M/s Abhoy Enterprises through its partner Sri Binay Kumar Singh aged about 55 years v. 1. 2. 3. 4. The State of Jharkhand through the Secretary, Rural Development Department
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI (Civil Writ Jurisdiction) W.P. (C) No. 5574 of 2021 M/s Abhoy Enterprises through its partner Sri Binay Kumar Singh aged about 55 years, son of Late Baidnath Singh, resident of Hamidganj, P.O. & P.S- Daltonganj, District- Palamau (Jharkhand) ... ... Petitioner ... Versus 1. 2. 3. 4. The State of Jharkhand through the Secretary, Rural Development Department, Government of Jharkhand having its office at Project Bhawan, Dhurwa, P.O. & P.S. Dhurwa, Dist. - Ranchi. The Chief Engineer, Rural Development Special Range, Ranchi, P.O. & P.S. - Dhurwa, Dist. - Ranchi. The Superintending Engineer, Rural Development Special Circle, Medininagar, P.O. & P.S. Daltonganj, Dist. Palamu. The Executive Engineer, Rural Development Special Division No.-II, Garhwa, P.O. & P.S. Garhwa, Dist. Garhwa. ... --------- CORAM: HON’BLE THE ACTING CHIEF JUSTICE ... ... Respondents
Legal Reasoning
“19. 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 in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their 2 W.P. (C) No. 5574 of 2021 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. As laid down in the judgments cited above 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. 20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case.” 7.
Arguments
HON’BLE MR. JUSTICE NAVNEET KUMAR --------- Mr. Shray Mishra, Advocate For the Petitioner: For the Respondents: Ms. Surabhi, A.C. to A.A.G-II --------- Order No. 09 /Dated: 8th May 2024 In this writ petition, the petitioner-M/s Abhoy Enterprises has made the following prayers: of For issuance appropriate writ/writs, “1. order/orders, direction/directions or a writ in the nature of certiorari for quashing the order dated 04.09.2021 contained in Memo No. 909 (Annexure-30) passed by the Executive Engineer, Rural Development Special Division-II, Garhwa whereby and whereunder the Executive Engineer has terminated the Agreement SBD No. 03/2012-13 dated 06.06.2012 and forfeited the security amount of the Petitioner firm without application of mind; And/or For issuance order/orders, II. direction/directions or a writ in the nature of mandamus directing upon the Respondent authorities for releasing the arrears of payment for the work already done by the Petitioner firm; appropriate writ/writs, of And III. Pass any other order/orders or direction/directions as Your Lordships may deem fit and proper in the facts and circumstances of the case and in the interest of justice.” 2. The petitioner-firm challenged termination of the agreement dated 6th June 2012 on the ground that the decision of the Executive Engineer was arbitrarily, whimsical and actuated with malice in law. 3. Briefly stated, SBD agreement for construction of three bridges was executed on 6th June 2012. The period of completion of the works under contract was 18 months which lapsed on 5th December 2013. According to the respondents, several letters were issued to the petitioner-firm for completing the subject works and finally a notice was published in the newspaper against the petitioner-firm. The respondents have pleaded that for violating clauses 2 and 3(a) of the agreement dated 6th June 2012, the security deposit furnished by the petitioner-firm was forfeited. 4. Clause 2 of the agreement between the parties provided that the time shall be the essence of the contract inasmuch as the contractor shall strictly observe the time-frame starting from the date on which the written order was issued. It further provided that for the part of the uncommenced/unfinished work the contractor shall be saddled with ½ percent of the estimated cost. Under clause 3, it was made known to the contractor that he shall render himself liable to pay compensation by forfeiting the security deposit. 5. In W.P.(C) No. 3513 of 2018, the writ Court did not interfere with the order dated 31st May 2018 by which the agreement was terminated. However, the writ Court issued a direction to the Executive Engineer to afford an opportunity to the petitioner-firm to respond to the show cause notice and to take a decision thereafter. Not only the explanation offered by the petitioner-firm is not a plausible ground to interfere in this matter, this Court shall also have in mind that in contractual matters the decision of the employer should be given precedence. 6. In “Silppi Constructions Contractors v. Union of India” (2020) 16 SCC 489 the Hon'ble Supreme Court has discussed the law on the subject in the following words:
Decision
For the foregoing reasons, we do not find any merit in W.P. (C) No. 5574 of 2021 which is, accordingly, dismissed. VK (Shree Chandrashekhar, A.C.J.) (Navneet Kumar, J.) 3 W.P. (C) No. 5574 of 2021