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Judgment
T.R. Ramachandran Nair, J.—The petitioner is aggrieved by the termination of a contract by Ext.P10 and a re-tender notice which is issued as Ext.P11. The petitioner was granted, after a tender process, two separate contracts for clear felling, collection, stacking and transportation of specified quantities of pulp wood from the "2005 Kottappara Captive Plantation" situated in Kodanad Forest Range. They are produced as Exts. P1 and P2. Requisite permissions were given as per Exts. P3 and P4. According to the petitioner, he started execution of the work but certain objections were raised by the local leaders of various Trade Unions and they dictated illegal terms regarding engagement of workmen and wages payable to them. They arrived at a settlement as evident from Ext.P5. Thereafter, the work was progressing and again one of the office bearers filed an injunction petition as I.A. No. 909/2012 in O.S. No. 143/2012 wherein an order was issued as per Ext.P6. The new office bearers raised unreasonable demands and obstructed the contract work and law and order situations emanated which compelled the petitioner to approach this Court by W.P.(C). No. 22083/2012 and an interim order was granted as per Ext.P7. The respondents are also parties therein. The petitioner, thereafter, requested for extension of three months'' time to complete the work as per Ext.P8. But later the third respondent, who was hostile to the petitioner issued a show cause notice as per Ext.P9 proposing to terminate the contract which was replied by the petitioner but, without heeding to the request, Ext.P10 termination order has been issued.
The petitioner contends that the order Ext.P10 is in violation of Articles 14, 19(1)g and 21 of the Constitution of India. The petitioner was not granted an opportunity of hearing before the Order is passed. The order is issued hastily and arbitrarily. Various aspects, pointed out by the petitioner, have not been assessed also. Finally, it is also stated that there are mala fides in the matter.
In the statement filed by the third respondent, various aspects have been explained. It is explained that in the purchase orders, phased programmes are specified in clause 2. In respect of Ext.P2 purchase order, the petitioner has delayed commencement of work. In the meeting of the Tender Committee held on 24/07/2012, he was informed about the urgency of commencing the work covered by the said purchase order. Thereafter also, there is failure. Letters were issued on 09/10/2012, 19/10/2012 and 20/10/2012 pointing out the delay in execution of the work and seeking to expedite the work. Thereafter also, there is failure. Thus, Ext.P9 show cause notice was issued. Even thereafter, he failed to commence the work and supply materials. The work was awarded for the year 2011-12 after getting special sanction for plantation well in advance to extract and transport before commencement of the working season as the company was in urgent need of the materials. The contract period was accordingly specified as 31/12/2012. In the statement, the stand taken is that the termination was required in such circumstances and the allegations of mala fides have been denied.
Learned counsel for the petitioner submitted that for various reasons, the action is bad in law and that the term prescribing the cut off date as 31/12/2012 in Exts. P1 and P2 is contradictory to Exts. P3 and P4 orders issued by the Divisional Forest Officer, Malayattoor Division. It is further submitted that the general conditions produced along with the reply affidavit also will have to be gone into (Ext.P12). It is also submitted that there is total denial of principles of natural justice as no personal hearing was granted. Learned counsel emphasised the fact that even though the area is covered by two purchase orders, it is contiguous. Therefore, the work done by the petitioner in respect of the area covered by Ext.P1 will enure to his benefit and hence the allegation cannot be justified.
In Ext.P3, the Divisional Forest Officer has prescribed a cut off date as 31/05/2013. This is heavily relied upon by the learned counsel for the petitioner Shri Aswin Gopakumar to contend that Exts. P1 and P2 should be read along with Ext.P3. Learned counsel for the Company Shri E.K. Madhavan submitted that actually, the contract was for 2011-12 extraction itself and, therefore, the period was fixed as 31/12/2012.
Evidently, the petitioner has accepted the terms of Exts. P1 and P2 and cannot now turn round and attack the conditions as attached therein and, therefore, there is no merit in the said contention. Ext.P3 is the proceedings of the Divisional Forest Officer, and the company has provided different tenders for the two areas for which they are duly empowered also. Therefore the said contention also cannot be accepted.
With regard to the maintainability of the writ petition in contractual matters, learned counsel for the petitioner relied upon ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and Others, para. 14, which is extracted below:
This judgment again, in our opinion, does not help the first respondent in the argument advanced on its behalf that in contractual matters remedy under Article 226 of the Constitution does not lie. It is seen from the above extract that in that case because of an arbitration clause in the contract, the Court refused to invoke the remedy under Article 226 of the Constitution. We have specifically inquired from the parties to the present appeal before us and we have been told that there is no such arbitration clause in the contract in question. It is well known that if the parties to a dispute had agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless of course both the parties to the dispute agree on another mode of dispute resolution. Since that is not the case in the instant appeal, the observations of this Court in the said case of State of U.P. and others Vs. Bridge and Roof Co. (India) Ltd., are of no assistance to the first respondent in its contention that in contractual matters, writ petition is not maintainable.
It is submitted that the writ petition is therefore maintainable as this Court can enter into areas where principles of natural justice are violated.
Learned counsel for the respondent company Shri E.K. Madhavan relied upon the dictum laid down by the Apex Court in State of Bihar and Others Vs. Jain Plastics and Chemicals Ltd., wherein in para. 7 it was held as follows:
In our view, it is apparent that the order passed by the High Court is on the face of it, illegal and erroneous. It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the appellants would justify breach of contract by the respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in an properly instituted civil suit rather than by a Court exercising prerogative of issuing writs.
My attention was also invited to another Judgment of the Apex Court in State of Gujarat and Others Vs. Meghji Pethraj Shah Charitable Trust and Others, wherein in para. 22 with regard to the requirement of observing the principles of natural justice, it was laid down thus:
We are unable to see any substance in the argument that the termination of arrangement without observing the principle of natural justice (audi alteram partem) is void. The termination is not a quasi-judicial act by any stretch of imagination; hence it was not necessary to observe the principles of natural justice. It is not also an executive or administrative act to attract the duty to act fairly. It was - as has been repeatedly urged by Sri Ramaswamy - a matter governed by a contract/agreement between the parties. If the matter is governed by a contract, the writ petition is not maintainable since it is a public law remedy and is not available in private law field, e.g., where the matter is governed by a non-statutory contract. [In this connection, See Assistant Excise Commissioner and Others Vs. Issac Peter and Others, on the relevance of doctrine of fairness in matters governed by contract, arrived at calling for tenders, auction or by negotiations]. Be that as it may, in view of our opinion on the main question, it is not necessary to pursue this reasoning further.
The Supreme Court was of the view that termination is not a quasi-judicial, executive or administrative act. Purely, the terms are governed by the contract entered into between the parties.
Herein, the petitioner was given a show cause notice and a reply was also given by the petitioner. Even in the writ petition and in the reply affidavit, the petitioner has not explained anything about the progress of the work and therefore, it is evident that as far as the work tendered under Ext.P2 is concerned, there was no progress. There are clauses in the agreement which provide for termination. Absence of a personal hearing cannot lead to violation of the principles of natural justice. This Court cannot, therefore, enter into disputed questions of facts. In a matter like this where the obligations arise under contract, normally, jurisdiction under Article 226 of the Constitution of India will not help the petitioner to get a relief. If there is a breach of contract, according to the petitioner, he will have to move other forums for getting appropriate relief. For all these reasons, the writ petition is dismissed. It is made clear that the findings entered into herein are for the disposal of the writ petition alone.