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2019 DIGILAW 1872 (JHR)

IL & FS Engineering & Construction Company Limited v. Jharkhand Bijli Vitran Nigam Limited

2019-11-18

H.C.MISHRA, RAVI RANJAN

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JUDGMENT : 1. Since identical issues are involved in all these matters they have been considered together and are being disposed of by a common order. 2. These appeals have been preferred assailing the decision dated 3rd July, 2019 rendered by a learned Single Judge of this Court in W.P.(C) No.1761 of 2019 and another analogous matters. In all the writ petitions, the appellant, i.e., IL & FS Engineering & Construction Company Limited was the writ petitioner. 3. The facts in brief which would be necessary for consideration of these appeals, stands enumerated as under: 4. The L.P.A. No. 460 of 2019 arises out of W.P.(C) No. 1761 of 2019. Facts of this case are that the respondent-Jharkhand Bijli Vitran Nigam Limited (hereinafter referred to as “JBVNL”) issued tender notice dated 31.08.2016 for work of Urban Electrification of Jamshedpur Electric Supply Area of Jharkhand under Integrated Power Development Scheme. The scope of work envisaged in the tender was as under: (i) supply of materials and equipments related to the contract and (ii) erection of all materials and equipments related to the contract. 5. The L.P.A. No. 465 of 2019 arises out of W.P.(C) No. 1853 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 02.09.2016 for appointment of executing agency for IPDS work on turnkey basis for strengthening, improvement, renovation and augmentation of distribution system/Urban Electrification Works in inter alia Dhanbad Electricity Supply Circle. 6. The L.P.A. No. 466 of 2019 arises out of W.P.(C) No. 1851 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 11.03.2017 for appointment of executing agency for IPDS work on turnkey basis for strengthening, improvement, renovation and augmentation of distribution system/Urban Electrification Works in inter alia Dumka Sahebganj Electric Supply Circle. 7. The L.P.A. No. 468 of 2019 arises out of W.P.(C) No. 1854 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 30.11.2016 for the work of Rural Electrification on fully turnkey basis under the Deendayal Upadhyaya Gram Jyoti Yojana for inter alia West Singhbhum District. 8. The L.P.A. No. 469 of 2019 arises out of W.P.(C) No. 1838 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 30.11.2016 for the work of Rural Electrification on fully turnkey basis under the Deendayal Upadhyaya Gram Jyoti Yojana inter alia for East Singhbhum District. 9. 8. The L.P.A. No. 469 of 2019 arises out of W.P.(C) No. 1838 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 30.11.2016 for the work of Rural Electrification on fully turnkey basis under the Deendayal Upadhyaya Gram Jyoti Yojana inter alia for East Singhbhum District. 9. The L.P.A. No. 470 of 2019 arises out of W.P.(C) No. 1837 of 2019. Facts of this case are that the respondent-JBVNL issued tender notice dated 24.08.2016 for the work of Rural Electrification on fully turnkey basis under the Deendayal Upadhyaya Gram Jyoti Yojana inter alia for Sahibganj and Pakur Districts. 10. For the respective tenders, the appellant was issued letter of intents (L.o.I.). According to the L.o.I. the work period was of 24 months from the date of issuance of L.o.I. Accordingly, letters of acceptance (L.o.A.) were also issued to the appellant and then two contract agreements were entered into between JBVNL and the appellant for the aforesaid works. However, since from inception of commencement of the work, the appellant faced certain problems and issues which were time to time raised with the respondent-JBVNL. While the appellant was executing the work, the holding company of the appellant and the entire IL & FS Group, came under the cloud due to high debt burden which resulted in Union of India approaching the National Company Law Tribunal, Mumbai by filing petition under Section 241 and 242 of the Companies Act, 2013 praying therein for suspension of the Board of Directors of the holding company of the appellant. The case was admitted and an order was passed on 01.10.2018 suspending the Board. Thereafter, the Board was replaced by Directors appointed by the Union of India and the said appointed Board approached the National Company Law Tribunal, Mumbai seeking a moratorium which was rejected vide order dated 12.10.2018. However, in an appeal filed against the aforesaid order dated 12.10.2018, the National Company Law Appellate Tribunal, New Delhi, on 15.10.2018, passed an order granting moratorium to the extent stipulated in its order. However, the respondent-JBVNL issued 14 days’ notice to the appellant for termination of contract agreement stating therein that the appellant has committed breach of contract. The appellant replied to the said termination notice seeking permission of the respondent-JBVNL for sub-contracting the work in question. However, the respondent-JBVNL issued 14 days’ notice to the appellant for termination of contract agreement stating therein that the appellant has committed breach of contract. The appellant replied to the said termination notice seeking permission of the respondent-JBVNL for sub-contracting the work in question. The representations were also filed before the JBVNL requesting to recall the notice for termination of contract agreement. However, eventually the respondent-JBVNL issued letter cancelling the work awarded to the appellant and L.o.A.s and the contracts agreements between the appellant and the JBVNL were also terminated. The appellant, even after termination of contract agreement, filed detailed representation to the respondent-JBVNL bringing to its notice the situation of IL & FS Group as stated above and also submitted the action plan for completion of balance work as, according to the appellant, around 40 to 49% of the respective work was already completed. However, as per the appellant, without considering their representations, the respondents issued tender notice re-tendering the work in question which was being executed by the appellant earlier and now the balance work has been awarded to the private respondents. 11. The respondent-JBVNL filed counter affidavit refuting the claims of the writ petitioner-appellant. It was urged on behalf of the respondents that JBVNL had issued L.o.I. and, thereafter, the contract was entered into by virtue of which the work was to be completed within a specific time of 24 months considering the public exigency and urgency. The writ petitioner-appellant having not done so, committed serious breach of contract. Therefore, the L.o.A. was cancelled and the contract agreement was terminated. Subsequently, the work was allotted in favour of the private respondents considering the public interest and they had already commenced the work. 12. In the aforesaid background of factual matrix, we have heard the parties and perused the materials available on record. 13. The fact of acceptance of tender of the writ petitioner-appellant and L.o.A. under L.o.I. having been issued and contract agreement having been assigned are admitted. This is also admitted position that the writ petitioner-appellant though commenced the work but failed to complete the same within the time specified as, even according to the writ petitioner-appellant, only 40 to 49% of the respective works could be completed. Therefore, there is no doubt that there was breach of the terms of contract whatever be the reason. This is also admitted position that the writ petitioner-appellant though commenced the work but failed to complete the same within the time specified as, even according to the writ petitioner-appellant, only 40 to 49% of the respective works could be completed. Therefore, there is no doubt that there was breach of the terms of contract whatever be the reason. This is also apparent from the pleadings of the parties concerned that factum of writ petitioner-appellant having been dragged in the proceeding of Insolvency and Bankruptcy Code, 2016, was not initially brought to the notice of respondent-JBVNL rather it was brought to the notice after cancellation of LoI and LoA as well as termination of contract agreement. 14. However, the moot question to be decided in the matter is whether it would be open for this Court to go into the factual aspect of the matter by assessing the situation or the loss faced by the writ petitioner-appellant by considering the evidence and take a decision with respect to the private contract agreement between the parties? When admittedly the work could not be completed within the time specified in the contract agreement, whether this Court should grant any relief by altering the terms or re-write the contract between the parties? 15. The learned Single Judge has referred the decision of Hon’ble Apex Court on this issue rendered in Union Territory of Pondicherry and Ors Vs. P.V. Suresh and Ors., (1994) 2 SCC 70 wherein it has been held that the Courts do not have such jurisdiction while exercising the power under Article 226 of the Constitution of India. 16. That apart, if there were difficulties or there was violation of the contract, terms and agreement or in view of the circumstances developed in between the parties, certain problems were there in completion of contract or there was some violation of the terms and conditions, the party concerned was at liberty to agitate the matter either before a Civil Court of competent jurisdiction or by invoking the arbitration clause which always stands ingrained in the contract agreement. At the time of hearing, learned counsel for the appellant was not in a position to say that such clause was not there in the contract agreement. 17. At the time of hearing, learned counsel for the appellant was not in a position to say that such clause was not there in the contract agreement. 17. This is admitted by the appellant that the work could not be completed within the contractual period and also that the writ petitioner was seeking to sub-contract balance portion of the work to another agency. Even show cause notice was issued and the same was replied by the appellant and thereafter, the respondent-JBVNL had taken a final decision of terminating the contract agreement. Thus, it would not be proper for this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, to question such decision unless and until it is proved before it that such decision making process suffers from certain fatal flaw. This Court cannot substitute its own decision in place of the decision taken by the concerned authority. On this point, the learned Single Judge has correctly placed reliance upon the decision of the Hon’ble Apex Court in TATA Cellular Vs Union of India, (1994) 6 SCC 651 and Siemens Public Communication Networks Private Limited and Anr. Vs. Union of India and others, (2008) 16 SCC 215 . 18. Having regard to the facts and circumstances and the discussions made as above, we are of the view that all the appeals would fail for want of any cogent materials or grounds warranting our interference in the judgment impugned. The order impugned cannot be faulted with. 19. In the result, all the appeals are dismissed.