Chattisgarh High Court
M/S Konark Agencies vs Municipal Corporation Raipur on 15 May, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
Digitally
signed by 2026:CGHC:23197-DB
MOHAMMED
AADIL KHAN NAFR
Date:
2026.05.19
11:15:58 HIGH COURT OF CHHATTISGARH AT BILASPUR
+0530
WPC No. 2519 of 2026
1 - M/s Konark Agencies Through its Proprietor-Shri Kanhaiya Lal
Gupta, Aged 53 Years, S/o Late Nandkishore Gupta Opp. Dr. Sur Clinic
Ganj Bans Tal Station Road, Raipur Chhattisgarh -492001
... Petitioner
versus
1 - Municipal Corporation Raipur Through its Commissioner, Nagar
Palika Nigam, Naya Mukhyalay Bhavan, Near Rajiv Gandhi Chowk,
Raipur (C.G.)
2 - Zone Commissioner, Zone No. 07 Municipal Corporation Raipur,
Zone Office No.07, Raipur (C.G.)
3 - Executive Engineer, PWD/ Zone No. 07, Municipal Corporation
Raipur, (C.G.)
4 - Engineer-in-Charge, Municipal Corporation Raipur, Zone No.07
(C.G.)
... Respondents
(Cause-title taken from Case Information System) For Petitioner : Mr. Rishabh Garg, Advocate.
For Respondents : Mr. Pankaj Agrawal, Advocate.
Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha, Chief Justice 15-05-2026 2
1. The present petition has been filed by the petitioner seeking the following relief(s):-
"10.1 The Hon'ble Court may kindly be pleased to issue an appropriate writ/order/direction quashing the termination notice dated 16.04.2026 issued by the Respondent as illegal, arbitrary, void ab initio, and contrary to the terms of the contract, having been passed without due consideration of the Petitioner's replies, without granting extension of time despite compensation events, and in violation of the principles of natural justice;
and 10.2) The Hon'ble Court may further kindly be pleased to issue an appropriate writ/order/direction quashing and setting aside the forfeiture of EMD, blacklisting/debarment order dated 27.04.2026, being illegal, arbitrary and violative of principles of natural justice 10.3) The Hon'ble Court may further kindly be pleased to issue an appropriate writ, order, or direction in favour of Petitioner and against the Respondents to withdraw, cancel, or keep in abeyance the fresh e-procurement tender bearing No. 189797 dated 27.04.2026, pertaining to the same work, until final adjudication and settlement of the Petitioner 's claims, as the same has been issued 3 in violation of contractual obligations and without settlement of dues; and 10.4) The Hon'ble Court may further kindly be pleased to issue an appropriate writ, order, or direction in favour of Petitioner and against the Respondents to the Respondent to grant an immediate personal hearing to the Petitioner and further stay the operation and effect of the termination order, blacklisting order, and fresh tender dated 27.04.2026, in the interest of justice and to prevent irreparable loss.
10.5) Cost of the petition may also be granted to the Petitioner; and/or 10.6) Any other relief, which this Hon'ble Court deems fit and proper, may also kindly be granted to the Petitioner, in the interest of justice."
2. The facts as mentioned in the petition are that, the Petitioner, M/s Konark Agencies, a proprietary civil contractor firm represented by Shri Kanhaiyalal Gupta, participated in an e-tender floated by Municipal Corporation Raipur on 18.01.2025 for construction of a retaining wall at Karbala Talab, Choubey Colony, Raipur. The Petitioner emerged as the lowest bidder (L-1) by submitting a bid of Rs. 1,31,54,000/- and deposited the requisite EMD. Consequently, Work Order No. 456/P.W.D./M.C. Zone-07/2025 dated 21.03.2025 was issued in favour of the Petitioner for execution of the work within a stipulated period of 4 six months. Although the Petitioner was ready to commence the work, the Respondents allegedly failed to provide approved drawings, site details, and technical instructions in a timely manner. The project formally commenced after a Bhoomi Poojan ceremony held on 06.05.2025, and the Petitioner thereafter undertook excavation and initial construction activities. The Petitioner contends that the execution of the work was repeatedly obstructed due to factors attributable to the Respondents, including verbal stop-work directions without written orders, non-shifting of electric poles, heavy monsoon conditions, and non-supply of approved drawings and layouts. Despite repeated representations and requests, only informal sketches and WhatsApp communications were allegedly provided for execution of the retaining wall work. Further case of the Petitioner is that substantial work amounting to approximately Rs. 80,00,000/- had already been executed, including excavation, retaining wall, pitching, and beam work, yet no running bills or payments were released by the Respondents. Multiple notices alleging delay and slow progress were issued by the Respondents between August 2025 and December 2025, to which the Petitioner submitted detailed replies attributing the delay to the Respondents' own lapses and seeking extension of time, approved drawings, and release of pending payments. Thereafter, the Respondents issued a final termination notice dated 16.04.2026 invoking Clause 3 of the agreement, withdrew the remaining work from the Petitioner, and proposed execution through another agency. Subsequently, a fresh tender for the same work was floated on 5 27.04.2026, the Petitioner's contract was cancelled, the EMD was forfeited, and the Petitioner was debarred from future tenders of the Municipal Corporation. The Petitioner alleges that the termination, forfeiture, blacklisting, and re-tendering actions are arbitrary, illegal, and contrary to the contractual provisions and principles of natural justice, particularly as the Respondents failed to provide proper drawings, unobstructed site access, measurement of executed work, and payment for completed work. Aggrieved by the said actions and continuous breaches of contract by the Respondents, the Petitioner has approached this Hon'ble Court seeking appropriate reliefs.
3. Learned counsel for the Petitioner submits that the impugned actions of the Respondents are wholly arbitrary, unreasonable, and violative of Articles 14, 19(1)(g), and 21 of the Constitution of India. Despite the Petitioner being the successful L-1 bidder and having executed substantial work under the contract, the Respondents repeatedly failed to fulfil their reciprocal contractual obligations, including providing approved drawings, technical layouts, unobstructed site access, and timely payment of running bills. The Petitioner was compelled to execute the work on the basis of informal sketches and WhatsApp communications, while repeated representations regarding non-shifting of electric poles, monsoon-related hindrances, and lack of approved plans remained unaddressed. The Respondents further issued verbal stop-work instructions without any written order, contrary to the contractual provisions, and thereafter mechanically issued repeated show-cause notices attributing delay solely to the Petitioner. In 6 such circumstances, the alleged delay was clearly attributable to the Respondents' own acts and omissions, and therefore invocation of the termination clause against the Petitioner is legally unsustainable. The Respondents, being State authorities within the meaning of Article 12, were bound to act fairly, transparently, and reasonably even in contractual matters, but instead adopted a coercive and high-handed approach in complete disregard of settled principles governing public contracts. It is further submitted that the termination notice dated 16.04.2026, subsequent forfeiture of EMD, blacklisting of the Petitioner, and issuance of fresh tender dated 27.04.2026 are illegal, disproportionate, and violative of the principles of natural justice. The detailed replies and explanations submitted by the Petitioner to the show-cause notices were never objectively considered, nor was any effective opportunity of hearing granted prior to imposing severe civil and financial consequences. The Respondents proceeded to terminate the contract without undertaking proper joint measurement of the executed work and without releasing any payment despite substantial work valued at approximately Rs. 80,00,000/- having already been completed. Simultaneous imposition of termination, forfeiture, recovery, compensation, and blacklisting is grossly excessive and reflects complete non-application of mind. The fresh tender issued for the same work, without settlement of the Petitioner's dues, demonstrates mala fide intent to create third-party interests and defeat the Petitioner's legitimate claims. Such conduct amounts to abuse of power, unjust enrichment, and procedural impropriety, rendering the impugned actions 7 liable to be quashed by this Hon'ble Court in exercise of its jurisdiction under Article 226 of the Constitution of India.
4. On the other hand, learned counsel for the respondents submits that the relief sought by the petitioner is with respect to alleged contractual obligations between the parties and involves disputed questions of fact requiring detailed examination of records. It is well settled that writ jurisdiction ought not to be invoked for enforcement of contractual claims, particularly where factual adjudication is required. He would further submit that regarding dispute, if any, there is remedy available to the Petitioner which is clause 28 in the contract, i.e., Arbitration Clause.
5. We have learned counsel for the parties, perused the material annexed with the petition.
6. Clause 28 of the contract stipulates the arbitration clause which reads as under:-
Clause 28 ARBITRATION CLAUSE:
Except as otherwise provided in this contract all question and dispute relating to the meaning of the specification, designs, drawings and instruction herein before mentioned as to thing whatsoever in any way arising out of or relating to the contract designs, drawings specification, estimate, concerning the works, or the execution or failure to execute the same, whether arising during the progress of the work, or a after the abandonment there of shall be referred to the Commissioner/CMO for his decision, within a period of 30 (thirty) days of such an 8 occurrence (s). There upon the Commissioner/CMO shall give his written instructions and/or decisions, after hearing the contractor and Engineer-in-Charge within a period of 15 (fifteen) days of such request. This period can be extended by mutual consent of parties.
Upon receipt of written instructions or decisions, of Commissioner/CMO the parties shall promptly proceed without delay to comply such instructions or decisions. If the Commissioner/CMO fails to give his instruction or decisions in writing within a period of 15 (fifteen) day's or mutually agreed time after being requested and/or, if the party (es) is/are aggrieved against the decision of the Commissioner/CMO, the aggrieved party may within 30 days prefer an appeal to the Competent Authority, who shall afford an opportunity to the parties of being heard and to offer evidence in support of his appeal. The, Competent Authority will give his decision within 30 (thirty) days, or such, mutually agreed period.
If any party is not satisfied with the decision of the Competent Authority he can file the petition for resolving the dispute through arbitration in the arbitration tribunal.
A reference to Arbitration Tribunal shall be no ground for not continuing the work on the part of the Contractor. Payment as per original terms and condition of the agreement shall be continued by the Commissioner/CMO in accordance with clause 8 above.
7. The Hon'ble Supreme Court in the case of Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking 9 (Best) and Others passed in Civil Appeal No. 3897 of 2023 vide judgment dated 19.05.2023 held as follows :
"48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489).
52. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out.10
The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India and Others, reported in (2005) 1 SCC
679.
53. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned.
Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v.
State of Orissa and Others, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain 11 special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes."
8. Upon perusal of the judgment passed by the Hon'ble Supreme Court in Tata Motors Limited (Supra), as the Apex Court has categorically held that judicial review in contractual and tender matters must be exercised with great restraint and only in cases where clear arbitrariness, mala fides, bias or irrationality is demonstrated, in the present case, no such exceptional circumstance is made out, and the dispute raised by the Petitioner arise purely out of contractual obligations involving disputed questions of fact relating to delay, execution of work, quality, measurements, payments, and alleged breaches by both parties, which cannot be adjudicated in exercise of writ jurisdiction under Article 226 of the Constitution of India. The scope of judicial review in contractual and tender matters is limited and the Court ordinarily does not interfere unless the decision-making process is found to be arbitrary, irrational or contrary to law, which is not established in the present case. Hence, in light of the settled legal position, the present petition seeking release of payment under a contract is misconceived, devoid of merit, and liable to be dismissed, leaving the petitioner to avail appropriate alternative remedies available 12 under law.
9. Therefore, the present petition being devoid of merits deserves to be and is hereby dismissed.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
Aadil