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2018 DIGILAW 1601 (PAT)

STATE OF BIHAR v. B. S. S. PROJECT PRIVATE LIMITED

2018-10-09

ASHUTOSH KUMAR, M.R.SHAH

body2018
JUDGMENT : Mukesh R. Shah, J. Admit. 2. Sri Jitendra Kumar Pandey, learned counsel, waives service of notice of admission on behalf of the original writ petitioner-respondent herein. 3. In the facts and circumstances of the case and with the consent of learned counsel appearing on behalf of the respective parties, present Letters Patent Appeal is taken up for final hearing. 4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Single Judge dated 03.08.2016 passed in Civil Writ Jurisdiction Case No.8030 of 2012 by which the learned Single Judge has allowed the writ petition, original respondents-the State of Bihar and Others have preferred the present Letters Patent Appeal. 5. That the original petitioner-respondent herein approached this Court by way of Civil Writ Jurisdiction Case No.8030 of 2012 to quash and set aside the order dated 12.04.2012 issued by the original respondent-Rural Works Department, Works Division, Samastipur, by which the PMGSY Contract Work Package No.30R/II and 30R/IV granted to the original writ petitioner came to be rescinded and the security deposit also came to be forfeited. 5.1. That during the pendency of the writ petition, the aforesaid decision of rescinding the contract came to be confirmed by the Empowered Standing Committee constituting of the Secretary, Rural Works Department, the Chief Engineer-4, Rural Works Department and one retired Engineer-in-Chief, Road Construction Department vide order dated 07.12.2012, confirming the rescinding of the contract and forfeiture of the bank guarantee/security deposit holding that the original writ petitioner was solely responsible for delay in execution of the project, the original writ petitioner preferred I.A. No.409 of 2013 and amended the petition which came to be allowed. 5.2. That at the time of hearing before the learned Single Judge, the original writ petitioner did not press the relief challenging the order rescinding the contract and challenged the forfeiture of the security deposit only. That by the impugned judgment and order, the learned Single Judge has quashed and set aside the order of forfeiture of security deposit on the ground that the same is in violation of the principles of natural justice. 5.3. Feeling aggrieved and dissatisfied with the order passed by the learned Single Judge quashing and setting aside the order of forfeiture of security deposit, the original respondents have preferred the present Letters Patent Appeal. 6. 5.3. Feeling aggrieved and dissatisfied with the order passed by the learned Single Judge quashing and setting aside the order of forfeiture of security deposit, the original respondents have preferred the present Letters Patent Appeal. 6. Sri Shashi Shekhar Kumar Prasad, learned AC to PAAG-2, appearing on behalf of the appellants have vehemently submitted that in the facts and circumstances of the case, the learned Single Judge has materially erred in quashing and setting aside the order forfeiting the security deposit. It is vehemently submitted by Sri Shashi Shekhar Kumar Prasad, learned AC to PAAG-2, appearing on behalf of the appellants that the learned Single Judge has materially erred in quashing and setting aside the order forfeiting the security deposit on the ground that the same is in violation of the principles of natural justice. 6.1. It is further submitted Sri Shashi Shekhar Kumar Prasad, learned AC to PAAG-2, appearing on behalf of the appellants that the learned Single Judge has not properly appreciated the fact that as such the original writ petitioner did not challenge and press the relief quashing and setting aside the order rescinding the contract. It is submitted that the learned Single Judge ought to have appreciated that once the contract was rescinded due to lapse on the part of the original petitioner, namely the delay on the part of the original petitioner-contractor in execution of the work, thereafter forfeiture of the security deposit was only a consequential act, for which the hearing was not required to be given. 6.2. Making above submissions, it is requested to allow the present Letters Patent Appeal. 7. Shri Jitendra Kumar Pandey, learned counsel appearing on behalf of the original writ petitioner has tried to oppose the present Letters Patent Appeal and support the impugned judgment and order by submitting that as the order forfeiting the security deposit was found to be in breach of the principles of natural justice, the learned Single Judge has rightly allowed the writ petition and has rightly quashed and set aside the order forfeiting the security deposit. 8. Heard learned counsel appearing on behalf of the respective parties. 9. 8. Heard learned counsel appearing on behalf of the respective parties. 9. At the outset, it is required to be noted that by the impugned judgment and order, the learned Single Judge has quashed and set aside the order forfeiting the security deposit on the ground that the same is in violation of the principles of natural justice. However, it is required to be noted that the contract came to be rescinded which came to be confirmed by the Committee holding that the delay was attributable to the original writ petitioner-contractor. Though in the main writ petition, the original writ petitioner initially challenged the order rescinding the contract, however, the original writ petitioner did not press the relief challenging the order rescinding the contract. Therefore, once the order rescinding the contract attained finality, in that case, forfeiture of the security deposit was only a consequential act for which no separate notice was required to be given. The forfeiture of the security deposit was made on the contract being rescinded on the ground that there was a delay on the part of the original writ petitioner in execution of the work as per the contract entered into between the parties. 9.1. As observed hereinabove, forfeiture of the security deposit is a consequence to the rescinding of the contract for the default on the part of the contractor. Under the circumstances, the learned Single Judge has materially erred in quashing and setting aside the order forfeiting security deposit by observing that the same is in violation of the principles of natural justice. 10. In view of the above and for the reasons stated above, the present APPEAL SUCCEEDS. The impugned judgment and order passed by the learned Single Judge dated 03.08.2016 passed in Civil Writ Jurisdiction Case No.8030 of 2012 insofar as quashing and setting aside the order of forfeiture of the security deposit is hereby quashed and set aside. No costs.