Document Fragment View

Matching Fragments

7. Shri M.L. Jaiswal, learned senior counsel appearing for the Board has contended that the petitioner failed to lift the monthly quantity of the coal and committed breach of the terms of the contract, in the circumstances the Board has rightly rescinded the contract and has rightly forfeited the security deposit of the petitioner. He referred to the Clauses 3, 7, 9, 15 & 16 of the contract and also to the chart Annexure-R-2, R-28 and R-29 to show as to how the petitioner miserably failed to lift the monthly quantity of coal and to deposit the monthly installments. He argued that in the first four months commencing from 20.11.1998 the petitioner could lift only 3793.33, 4956.61, 3944.28 and 5591.99 cubic meters of coal respectively as against 6250 cubic meters of coal which was required to be lifted in each month. He submitted that the petitioner failed to lift the coal even though he was granted the relaxation of lifting the coal of the period 20.1.2000 to 19.2.2000 in three sub installments. In the circumstances, the Board was left with no option but to forfeit the security amount. He further submitted that the letters dated 10.3.2000 (Annexure-P/13), 13.3.2000 (Annexure P/14), 14.3.2000 (Annexure P/15) & 18.3.2000 (Annexure P/16) respectively were issued to the petitioner to deposit the third sub installment of the month 20.1.2000 to 19.2.2000 and lift the unlifted quantity of coal was granted and by these letters no extension of time to lift the monthly quota was granted. According to him, giving this facility to the petitioner cannot be construed to be waiver of the rescission of contract and cannot take away the right of the Board to forfeit the security amount. He further submitted that since the validity of the Bank Guarantees were due to expire the Board directed the petitioner to renew the same and by such letter directing the petitioner to renew the period of Bank Guarantees it cannot be construed that the Board has waived the rescission of contract or waived the right to forfeit the security amount. He argued that in view of Clause 16 of the terms of the contract (Annexure P-2) no prior notice to the petitioner for rescission of the contract was necessary.

(iii) In case the contract shall be rescinded under the provision aforesaid the contractor shall not be entitled to recover or to be paid any sum for any work therefore actually performed under this contract, unless and until the Engineer- Incharge will have certified in writing the performance of such work and value payable in respect thereof, and he shall only be entitled to be paid the value so certified.

11. On going through the aforesaid Clause 16 of the agreement it is clear that to rescind the contract the only requirement is issuance of rescission notice in writing to the Contractor under the hand of Engineer-in-Charge and such rescission notice shall be conclusive evidence of rescission of contract. Clause 16 also provides that on rescission of contract the security deposit of the contractor shall stand forfeited. In the present case before rescission of the contract the petitioner was issued various letters (Annexure R-24 to R-27) directing him to deposit the balance amount and to lift the balance quantity of the coal of the said period. On petitioner's failure the order dated 2.3.2000 was issued in writing by the Engineer-in-Charge and his contract was rescinded. Again he was directed to deposit the third sub installment of which facility was already extended to him. However, inspite of several letters (Annexure P-13, P-14, P-15 and P-16) the petitioner could not deposit the third sub installment and lift the balance quantity of coal.

12. In view of the aforesaid background, it is very clear that the petitioner breached the terms of the contract and failed to lift the agreed monthly quantity of coal. Merely because after rescission of the contract the Board had given facility of lifting the balance unlifted quantity of coal by paying the third sub installment, it would not amount to waiver of the rescission of contract. In order to constitute waiver there should be conscious, voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such a waiver the party would have enjoyed. The agreement between the parties in the present case is that the petitioner was required to lift one lakh cubic meters of coal in 16 months in 16 equal monthly fixed quantity of coal. The petitioner utterly failed to comply its obligation of lifting the monthly fixed quantity of coal from the very beginning. In the circumstances if the Board has shown some latitude at the initial stage of the contract by allowing the petitioner to lift the balance quantity of coal of the initial four months period it cannot be regarded as waiver of the rescission of contract. At no point of time and by not a single communication the Board had ever even impliedly expressed its willingness to withdraw the rescission of contract or to grant any relaxation to the petitioner in lifting the monthly fixed quantity of coal by extending the period of 16 months. The letters of the Board by which the petitioner was allowed to lift the coal was for allowing the petitioner to lift the coal of the months which had already passed and the quantity of which period the petitioner could not lift. The petitioner was never extended the benefit of lifting the further quantity of coal of the subsequent months after the contract was rescinded. In this view of the matter there is no distinct and intentional act done by the Board so as to hold that the Board had waived the rescission of the contract. Similarly if the Board had directed the petitioner to renew the Bank Guarantees which were about to expire, it cannot be said that the Board had waived the right of rescission of contract and the right to forfeit the security amount.

13. Although in the terms of the contract there is no provision or requirement of issuance of prior notice before rescission of the contract and the only requirement is that the rescission notice should be in writing, signed by Engineer-In-Charge, still on going through the various letters (Annexures P24 to P-27) issued by the Board before rescission of the contract it is revealed that the petitioner was warned time and again to fulfill the terms of contract by lifting the coal. Thus, there is no violation of the terms of the contract by the Board in passing the order of rescission of the contract and in forfeiting the security amount. The order of rescission and the order of forfeiture of security amount are perfectly in tune with the terms of the contract and in view of the letters (Annexure P-24 to P-27) issued to the petitioner by the Board there is no violation of principles of natural justice on the part of the Board.