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Showing contexts for: notice terminating contract in Roadway Solutions India Infra Limited vs National Highway Authority Of India on 24 May, 2023Matching Fragments
10. The respondent, on 17th January, 2023, sent a Notice alleging defaults of the petitioner under the Contract. In reply to the notice, the petitioner sent a letter dated 24th January, 2023 and denied all the allegations mentioned in the notice.
11. The respondent issued a notice of termination dated 31 st January, 2023 under Clause 63.1 of CoPA, giving a notice of 14 days, upon the expiry of which the respondent was automatically entitled to terminate the contract. The petitioner sent a reply to the said notice vide response dated 4th February, 2023. Thereafter disputes arose between the parties. It is the respondent‟s case that due to non-performance on the part of the petitioner which showed no progress in executing works even after lapse of six months (from 27th July, 2022 to 31st January, 2023) and after repeated reminders, the respondent was left with no option but to issue Notice of Intention To Terminate (NITT). This contention was vehemently refuted by the petitioner and it is under these circumstances that the petitioner, aggrieved by such action, has approached this Court through the present petition.
28. It is submitted that the notice of intent to terminate the Contract was issued by the respondent subsequent to the invocation of the dispute resolution clause in the Contract by the petitioner to suppress lapses on the part of the respondent. The said notice of intent to terminate was NEUTRAL CITATION No.2023:DHC:3610 issued without any application of mind and without consideration of the various correspondences of the petitioner dealing with all baseless allegations made by the respondent. It is submitted that the respondent being machinery of the State is bound to act fairly and reasonably. It is submitted that the petitioner has made out a prima facie case, thereby making them entitled to the reliefs as prayed in the instant petition.
29. Learned senior counsel appearing on behalf of the petitioner submitted that the instant Contract is at pre-termination stage and currently not terminated, therefore, interim relief by way of Section 9 of the Act may be granted.
30. It is submitted that there is no basis for issuance of Notice of Intent to Terminate dated 31st January, 2023 as none of the provisions in the Contract entitled the respondent to issue such a notice in the facts and circumstances of the instant case. It is vehemently submitted that the Contract is not per se a determinable contract and in any event, the Government contracts are to be treated differently as there is an obligation to act fairly and in an unarbitrary manner. It is submitted that in the instant case, it is evident that the respondent has acted in arbitrary, mala fide, illegal and unjust manner which is in derogation of the Contract entered into between the parties. It is submitted that the present Contract is still under effect and the petitioner is also ready and willing to perform the Contract. In support of his arguments, he has placed reliance on the following judgments i.e., A. Murugan and Ors. v. Rainbow Foundation Ltd , 2019 SCC OnLine Mad 37961, DLF Home Developers Limited Vs. Shipra Estate Limited and Ors, O.M.P. (I) (COMM.) 209/2021 dated 08th November, 2021, Jumbo World NEUTRAL CITATION No.2023:DHC:3610 Holdings Limited and Anr vs. Embassy Property Developments Private Limited, 2020 SCC OnLine Mad 61, Golden Tobacco Limited Vs. Golden Tobie Private Limited O.M.P. (I) (COMM.)182/2021 dated 24th September, 2021, Atlas Interactive (India) Pvt. Ltd. Versus Bharat Sanchar Nigam Limited & Anr. 2005 SCC OnLine Del 190, T.O. Abraham Vs. Jose Thomas and Ors. R.F.A. No. 695 of 2015 dated 17th October 2017, Kerala High Court, Indian Medicines Pharmaceuticals Corporation Ltd. v. Kerala Ayurvedic Cooperative Society Ltd. & Ors. 2023 SCC OnLine SC 5, Gwalior-Jhansi Expressway Limited v. National Highway Authority of India 2014 SCC OnLine Del 1124, Pioneer Publicity Corporation v. Delhi Transport Corporation, (2003) 103 DLT 442, Simplex Infrastructures Ltd. v. National Highways Authority of India O.M.P.(I) Comm. 69/2023 dated 03rd March, 2023 , Delhi High Court and Yassh Deep Builders LLP v. Sushil Kumar Singh & Anr. 2023 SCC OnLine Del 1499.
65. At last, the petitioner submitted that the issuance of the new tender to another contractor would cast a heavy burden on the public exchequer and is against public interest. Further, if a new tender is floated, it will take substantial time to appoint a new contractor, which will be an antithesis to public interest.
66. The petitioner also averred that the Contract is not per se a determinable contract. It was submitted that the present Contract is still under effect and has not been terminated and the petitioner is ready and willing to perform the Contract. As far as the NITT is concerned, it is merely communicating an intention to terminate the Contract and has been issued under Sub-Clause 63.1 of CoPA giving 14 days' time to the petitioner to show cause as to why the Contract should not be terminated. The said Notice has been duly replied to by the petitioner on 4th February, 2023. In support of his contention, the learned senior counsel for the petitioner relied upon several judgments and judicial pronouncement in the foregoing paragraphs. It is submitted that the contracts were classified in five broad categories which included contracts that are terminable unilaterally on "without cause" or "no fault" basis. Contracts that are terminable subject to a breach notice and granting an opportunity to cure the breach are not determinable in nature although they can be terminated under specific circumstances.