IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 20TH DECEMBER 2010 / 29TH AGRAHAYANA 1932 WP(C).No. 21056 of 2010(F) --------------------------------- PETITIONER(S): ------------------- 3I INFOTECH LTD., TOWER #5, INTERNATIONAL INFOTECH PARK, 6TH FLOOR, VASHI STATION COMPLEX, VASHI, NAVI MUMBAI-400703, REP. BY RAGHU PRASAD K.S., DELIVERY HEAD (LARGE PROJECTS). BY ADVS. SRI.P.B.SURESH KUMAR SRI.K.P.SUJESH KUMAR RESPONDENT(S): -------------------- 1. STATE OF KERALA, REP. BY THE CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. KERALA SUSTAINABLE URBAN DEVELOPMENT PROJECT, REP. BY ITS DIRECTOR, KERALA SUSTAINABLE URBAN DEVELOPMENT PROJECT, 5TH FLOOR, TRANS TOWER, VAZHUTHACAUD, THIRUVANANTHAPURAM-695 014. 3. THE PROJECT DIRECTOR, KERALA SUSTAINABLE URBAN DEVELOPMENT PROJECT, 5TH FLOOR, TRANS TOWER, VAZHUTHACAUD, THIRUVANANTHAPURAM-695 014. 4. IDBI BANK LTD., TRADE PROCESSING CENTRE, FLOOR NO.5, MAFATLAL CENTRE, NARIMAN POINT, MUMBAI-400 021, REP. BY ITS MANAGER. R1 TO R4 BY GOVT. PLEADER SRI.DILEEP MOHAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs/ WP(C).No. 21056/2010(F) APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE INVITATION PUBLISHED BY THE THIRD RESPONDENT DATED 09/07/2007. P2: COPY OF THE BIDDING DOCUMENT SUPPLIED BY KSUDP TO THE PETITIONER DATED NIL. P3: COPY OF THE LETTER ACCEPTANCE ISSUED TO THE PETITIONER BY THE THIRD RESPONDENT IN RELATION TO THE WORK IN RESPECT OF THIRUVANANTHAPURAM AND KOLLAM CORPORATIONS DATED 28/09/2007. P4: COPY OF THE LETTER ACCEPTANCE ISSUED TO THE PETITIONER BY THE THIRD RESPONDENT IN RELATION TO THE WORK IN RESPECT OF KOCHI, THRISSUR AND KOZHIKODE CORPORATIONS DATED 28/09/2007. P5: COPY OF THE AGREEMENT ENTERED INTO BETWEEN THE PETITIONER AND THE THIRD RESPONDENT FOR PROCUREMENT OF PROPERTY TAX MAP FOR THIRUVANANTHAPURAM AND KOLLAM CORPORATIONS DATED 19/10/2007. P6: COPY OF THE AGREEMENT ENTERED INTO BETWEEN THE PETITIONER AND THE THIRD RESPONDENT FOR PROCUREMENT OF PROPERTY TAX MAP FOR KOCHI, THRISSUR AND KOZHIKODE CORPORATIONS DATED 19/10/2007. P7: COPY OF THE LETTER SUBMITTED TO THE THIRD RESPONDENT BY THE VICE PRESIDENT OF THE PETITIONER DATED 28/06/2010. P8: COPY OF THE COMMUNICATION ISSUED BY THE THIRD RESPONDENT TO THE PETITIONER DATED 30/06/2010. P9: COPY OF THE COMMUNICATION SENT BY THE THIRD RESPONDENT TO THE FOURTH RESPONDENT DATED 30/06/2010. P10: COPY OF THE LETTER SENT BY THE VICE PRESIDENT OF THE PETITIONER TO THE THIRD RESPONDENT DATED 02/07/2010. P11: COPY OF THE COMMUNICATION SENT BY THE THIRD RESPONDENT TO THE PETITIONER DATED 07/08/2010. P12: COPY OF THE COMMUNICATION SENT BY THE PETITIONER TO THE THIRD RESPONDENT DATED 23/10/2010. .............2/-... ...2... WP(C).No. 21056/2010(F) RESPONDENT'S EXHIBITS: R2(a):COPY OF THE MINUTES OF THE MEETING HELD ON 29/05/2010. /TRUE COPY/ P.A. TO JUDGE svs ANTONY DOMINIC, J -------------------------------------- W.P.(C).No. 21056 OF 2010 ------------------------------------------------------------- Dated this the 20th day of December, 2010 JUDGMENT The 2nd respondent invited tenders for the supply of Geographic Information System based property tax database in respect of the properties in five Municipal Corporations in the State. Ext.P2 is a bid document. Petitioner submitted its bids, which were finally accepted and the acceptance was conveyed to the petitioner by Exts.P3 and P4 communications. Exts.P5 and P6 are the agreements that were executed between the petitioner and respondents 2 and 3. 2. In terms of the agreements, the work ought to have been completed by 18.10.2008. At the request of the petitioner, time was extended on four occasions and the extended time expired on 18.7.2010. Even according to the petitioner, the work could be completed only partially and finally, the 3rd respondent issued Ext.P8 order dated 30.6.2010, terminating the agreements and informing that the petitioner's liability to the Government on account of fresh tendering and awarding of the work shall be the sole responsibility of the petitioner and that appropriate action for making good the damages suffered by the 2nd respondent, will be W.P.(C).No. 21056 OF 2010 2 initiated. It is stated that subsequent steps were taken for invoking Bank guarantee furnished by the petitioner. It was at that stage, this writ petition was filed challenging Ext.P8 and consequential proceedings. 3. Petitioner states that though, subsequently, on the representations made by them and the meeting held between parties, they were issued Ext.P11 offering to extent the time, which was accepted by them by Ext.P12, no further orders were issued. The main argument of the counsel for the petitioner is that, even if, it is accepted that, under the provisions of Ext.P2 bid document and the agreements, once default is committed, the respondents had the liberty to terminate the contract at the risk and cost of the defaulting party, any such action has to be guided by fairness. It is contended that Ext.P8 was issued without issuing notice to the petitioner or affording them an opportunity to represent their case. On this ground, the learned counsel for the petitioner submits that this court should require the respondents to afford them an opportunity of hearing before any decision is taken to impose penalty on the petitioner. W.P.(C).No. 21056 OF 2010 3 4. Respondents have filed a counter affidavit. In so far as the allegations contained in para 6 of the writ petition accusing the respondents of having committed various breaches, which allegedly prevented the petitioner from executing the work are concerned, all these allegations have been denied by the respondents in paragraph 9 and 10 of their counter affidavit. In so far as the contention that the issuing Ext.P8, which visits the petitioner with penal consequences, respondents have not acted fairly by issuing notice or giving the petitioner an opportunity to make their representations in the matter, it is contended that after agreements were executed in October 2007, the first show cause notice warning of termination was issued to the petitioner on 21.6.2008. It is stated that there was no response to the said notice and that on 25.7.2008, a letter was addressed to the Project Manager of the petitioner, asking to show cause why action should not be initiated for their failure to meet the contract obligations. 5. The learned Government Pleader's submission is that, it was in response to the above letter, a letter dated 27.8.2008 was submitted by the petitioner, requesting for extension of time W.P.(C).No. 21056 OF 2010 4 till 18.4.2009, which was allowed in the meeting held on 3.9.2008. It is stated that even thereafter there was no progress, and that faced with the threat of invocation of Bank Guarantee, on 31.12.2008, petitioner issued a letter requesting the respondents not to invoke Bank Guarantee. It is stated that though on 18.3.2009, Bank Guarantee was invoked at the request of the petitioner, the contract period was again extended on 4.5.2009 till 18.10.2009. Again, there was a review meeting and the contract period was further extended till 18.1.2010. According to the learned Government Pleader, even during these periods there was no progress in the work and that in spite of letter dated 19.12.2009 warning of legal action, at the request of petitioner, on the 4thoccasion, period for completion of the work was again extended till 18.7.2010. It is stated that despite of these, the petitioner completed only 16% of the work and therefore they were issued letter dated 11.3.2010 and e-mail dated 18.3.2010, warning of legal action. Even thereafter, there was no progress in the work and that a review meeting was held on 15.5.2010 and 29.5.2010. Ext.R2(a) is the minutes of the review meeting held on 29.5.2010, which shows that three representatives of the W.P.(C).No. 21056 OF 2010 5 petitioner were present and that the petitioner did not dispute that they had completed only 15-20% of the work. It is also stated in the minutes that if the petitioner does not complete the work, it was made clear that the contract will have to be terminated and the petitioner will have the sole responsibility for the damages suffered by the 2nd respondent. It is stated that even thereafter not only that there was no progress in the work, but also the petitioner did not even attend the review meeting that was held on 15.6.2010. According to the respondents, it was in these circumstances, by Ext.P8, the contract had to be terminated. 6. As already stated, the only question canvassed by the petitioner is that in issuing Ext.P8 communication, the respondents have not acted fairly or reasonably. The fact that a termination, petitioner is liable for the risk and cost cannot be disputed in view of Clause 31 (1) of the Ext.P2 bid document. As far as the question whether the respondents have acted fairly and reasonably is concerned, such contention will have to be decided in the light of the facts disclosed in the counter affidavit. Averments in the counter affidavit, which are not rebutted by any W.P.(C).No. 21056 OF 2010 6 reply, shows that despite repeated extensions granted, the petitioner did not even complete 20% of the work. They were also warned repeatedly, that action will be initiated for termination of the work and even that did not persuade the petitioner to make any progress in the work. In such circumstances, on these facts, I do not think there is any justification for the petitioner to contend that the respondents have acted unreasonably or unfairly or in violation of the principles of natural justice. Therefore, I do not find any merit in the writ petition. Writ petition fails and is dismissed. ANTONY DOMINIC JUDGE dmb