R.Ramasamy v. The State of Tamil Nadu

For Petitioner: M/s.C.Uma Mr.N.R.R.Arun Natarajan M/s.Kavitha Deenadayalan For Respondents : Mr.P.Subramani Addl. Govt. Pleader for R1-2COMMON ORDERBy consent the main Writ Petitions itself are for taken up fordisposal. In W.P.No.24442/2009, the challenge is to an order passedby the third respondent dated 16.11.2009 calling for fresh tendersin respect of a road contract and for a consequential direction topermit the petitioner to complete the remaining road improvementwork. In W.P.No.24443/2009, the challenge is to an order dated28.10.2009 passed by the second respondent by which the roadcontract work, which was awarded to the petitioner was cancelledand the petitioner's name was included in the list of blacklistedcontractors. 2. The petitioner is a registered Class –I contractor withthe Rural Development Department and is stated to be performingcontracts for various Government Departments, since 1970 and therehas been no allegation against the petitioner. The thirdrespondent by notification dated 10.01.2008 called for tenders fromeligible contractors for certain contract work, which were roaddevelopment works at an estimated cost of Rs.34.46 lakhs. Thepetitioner's submitted his tender on 31.01.2008 by quotingRs.34,28,259/- and after negotiation, the quote was accepted andthe contract was awarded in favour of the petitioner by the secondrespondent, by order dated 12.02.2008. The agreement was executedbetween the petitioner and the department on 14.03.2008, after theexecution of the agreement, it came to the notice of the petitionerthat the site condition was not conducive and therefore a requestwas made to the third respondent to pay additional amount forcarrying out the work, which was not within a scope of theagreement inspection was also conducted by the authorities on15.01.2009 and subsequently on 19.01.2009 and they assessed thevalue of the works done by the petitioner at Rs.7,70,619/-. 3. On 22.04.2009 a sum of Rs.2,21,441/- was given as partpayment after deducting the fine amount of Rs.1,71,413/-, whichaccording to the respondent was deducted for slow progress of work.The second bill was partly approved on 08.08.2009 and this was dueto a recommendation by the Assistant Executive Engineer, oneMr.Senthil Kumar to withhold 50% of the total bill amount. At thatstage, the petitioner received a show cause notice dated16.10.2009, which was based on the letters of the AssistantExecutive Engineer Senthil Kumar, dated 14.09.2009 and 02.10.2009 https://hcservices.ecourts.gov.in/hcservices/ recommending for cancellation of the contract awarded in favour ofthe petitioner. The petitioner not being aware about suchrecommendation of the Assistant Executive Engineer completed theCulvert work on 25.10.2009 for a value of Rs.1,12,240/-. It isfurther stated that though inspection for the Culvert was over on26.10.2009, the petitioner's bill was not settled. In the showcause notice explanation was sought for the slow progress in workand stating that it is proposed to remove the petitioner's namefrom the list of registered contractors. The petitioner by replydated 22.10.2009, submitted his explanation for the delay, whichhas been stated in his earlier representations dated 05.01.2009 &13.07.2009 followed by another reminder dated 23.05.2009. It wasfurther stated that the petitioner was not able to complete oneCulvert work as per schedule as he had to construct let outdrainage for 20 metres in Tea Estate belonging to a private person,who had not permitted the petitioner's workman to enter theproperty. But, however the petitioner subsequently completed thework and these facts were well within the knowledge of theAssistant Executive Engineer and Block Engineer. However, by theimpugned order dated 28.10.2009, the petitioner's contract wascancelled and the petitioner was also blacklisted. Subsequently, are-tender was called for by the third respondent by notificationdated 16.11.2009 and this re-tender notification is impugned inW.P.No.24442/2009, the cancellation of the contract andblacklisting by order dated 28.10.2009 is impugned inW.P.No.24443/2009. 4. The petitioner would contend that the impugned order ofcancellation of tender and blacklisting the petitioner is arbitraryand illegal and violative of Article 14 and Article 19(1)(g) of theConstitution. That the order has been passed without properapplication of mind and without assigning the real reason and theorder has been passed without observing the principles of naturaljustice, since no site inspection was conducted before concludingthat there is delay in execution of work. Further even in the showcause notice, it was pre-decided to blacklist the petitioner andsuch pre-decision vitiates the entire proceedings. The variousletters given by the petitioner explain the reasons for slowprogress was not considered. Further the site condition was notrevealed to the petitioner, which involved additional expenses forthe petitioner to transport gravel from outside. The petitioner'spast blemishness conduct in performing various works for theDepartment from 1970 onwards was not taken into considerationbefore the blacklisting. That due to pressure of the authorities,the petitioner was compelled to perform certain works, which wereout side the scope of the agreement. The fine amount of Rs.5000/-per day is exorbitant and against the principles of natural justiceand violative of Rule 57.1 and Rule 57.2. The petitioner has notbeen paid the bill and has been waiting for more than 8 months to https://hcservices.ecourts.gov.in/hcservices/ get amount, the petitioner alone has been singled out, when oneother contractor by name Mr.Gopal, who was awarded the roadimprovement work from Kukkalthurai – Anna Nagar K.M 0/0 – ¼ but didnot complete the work on time, but allowed to carry out the work.On these grounds, the petitioner would contend that the order ofcancellation of the contract awarded, and blacklisting is illegaland the re-tender at the risk and cost of the petitioner is alsoarbitrary.5. A counter affidavit has been filed by the third respondentstating that there were some remarks against the petitioner inrespect of a scheme, which was implemented during 2007-08. It issubmitted that the impugned order of cancellation was issued aftercarefully monitoring the progress of road work and afterobserving the procedures as required. It is further stated thatthe contractors is expected to inspect the road, availability ofstone jelly, gravel etc., and then quote his rates for tenders. Itis further submitted that under the scheme, if the work is notcompleted the Government will have to incur loss by way ofadditional interest amount and as per the agreement, the petitionerhad to complete the work on or before 14.06.2008 as per the programof work under clause 23 of the agreement. The rate of progress forthe first month 30%, second month 70% & third month 100% should becompleted and that the petitioner did not commence the work, evenafter the expiry of the agreement period of three months and thework was started only after the agreement period, after lapse ofseven months from handing over the site and in terms of clause 54of the tender notice time is the essence of the contract. It isfurther submitted that after following the proper procedure thecontract was determined and the petitioner was also blacklisted forthe poor performance in the subject contract as well as consideringthe bad remark in an earlier work. It is submitted that the writpetition is not maintainable, since it is a non-statutory contractand if at all the petitioner is aggrieved, he can work out hisremedies by invoking the arbitration clause in the agreement. Itis further submitted that the proposed road is an important linkroad and because of the interim order the re-tender cannot becalled for and the public or put to great difficulty, since theyhave to take an circuitous route. Therefore, it has been statedthat the writ petition is devoid of merits.6. Having considered the submissions on either side beforeexamining the controversy in the present case, it is necessary tofirst consider whether the petitioner would be entitled to invokethe extraordinary jurisdiction of this Court under Article 226 ofthe Constitution of India in the given facts and circumstances.Admittedly the present contract between the petitioner and thethird respondent is a non statutory contract and the onlydifference being that one of the contracting parties is a limb of https://hcservices.ecourts.gov.in/hcservices/ the Government of Tamil Nadu. In terms of clause 55 & 56 of theagreement dated 14.03.2008 executed between the petitioner and thedepartment contemplates settlement of disputes and resolution ofdisputes and the same reads as under:-"55. SETTLEMENT OF DISPUTES:-If any dispute or difference of any kind whatsoevershall arise between the engineer of employer and thecontractor in connection with, or arising out of thecontract, of the execution of the works whether during theprogress of the works or after their completion and whetherbefore of after the termination, abandonment or breach of thecontract, it shall in the first place, be referred to andsettled by the Engineer who shall within a period of thirtydays after being requested by the contractor to do so, givewritten notice of his decision to the contractor. Uponreceipt of the written notice of decision of the Engineer thecontractor shall promptly proceed without delay to complywith such notice of decision.If the Engineer fails to give notice of his decision inwriting within a period of thirty days after being requestedor if the contractor is dissatisfied with the notice ofdecision of the Engineer, the contractor may within thirtydays after receiving the notice of decision appeal to theemployer who shall afford an opportunity to the contractor tobe heard and to offer evidence in support of his appeal. Theemployer shall give notice of his decision within a period ofthirty days after the contractor has given the said evidencein support of his appeal. Subject to arbitration, ashereinafter provided, such decision of the Employer inrespect of every matter so referred shall be final andbinding upon the contractor and shall forthwith be giveneffect to by the contractor who shall proceed with theexecution of the works with all due diligence whether herequires arbitration, as hereinafter provided or not if theEmployer has given written notice of his decision to thecontractor and no claim to arbitration has been communicatedby him by the contract within a period of thirty days fromreceipt of such notice the said decision shall remain finaland binding upon the contractor. If the Employer shall failto give notice of his decision, as aforesaid, within a periodor thirty days after being decision, requested as aforesaid,or if the contractor be dissatisfied with any such decisionthen and in any such case the contractor within thirty daysafter the expiration of the first named period of thirty daysat the case may be required that the matter or matters indispute be referred to arbitration as hereinafter provided.56. RESOLUTION OF DISPUTES:Settlement of claims by Arbitration:All disputes of differences in respect of which the https://hcservices.ecourts.gov.in/hcservices/ decision is not final and conclusive if the claims monetaryvalue is less than Rs.2.00 lakhs (Rupees Two Lakhs only)shall be referred for arbitration to a sole arbitrator. TheDistrict Collector, Trichy or the successor to his office.The arbitration shall be conducted in accordance with theprovisions of Indian Arbitration and conciliations Act 1996or any statutory modifications thereof. The decision of thesole arbitrator shall be final and binding on the partiesthereto. The arbitrator shall determine the amount ofarbitration to be awarded to either parties.Performance under the contract shall continue duringarbitration proceedings and payments due to the contractor bythe owner shall not be withheld. Unless they are the subjectmatter of the arbitration proceedings.All awards shall be in writing and such a words shallstate reasons for the amounts awarded. Neither party is entitled to bring a claim toarbitration if the Arbitration has not been appointedbefore the expiration of thirty days after defectliquidity period.If the claims exceed monetary value of more than Rs.2.00 lakhs (Rupees two lakhs only) the same shall be referred to the civil court having jurisdiction for decisions."7. Therefore in respect of all disputes and difference whichmay arise out of the contract, of the execution of the works evenafter their completion, before or after termination is required tobe settled/resolved in terms of the procedure agreed to by theparties under clause 55 & 56 of the agreement.8. With this factual backgrounds, if the law on the subjectregarding maintainability of writ petitions in contractual mattersis examined. There are several decisions of the Hon'ble SupremeCourt dealing with this issue some of which are stated hereunder.9. In National Highways Authority of India v. GangaEnterprises (2003 (7) SCC 410) , the Hon'ble Supreme Court held asfollows:6. The respondent then filed a writ petition in theHigh Court for refund of the amount. On the pleadingsbefore it, the High Court raised two questions viz.:(a) whether the forfeiture of security deposit iswithout authority of law and without any bindingcontract between the parties and also contrary toSection 5 of the Contract Act; and (b) whether the writpetition is maintainable in a claim arising out of abreach of contract. Question (b) should have been firstanswered as it would go to the root of the matter. The https://hcservices.ecourts.gov.in/hcservices/ High Court instead considered Question (a) and thenchose not to answer Question (b). In our view, theanswer to Question (b) is clear. It is settled law thatdisputes relating to contracts cannot be agitated underArticle 226 of the Constitution of India. It has beenso held in the cases of Kerala SEB v. Kurien E.Kalathil (2000 (6) SCC 293), State of U.P. v. Bridge &Roof Co. (India) Ltd.(1996 (6) SCC 22) and BareillyDevelopment Authority v. Ajai Pal Singh 1989 (2) SCC116 . This is settled law. The dispute in this case wasregarding the terms of offer. They were thuscontractual disputes in respect of which a writ courtwas not the proper forum. Mr Dave, however, relied uponthe cases of Verigamto Naveen v. Govt. of A.P. (2001 (8SCC 344)) and Harminder Singh Arora v. Union of India1986 (3) SCC 247). These, however, are cases where thewrit court was enforcing a statutory right or duty.These cases do not lay down that a writ court caninterfere in a matter of contract only. Thus on theground of mainta inability the petition should havebeen dismissed.10. In Kerala State Electricity Board and Anr. v. Kurien E.Kalathil and Ors. (2000 (6) SCC 293), the Hon'ble Supreme Courtdealt with the question of maintainability of petition underArticle 226 of the Constitution and the desirability of exhaustionof remedies and availability of alternative remedies, as alsodifference between statutory contracts and non-statutory contracts.In paras 10 and 11 of the judgment it was held as follows:"10. We find that there is a merit in the firstcontention of Mr Raval. Learned Counsel has rightlyquestioned the maintainability of the writ petition. Theinterpretation and implementation of a clause in acontract cannot be the subject-matter of a writpetition. Whether the contract envisages actual paymentor not is a question of construction of contract. If aterm of a contract is violated, ordinarily the remedy isnot the writ petition under Article 226. We are alsounable to agree with the observations of the High Courtthat the contractor was seeking enforcement of astatutory contract. A contract would not becomestatutory simply because it is for construction of apublic utility and it has been awarded by a statutorybody. We are also unable to agree with the observationof the High Court that since the obligations imposed bythe contract on the contracting parties come within thepurview of the Contract Act, that would not make the https://hcservices.ecourts.gov.in/hcservices/ contract statutory. Clearly, the High Court fell into anerror in coming to the conclusion that the contract inquestion was statutory in nature.11. A statute may expressly or impliedly confer power ona statutory body to enter into contracts in order toenable it to discharge its functions. Dispute arisingout of the terms of such contracts or alleged breacheshave to be settled by the ordinary principles of law ofcontract. The fact that one of the parties to theagreement is a statutory or public body will not byitself affect the principles to be applied. The disputesabout the meaning of a covenant in a contract or itsenforceability have to be determined according to theusual principles of the Contract Act. Every act of astatutory body need not necessarily involve an exerciseof statutory power. Statutory bodies, like privateparties, have power to contract or deal with property.Such activities may not raise any issue of public law.In the present case, it has not been shown how thecontract is statutory. The contract between the partiesis in the realm of private law. It is not a statutorycontract. The disputes relating to interpretation of theterms and conditions of such a contract could not havebeen agitated in a petition under Article 226 of theConstitution of India. That is a matter for adjudicationby a civil court or in arbitration if provided for inthe contract. Whether any amount is due and if so, howmuch and refusal of the appellant to pay it is justifiedor not, are not the matters which could have beenagitated and decided in a writ petition. The contractorshould have relegated to other remedies."11. Reference can also be made to State of Gujarat and Ors. v.Meghji Pethraj Shah Charitable Trust and Ors. (1994 (3) SCC 552).In para 22 the Hon'ble Supreme Court observed as follows:"22. We are unable to see any substance in the argumentthat the termination of arrangement without observingthe principle of natural justice (audi alteram partem)is void. The termination is not a quasi-judicial act byany stretch of imagination; hence it was not necessaryto observe the principles of natural justice. It is notalso an executive or administrative act to attract theduty to act fairly. It was -- as has been repeatedlyurged by Shri Ramaswamy -- a matter governed by acontract/agreement between the parties. If the matter is https://hcservices.ecourts.gov.in/hcservices/ governed by a contract, the writ petition is notmaintainable since it is a public law remedy and is notavailable in private law field, e.g., where the matteris governed by a non-statutory contract. Be that as itmay, in view of our opinion on the main question, it isnot necessary to pursue this reasoning further."12. In State of U.P. and Ors. v. Bridge & Roof Company(India) Ltd. (1996 (6) SCC 22), the Hon'ble Supreme Court dealtwith the issue in paras 15 and 16 in the following manner:"15. In our opinion, the very remedy adopted by therespondent is misconceived. It is not entitled to anyrelief in these proceedings, i.e., in the writ petitionfiled by it. The High Court appears to be right in notpronouncing upon any of the several contentions raisedin the writ petition by both the parties and in merelyreiterating the effect of the order of the DeputyCommissioner made under the proviso to Section 8D(1).16. Firstly, the contract between the parties is acontract in the realm of private law. It is not astatutory contract. It is governed by the provisions ofthe Contract Act or, maybe, also by certain provisionsof the Sale of Goods Act. Any dispute relating tointerpretation of the terms and conditions of such acontract cannot be agitated, and could not have beenagitated, in a writ petition. That is a matter eitherfor arbitration as provided by the contract or for thecivil court, as the case may be. Whether any amount isdue to the respondent from the appellant-Governmentunder the contract and, if so, how much and the furtherquestion whether retention or refusal to pay any amountby the Government is justified, or not, are all matterswhich cannot be agitated in or adjudicated upon in awrit petition. The prayer in the writ petition, viz., torestrain the Government from deducting a particularamount from the writ petitioner's bill(s) was not aprayer which could be granted by the High Court underArticle 226. Indeed, the High Court has not granted thesaid prayer."13. In India Thermal Power Ltd. v. State of M.P. and Ors.(2000 (3) SCC 379) , the Hon'ble Supreme Court observed as follows:"11. It was contended by Mr. Cooper, learned SeniorCounsel appearing for appellant GBL and also by somecounsel appearing for other appellants that theappellant/IPPs had entered into PPAs under Sections 43and 43A of the Electricity Supply Act and as such they https://hcservices.ecourts.gov.in/hcservices/ are statutory contracts and, therefore, MPEB had nopower or authority to alter their terms and conditions.This contention has been upheld by the High Court. Inour opinion the said contention is not correct and theHigh Court was wrong in accepting the same. Section 43empowers the Electricity Board to enter into anarrangement for purchase of electricity on such termsas may be agreed. Section 43A(1) provides that agenerating company may enter into a contract for thesale of electricity generated by it with theElectricity Board. As regards the determination oftariff for the sale of electricity by a generatingcompany to the Board, Section 43(1)(2) provides thatthe tariff shall be determined in accordance with thenorms regarding operation and plant-load factor as maybe laid down by the authority and in accordance withthe rates of depreciation and reasonable return andsuch other factors as may be determined from time totime by the Central Government by a notification in theOfficial Gazette. These provisions clearly indicatethat the agreement can be on such terms as may beagreed by the parties except that the tariff is to bedetermined in accordance with the provision containedin Section 43A(2) and notifications issued thereunder.Merely because a contract is entered into in exerciseof an enabling power conferred by a statute that byitself cannot render the contract a statutory contract.If entering into a contract containing the prescribedterms and conditions is a must under the statute thenthat contract becomes a statutory contract. If acontract incorporates certain terms and conditions init which are statutory then the said contract to thatextent is statutory. A contract may contain certainother terms and conditions which may not be of astatutory character and which have been incorporatedtherein as a result of mutual agreement between theparties. Therefore, the PPAs can be regarded asstatutory only to the extent that they containprovisions regarding determination of tariff and otherstatutory requirements of Section 43A(2). Opening andmaintaining of an escrow account or an escrow agreementare not the statutory requirements and, therefore,merely because PPAs contemplate maintaining escrowaccounts that obligation cannot be regarded asstatutory." 14. Therefore as per the law declared by the Hon'ble SupremeCourt the present contract would not become statutory merely https://hcservices.ecourts.gov.in/hcservices/ because it has been awarded by the State. That apart a disputeresolution mechanism has been provided for under the contractitself and the petitioner being a party to the said agreement,consciously agree to such procedure. Therefore, at this stage ofthe matter, the petitioner cannot be allowed to wriggle out of thebinding arbitration agreement between the parties. Therefore, thewrit petition challenging the cancellation of such non-statutorycontract cannot be entertained.15. Under the same impugned order dated 28.10.2009, thepetitioner has been blacklisted from the list of contractors.Blacklisting a registered contractor that too a contractor who hasbeen registered with the department from 1970 onwards is of seriousconsequences to the petitioner and before the same is resorted tothe petitioner is entitled to the afforded adequate and effectiveopportunity to putforth his defence. In the instant case, theaspect regarding the cancellation of the contract as well asblacklisting were rolled into a common show cause notice and acommon order came to be passed. This in my view may not be anappropriate procedure, since the matter pertaining to ablacklisting of contractor is an independent issue, since a personwho is the tender awarding authority would be entitled to cancel acontract awarded, but may lack the power to blacklist thecontractor, since his registration would be by another authority ata higher level. In any event the department may not resort toblacklisting based on a solitary instance and several factors haveto be gone into before such power is being invoked. 16. It is an admitted fact that black listing of a contractoris a serious matter as it involved civil consequences and thecontractor is shut out from being able to participate in any of thebids or auction. Therefore, the Honourable Supreme Court and thisCourt have consistently held that when a department or an agencydecides to black list a contractor, it is incumbent that theprinciples of natural justice should scrupulously followed.17. The said proposition has been emphasised by the HonourableSupreme Court in the following decision;(i) In Erusian Equipment & Chemicals Ltd. v. State of WestBengal reported in MANU/SC/0061/1974 : 1975 1 SCC 70 theHonourable Supreme Court has held in paragraph 20 as follows;Blacklisting has the effect of preventing a person from theprivilege and advantage of entering into lawful relationshipwith the Government for purpose of gains. The fact that adisability is created by the order of blacklisting indicatesthat the relevant authority is to have an objectivesatisfaction. Fundamentals of fair play require that the https://hcservices.ecourts.gov.in/hcservices/ person concerned should be given an opportunity to representhis case before he is put on the blacklist.(ii) In J. Vilangandan v. Executive Engineer (P.W.D.),Ernakulam reported in MANU/SC/0034/1978 : AIR 1978 SC 930while following the jugdment in Erusian Equipment case(cited supra), has stated that while conceding that theState can enter into contract with any person it chooses andno person has a fundamental right to insist that theGovernment must enter into a contract with him, held thatthe fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have anobjective satisfaction. Fundamentals of fair-play requirethat the person concerned should be given an opportunity torepresent his case before he is put on the black-list.(iii) In Raghunath Thakur v. State of Bihar reported inMANU/SC/0392/1988 : 1989 1 SCC 229 while considering a casewhere the person granted a right to vend liquor was placedin a black listing in respect of future contracts, theHonourable Supreme Court has observed that even if the rulesdo not express so, it is an elementary principle of naturejustice that parties affected by any order should have rightof being heard and making representations against the order.In that view of the matter, the last portion of the order inso far as it directs blacklisting of the appellant inrespect of future contracts, cannot be sustained in law.18. The decisions in the case of Raghunath Thakur and ErusianEquipment as referred supra have been followed by the HonourableSupreme Court in B.S.N. Joshi & Sons Ltd. v. Nair Coal ServicesLtd. and Ors. reported in (2006) 2 SCC 548 and reiterated theprinciples laid down.19. Therefore in view of the ratio laid down by the HonourableSupreme Court as stated above an order of black listing has civilconsequences for future business of person concerned and the personaffected by an order has a right of being heard and making arepresentation against any order even though the Rules do notprovide specifically.20. The learned Special Government Pleader would submit thatthe petitioner had been afforded with an opportunity and a showcause notice was issued, reply was received and thereafter, an https://hcservices.ecourts.gov.in/hcservices/ order has been passed. Therefore, the learned Special GovernmentPleader submits that there has been substantial compliance ofprinciples of natural justice and the impugned order is perfectlylegal and valid. On the other hand, the learned Counsel appearingfor the petitioner would submit that the impugned order is devoidof reasons .21. It is relevant to note that the Honourable Supreme Courtin a decision reported in S.N. Mukherjee v. Union of IndiaMANU/SC/0346/1990 : AIR 1990 SC 1984 observed that in view of theexpanding horizon of the principles natural justice, therequirement to record reasons can be regarded as one of theprinciples of natural justice which govern exercise of power byadministrative authorities. The rules of natural justice are notembodied rules. The extent of their application depends upon theparticular statutory framework where under jurisdiction has beenconferred on the administrative authority. With regard to theexercise of a particular power by an administrative authorityincluding exercise of judicial or quasi judicial functions thelegislator, while conferring the said power, may feel that it wouldnot be in the larger public interest that the reasons for the orderpassed by the administrative authority be recorded in the order andbe communicated to the aggrieved party and it may dispense withsuch a requirement.22. The respondents being an administering authority is boundto act fairly and reasonable and all the actions of the respondentshave to satisfy the touchstone of reasonableness. The requirementto record reason is incumbent and Courts have consistently heldthat an order devoid of reasons is in violation of principles ofnatural justice and liable to be set aside. 23. Thus, in view of the law laid down by the Hon'ble SupremeCourt, I am of the clear view that the petitioner has not beenafforded adequate opportunity before he was blacklisted andtherefore, the impugned order to that extend has to be held to beillegal. 24. The impugned order in W.P.No.24442/2009 is a re-tendernotification dated 16.11.2009. This re-tender notification is aconsequence of the cancellation of the contract awarded to thepetitioner. In the previous part of this order, it has been heldthat the remedy for the petitioner against the cancellation of thecontract is under clause 55 & 56 of the agreement and Writ Petitionis not the remedy. In such circumstances there will be nojustification for the petitioner to prevent the department from https://hcservices.ecourts.gov.in/hcservices/ conducting a re-tender for the work. It is relevant to note thatthe work relates to a road development work in Nilgiris Districtand it is common knowledge that owing to recent lands slides in thearea, these works cannot be withheld for indefinitely long periodof time, that to the instance of the petitioner. It has been statedin the counter affidavit that the proposed road work is animportant link road and the public are suffering without properlink road and taking circuitous route for the conveyance ofagricultural products to market centres and the school goingchildren are also put to great difficulty and if there is delay incompletion of the road work on time, it would result in escalationthe cost and interest. In view of the said submissions, I am ofthe clear view that the petitioner is not justified in withholdingthe re-tender pursuant to the notification dated 16.12.2009. It isneedless to state that though this work is at the risk and cost ofthe petitioner, such claim of risk and cost would be subject to thearbitration proceedings, which the petitioner is bound to raise interms of the conditions of the agreement. Therefore, I find thatthere are no valid grounds to quash the re-tender notification. 25. In the result the Writ petitions are disposed of with thefollowing directions:-i)The writ petition filed challenging the impugned order dated28.10.2009 in W.P.No.24443/2009 challenging the cancellationof contract awarded to the petitioner is not maintainable andthe remedy for the petitioner is only under clause 55 & 56 ofthe agreement dated 14.03.2008, and accordingly the WritPetition challenging that portion of the order canceling thecontract is dismissed.ii)The order of blacklisting of the petitioner from the list ofregistered Class I contractors under the same order dated28.10.2009 is held to be illegal and bad in law and in grossviolation of principles of natural justice. Therefore, theimpugned order dated 28.10.2009 in so far as it relates toblacklisting the petitioner is quashed, leaving it open tothe Department to initiate fresh action in accordance withlaw if so advised.iii)The W.P.No.24442/2009 filed challenging the re-tendernotification dated 16.11.2009 is dismissed. iv)The petitioner shall be entitled to invoke the procedure forsettlement/resolution of dispute under clauses 55 & 56 of theagreement dated 14.03.2008 and in such proceedings, thepetitioner would also be entitled to contest the cancellationof the contract, the justifiability of the fine levied aswell as the aspect regarding risk and cost contemplated onaccount of re-tender dated 16.11.2009, and all other matterwhich are covered within the scope of clause 55 & 56 of theagreement. https://hcservices.ecourts.gov.in/hcservices/ v)Consequently, the respondents are directed to proceed furtherwith the re-tender notification dated 16.11.2009 and finalisethe tender in accordance with law. vi) Consequently, connected miscellaneous petitions are alsoclosed. No costs. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar.pbnTo1.The State of Tamil Nadu, Rep. by its Secretary to Government, Rural Development Department, Fort St. George, Chennai – 600 009.2.The District Collector/Chairman DRDA Uthagamandalam, The Nilgiris District.3.The Project Officer, Rural Development Agency, Uthagamandalam, The Nilgiris District.1 cc to M/s. Uma Advocate, SR. 51881 cc to M/s. Uma, Advocate, SR. 51891 cc to Government Pleader, Sr. 5493W.P.Nos.24442& 24443/2009GS (CO)kk 11/2