MATHA TECHNOLOGIES v. DULY AUTHORIZED SIGNATORY, MR. RAMAPPA RATHOD

private partnership firms calling in question the legality and correctness of the action of respondent No.1 in approving the cancellation of the tender earlier awarded in favour of the petitioners, culminating in communication bearing No. ED-222-DTE-2024 dated 24.01.2025, produced Annexures-A B respectively. Consequentially, the petitioners have sought issuance of a writ in the nature of mandamus directing the respondents to continue the contractual arrangement in terms of the work orders issued in their favour.

The gravamen of the grievance, as projected in both the petitions, is that pursuant to a tender process initiated by the Directorate of Technical Education, the petitioners were invited for negotiations, wherein, through a consensual arrangement, the petitioners agreed to apportion the scope of work by dividing the operational - 5 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR responsibilities, each firm undertaking services in 15 districts. It is the specific case of the petitioners that such division of contractual obligations was not unilateral, but a mutually agreed arrangement arrived at in the presence of the departmental authorities.

It is further contended that following a series of deliberations, both the petitioners were issued formal work orders dated 21.07.2018, and in furtherance thereof, separate agreements came to be executed between each petitioner firm and respondent No.3, delineating the respective rights, duties, and obligations governing the execution of the contract.

The petitioners assert that under the terms of the agreement, the respondents were obligated to pay service charges at the rate of 13% on the wage component, including revisions effected in compliance with statutory mandates under the Minimum Wages Act, 1948. However, contrary the agreed stipulations, - 6 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR respondents are alleged to have unilaterally withheld payment of service charges on the enhanced wage component, thereby committing a fundamental breach of contractual obligations.

Aggrieved by such non-compliance, petitioners submitted multiple representations calling upon the respondent-authorities to honour the contractual terms and release the legitimate dues. It is their case that notwithstanding the petitioners having discharged their obligations in entirety and having continuously rendered manpower services, Department of Treasury abruptly stalled clearance of invoices on the ostensible ground of absence of a requisite Letter of Intent, which according to the petitioners, is wholly untenable and contrary the subsisting contractual framework.

In this backdrop, the petitioners were constrained to approach the jurisdictional Commercial - 7 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR Court and had secured an order of injunction restraining the respondents from taking precipitative action. However, in blatant disregard of the said subsisting injunction order, respondent No.1 proceeded to accord approval cancellation of the tender on 24.01.2025, pursuant to respondent-authorities issued notice

12.02.2025, unilaterally terminating the contractual arrangement and directing the petitioners to discontinue manpower services upon expiry of three months from the date of receipt of the said notice.

In response to the notice issued by this Court in the captioned writ petitions, the State has entered appearance and has filed its detailed statement of objections in W.P. No.12143/2021, which is adopted in the connected matter.

The sum and substance of the defence set up by the respondent–State is that the petitioners have not approached this Court with clean hands and that the - 8 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR contractual relationship was vitiated on account of material deviations committed by the petitioners in the course of execution of the work. It is specifically contended that, after completion of initial financial year, petitioners, to the utter shock of the respondent- department, commenced raising invoices at enhanced rates by claiming service charges at 13% on revised wage components, which according to the respondents, was not in consonance with the terms of the contract. Therefore, the invoices so raised were treated as being dehors the contractual stipulations.

The respondents further place reliance on a Circular issued by the Additional Chief Secretary, Department of Finance, bearing No. DE 355 ªÉZÀÒ-12/2024 wherein it is mandated that all successful L1 bidders are required to compulsorily upload and submit a Letter of Intent on the e-procurement portal as a condition precedent for continuation of contractual arrangements. Placing heavy reliance on the said circular, - 9 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR respondents contend that a comprehensive re-examination of agreements entered into with various contractors was undertaken.

Upon such scrutiny, it is asserted that in several contracts, including those entered into with the present petitioners, no Letter of Intent was found to have been uploaded or furnished as mandated. This, according to the respondents, constitutes a serious procedural and contractual lapse, rendering the continuation of such contracts untenable.

On merits, the respondents contend that the tender in question pertained to engagement of manpower, particularly Group-D employees, and that two separate agreements came to be executed with the petitioner firms. However, it is alleged that the very manner in which the work order was structured suffers from a fundamental illegality, inasmuch as the original tender, which ought to have been awarded to a single L1 bidder, was - 10 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR impermissibly split and apportioned between two distinct entities, namely the present petitioners.

It is the categorical stand of the respondents that such splitting of the tender is in violation of the governing procurement norms and the aforesaid circular, and therefore, the very foundation of the contractual arrangement is vitiated. In furtherance of this position, the Commissioner of the Department of Technical Education issued notice dated 12.02.2025, setting out the reasons for termination and calling upon the petitioners to discontinue services.

Without prejudice to the above contentions, the respondents have also taken a stand that there has been a subsequent change in policy, pursuant to which all subsisting agreements were revisited, and contracts not in conformity with the revised norms were identified for termination. It is therefore contended that the impugned action is a policy-driven decision, taken in public interest, - 11 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR and does not warrant interference in exercise of writ jurisdiction.

The respondents further contend that the agreements in question were, in any event, for a fixed tenure of five years commencing from the year 2018, and the said contractual period has already expired. Consequently, it is urged that the petitioners no longer possess any subsisting enforceable right and have lost locus standi to challenge the impugned action. On these grounds, the respondents seek dismissal of the writ petitions as being devoid of merit, both on facts and in law.

Heard the learned Senior Counsel appearing for the petitioners and the learned Additional Advocate General appearing for respondents.

The following points would consideration: - 12 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR "(i) Whether impugned action respondents cancelling tender communication dated 24.01.2025 and consequential notice dated 12.02.2025 is arbitrary, illegal, and violative of Articles 14 and 19(1)(g) of Constitution of India? (ii) Whether the respondents are justified contending that the petitioners committed breach of contractual terms by raising invoices with enhanced service charges at 13% on revised wage components, and if so, whether such alleged deviation warrants termination of the entire contract? (iii) Whether the reliance placed by the respondents the Circular dated 1-8-2024 mandating submission of Letter of Intent on the e-procurement portal can be retrospectively applied to contracts executed in the year 2018, so as to invalidate the petitioners’ contractual rights? - 13 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR (iv) Whether the respondents establish that the original tender process stood vitiated on account of impermissible splitting of the contract between two entities, and if so, whether the petitioners can be faulted for an arrangement allegedly approved and respondent-authorities themselves? (v) Whether the impugned action of cancellation is sustainable in law in light of the subsisting injunction order passed by the competent Commercial Court, and whether such action amounts to wilful disobedience of a judicial order? (vi) Whether the respondents can justify impugned action on the ground of subsequent policy change, and whether such policy decision can override vested contractual rights of the petitioners without affording due process? - 14 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR (vii) Whether the contention of the respondents that the contract period has expired and thereby the petitioners have lost locus standi to maintain the writ petitions is tenable in the facts and circumstances of the case? (viii) Whether the petitioners have made out a case for issuance of a writ of mandamus directing continuation of the contractual arrangement, or any other consequential reliefs?" Findings on Point Nos. (i) to (viii)

Before adverting to the rival contentions and embarking upon an analysis of the points formulated hereinabove, this Court deems it apposite to refer to the relevant clauses of the agreement governing the parties. The contractual relationship between the petitioners and the respondent-authorities is regulated by the Agreement dated 22.09.2018. In order to appreciate the controversy in its proper perspective, particularly with regard to the - 15 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR tenure of the contract and the obligations inter se the parties, it is necessary to extract the clauses pertaining to the period of the agreement as well as Clause 9, which assumes significance in the context of the present dispute. The same are extracted hereunder for ready reference: "9. (cid:1)ೆಂಡ(cid:5)(cid:6)ಾರರರು (cid:10)ಾವ(cid:12)(cid:6)ೇ ಷರತು(cid:16)/(cid:17)ಬಂಧ(cid:20)ೆಗಳನು(cid:24) ಉಲ(cid:27)ಂ(cid:28)(cid:29)ದ(cid:31)(cid:27) ಅಥ"ಾ ಒದ$(cid:29)ದ %ೇ"ೆ ತೃ’(cid:16)ಕರ"ಾ$ರ)ದ*(cid:31)(cid:27) ಇ,ಾ-ೆಯು ಅವ/0ೆ ಮೂರು 3ಂಗಳ (cid:31)4ತ (cid:20)ೋ56 (cid:17)ೕ7 ಗು3(cid:16)0ೆಯನು(cid:24) ರದು*ಪ7(cid:29) 9ಾ(cid:10)ಾ:;ಾ/ತ ಭದ=>ೆಯ ?ೇವ@ಯನು(cid:24) ಸ9ಾ:ರ9ೆB ಮುಟುD0ೋಲು EಾF9ೊಳG,ಾಗುವ(cid:12)ದು. ಈ ಸಂಬಂಧ (cid:17)(cid:6)ೇ:ಶಕರ 3ೕJಾ:ನ"ೇ ಅಂ3ಮ"ಾ$ರುತ(cid:16)(cid:6)ೆ. ಇ(cid:6)ೇ /ೕ3 (cid:1)ೆಂಡ(cid:5)(cid:6)ಾರರು Eೊರಗು3(cid:16)0ೆ (cid:17)(cid:31)(cid:27)ಸುವ(cid:12))ದ*(cid:31)(cid:27) ಕ(cid:17)ಷK ಮೂರು 3ಂಗಳ ಮುಂLೆ (cid:20)ೋ56 ಅನು(cid:24) ಇ,ಾ-ೆ0ೆ (cid:17)ೕಡತಕBದು*.

12. ಇಂಡ(cid:29)MೕಯN 7%ೊOೕP ಆRD 1947, ರಂ>ೆ Eೊರಗು3(cid:16)0ೆ (cid:20)ೌಕರರ %ೇ"ೆಯನು(cid:24) ಪ=3 240 )ನಗT0ೆ/ಹ(cid:20)ೊ(cid:24)ಂದು 3ಂಗT0ೆ ಸV$ತ0ೊT(cid:29) %ೇ"ೆWಂದ ಕXಾYಯ"ಾ$ ZಡುಗXೆ0ೊT(cid:29)ವ(cid:12)ದು. ಸದ/ ZಡುಗXೆ0ೊT(cid:29)ದ (cid:29)ಬ[ಂ) ಹು(cid:6)ೆ*0ೆ ಇ(cid:20)ೊ(cid:24)ೕವ: \ೇ]ೆ Eೊರಗು3(cid:16)0ೆ (cid:29)ಬ[ಂ)ಯನು(cid:24) ತ^ಣ (cid:20)ೇಮ9ಾ3 Jಾ79ೊಂಡು (cid:17)‘ೕಜ(cid:20)ೆ Jಾಡುವ(cid:12)ದು.

13. Eೊರಗು3(cid:16)0ೆ ಆ;ಾರದ bೕ,ೆ (cid:20)ೇಮಕ0ೊಳcGವ (cid:29)ಬ[ಂ)ಗಳc, ಎರಡ(cid:20)ೇ eಾ5:ಯವ/ಂದ (cid:20)ೇಮ9ಾ30ೊಂ7ರುವ(cid:12)ದ/ಂದ, ಸದ/ (cid:29)ಬ[ಂ)ಗಳc ಮತು(cid:16) ಎರಡ(cid:20)ೇ eಾ5:ಯವರ ಮಧf ಉದghಸುವ (cid:10)ಾವ(cid:12)(cid:6)ೇ i(cid:20)ಾ(cid:24)ieಾ=ಯಗಳನು(cid:24), "ಾfಜfಗಳನು(cid:24) ಅಥ"ಾ ಪರಸOರರ "ಾfಜfಗಳನು(cid:24) 9ಾj:ಕ (cid:20)ಾf(cid:10)ಾಲಯಗಳ(cid:31)(cid:27) ಬ0ೆಹ/(cid:29)9ೊಳcGವ(cid:12)ದು. (cid:10)ಾವ(cid:12)(cid:6)ೇ 9ಾರಣಕೂB ಇ,ಾ-ಾ ಅk9ಾ/ಗಳc / ಆ(cid:10)ಾ ಸಂ%ೆVಗಳ ಮುಖfಸVರುಗಳc / (cid:29)ಬ[ಂ)ಯವರು ಈ ಪ=F=nಯ(cid:31)(cid:27) (cid:10)ಾವ(cid:12)(cid:6)ೇ /ೕ3ಯ(cid:31)(cid:27) oಾಗವpಸುವಂ3ಲ(cid:27)." - 16 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR

Upon a careful consideration of the rival submissions and on perusal of the material on record, more particularly the Agreement dated 22.09.2018 governing the parties, this Court finds that two crucial aspects unmistakably emerge from a conjoint reading of the relevant clauses extracted supra.

Firstly, the contractual arrangement entered into between the petitioners and the respondent- authorities was for a fixed tenure of five years, commencing from the year 2018. The said period having admittedly come to an end in the year 2023, the contract has worked itself out by efflux of time, thereby extinguishing any subsisting contractual right in favour of the petitioners.

Secondly, Clause 9 of the Agreement unequivocally stipulates that the contract is determinable in nature, and can be terminated by either party by issuing a three months’ notice. The said clause confers an - 17 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR express contractual right on the respondent-authorities to bring the arrangement to an end in accordance with the agreed terms.

In the light of these governing stipulations, the impugned action of the respondents in issuing notice dated

12.02.2025, pursuant to approval dated 24.01.2025, cannot be said to be dehors the contract. On the contrary, the termination is in consonance with Clause 9 of the Agreement. It is a settled principle that parties to a contract are bound by its terms, and having entered into a determinable contract with a fixed tenure, the petitioners cannot now be permitted to resile and seek enforcement beyond the contractual framework.

That apart, the respondents have also placed reliance on a Circular issued by the Finance Department mandating compliance certain procedural requirements, including submission of a Letter of Intent through the e-procurement portal. The material placed on - 18 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR record indicates that the respondents have undertaken a review of existing contracts in the light of the said policy directive. Insofar as the petitioners’ contracts are concerned, the respondents have pointed out procedural irregularities, including the manner in which the tender work came to be split between two entities. Though serious contentions are urged on either side touching upon the legality of such arrangement under the Karnataka Transparency in Public Procurements Act, 1999, this Court is of the considered view that an elaborate adjudication on these aspects is rendered academic in view of the conclusion that the contract itself has come to an end.

This Court also cannot lose sight of the fact that even otherwise, the contract being determinable in nature, no writ of mandamus can ordinarily be issued to enforce continuation of such contractual arrangement, particularly when the tenure has already expired. The petitioners, therefore, cannot claim any vested or enforceable right to - 19 - NC: 2026:KHC:23145 WP No. 12143 of 2025 C/W WP No. 12145 of 2025 HC-KAR seek continuation of the contract beyond the agreed period.

Insofar as the contention relating to subsisting interim orders passed by the Commercial Court is concerned, the same does not come to the aid of the petitioners in the present proceedings, inasmuch as the contractual relationship itself has ceased to exist by operation of time and by invocation of the termination clause.