Case: Union of India Vs. Hetovi Kappo &amp; Others

2. A public interest litigation, was filed in the Gauhati High Court, invoking the jurisdiction of the High Court under Article 226 of the Constitution of India. The petitioner had invoked the writ jurisdiction of the High Court, in an effort to expedite the laying of a 329 kilometers road, the construction whereof had been stalled. It is for the aforesaid objectives, that the petitioner before the High Court, had prayed as underTo issue a writ in the nature of Mandamus and/or any other appropriate writ, order or directions directing the respondent authorities to complete thework of the approach road from Hebolimi Village to the National Highway in particular and also all the other parts of the 329 kms of roads under the present project, as early as possible even by applying alternate means, if necessary;      2. To issue a writ in the nature of Mandamus and/or any other appropriate writ directing the respondent authorities to reject the Revised Cost Estimate submitted by M/s.(Joint Venture) through the Chief Engineer (National Highway) Nagaland, PWD, vide official correspondence dated 20.02.2012;      3. To issue a writ in the nature of Mandamus and/or any other appropriate writ directing the respondent authorities to blacklist M/s.(Joint Venture) from further tender works in the Public Works Department, Government of Nagaland.      4. To issue a writ in the nature of mandamus and/or any other appropriate writ directing and enquiry by the Central Bureau of Investigation (CBI) in the Mega Project in the State of Nagaland initiated by the Public Works Department converting a total length of 329 kilometers road for two laning from i.a, iii.oto and this Honble Court may be further pleased to supervise such enquiry by the Central Bureau of Investigation (CBI).      And/or pass such further order/orders as Your Lordship may deem fit and proper in the facts and circumstances of the case.It seems that the High Court, in its desire to ensure completion of the above road project expeditiously, had issued directions to Respondent No.7 to complete the project without any delay. In order to achieve the aforesaid objective, the High Court had even required the progress thereof, to be supervised by Honble Mr. Justice R.B. Mishra, a former Judge of the Gauhati High Court. The High Court had even required payments to be released to Respondent No., for the work already executed. In this behalf, it would be necessary to record, that in the estimation of the High Court, an approximate amount of Rs.540.31 crores, was payable to Respondent No.7, for the work already executed.      4. On 7th October, 2016, this Court passed the following directions, and sought a report from the appellant herein, and from the State of Nagalanddo not for the present intend to express any final opinion on the contentions urged on behalf of the petitioner and those strenuously put forth by Dr. Abhishek Manu Singhvi appearing for the contractor lest we prejudice the case of anyone of the two parties. All that we are inclined to do for the present is to secure the following information from theWho all are parties to the agreement with the contractor in relation to works in dispute? A copy of the contract/document shall be placed on record by the Union of India and/or Government of Nagaland as the case may be.      (ii) At what stage was it first noticed by the Government of India and/or Government of Nagaland that the contractor was committing the defaults in the execution of the contracted works? Material to support the version regarding the earliest occurrence and noticing of defaults committed by the contractor shall be placed on record.      (iii) What action, if any, was proposed by the Government of India and/or the Government of Nagaland on account of the defaults reported against the contractor either in terms of giving any notice and/or cancellation of the contract?      (iv) If a decision regarding cancellation of the contract at any stage prior to 11.01.2015 taken then why was no formal order of cancellation of the contract issued? Copies of notices and/or letters if any exchanged between the parties regarding default by the contractor and remedial measures shall be placed on record.      (v) If the Government of India considers the contractor to be responsible for the stalemate then what is the road map which the Government proposes to adopt in regard to the works in question? Has the government taken any decision as to the agency that would be employed for executing the contracted works?      (vi) Is the Government of India ready to financially support the project in question? Copies of the decision on the subject shall be placed on record by the Government of India.      (vii) In the opinion of Government of India is there any dereliction by any officer at any level in the matter of implementing the contract. If so, what action, if any, is the Government proposing to take against those responsible for dereliction?      (viii) If no inquiry has been conducted to fasten responsibility so far, is the Government of India ready to have the matter inquired into by the Central Vigilance Commissioner to identify those responsible for acts of omission and or commission?      (ix) What is thewithin which the works are now expected to be completed? In case the Government of Nagaland was expected to work the contract, has the Government of Nagaland explained the reasons why no termination was ordered at the appropriate stage and taken action against officers responsible for dereliction in that regard.?"

Court's reasoning:
A perusal of paragraph 23 extracted above reveals, that the appellant herein had already decided to foreclose the contract. It is also apparent, that the appellant herein, has already decided to execute theproject, by inviting freshperusal of the assertions expressed in paragraph 27 reveals, that in the estimation of the appellant, the completion of the road project, is likely to take about 3 years and 6 months.Having heard learned counsel for the rival parties, we are satisfied, that the public interest litigation initiated by Respondent No.1, was with the sole object of having the road project completed at the earliest. Pendency of the present proceedings before this Court, keeping in view the stance adopted by the appellant, shows that theobjective cannot be achieved, through Respondent No.7. We are, therefore, satisfied in allowing the appellant to retender the project, by initiating a fresh process, by following the contemplated procedure. In view of the assurance given to this Court, we direct the appellant as also the State of Nagaland, to ensure completion of the project, within a period of three years and six months from today.It is also essential for us to record, some observations in respect of the claim of Respondent No.7 with reference to the work already executed. It is also necessary to keep in mind the effect of the cancellation of the contract and also the loss (if any) suffered by Respondent No.. Insofar as all these aspects, and similar allied aspects are concerned, we are of the view, that the consequences emanating out of the agreement dated 3rd February, 2011, executed between the State of Nagaland and Respondent No.7, can only be settled in terms of the arbitration clause incorporated in their