Jharkhand High Court
M/S A.B. Enterprise vs Union Of India on 5 December, 2023
Author: Sanjaya Kumar Mishra
Bench: Sanjaya Kumar Mishra, Ananda Sen
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No. 2893 of 2020
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M/s A.B. Enterprise, a proprietorship firm having its registered office at
Abbas Ali Ansari, Santibana Park, Durgapur, District- Paschim Bardhaman,
West Bengal, represented by the proprietor Akshay Kumar Paul.
... ... ... ... Petitioner
Versus
1. Union of India, through the Secretary, Ministry of Road Transport and
Highways, Govt. of India, having office at Sansad Marg, New Delhi.
2. National Highway Authority of India, a Statutory body established under the
National Highway Authority of India, represented by its General Manager,
Commercial Operation, having its office at G-5X6, Section -10, Dwarka,
New Delhi.
3. G.M. (Tech.) and Project Director NHAI (Ministry of Road Transport and
Highways, Govt. of India) Project Implementation Unit, Ranchi.
4. The General Manager (CO), Ministry of Road Transport and Highways,
Govt. of India, Sector-10, Dwarka, New Delhi.
5. The Manager (Tech), Ministry of Road Transport and Highways, Govt. of
India, Ranchi ... ... ... ... Respondents
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CORAM: SRI SANJAYA KUMAR MISHRA, C.J.
SRI ANANDA SEN, J.
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For the Petitioner: M/s Sumeet Gadodia, Shilpi Sandil Gadodia, Ritesh Kumar
Gupta, Ankit Kumar, Shruti Shekhar, Advocates.
For UOI: Mr. Shiv Kumar Sharma, CGC
For NHAI: M/s Khushboo Kataruka & Shubham Kataruka, Advocates.
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13/ Dated: 05.12.2023:
Upon hearing the learned counsel for the parties, this Court passed
the following, (Per, Sanjay Kumar Mishra, J.)
ORDER
By way of filing this writ petition under Article 226 of the Constitution of India, the petitioner prays for following relief(s);
(I) For issuance of appropriate Writ(s)/Order(s)/Direction(s) for quashing the memo of termination issued by the General Manager (CO) vide letter dated 11.9.2020 (Annexure-13);
(ii) For issuance of appropriate Writ(s)/Order(s)/Direction(s) for quashing up of the letter No. NHAI/13013/547/CO/19-20/Eg/Murma EP/648 dated 11.9.2020 (Annexure-13) issued by the General Manager (CO), Ministry of Road Transport and Highway;
(iii) For issuance of appropriate Writ(s)/Order(s)/Direction(s) upon the respondent No. 6 to bring on record the order passed by the General Manager (CO), Ministry of Road Transport and Highway;
and
(iv) During the pendency of this writ petition, operation of impugned memo dated 11.9.2020 (Annexure-13) 2. 10.9.2020 (Annexure-14) may be ordered to be stayed.
2. The facts of this case are not disputed. The competent authority of the National Highways Authority of India (hereinafter referred as 'NHAI') has issued e-quotation inviting engagement of user fee collection agency for Toll Plaza on 11.10.2019 at Murma Fee Toll Plaza at Ranchi Piska More to Bijupara Kuru Section of National Highway 75. The petitioner participated in the e- tender and in the month of November, 2019 the petitioner was declared as H1 bidder and was issued a letter of award appointing it as the Agency of the respondent- NHAI for user fee collection. The petitioner deposited Cash Performance Security of Rs.1,55,10,000/- and Common Bid Security of Rs.50,00,000/-. The total amount deposited by the petitioner was Rs.2,05,10,000/-
3. A reference to the e-quotation of Annexure- CA/2 to the counter affidavit reveals that on 11.10.2019 the e-tender was floated for engagement of users fee collection agency on the basis of e-quotation through e-tender for Murma Fee Plaza. There is no mention in the e-quotation or e-tender to establish a temporary plaza. However, Annexure-CA/4 of the counter affidavit reveals that after the engagement/selection of the petitioner for upgrading the Toll Plaza, the General Manager (Tech) and Project Director, NHAI wrote a letter to the General Manager of the petitioner intimating as follows:-
"It is relevant to mention here that Toll Plaza infrastructure has not been established due to objection by local public public land for Toll Plaza has not been required as yet. In the meantime, notification for Assembly Election has been issued in the State of Jharkhand and Model Code of Conduct is in force. Temporary Toll Plaza structure is being set up at Toll Plaza site. There is possibility of public agitation of the site of Toll Plaza also.
It would be desirable to see whether Toll collection can be started during the enforcement of Model Code of Conduct in the State of Jharkhand for Assembly Election."
(under lined to supply emphasis)
4. On 30.12.2019, the General Manager (CO) again wrote the petitioner regarding engagement of user fee collection agency, the content of the letter reads as under;
"Please refer to your letter cited under Ref.(ii) vide it was submitted that during site visit of the proposed fee plaza location, it was observed that toll booths are not yet constructed and operation of the fee plaza shall take place once the booths are constructed. It was further requested to allow time for submission of performance security till the construction of toll booths.
In this regard, it is to mention that P.D, PIU-Ranchi vide e- mail dated 19.12.2019 has informed the installation of temporary Toll Plaza is in process and likely date of commencement of user fee collection is 15.1.2020.
(under lined to supply emphasis) 3. In view of the above, it is requested to deposit the Performance Security of Murma Fee Plaza on or before 10.1.2020, sign the Contract agreement and takeover of the fee plaza as per the instructions of RO/PD."
5. Thereafter, the petitioner asked to operate the user fee collection from the temporary complex at the site. It is not disputed at this stage that the permanent toll plaza could not be constructed on the site. It is also apparent from Annexure-CA/5 to the counter affidavit that it was stated by the respondent- NHAI that it is intending to establish temporary toll plaza, which is likely to be constructed by 15th January 2020. On 27.1.2020, the petitioner visited the temporary toll plaza and found that there are certain deficiencies in the temporary toll plaza. The petitioner specifically stated in his petition that the toll plaza cannot be operated unless the deficiencies are removed. The deficiencies are regarding the non-supply of electricity and earthing, non-supply of water, no toilet and bathrooms were available, no server room was available, no boom barrier, RFID system, road divider system for making channel , CCTV etc. including H/H POS, ISP etc. were available at the temporary toll plaza. On 6 th of February, 2020, pursuant to the representation of the petitioner, the respondent- NHAI directed the agency responsible for construction of toll plaza, namely M/s Varaha Infra Limited- Sunil Hitech Engineers Limited (JV) to complete the infrastructure pertaining to temporary toll plaza. On 26.2.2020 in the letter the respondent- NHAI again specifically recorded that due to non-availability of land, fee plaza construction could not be established and only temporary toll plaza has been established (vide Annexure-CA/11 to the counter affidavit). On 3.3.2020, despite the fact that the toll plaza could not be established, an agreement was entered with the petitioner for working as contractor/agency for the collection for user fee.
6. On 12.3.2020, the petitioner, pursuant to the agreement, was directed to undertake the activity of the collection of user fee with effect from 16 th March, 2020. On 13.3.2020, the petitioner mobilized its resources for operation of toll plaza but when the petitioner visited the toll plaza, the discrepancies was noticed, which have been reflected in preceding paragraph like non-supply of electricity and earthing, non-supply of water, no toilet and bathrooms were available, no server room was available, no boom barrier, RFID system, road divider system for making channel , CCTV etc. including H/H POS, ISP etc. were available at the temporary toll plaza. On 16th March, 2020, despite the minimum infrastructure at toll plaza and the fact that no permanent toll plaza was constructed, the respondent authority directed the petitioner to take over the toll plaza and start 4. tolling operation. In the said letter, it was also reflected, as alleged by the petitioner, that the toll plaza is ready for operation, except Acquirer bank is to be operated by IHMCL. From 22nd -23rd March, 2020 national-wise lock down was imposed due to COVID-19 pandemic. On 18th April, 2020, the petitioner was directed to resume the toll operation. On 6.5.2020, the petitioner informed the respondent that due to COVID-19 pandemic, requisite staff were not available and they were expected to report back at toll Plaza location on 18.5.2020 and thereafter the petitioner would be able to able to commence the operation of the toll plaza. On 30.6.2020, the petitioner filed representation before the Chairman of the NHAI bringing to the notice of the said authority that only temporary toll plaza has been constructed without infrastructure and further due to lock down, the petitioner was unable to commence the operation of collection of user fee and requested the Chairman, NHAI to cancel the contract without imposing any penalty. However, on 7.7.2020, pursuant to the representation of the petitioner, the petitioner was informed that the fee plaza is complete in all respect and the petitioner was directed to takeover the operation for collection of user fee. On the same day, the petitioner, pursuant to the letter, again visited the site of the toll plaza for taking undertaking the activity of collection of toll, but found that several basic necessities needed to run the toll plaza were absent and accordingly, he intimated the respondent authority. On 27.7.2020, a meeting was held at the site and the petitioner during the said meeting noticed various discrepancies in the infrastructure of the Toll Plaza and informed the same to the respondent authority vide e-mail on the same day. On 28.7.2020, the respondent admitted that several infrastructures are still wanting but stated that since toll plaza is a permanent toll plaza, the petitioner is required to undertake the work on the existing facility. The petitioner, on the compulsion, mobilized his resources to carry out the operation of the toll plaza. However, the petitioner admittedly faced hindrance of the local public in carrying out the work of toll plaza. This fact, as per the petitioner, is admitted by the respondent. On 25.8.2020, the petitioner informed the respondent regarding hindrances, caused by the local public in carrying out the activities of toll plaza.
7. On 10.9.2020, the respondent authority invited fresh e-quotation for appointment of user fee collection agency for the said same toll plaza. The said quotation was invited even prior to the termination of the contract of the petitioner. On 11.9.2020, the order impugned was issued by the General Manager (CO)- respondent No. 4 wherein the respondent authority in most illegal and arbitrary manner has forfeited the Cash Performance Security of Rs.1,55,10,000/- and 5. Common Bid Security of Rs.50,00,000/- and also debarred the petitioner from the list of per-qualified bidder for a period of two years. The agency, which was selected on the second e- invitaiton i.e. M/s Riddhi Siddhi Associates started the work of toll collection on 30.9.2020 but could operate the said toll plaza only 15 to 20 minutes due to local public resistance. The bid security of the said Agency has been duly refunded, which would be evident from the information supplied to the petitioner under Right to Information Act, 2005. It is also not disputed at this stage that the NHAI keeping in view of the local resistance i.e., faced by it, in setting of a toll plaza at the site, has been done away with and the NHAI is not proceeding to have a toll plaza on the site, as described above.
8. On a reference to the counter affidavit specially at page 26, sub-para 9(xxxvi), it would appear that the respondent admits that there was local resistance in setting up the toll plaza. In this connection, we find it appropriate to quote the exact words/language, used by the respondent authority in paragraph 9(xxxvi) of the counter affidavit, which is as follows;
"9(xxxvi): It is to be noted that on 25.8.2020, the petitioner again wrote to respondent NO. 3 vide its letter No. ABE/MURMA/16 dated 20.8.2020, wherein it has stated reason of some local disturbance and withdrawn itself from carrying out its contractual obligations and put the entire onus on NHAI to make arrangements and maintain law and order from the local public end as well. The alleged incident pertaining to disturbance caused by local MLA with some security guards should have been treated as part and parcel of operating a Toll Plaza on a National Highway and the said one of incident could not have been made as another excuse to deny the commencement of toll operations by the petitioner."
9. Thus, keeping in view the aforesaid facts, undisputed at this stage, the learned counsel of the petitioner would submit the following points of argument for allowing the writ petition:-
(i) The e-tender was floated for operation of a regular toll plaza and not a temporary toll plaza.
(ii) The toll plaza could not be established and the rule of the game was changed and the petitioner was asked to run a temporary toll plaza that too which did not have the basic amenities/facilities for the staff working there.
(iii) It is not disputed that due to public resistance, permanent toll plaza could not be constructed and the toll plaza even in a temporary shade could not be operated by the petitioner.
(iv) It is also not disputed at this stage that the second e-tender was given to one M/s Riddhi Siddhi Associates a joint venture, and the said tenderer also could not carry out the work and ultimately that tender was also cancelled.6.
(v) It is also not disputed that the NHAI has decided not to establish any toll plaza at the site because of the local resistance, led by the local politicians of the area.
. (vi) It is brought to our notice also that the petitioner has been given a discriminatory treatment at the hands of the respondent authorities in the sense that a party, who tendered his bid document in the second e-tender invitation, was refunded his bid security deposit and EMD, but that benefit is not granted in favour of the petitioner instead, the money deposited by the petitioner has been forfeited and it has been blacklisted.
It is, therefore, submitted on behalf of the petitioner that the action of the respondent is not only arbitrary, but is discriminatory on the face of the record.
10. The learned counsel for the respondent would however make an attempt to distinguish the case of the petitioner and the second tenderer i.e. M/s Riddhi Siddhi Associates in the sense that as per our observation that the plaza was taken over by the second tenderer. However, we do not find any force in the said submission in the sense that the second tenderer was also not given permanent structure for carrying out the operation of users fee collection. Moreover, the second tenderer also could only operate the plaza only for 15-20 minutes before the entire operation was closed down.
11. The learned counsel for the respondent would very emphatically argued that this case involves complicated and disputed questions of facts and therefore, the writ petition is not maintainable, therefore this writ petition should be dismissed. The learned counsel during her argument would rely upon the judgment of the Hon'ble Supreme Court rendered in the case of Gorkha Security Services Vs. Government (NCT of Delhi) and Others, reported in (2014) 9 SCC 105, wherein the Hon'ble Supreme Court dealing with a matter regarding tender has held that High Court has simply stated that the purpose of show cause notice is primarily to enable the noticee to meet the grounds on which the action is proposed against him. No doubt, the Hon'ble Supreme Court has further held that the High Court is justified to this extent. However, it is equally important to mention as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which an action is proposed. To put it otherwise, the Hon'ble Supreme Court was of the opinion that in order to fulfill the requirements of principles of natural justice, a show cause notice should meet the following two requirements viz:
(i) The material/grounds to be stated which according to the department necessitates an action;
(ii) Particular penalty/action which is proposed to be taken. It is this second requirement which the High Court 7. has failed to omit.
The Hon'ble Supreme Court thereafter hastened to add that even if it is not specifically mentioned in the show cause notice but it can clearly and safely be discerned from the reading thereof, that would be sufficient to meet this requirement.
12. Therefore, the observation of the Hon'ble Supreme Court is not squarely applicable in this case. This case stands on a different footing. As we have narrated above, the facts of this case are not disputed. The submission of the learned counsel appearing for the NHAI that the disputed question of fact do arise in this case is, in fact, not a correct submission. Moreover, even when there are certain disputed question of fact and the petitioner can demonstrately establish that there has been arbitrariness on the part of the respondent authorities, then it shall be appropriate on the part of the High Court to exercise the writ jurisdiction under Article 226 of the Constitution and interfere in the matter.
13. Learned counsel for the petitioner would rely upon the judgment of the Hon'ble Supreme Court rendered in the case of M.P. Power Management Company Limited, Jabalpur Vs. Sky Power Southeast Solar India Private Limited & Ors. reported in (2023) 2 SCC 703. A reference to paragraph 82.3 reveals that the Hon'ble Supreme Court has held that the mere fact that relief is sought under a contract which is not statutory, will not entitle the respondent State in a case by itself to ward off scrutiny of its action or inaction under the contract, if the complaining party is able to establish that the action/inaction is, per se arbitrary. At paragraph 82.9, the Hon'ble Supreme Court has further held that the need to deal with disputed questions of fact, cannot be made a smokescreen to guillotine a genuine claim raised in a writ petition, when actually the resolution of a disputed question of fact is unnecessary to grant relief to a writ applicant. At pragraph- 82.10 and 82.11, the Hon'ble Supreme Court has further held that the reach of Article 14 enables a writ court to deal with arbitrary State action even after a contract is entered into by the State. A wide variety of circumstances can generate causes of action for invoking Article 14. The Court's approach in dealing with the same, would be guided by, undoubtedly, the overwhelming need to obviate arbitrary State action, in cases where the writ remedy provides an effective and fair means of preventing miscarriage of justice arising from palpably unreasonable action by the State. The Hon'ble Supreme Court further held that termination of contract can again arise in a wide variety of situations. If for instance, a contract is terminated, by a person, who is demonstrated, without any need for any argument, to be the person, who is completely unauthorised to 8. cancel the contract, there may not be any necessity to drive the party to the unnecessary ordeal of a prolix and avoidable round of litigation. The intervention by the High Court, in such a case, where there is no dispute to be resolved, would also be conducive in public interest, apart from ensuring the fundamental right of the petitioner under Article 14 of the Constitution of India. When it comes to a challenge to the termination of a contract by the State, which is a non-statutory body, which is acting in purported exercise of the powers/rights under such a contract, it would be over simplifying a complex issue to lay down any inflexible rule in favour of the Court turning away the petitioner to alternate fora. Ordinarily, the cases of termination of contract by the State, acting within its contractual domain, may not lend itself for appropriate redress by the writ court. This is, undoubtedly, so if the Court is duty-bound to arrive at findings, which involve untying knots, which are presented by disputed questions of facts. Undoubtedly, in view of ABL international Ltd. Vs. Export Credit Guarantee Corpn. of India Ltd., report in (2004) 3 SCC 553, if resolving the dispute, in a case of repudiation of a contract, involves only appreciating the true scope of documentary material in the light of pleadings, the Court may still grant relief to an applicant. The Hon'ble Supreme Court, however, entered a caveat. The Courts are today reeling under the weight of a docket explosion, which is truly alarming. If a case involves a large body of documents and the Court is called upon to enter upon findings of facts and involves merely the construction of the document, it may not be an unsound discretion to relegate the party to the alternate remedy. This is not to deprive the Court of its constitutional power as laid down in ABL (Supra). It all depends upon the facts of each case as to whether, having regard to the scope of the dispute to be resolved, whether the Court will still entertain the petition.
14. Thus, keeping in view of the aforesaid observation made in the latest judgment of the Hon'ble Supreme Court, we find that there has been a discriminatory treatment to the petitioner as against M/s Riddhi Siddhi Associates, the second successful tenderer in the second e-invitation for quotation.
15. It is not disputed that after the award of the contract, it was impossible on the part of the petitioner to undertake the process of collection of Toll on the National Highways.
16. Similar question arose in a case before us and this Court in the case of AKA Logistics Private Limited Vs. Central Coalfields Limited and Ors. [WP(C) No. 105 of 2023], as per the judgment dated 14.6.2023, has taken into consideration the impact of Section 56 of the Contract Act and has held 9. as follows;
"11. Thus, Section 56 of the Contract Act shall come into play. It provides that an agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
12. From the chronological facts mentioned herein above, it is clear that on 23.08.2018, the tender was floated, letter of intimation was issued on 05.03.2019 and the Order (Public Procurement No.1) was issued on 23.07.2020.
13. Thus, the contract that was envisaged by the parties to enter into became impossible to be performed and also became unlawful and therefore, the petitioner could not have executed the contract with the Central Coalfields Limited. Our view is fortified by the reported case of Delhi Development Authority Vs Kenneth Builders And Developers Private Limited And Others, (2016) 13 SCC 561, wherein in para-36 the Hon'ble Supreme Court has observed as follows:
"36 On a conspectus of the facts and the law placed before us, we are satisfied that certain circumstances had intervened, making it impracticable for Kenneth Builders to commence the construction activity on the project land. Since arriving at some clarity on the issue had taken a couple of years and that clarity was eventually and unambiguously provided by the report of the CEC, it could certainly be said that the contract between DDA and Kenneth Builders was impossible of performance within the meaning of that word in Section 56 of the Contract Act. Therefore, we reject the contention of the DDA that the contract between the DDA and Kenneth Builders was not frustrated."
14. In that view of the matter, this Court is of the opinion that the action of the petitioner in not executing the contract with the respondents-CCL cannot be found at fault and therefore, though the action of the respondents in cancelling the Letter of Award is legal, the action on their part, forfeiting the earnest money deposit is illegal and therefore, the writ application is allowed. The impugned Annexure-22 dated 25.10.2022 to the writ application is quashed to that extent. Accordingly, a writ of certiorari is issued. A writ of mandamus is also issued directing the respondents-C.C.L. to refund the earnest money deposit of Rs.50 lakhs to the petitioner along with simple interest @ 6 % per annum from the date of issuance of Annexure-22 till the date of actual payment within a period of 60 days from today."
17. In this case also, we find that the petitioner was faced with a situation of frustration or supervening impossibility. It is not disputed by the NHAI that it is not only the petitioner, who could not operate the toll plaza on the site but the second tenderer in the second e-invite quotation, also could not operate the toll plaza and finally NHAI has done away with the idea of establishing the toll plaza at the site. This shows that there are factors beyond control of any of the parties for operation of toll plaza at the site and then the principle of frustration or of supervening impossibility is applicable in its full force.
10.18. The contention raised by the learned counsel for the respondent that the second successful tenderer in the second e-invite stands in a different footings, is not based on an intelligible differentia. The fact remains that both the petitioner and the successful second tenderer in the second e-invite did not or could not operate the toll plaza because of local resistance and both were hit by the principle of frustration or supervening impossibility.
19. In that view of the matter, we find that not only the respondent has acted in an arbitrary and whimsical manner but also has treated the petitioner with a discriminatory attitude in the sense that they have not forfeited the deposit made by the successful tenderer in the second e-invite and has forfeited the deposit of the petitioner without any valid reason.
20. Thus, we are inclined to allow this writ petition. The writ petition is allowed. Consequently, Letter dated 11.09.2020 (Annexure-13), as prayed for, is hereby quashed by issuance of certiorari. The writ of mandamus is issued to the respondent to pay back Rs.2,05,10,000/- (rupees two crore, five lakh and ten thousand) to the petitioner along with simple interest @ 6 % per annum from 11.09.2020 till the date of actual payment within a period of 60 (sixty) days from today.
21. There shall be no orders as to costs.
22. Pending applications, if any, stand disposed of.
23. Grant urgent certified copy of this order as per the Rules.
(Sanjaya Kumar Mishra, C.J.) (Ananda Sen, J.) Anu/-Cp2.
A.F.R.