<S) INTHEHIGHGQURTOFCHHATmSGA ATBILASP^ W.P.IONO,,. ¥J20IO PETITIONER M/s. Vanshika CcinstrUGtiori Devri (Rajmarg), Through its partner/power 6f attomey hfllder- Rain Lal Jhariya, aged about 42 years, S/o Shn Kanchliedi LaT Jhariya, R/o Tendukheda, Tefasil- Tendukheda, District-Narsinghpur (M.P.) VBRSUS RESPONDENTS:1) ^ 2) /^. i^ ^ly '; (fwff^- ^^w / *" 3) 4) (< State dfChhattisgai-h, Through: Secretary, Public Works Oepartment (National Highway), D.K.S. Bhawari, Raipur, District-Ralpur (C.G.) Engineer in Chief, F'ublic Works DepSrtment, Sirpur Bhawan, Raipur, District-Raipur (C.G.) ChiefEngineer, Public Works Department (Nafional Highway Zone), PensiQn Bada, Raipiir, Eltstrict-Raipur (C.G.) Superintending Engineer, National HighwayCu^le, PublrcWbrks Department, Pensi.on Bada, Raipur, Distnct-Raipur (C.G.).':. :;•,,.•::::1'':''.^ E^ceeutive Engineer, Public Works Department (Natkinal Highway No.2), Perision Bada, Raipur, District-Raipur (°•°•) :''.:'''-:1.;:.:;' Uniori bf India, Through Miriistry of Suriace Transport 6s National Highway, NewDelhi. '\ • . WRITPETITIONtJ:NDERARTlCLE2260FTHECONSnTUTION OFJNDtA ^ T0'. ^ .• .: :. :.':'..: ••:^:'::::'.'':.(''^ THE HON'BLE GHIEP JUSTICE AND HIS CQMRANIQN ; JUSTICES OR THE , HON'BLE HIGH COURT QF CHHATnSGARH AT BILASPUR (C.G.): • ^ , , ' • • ,.^ 5) ^ 6< K.^SS'Ss^aKsS:^ l'"',s;i a !... ^S /)?• HIGHCOURTOFCHHATTISGARHATBILASPUR Writ Petition (0 No.5566 of 201 Q PETITIONER: M/ s Vanshika Construetion Devri (Rajmarg), Through its partner/ power of attomey holder - RamLal Jhariya, aged aboyt 42 years, S/o Shri Kanchhedi Lal Jhariya, R/o Tendukheda, Tehsil Tendukheda, District Narsinghpur (MP) Versus RESPONDENTS: 1. 2. 3. 4. 5. 6. State of Chhattisgarh, Through Secretary, Public Works Department (Natipnal Highway) DKS Bhawan, Raipur, District Raipur(CG) Engineer in Chief, Public Works Department, Sirpur Bhawan, Raipur, District Raipur (CG) Chief Engineer, Public Works DepartrUent (Na.tional Highway Zone), Pehsion Bada, Raipur, District Raipur (CG) Syperintending Engineer, National Highway Circle, Public Works Department, Pension Bada, Raipur, District Raipur (CG) Executive Engineer, Public Works Department (Natiorial Highway No.2), Pension Bada, Raipur, DistrictRaipur(CG) Union of India, Through Minista-y of Syrfaee Transport 8s National Highway, New Delhi Present: Shri Sunil Otwani, counsel for the petitioner. Shri Sumesh Bajaj, Govt. Advocate for State/respondents No.l t6 5. Shri Anand Verma, counsel for respondent No.6. Division Bench: Hon'ble Shri Dhirendra Mishra SB Hon'ble Sfari R.N'.^GUandrakar, JJ. ORPER (Passed on _gr'0ctober, 2010) HIGH COURT OF CHHATTISGARH AT BILASPUK Writ Petition fC) No.5566 of 2010 PETITIONER: M/s Vanshika Construction Devri (Rajmarg) Versus RESPONDENTS: State of Chhattisgarh and others ORDER FOR CONSIDERATION Sd/- Dhirendra Mishra Judge HON'BLE SHRIjl.N. CHANDRAKAR, J ^ &Jt2— Sd/- R.N. Chandrakar Judge POST FOR ORDER ON o8> -10-2010 SAI- DhirendraMtehra Judge *111»•iS.i' !,y,..i SS^BUI o} jauoppad aq^ uodn ^SBO srA(np B pLre 3AoqB psuopuau.i s^tsodsp - aip uiojj a^p anp sip Aq jauoppsd sq^ Aq pred ^ou si qoit[M ^uaj jo luauin^sui &SIB ^onpap 01. jsauiSug aApnoaxg sq^ s-iSAoduis (B)^ asnBp vavft pspus^uoo svMi ii '^usmsajgB sq} jo (q)i: pu^ (B)T: asnBjo 01 Smxiajsy •e •S-ON luspuodssj oi usAig OS\B SBA aoud pres 3tp jo ^wi.ovae jo %sz jo Aou3A(os anusAsj V 'Atunoas a&oqv 3tp Of. uopippB urs'ofj luspuodsaj ajojaq paqsiujnj os^e SBA sq3(B( g/'syjo sun^ sqi oi as^uBjenS !{UBq v 'ilQd 1° ui-ioj 3Lp m sqifBi 8£'syjo tuns TS paiisodsp pBq jauoppsd sqj, "TTOZ sunp tot'T 04 OTOS '^snSny itct7 uiojj Supusmmoo s£sp ^ ^ sqtuoui OT JP pouad TB joj jauoppsd sq^ 01 jaAO pspuBq SBA q:ooq ^0} •^uavaaa.Sv aip jo suoisiAojd sqi jsd SB i'eq^ pa^iutqns jsuoppsd sq^ joj psunoo psujBaq •5 •g/d-ajnxauuy spiA !(JOM SAoqs stp JQJ psnsst uasq SBtI JLIN qsajj pire QTOS 'lsnSnvio6T '3'T 31BP 3nP 3LP Aq ^aureq xez \\o^ aip jo-/o08'96'/£'syjo ^uauiii^suT isT Aad 01 pairej jauoppsd sqi ^q^ punojS sq^ uo JSAO US^CBI uasq s^q jaTjj^q XK) noi sip jo uoisssssod pus ^oajja a^Bipsuiiui ipiA ^uaLuasjSB sip jo 91: puB gT 3STIBI;) -I3CI SBOTOZ -g-/,2 ps^p T:/d-sjnxsuuv jo japjo psugndiui spiA 9"ON ^uapuodsaj ^q p3}Buiuij3i uaaq ssq ^uauiasjSB xe^ ^01 sq^ 'JSASAOL; 'pa^noaxa SBA (9/d -sjnxsuuy) yiavaaajSv uy '^a^J^uoo pspj^AB SBM JSppiq ^ssqSiq Suraq jauoppsd 3Lp pue psusdo SBA piq ^pLreug siq '(g/d-sjnxsuuv) uiajsq jsuoppsd sq^ Aq pa^y uoppsd IUA B ui psss^d ^jnoQ siqtjo jspjo jad SB 'j3A3Aoq 'suopoalqo j-BOiuqos: ure^iao uo s^uspuodsaj 3i[: Aq pajsptsuoo ^ou SBM jsjjo s.jauoppad 319 'Aippiui •(•t./j-ajnxauuv) Japua; SupIAUI UOpBOIJpOU 3pTA QOZ'ON A'8AC[3TH I^UORBN ^ pSl-BOOI ^BqSpUB^ aSpug pAsq q3tH 1'e uoposnoo ^05 JQJ sjsyo ps^iAui s^uapuodssj sqj, •i •p 'njifsijf nJpuajtVQ Rq passvd sonii-ino^) an^fo ^ap^o 6uyn6^of 3i{j, good the deficiency ih deposit within 10 days. Notice ofAnnexure-P/10 was issued by the Executive Engineer calling upon the petitioner to deposit first installmentofRs.37,96,800/-whichfell due on 19-8-2010, failing which action as per the agreenient was eontemplated. The above notice was dispatched on 26th August, 2010 and the sanie was received by the pedtioner on 28th Augusf, 2010. The petitioner prepared the demand draft for the aforesaid sumon 28-8-20i0 videAnnexure-P/11, however, the impugned order was passedoh 27-8-2010 and toll tax agreement was terminated with iminediate effect even before the notice dated 20th August, 2010 could be received by the petitioner, though the petitioner intimated respondent No.5 that the demand draft is already prepared. As per instructions of respondent No.5, thei petitioner got prepared demand draft for interest part vide Annexure-P/12. The petitioner handed over both the drafts to respondentNo.5. 4. It was further argued that the petitioner was paying to the respondents an araoynt of mbre than Rs.l.SS lakhs per day, however, after 27-8- 2010, cpUection from the booth has substantially reduced to the extent ofRs.55,000/- per day. The entire action ofrespondent No.5 is actuated by malice and the agreement has been cancelled withqut affording any opportunity of hearing, against the principles of natural justice and in contravention ofclause l(a) 8s l(b) ofthe agreement. 5. On the other hand, Shri Sumesh Bajaj, leamed Gpvt. Adyocate appearing for fhe State argued that the instant petition relates to a contracfa^al dispute between the pedtioner and the State govemed by the terms of contract and the dispute ofsuch nature cannot be agitated before the High Court by invoking the writ jurisdiction under Article226 -.ofthe Constitution. Principles ofnatural justice are not applicable to contractual dispute between the parties. Frora reading of the agreement in its entirety, it is evident that there is no provision ofissuing any show cause notice to the contractor prior to terminating his contract. The petidoner was bound to pay installment regularly and was not entitled to claim any remission from the table given in clause {2). The petitioner has guaranteed punctual payment ofinstallment ofrenf 6n due date for the lease as per clause 18 of the contract, whether the sarae is demanded or not. The notice of Annexure-P/10 was for recovery of amount due against the petitioner, failing which action was contemplated as per clause l(a) and l(b) and clause 16 of the agreement. Since the petitioner had failed to pay first installment by due date, the contract has righfly.been terminated. 6. Heard leamed counsel fpr the parties. 7. Indisputably, after the contract was awarded to the petitioner, agreementofAnnexure-P/6 was entered into between the pedtioner and respondent No.5. From perusal of the agreement, it is clear that the petitioner hasi deposited a sum &f Rs.38 lakhs in the shape of 3 Nos. FDR by way of security for due performance of the contract, which was refundable at the termination of the lease and after all claims of the Central Govemment in respect thereof were finallysettled. 8. Clause 1 (a) ofthe agreement further stipulates'that ifcontractor fails to pay any installment of rent by due date, the same would be deducted from the deposit. It further stipulates that when such deduction is made, the contractor is to make good the deficiency within 10 days of re.ceipt of notice thereof so-that the amount of deposit as security continues to be Rs.38 lakhs. After the petitioner made the default by not paying first installment on 19th August, 2010, a notice was issued iSSSE^^ ••%. on 20th August, 2010 and the petitioner was called upon to deposit installment by way of bank draft forthwith, failing which acti.on as per agreement was contemplated. 9. It is not the case of the respondents that the said nofice was issued to fhe petitioner after deducting the amount of installment from his security deposit, therefore, submission of Shri Bajaj that the document ofAnnexure-P/10 was in terms of clause l(a), l(b) and clause 16 ofthe agreement and not for termination of the contract under clause 15 is without any substance. lO.Indisputably, notice dated 20th August, 2010 has been dispatched from the offiee ofrespondent No.5 on 26-8-2010 at 11.23 hours aspleaded in the petition and adinitted in the counter affidavit. The contract has been terminated on 27-8-2010 even before the notice ofAnnexure-P/10 was served upon the petitioner. 11.We find no substance in the contention of learned counsel for the respondents that the contract became liable for termination on account of non payment of installment on 19-8-2010. The veiy fact that by the notice ofAnnexure-P/10 dated 20th August, 2010 the contract has not been terminated clearly reveals that the petitioner was directed to deposit installment in the office and on his failure.action under the agreement was to be taken including terminatibn. of the contract. 12.Plain reading of clause l(a) and l(b) of the agreement makes it abundantly clear that ifthere is any failure on the part ofthe contractor to pay installment on due date, the saine could be deducted from security deposit and the contractor was to make good the deficiency in the security deposit within a period of 10 days from the date of notice .alongwith interest of 10% per annum giving a grace period of3 days to .:;,%. ^- the Gontractor. Had it been an intention under the agreement that contract stands automatically terminated on failure of the contractor to pay the rent by due date, in that case, quesdon ofdeducting the amount of installment from the security deposit and making good the deficiency thereafter wifhin 10 days from the receipt of notice along with interest of 10% does not arise and in that case, the State could proceed under clause 15 of the agreement to terminate the contract and recover the loss suffered by the State. IS.From the pleadings in the writ petition and counter affidavit, we find that apart from Rs.38 lakhs that was deposited by the petidoner as security deposit with the State, the petitioner had also furnished bank guarantee for a sum of Rs.75 lakhs being 25% of total offset price amount of bid by way of additional security for due performance of contract. Clause 1 (b) ofthe contract also provides that ifthe contractor fails in payment of installment of rent by due date, the same may be deducted from that deposit and the contractor is obliged to inake good the deficiency in addidonal security deposit also so that security continues to be Rs.75 lakhs. The nodce of Annexure-P/10 was admittedly dispatehed after 6 days from the date of issue on 26th August, 2010 and the same was received on 28tb August, 2010. By 20tt Augusf, 2010, the petitioner had already prepared the demand draft for the entire sum towards first installment even before the receipt of notice. 14.It is true that the scope of interference in contractual raatters is very limited and the writ Court would ordinarily not enforce the terms of contract, however, when decision inaking process is so arbitrary or irrational that no responsible authority acting reasonably or lawfully -could have taken such decision, power of judicial review can be jo (q)i: ptre (13}]^ ssni3p jo suoisiAojd jsd SB ^usw^-iBdap sqi qiiM siq^reAB' qonm AISA SBA qoii[Ai, '^isodsp ^unoss siq TUOJJ ^uami^sui jo lunoure aq^ guponpap ^noipiAV jguoppsd sqi uodh psAjss SBM OT/d-3Jl^xsuuv jo aopbu aqi sjojsq USAS S'ON luspuodssj Aq aissq }oq ui p3}BUTiuj3} uasq saq ^OB-quoo aip pue jsuoppsd sq^ Aq^OBj^uoo si-p jo soireiiuojjsd snp joj lisodsp Atunoss puopippB pire iisodap Atunoss jo ABM Xq (sqsi^i S2,"sy jo as^UBj^nS 3(ueq pire sqsfei gS'sy jo UIns ^ •Ioj syaj g) ^unouiB ^uspyjns p^q siuspuodssj sq^ }Bq} ^oq psnimp-B 3Lp jo AvaiA uygi "OTOS 'IsnSnVid6I uo}U3ui^}sui jo ^usui^Bd JQ ^nBjsp psga^e sqi joj OIOZ 'lsnSny in^S uo pa^uimja^ SBA luauisajSB aq^ 'jauoppad 3ip ^q paAisosj sq pinoo sures sq^ sjpjsq u3AS puB OTOS '^snSnv q,9Z uo sA^p 9 jay^ S'ON ^uspuodssj jo aoijjo sq^ uiojj p3i.[3}'Bdsip SBA aures aip 'jsASAoq 'OT05 'lsnSnV qiOZ uo psnssi SBA sopou aqj, •3(JOAY aqi pspjBM'e SBA sq 'jsppiq ^ssqSiq sqi Suraq puB pauado SBA piq aoud siq 's/d-sjnxauuvjo jspjo spiA ^inoQ siq^ uiojj suoposjip -isyB 'jsASAoq 'ps^dsooB SBA jajspusi siSuis ai.p jo piq puB pa^daoo^ ^ou SBA jauoppad sip jo piq (Bomqoa: sq; 'soLreism }sjg sip ui ^Bq^ pug SA 'stuaui&pnf pressjojB aq^ UT UAQp pre^ A\BI jo S3{dpuud 3Lp ^dd^ aAjrsi •{OST sasBQijnooauiajdng T (600S) 'sqooa UBipu]: 'SA uotiejod.ioosauisnpui isajoj ^VS^Q vsivveuneyi PUB sig SSSBQ i.inoo auiajdng 91 (800S) 'sJaqio pnB eipni jo uoiun •SA lav^ovv PUB paiiiun aiBA;j<i sqjoMiaN uoiiBoiunmuioo anqnd suaiuaig ssg} 'suopo^sLre^ ^iojsuimoo qons jo ppg sql ui si'ejsdo ^ou op soTisnf ^ejn^Bu pue A^inba jo sa^dpuuj •Buno^ I'ejnpsoojd B si sjsq^ JI U3A3 A3TA3J ^TOIpnfjO J3AOd JO 3SpJ3X3 UI SJSJ.IS^UI }OU n;A IJnO^ '^ssjaiui oiiqnd m pue apgeuoq sruopoE aip ajaqA 'jiSAaMOH "psspjaxs •^ ^f"^^ ^'-B-u,,'i'% I ©-,.' l ^,K:1-':1 tft;;: :~i^^,-.. ...-g^-^ the agreement, the non-payfflent of first installment was only an excuse for terminating the contract. 17.We have already taken note of the fact that the price bid of the petitioner was opened onlyafter directions from the High Court and prior to that, offer of the single tenderer was accepted. 18.0n the basis of aforesaid discussion, we are of the opinion that the petitioner has been able to inake out a case for interference of this Court under Article 226 of the Constitution of India. 19.In the result, the writ petition is allowed and the impugned order of Annexure-P/1 dated 27-8-2010 is herebyquashed. Barv Sd/- Dhirendra Mishra \ Judge Sd/- R.N. Chandrakar Judge