 14. Thereafter, on 03.03.2017, the respondent No. 2 served a notice without prejudice under Clause 72.2(iii) and (iv) of the GCC asking the petitioner to achieve certain progress given in the said communication within 7 days of issuance of the letter, failing which the respondent No. 2 will be constrained to get the works withdrawn/terminated and get them executed at risk and cost of the petitioner. Against the said communication, the petitioner on 05.03.2017 sought for reconsideration of the said decision and to grant extension of time to complete the project. The petitioner thereafter, vide communication dated 10.03.2017 was given another opportunity by the respondent No. 2 asking the petitioner to achieve progress within 7 days of issuance of the letter and failing which, the works will be withdrawn/terminated and executed at the risk of the petitioner. 15. The petitioner thereafter, vide communication dated 10.03.2017 was given another opportunity by the respondent No. 2 asking the petitioner to achieve progress within 7 days of issuance of the letter and failing which, the works will be withdrawn/terminated and executed at the risk of the petitioner. 15. On receiving the said communication dated 10.03.2017, the petitioner by writing a letter on 14.03.2017 to the respondent No. 2 sought for extension of time till March, 2018. The said communication was followed by another communication written by the petitioner to the respondent No. 2 on 16.3.2017 explaining the reason for the delay while asking for extension of time till March, 2018. However, the respondent No. 2 vide communication dated 20.03.2017 issued the impugned Termination Letter to the petitioner in accordance with Clause 72.2 of the GCC. It was also mentioned that on termination of the contract, the respondent No. 2 will forfeit all the Bank Guarantees/Securities/Retention Money etc. and takes possession of the site and the unused construction materials, plant and machinery. The petitioner was also asked to depute its representative for taking joint measurement of the executed work by them within a period of three days from receipt of the notice failing which the measurement will be taken by the respondent No. 2, which shall be treated as final and binding upon the petitioner. Following the Termination Letter, the petitioner received a communication from the Allahabad Bank, Dimapur Branch dated 20.3.17, asking the petitioner to arrange the guarantee amount immediately for regularization of the account since the Bank Guarantees were invoked by the respondent No. 2. 16. Pursuant to the above steps, the petitioner wrote a letter to the Director of the respondent No. 2 Organization at New Delhi, requesting withdrawal of the Termination Letter dated 20.03.2017 but however, as no steps were taken as requested, the petitioner is before this Court through the present writ petition. 17. Appearing for the petitioner, Mr. P. Choudhury, the learned counsel submits that the writ petition is not filed on the ground of breach of contract nor has it been filed to claim damages and monetary compensation. The petitioner is primarily aggrieved against the termination of the contract and the respondent No. 2 having the entity of a state as defined under Article 12 of the Constitution of India, the petitioner has every right to file the writ petition against the respondent No. 2. The petitioner is primarily aggrieved against the termination of the contract and the respondent No. 2 having the entity of a state as defined under Article 12 of the Constitution of India, the petitioner has every right to file the writ petition against the respondent No. 2. He also submits that the Contract Agreement between the parties is an agreement as defined under Article 298 of the Constitution of India and therefore, non-exhaustion of alternative remedy as may be available prior to filing the present writ petition will not render the writ petition as not maintainable. From the impugned action of the respondent No. 2 in terminating the Contract Agreement, there is clear violation of the rights of the petitioner provided under Articles 14, 19, 21 and 300A of the Constitution of India. He submits that the Termination Letter dated 20.03.2017 in purported exercise of Clause 71 and 72 of the GCC is most arbitrary, discriminatory and violative of the Constitutional rights of the petitioner. He submits that the four (4) Bank Guarantees were illegally encashed by the respondent No. 2 even before the Contract Agreement was terminated. He submits that as can be seen from the terms and conditions provided in the GCC as well as the ACC, time was never intended to be the essence of the contract. By referring to Clause 72.4 of the GCC, Mr. P. Choudhury submits that there is flexibility of the time schedule as it was extendable as per the said provision. Therefore, for this reason, the contract could not have been terminated by the respondent No. 2. 18. He further submits that the respondent No. 2 cannot raise any objection on the maintainability of the writ petition and claim that there are disputed questions of facts involved which will necessarily oust the writ jurisdiction of this Court inasmuch as it is not even the pleaded case of the respondents. Therefore, the objection raised on the maintainability of the writ petition at the stage of the argument only has to be rejected. 19. On merit, the learned counsel Mr. P. Choudhury submits that it is the respondent No. 2, who in fact has failed to comply with Clause 43.1 of the GCC in the first place by not handing over the sites for commencement of the work within 10 days of the signing of the LOI. 19. On merit, the learned counsel Mr. P. Choudhury submits that it is the respondent No. 2, who in fact has failed to comply with Clause 43.1 of the GCC in the first place by not handing over the sites for commencement of the work within 10 days of the signing of the LOI. In other words, he submits that although the LOI was issued on 19.11.2012, the sites were not handed over to the petitioner. In fact, only 2 sites were handed over after a period of 12 months from signing the LOI and the remaining 11 sites were handed over in paper almost after 18 months from the date of issuance of the LOI. He submits that from the communication dated 2.6.2014 issued by the respondent No. 2 (Annexure P-37 of the additional affidavit dated 30.5.2017), it can clearly be seen that the sites were not free from encumbrances. 20. He submits that as per clause 42 of the GCC, in case of a difference, contradiction, discrepancy and dispute with regard to the conditions of the contract as provided under the GCC and ACC, the GCC will only be preceded by the ACC. By referring to clause 18 of the ACC, he submits that there is no such provision which permits termination of the contract in case the petitioner is unable to complete the work within the stipulated time. What is only provided is that the petitioner will be liable to pay compensation for the delay in completing the work as prescribed in the ACC. Clause 72.2 of the GCC may provide for cancellation/determination of the contract in full or in part in case when the contract could not be completed within the prescribed time. However, the conflict between clause 72.2 of the GCC and clause 13 of the ACC will only have to be understood by observing the Order of Precedence as provided under clause 42 of the GCC. Therefore, the termination Letter dated 20.03.2017 is only void ab initio. The petitioner is only entitled to be given extension of time since the work could not commence from the 10 days of signing of the LOI in terms of clause 72.4 of the GCC. 21. Thus, the termination Letter dated 20.03.2017 under the given facts and circumstances of the case, being unsustainable, the same should be set aside and quashed. The petitioner is only entitled to be given extension of time since the work could not commence from the 10 days of signing of the LOI in terms of clause 72.4 of the GCC. 21. Thus, the termination Letter dated 20.03.2017 under the given facts and circumstances of the case, being unsustainable, the same should be set aside and quashed. In so far as the 4 encashed bank guarantees is concerned, the respondent No. 2 is liable to re-store the same after time extension is granted to the petitioner to complete the construction work of the 9 BOPs. He further submits that the subsequent tender floated by the respondent No. 2 for the 9 BOPs also having been stayed by this Court vide Order dated 30.05.2017, the same should also be made absolute. 22. In support of his submission, Mr. P. Choudhury, the learned counsel for the petitioner has relied upon the following decisions of the Apex Court and of this Court:- (1) Adisons Construction Ltd. Vs. Union of India & Ors., 2009 (1) GLT 773. (2) M/s. Radhakrishna Agarwal & Ors. Vs. State of Bihar & Ors., (1977) 3 SCC 457 . (3) Assistant Excise Commissioner & Ors. Vs. Issac Peter & Ors., (1994) 4 SCC 104 . (4) Hindustan Construction Co. Ltd. Vs. State of Bihar & Ors., (1999) 8 SCC 436 . (5) Arosan Enterprises Ltd. Vs. Union of India & Anr., (1999) 9 SCC 449 . (6) State of Bihar & Ors. Vs. Jain Plastics and Chemicals Ltd., (2002) 1 SCC 216 . (7) Himadri Chemicals Industries Ltd. Vs. Coal Tar Refining CO., (2007) 8 SCC 110 . (8) Vinitec Electronics Private Ltd. Vs. HCL Infosystems Ltd., (2008) 1 SCC 544 . (9) Pimpri Chinchwad Municipal Corporation & Ors. Vs. Gayatri Construction Company & Anr., (2008) 8 SCC 172 . (10) A.S. Motors Private Ltd. Vs. Union of India & Ors., (2013) 10 SCC 114 . (11) Joshi Technologies International Inc. Vs. Union of India & Ors., (2015) 7 SCC 728 . (12) Gujarat Maritime Board Vs. Larsen and Toubro Infrastructure Development Projects Limited & Anr., (2016) 10 SCC 46 . (13) Central Inland Water Vs. Brojo Nath Ganguly & Anr., 1986 (3) SCC 156 . (14) Mahabir Auto Stores & Ors. Vs. Indian Oil Corporation & Ors., (1990) 3 SCC 752 . (15) Madhya Pradesh Housing Board Vs. (12) Gujarat Maritime Board Vs. Larsen and Toubro Infrastructure Development Projects Limited & Anr., (2016) 10 SCC 46 . (13) Central Inland Water Vs. Brojo Nath Ganguly & Anr., 1986 (3) SCC 156 . (14) Mahabir Auto Stores & Ors. Vs. Indian Oil Corporation & Ors., (1990) 3 SCC 752 . (15) Madhya Pradesh Housing Board Vs. Progressive Writers & Publishers, (2009) 5 SCC 678 . (16) Indian Oil Corporation Limited Vs. Nilofer Siddiqui & Ors., (2015) 16 SCC 125 . 23. Appearing for the respondent No. 1, Ms. Zairemsangpuii, the learned CGC submits that the Ministry of Home Affairs have given the task of carrying out the construction and implementation of BOPs to the respondent No. 2, which is a Government of India enterprise. Therefore, it is the sole responsibility of the respondent No. 2 to ensure proper and timely construction of the BOPs. As such, the respondent No. 1 directly has no role to play in the present dispute. 24. Mr. M. Choudhury, the learned senior counsel appearing for the respondent No. 2 submits that against the writ petition, the respondent No. 2 filed an affidavit-in-opposition on 22.06.2017, wherein the stand of the respondent No. 2 is set out. He submits that besides filing a reply affidavit to the affidavit-in-opposition of the respondent No. 2, the petitioner has taken the liberty of filing as many as 5 additional affidavits and prior to filing the additional affidavits, the petitioner did not take the permission of the Court for filing the same. Before advancing his argument on the merits of the case, Mr. M. Choudhury, the learned senior counsel at the outset submits that the writ petition is not maintainable. He submits that the nature of the dispute inherently involves disputed question of facts and therefore, the case cannot be entertained under a writ jurisdiction. Moreover, the contract agreement having been terminated as per the relevant provisions provided in the GCC, the only remedy available for the petitioner as to file the suit for damages before a competent Civil Court. He submits that under a contract agreement, they cannot be any violation of natural justice so long as the contract is terminated in exercise of the conditions of the contract. Therefore, the writ petition is liable to be dismissed at the very threshold. 25. He submits that under a contract agreement, they cannot be any violation of natural justice so long as the contract is terminated in exercise of the conditions of the contract. Therefore, the writ petition is liable to be dismissed at the very threshold. 25. On merit, the learned senior counsel submits that from the NIT that was issued on 14.09.2012, more particularly at clause 3.0, the intending bidders for the construction of the 13 BPOs were clearly informed that the contractor to undertake the work will be required to arrange all the infrastructures and transport, such as bridges and ferries to undertake the work. The intending bidder to undertake the construction was also advised to visit the work sites and be acquainted with the nature of the work so that they can foresee what was to be expected. 26. In this connection, the learned senior counsel refers to clause 2.0 of the NIT as well. He, further, refers to clause 1.4(e) & (m) of the GCC as well. He submits that as per clauses 1.1,2.1 and 3.4 as well as 4.1 of the GCC, time is very much the essence of the contract. He submits that the LOI was issued to the petitioner on 19.11.2012 and the contract agreement was executed on 28.12.2012. Undisputedly, on signing the agreement, 2 sites were handed over to the petitioner. Thereafter, the remaining 11 sites were handed over to the petitioner on 21.1.14. Despite handing over all the sites, the petitioner failed to make the required progress. On 21.11.14, a joint meeting was held, wherein it was mutually agreed upon that the respondent No. 2 will undertake the work in respect of 4 sites on behalf of the petitioner and the completion time of the work was extended to May, 2015. However, the petitioner failed to make any progress of the work as on May, 2015 as agreed earlier. As such, on 5.8.15, further extension of time was granted till 31.5.16 and the rates were also revised for the 9 BOPs from Rs. 42,65,52,203.98/- to Rs. 56,48,53,863.97/-. 27. A joint meeting was thereafter held on 22.09.2015, wherein it was mutually agreed upon for extension of the completion time up to May, 2016. However, the petitioner again failed to complete the work on the remaining 9 BOPs by 31.05.2016 even after getting the revision of rates. 42,65,52,203.98/- to Rs. 56,48,53,863.97/-. 27. A joint meeting was thereafter held on 22.09.2015, wherein it was mutually agreed upon for extension of the completion time up to May, 2016. However, the petitioner again failed to complete the work on the remaining 9 BOPs by 31.05.2016 even after getting the revision of rates. By 31.05.2016, after 25 months had passed from the date of final handing over all the sites, i.e., 21.4.2014 and therefore, since the matter became serious, another joint meeting was held on 18.10.2016. On 18.10.2016, it was expressly agreed upon as a special case that the petitioner will be granted time upto 31.05.2016, subject to critical review of the performance of the petitioner. Based on the performance upto 31.12.2016, respondent No. 2 would take the final decision whether or not to continue with the petitioner. In so far as the works pertaining to 4 BOPs, the same was already withdrawn from the petitioner as mutually agreed upon on 21.11.2014. 28. The learned senior counsel, however, submits that the petitioner failed to achieve the progress of the work by 31.12.2016, as was fixed in the meeting held on 18.10.2016 despite provisional extension of time. Therefore, the respondent No. 2 had no choice but to issue a notice to the petitioner on 03.03.2017 in terms of clause 72.2(ii)(iv) of the GCC. Instead of achieving the targets set out for the petitioner, the petitioner vide Notification dated 05.03.2017 sought for extension of time while justifying the delay. Therefore, the respondent No. 2 was compelled to issue a notice to the petitioner in terms of clause 72.2(iii) & (iv) of the GCC on 10.3.2017. Despite the notice, the petitioner failed to make any progress on the work as stipulated in the notice and therefore, the impugned termination letter was issued to the petitioner on 20.03.2017. Upon issuance of the termination letter, respondent No. 2 invoked the bank guarantees amounting to Rs. 6,04,40,057/- provided by the petitioner in the form of security deposits/performance bank guarantees by addressing the Letter of Invocation dated 20.3.2017 to the Allahabad Bank, Dimapur Branch. In response to the invocation letter, the Allahabad Bank, Dimapur Branch on 22.3.17, issued a demand draft in favour of the respondent No. 2. 29. 6,04,40,057/- provided by the petitioner in the form of security deposits/performance bank guarantees by addressing the Letter of Invocation dated 20.3.2017 to the Allahabad Bank, Dimapur Branch. In response to the invocation letter, the Allahabad Bank, Dimapur Branch on 22.3.17, issued a demand draft in favour of the respondent No. 2. 29. The learned senior counsel submits that the termination of the contract was only due to the poor performance of the petitioner and the failure on its part to complete the project despite being given repeated extension of time and with the revision of the quoted cost. The petitioner has only made a belated challenge to clause 71 & 72 of the GCC after failing to perform. He submits that the project for construction of Border Outpost along the Indo-Bangladesh Border is of national importance and time is very much the essence of the contract. Although the completion time of the construction work was 18 months as per the NIT, the contract given to the petitioner was terminated after a period of 35 months due to failure on the part of the petitioner to complete the project. No doubt, only 2 sites were handed over to the petitioner initially but the remaining 11 sites were handed over on 21.04.2014 and therefore, the petitioner had sufficient time to complete the project after extension was given on several occasions. He submits that the handing and taking over of 11 sites as mentioned in the letter dated 21.04.2014, categorically means that the land acquisition process was complete for all the locations and were hindrance free in all respect. However, the petitioner could not complete the work even after 35 months from the date of handing over of the sites. In so far as invoking of the bank guarantees concerned, the same was done on the very day of the termination of the contract i.e., 20.03.2017 and the petitioner communicated about the termination. The official decision to terminate the contract was only in consonance with the decision of the Head Office at New Delhi, which was taken earlier and thereafter, communicated to the petitioner. Therefore, there arises no issue that the bank guarantees were encashed prior to termination. The official decision to terminate the contract was only in consonance with the decision of the Head Office at New Delhi, which was taken earlier and thereafter, communicated to the petitioner. Therefore, there arises no issue that the bank guarantees were encashed prior to termination. The reason for the delay in completion of the work, such as, rainy season, typical terrain and weather conditions were all taken into consideration at the very beginning while calculating the time for completing the project. 30. The learned senior counsel further submits that the petitioner has also made a breach of the contract by subletting the work to other parties. As per clause 59 of the GCC, the petitioner cannot sublet the contract to other parties. 31. The learned senior counsel in support of his submission that the case necessarily involves disputed questions of facts and therefore, there is no infringement of Article 14 of the Constitution of India has relied upon the following decisions:- (1) M/s. Radhakrishna Agarwal & Ors. Vs. State of Bihar & Ors., 1977 (3) SCC 457 (2) State of Bihar & Ors. Vs. Jain Plastics & Chemicals Ltd., 2002 (1) SCC 216 . (3) Adisons Constructions Ltd. Vs. Union of India & Ors., 2009 (1) GLT 773. (4) Pimpri Chinchwad Municipal Corporation & Ors. Vs. Gayatri Construction Company & Ors., (2008) 8 SCC 172 . (5) State of U.P. & Ors. Vs. Bridge & Roof Company (India) Ltd., (1996) 6 SCC 22 . In so far as the violation of the principles of natural justice is concerned, the learned senior counsel relies upon the following decisions:- (1) State of Gujarat & Ors. Vs. Meghji Pethraj Shah Charitable Trust & Ors., (1994) 3 SCC 552 . (2) M/s. Radhakrishna Agarwal & Ors. Vs. State of Bihar & Ors., 1977 (3) SCC 457 . 32. Further, in support of his submission that no injunction can be granted for invocation of a bank guarantee except on the ground of fraud and on the ground of irretrievable injury, the learned senior counsel relies upon the following decisions:- (1) Himadri Chemicals Industries Ltd. Vs. Coal Tar Refining Co., (2007) 8 SCC 110 . (2) Vinitec Electronics Private Ltd. Vs. HCL Infosystems Ltd., (2008) 1 SCC 544 . 33. I have heard the learned counsels for the rival parties and I have perused the materials on record including the authorities relied upon by the parties. Coal Tar Refining Co., (2007) 8 SCC 110 . (2) Vinitec Electronics Private Ltd. Vs. HCL Infosystems Ltd., (2008) 1 SCC 544 . 33. I have heard the learned counsels for the rival parties and I have perused the materials on record including the authorities relied upon by the parties. 34. The facts broadly projected by the petitioner is that the respondents, more particularly, the respondent No. 2 issued the NTT on 14.9.2012 for construction of 10 Platoon Level BOPs and 3 Company level BOPs along the Indo-Bangladesh Border in the State of Mizoram. Pursuant to the NIT, the petitioner submitted its tender and the respondent No. 2 upon considering the tenders that were submitted, issued the LOI in favour of the petitioner on 19.11.2012. Following the issuance of the LOI, a Contract Agreement for the 13 BOPs was signed between the petitioner and the respondent No. 2. On signing such agreement, 2 sites for construction of Platoon Level BOPs i.e. Barapansuri and Jarralsuri sites were handed over to the petitioner. Thereafter, the remaining 11 sites for construction of BOPs were handed over to the petitioner on 21.04.2014. Admittedly, since the petitioner could not complete the construction of the BOPs, the contract was terminated vide the impugned Termination Letter dated 20.3.2017. Following the termination, the Bank Guarantees were encashed by the respondent No. 2 on the same day and the amount credited to the Account of the respondent No. 2 by the Bank on 22.3.2017. Since the respondent No. 2 has raised the issue of maintainability of the writ petition, it will be apposite to consider whether the writ petition is maintainable before proceeding to examine the case on merit. 35. As per the NIT dated 14.09.2012, the stipulated time for completion of the work was 18 months. The LOI was issued to the petitioner on 19.11.2012 by the respondent No. 2, whereby it was provided that the construction work will include Civil work, Structural work, Plumbing work, Electrical work, Site development work, Approach road and any other work not specified but required for construction of the BOPs. The completion time of 18 months for the construction work from the date of issuance of the LOI in accordance with the time schedule was reiterated. Upon acceptance of the LOI, the petitioner and the respondent No. 2 signed the Contract Agreement on 28.12.2012. The completion time of 18 months for the construction work from the date of issuance of the LOI in accordance with the time schedule was reiterated. Upon acceptance of the LOI, the petitioner and the respondent No. 2 signed the Contract Agreement on 28.12.2012. The petitioner vide its letter dated NIL (Annexure P-5) also submitted a letter to the respondent No. 2 agreeing with the time stipulated for jobs and completion of work in all respect in different stages mentioned in the time schedule while accepting that time was the essence of the contract. The petitioner by the said communication also agreed that recovery shall be made in case of failure to complete the work according to the schedule of time stipulated in the contract. The petitioner also further agreed that in exceptional circumstances, extension of time may be granted by the respondent No. 2 in its discretion for some items. It was also agreed upon that the LOI shall be liable to be cancelled and the earnest money liable to be forfeited, if the petitioner failed to commence the work within 10 days from the date of issuance of the LOI. It was under such circumstance that the construction of BOPs was sought to be executed through the petitioner. 36. The Contract Agreement between the parties concerned is further regulated by the GCC and ACC. The relevant provisions of the GCC may be adverted to first-Clause 2.0 of the GCC provides that the tenderers, before submitting its tenders is advised to visit the site, its surroundings to assess and satisfy themselves about the local conditions, such as the working and other constraints at the site, approach road to the site, availability of water and power supply, applicability of taxes, duties and levies, etc., amongst others. Clause 2.2 of the GCC deals with handing over and clearing of sites. Clause 2.2.2 of the GCC provides that the respondent No. 2 will make efforts to hand over the site to the contractors free of encumbrances. However, in case of delay in handing over the sites to the contractor, the respondent No. 2 shall only consider suitable extension of time for execution of the work and no revision in contract prices or any other compensation, whatsoever including the idleness of the contractors' labours, equipments, etc., will be considered. Clause 72.2 of the GCC deals with cancellation/determination of contract in full or part. Clause 72.2 of the GCC deals with cancellation/determination of contract in full or part. Clause 72.2(iii) stipulates that if the contractor fails to complete the work within the stipulated date, or items of work with individual date of completion, if stipulated before such dates of completion, a notice shall be given in writing in that respect by the Engineer-in-charge. Further, clause 72.2(iv) stipulates that if the contractor persistently neglects to carry out his obligations under the contract and/or commits default in complying with any of the terms and conditions of the contract and does not remedy it or take effective steps to remedy it within 7 (seven) days after a notice in writing by the Engineer-in-charge, the Engineer-in-charge may without prejudice to any other rights or remedy, which shall have accrued to the respondent No. 2, by a notice in writing cancel the contract as a whole or such items of works in default of the contract. On such cancellation, the respondent No. 2 will have the power to take possession of the site, carry out the incomplete work at the risk and cost of the, contractor and forfeit the security deposit cum performance guarantees, amongst others. 37. As per clause 72.4 of the GCC, the time allowed for execution of the works as specified in the terms of contract or the extended time in accordance with these conditions shall be the essence of the contract. The execution of the work shall commence from the 10th day or such time as mentioned in the LOI. If the contractor commits default in commencing the execution of the work as aforesaid, the executing agency shall without prejudice to any other right or remedy available in law, be at liberty to forfeit the earnest money absolutely. 38. Besides the GCC, ACC was formulated by the respondent authorities for its execution of the contract work. Clause 1.0 of the ACC provides that if there are any variance with the provisions of GCC, then the provisions of ACC shall take precedence over the GCC of contract. Clause 4.0 of the ACC deals with the handing over the site. Clause 4.1 provides that the site may be handed over in parts progressively in phases to the contractor. The contractor shall take up the construction activities on such released fronts in parts/phase without any reservation whatsoever. Clause 4.0 of the ACC deals with the handing over the site. Clause 4.1 provides that the site may be handed over in parts progressively in phases to the contractor. The contractor shall take up the construction activities on such released fronts in parts/phase without any reservation whatsoever. However, in case of any delay in handing over the site to the contractor, the respondent No. 2 shall consider suitable extension of time for the execution of the work without any consideration for other compensation towards idleness of contractor's labour, equipments etc. Clause 4.2 further provides that the contractor shall make his own arrangement for approach to work site including borrow/disposal area and for movement of men, materials, machineries, other equipment etc. required for carrying out the work under the contract. Clause 7.1 provides that the entire scope of the work covered under the contract shall be completed within 18 calendar months from the date of issue of Letter of Intent (LOI). The completion time includes monsoon/rainy season coming during the currency of the contract. It is further provided that although, the time of completion of the total work was stipulated as 18 months from the date of the LOI, 50% work of all the BOPs are to be completed in all respect within eight and half months from the date of the LOI. 39. Coming to the execution of the work, it may be noticed that on 28.12.2012, 2 sites i.e. Barapansuri and Jarralsuri were handed over to the petitioner. Thereafter, on 21.4.2014, the remaining 11 sites were handed over to the petitioner. On 11.4.2014, the respondent No. 2 wrote to the petitioner that on review, it was noticed that the petitioner had taken very little effort to work in the BOPs, such as Tablabagh, New Balukiasuri, Lokhisuri, Devasora, Nakukchhara, Durusuri and Saisen Chhora. Although, few labourers were mobilized for jungle clearance work in Tablabagh and New Balukiasuri, the work of jungle clearance was suspended and no work was being done for the last more than one month. Further, the work at Jarralchuri, Barapansuri and Silkur-II were progressing very slowly with only 5 to 10 labours engaged. It was, therefore, remarked in the column provided in the communication that the work in respect of Silkur-II was abandoned while there was only 4% and 10% progress of work achieved in respect of Jarralchuri and Barapansuri respectively. Further, the work at Jarralchuri, Barapansuri and Silkur-II were progressing very slowly with only 5 to 10 labours engaged. It was, therefore, remarked in the column provided in the communication that the work in respect of Silkur-II was abandoned while there was only 4% and 10% progress of work achieved in respect of Jarralchuri and Barapansuri respectively. The petitioner was therefore requested to speed up the work. At this stage, it may further be noticed that although Silkur-II was said to have been handed over on 21.4.2014 along with 10 other sites, the communication dated 11.4.2014 indicates that the work was started in the last season for only 7 days and, thereafter, the site was abandoned. In short, if the site was handed over on 21.04.2014, the respondent No. 2 could not have come up with such a remark. In so far as Barapansuri and Jarralchuri are concerned, the same admittedly was handed over on 28.12.2012 and therefore, it was possible to indicate the progress of the work on the 2 sites. 40. In response to the communication dated 11.04.2014 amongst others, the petitioner on 18.04.2014 wrote to the respondent No. 2 that despite giving full Bank Guarantees for all the 13 sites, only 2 sites were received initially and the remaining 11 sites were pending for being handed over for want of clearance and land demarcation. Although the petitioner deputed its representative for identification of the 11 sites as was requested, land was never handed over to them. Therefore, the petitioner requested to provide suitable price escalation due to lapse of time and to provide compensation for charge and interest on all the Bank Guarantees including cost of establishments, manpower, travel expenses and miscellaneous expenses incurred from the date of issuance of the LOI till all the sites were handed over. 41. Again on 22.04.2014, the respondent No. 2 wrote to the petitioner informing that there was negligible progress in the 2 BOPs i.e. Barapansuri and Jaralsuri, which were available for construction from the very beginning. The petitioner did not make necessary arrangements for the required construction materials, manpower etc. to enhance the pace of work and according to the respondent No. 2, the work at the 2 BOPs had completely stopped from 5.4.2014 due to nonpayment of wages to the workers. The petitioner did not make necessary arrangements for the required construction materials, manpower etc. to enhance the pace of work and according to the respondent No. 2, the work at the 2 BOPs had completely stopped from 5.4.2014 due to nonpayment of wages to the workers. Therefore, the petitioner was asked to gear up work progress for all the 13 BOPs by deploying the required manpower and sufficient construction material. It was also mentioned that the progress of work in every month and continuously for the next 3 months will be assessed for taking further course of action. 42. On 21.11.2014, a meeting was held between the representatives of the petitioner and the respondent No. 2, wherein it was observed that the BOP for Barapansuri will be handed over by April, 2015, while on a joint visit to the site at Jaralsuri and Barapansuri, the culvert crossing to the 2 sites were found to have collapsed and therefore, the BOP at Jarralchuri was targeted to be completed by the Financial Year ending 2014-2015. In so far as the 4 BOPs at Bindosora, Tablabagh, Kalapani and New Balukiasuri were concerned, the respondent No. 2 will be completing the work on behalf of the petitioner. For the remaining 7 BOPs, the construction work could not be taken up since Mar Boat was yet to be operational. Despite this, it was resolved that necessary arrangements for completing the 7 BOPs within the schedule time of completion i.e., May, 2015 will be undertaken along with the remaining BOPs. 43. Thereafter, a joint meeting between the petitioner and the respondent No. 2 through their representatives was again held on 22.09.2015, wherein the details of the steps required for completing the constructions of BOPs in respect of the 9 sites i.e., Jurralsuri, Barapansuri, Silkur-II, Lokhisuri, Dursuri, Devasora, Nakukchara, Saisen Basti and Saisen Chari were laid down with the target for completing the work as May, 2016. Following the meeting resolution, the respondent No. 2 wrote to the Branch Manager, Allahabad Bank in Dimapur to extend the validity period of the Bank Guarantees for another year since it was due to expire on 28.05.2016. Following the meeting resolution, the respondent No. 2 wrote to the Branch Manager, Allahabad Bank in Dimapur to extend the validity period of the Bank Guarantees for another year since it was due to expire on 28.05.2016. It was also indicated that in case, the validity of the bank guarantees were not extended, the communication may be treated as a notice for encashment of the bank guarantees and be permitted by demand draft in favour of the respondent No. 2 and payable at New Delhi. A similar communication was made to the Branch Manager, Allahabad Bank in Dimapur, by the respondent No. 2 on 22.04.2016 and on 14.09.2016 but for a different amount. 44. By Communication dt. 18.10.2016, the respondent No. 2 wrote to the petitioner to immediately mobilize materials and labour to complete all the 9 BOPs and that the work will be reviewed to see the progress achieve up to 31.12.2016. On the same day i.e., 18.10.2016, a joint meeting was held between the petitioner and the respondent No. 2, wherein the progress of the work and the extension of time given earlier were considered. Based on the observation that was made, it was decided that depending upon the performance of the petitioner up to 31.12.2016, a decision will be taken by 10.01.2017 whether to continue the construction work with the petitioner or terminate the contract and forfeit the securities. Thereafter, on 03.03.2017, a notice was given to the petitioner by the respondent No. 2 under clause 72.2(iii) & (iv) of the GCC to show progress of work within 7 days from the date of the communication, failing which the contract works will be withdrawn/terminated. It may be noticed that although the petitioner was left with only 9 BOPs pursuant to the Meeting Minutes dated 21.11.2014, the notice dated 03.03.2017 only mentioned 6 BOPs. Nevertheless, in response to the notice, the petitioner on 05.03.2017 submitted a detailed clarification while seeking extension of time for completing the work. Instead of granting further time, a similar notice was issued by the respondent No. 2 to 1 he petitioner on 10.03.2017 asking the petitioner to show progress within 7 days of issuance of the letter, failing which the contract works will be withdrawn/terminated. Instead of granting further time, a similar notice was issued by the respondent No. 2 to 1 he petitioner on 10.03.2017 asking the petitioner to show progress within 7 days of issuance of the letter, failing which the contract works will be withdrawn/terminated. The petitioner again vide Notification dated 14.03.2017 requested the respondent No. 2 to grant further time till March, 2018 while also submitting a detailed representation with justification on 16.03.2017. However, the respondent No. 2 vide the impugned Termination Letter dated 20.03.2017 terminated the contract for construction of the 9 BOPs with immediate effect. On the same day, the respondent No. 2 wrote to the Allahabad Bank in Dimapur for encashing the bank guarantees. 45. From what can be noticed on the facts as set out above, there are disputes with regard to the handing over the sites, the extend of the construction work completed, the invocation of bank guarantees and also subletting of work to other parties by the petitioner amongst others. It may further be noticed that there is also a dispute with regard to the time being the essence of the contract. Further, pursuant to the termination of the contract, the respondent No. 2 has floated a fresh NIT for completing the construction of BOPs on the 9 sites, which were allotted to the petitioner. However, due to the interim order passed by this Court, the tender has not been finalized. Even without entering into the merit of the case, there are inherent disputed questions of facts involved. 46. Although the petitioner tried to project the fact that the writ petition is filed on account of termination of the contract and not on account of the breach of the contract, the fact remains that the reason for terminating the contract was on account of the inability on the part of the petitioner to complete the construction work of BOPs, although several extension of time was granted to it by the respondent No. 2. Therefore, as observed herein above, the issue necessarily involves disputed questions of facts, which cannot be adjudicated in a writ proceeding. Moreover, pursuant to the termination of the contract, even the bank guarantees have already been encashed as on 22.3.2017. Therefore, as observed herein above, the issue necessarily involves disputed questions of facts, which cannot be adjudicated in a writ proceeding. Moreover, pursuant to the termination of the contract, even the bank guarantees have already been encashed as on 22.3.2017. The petitioner has also contended the fact that all the 13 BOPs were not handed over in terms of the LOI and that the other relevant factors for non-completion of the construction work is due to restriction of the working season, only up to 6 months in a year and also the inaccessibility of the work site due to the geographical location of the sites. On the other hand, it is the claim of the respondent No. 2 that all these factors were taken into account while fixing the completion time at 18 months from the issuance of the LOI. 47. The Apex Court in the case of M/s. Radhakrishna Agarwal & Ors. (Supra) has held that Article 14 of the Constitution of India will not be attracted in a case of non-statutory contract. The Apex Court further held that the limitation imposed by rules of natural justice cannot operate upon powers, which are governed by the terms of an agreement exclusively. The only question, which normally arises in such cases, is whether the action complaint of is or is not in consonance with the terms of the agreement Consequently, the appeal filed by the aggrieved lessee was dismissed. 48. In the case of Bridge & Roof Company (India) Ltd. (Supra), the dispute was with regard to the certain payments which according to the respondents were due while the said appellant contended that it was entitled to retain the same. The Apex Court held that the contract between the parties was in the realm of private law and it was not a statutory contract. It was, therefore, governed by the provisions of contract Act and if that was the case, it was a matter to be decided by way of arbitration or before a competent Civil Court. 49. In the case of Kerala State Electricity Board & Ors. (Supra), the dispute was with regard to the time extension for completion of work granted by way of a supplementary agreement. The High Court held that the termination of the contract was arbitrary, unjust and not in public interest and therefore, directed the appellant to pay the contractor the labour escalated amounts. (Supra), the dispute was with regard to the time extension for completion of work granted by way of a supplementary agreement. The High Court held that the termination of the contract was arbitrary, unjust and not in public interest and therefore, directed the appellant to pay the contractor the labour escalated amounts. The Apex Court held that a contract would not become statutory simply because it is for construction of a public utility and that it has been awarded by a statutory body as observed by the High Court. It was further held that a statute may expressly or impliedly confer power on a statutory body to enter into contract in order to enable it to discharge its functions. Dispute arising out of the terms of such contract or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. Therefore, the disputes relating to interpretation of the terms and conditions of such contract cannot be agitated in a petition under Article 226 of the Constitution of India. 50. A Coordinate Bench of this Court, in Adisons Construction Ltd. (Supra) has held that the termination of the contract given to the petitioner by the respondents was on account of failure on a part of the petitioner to complete the contract work and the conditions stipulated in the GCC clearly provided that the contract will be liable to be cancelled, on the failure of the contractor to complete the work within the stipulated time. Despite the extension of time given to the contractor, no progress was achieved and therefore, the contract was cancelled. It was held that the nature of dispute having involved disputed questions of facts and there being an alternative remedy available, the writ petition was not maintainable. Therefore, on this ground, the writ petition was dismissed. 51. It is a well settled principles of law that the interpretation of a clause in a contract agreement and implementation of such clause cannot be made a subject matter of a writ petition and the remedy of the aggrieved person lies in approaching a competent Civil Court or some other appropriate forum. 51. It is a well settled principles of law that the interpretation of a clause in a contract agreement and implementation of such clause cannot be made a subject matter of a writ petition and the remedy of the aggrieved person lies in approaching a competent Civil Court or some other appropriate forum. Therefore, upon considering the present case in its entirety, I am of the considered opinion that there are disputed questions of facts involved and for this reason, I do not find the necessity to proceed further with the merits of the case. In view of such finding, there is also no necessity in dwelling upon the other authorities relied by the parties. Accordingly, the writ petition stands dismissed. 52. The interim order passed earlier shall stands merged with this order. No cost.