The High Court
Case Details
Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 IN THE HIGH COURT OF ORISSA AT CUTTACK CMP Nos. 1464 and 1071 of 2023 (Applications under Articles 226 and 227 of the Constitution of India) ***** Subash Chandra Mund …… Petitioner -Versus- The Executive Engineer, Nabarangpur and others .…… Opp. Parties Advocates appeared: For Petitioner : Mr. Bibekananda Bhuyan, Advocate, Mr. Prabodh Chandra Nayak, Advocate For Opp. Parties : Mr. Swayambhu Mishra, Additional Standing Counsel CORAM: MR. JUSTICE K.R. MOHAPATRA ------------------------------------------ Date of Judgment: 28.03.2024 ----------------------------------------- JUDGMENT K.R. Mohapatra, J. 1. 2. These matters are taken up through hybrid mode. CMP No.1464 of 2023 has been filed assailing order dated 18th October, 2023 (Annexure-12) passed by learned Additional District Judge, Nabarangpur, in FAO No.08 of 2023, whereby dismissing an appeal learned appellate Court confirmed the order dated 19th August, 2023 (Annexure-8) passed by learned Senior Civil Judge, Nabarangpur in IA Nos.15 and 16 of 2023 (arising out CMP Nos. 1464 and 1071 of 2023 Page 1 of 11
Legal Reasoning
Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 2 // of CS No.58 of 2021) by which applications under Order XXXIX Rules 1 and 2 read with Section 151 CPC were dismissed. 2.1 CMP No.1071 of 2023 has been filed assailing the order dated 5th August, 2023 (Annexure-12) passed by learned Additional District Judge, Nabarangpur, in FAO No.1 of 2023, whereby dismissing the appeal learned appellate Court confirmed the order dated 2nd March, 2023 (Annexure-8) passed by learned Senior Civil Judge, Nabarangpur in IA No.23 of 2022 (arising out of CS No.58 of 2021) by which, an application under Order XXXIX Rules 1 and 2 CPC was dismissed. 3. Since facts as well as points of law involved in both the CMPs are common, those are taken up together for final disposal. For convenience of discussion, CMP No.1464 of 2023 is taken up first. 4. Facts in nutshell for proper adjudication of both the CMPs are thus.— (a) The Petitioner being a Special Class Contractor, was awarded with a contract, namely, “Construction of HL Bridge over river Indravati 18th KM on Kodinga Chirma Nadighat Road in the district of Nabarangpur under Biju Setu Yojana”. Accordingly, Agreement No.1/2017-18 was signed. Due to some reasons, the work could not be completed within the time stipulated in the agreement. Ultimately the contract was rescinded on 31st December, 2020 and the Petitioner was communicated with the same vide letter dated 14th January, CMP Nos. 1464 and 1071 of 2023 Page 2 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 3 // 2021. Being aggrieved, the Petitioner filed CS No.58 of 2021 in the Court of learned Senior Civil Judge, Nabarangpur seeking for the following reliefs. “I. To declare the order dated 31.12.2020 and the communication dated 14.01.2021rescinding the contract work namely “H.L. Bridge over River Indravati 18th KM on Kodinga Chirma Nadighat Road in the district of Nabarangpur under Biju Setu Yojana” to be illegal, arbitrary and in violation of the agreement conditions, To direct the defendants to make payment II. of the suit amount Rs. 1,42,29,000/- (Rupees one crore forty-two lakh twenty-nine thousand) only, i.e., Rs. 30,000/- balance amount of recurring bill + Rs.1,12,29,000/- towards EMD, ISD and APSD etc. with interest at the rate of 18% per annum from the same was due and till the actual date of payment with future and pendente lite interest, III. To pay cost of the suit, IV. To pass any other relief as the Hon’ble Court deems fit and proper in the interest of justice.” (b) During pendency of the suit, Petitioner participated in another tender. The Tender Evaluation Committee declared the bid of the Petitioner non-responsive, as the agreement, as aforesaid, was rescinded. Hence, the Petitioner filed IA No.23 of 2022 with a prayer to pass temporary injunction restraining Opposite Parties from disallowing the Petitioner to participate in the tender process during pendency of the suit. The said application was dismissed vide order dated 2nd March, 2023 (Annexure-8 in CMP No.1071 of 2023). Assailing the same, CMP Nos. 1464 and 1071 of 2023 Page 3 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 4 // the Petitioner preferred FAO No.1 of 2023, which was also dismissed vide order dated 5th August, 2023 (Annexure-12 in the said CMP) passed by learned Additional District Judge, Nabarangpur. (c) During pendency of CMP No.1071 of 2023, the Petitioner filed other two petitions under Order XXXIX Rules 1 and 2 and Section 151 CPC in IA Nos.15 and 16 of 2023 with a prayer to restrain Opposite Parties from taking any coercive action in furtherance of order of rescission dated 31st December, 2020 passed by the Engineer in Chief, Rural Works Department, Bhubaneswar-Opposite Party No.3 in respect of aforesaid agreement during pendency of the suit. The said applications were rejected vide order dated 19th August, 2023 (Annexure-8 to CMP No.1464 of 2023). Assailing the same, the Petitioner preferred FAO No.8 of 2023, it was also dismissed vide order dated 18th October, 2023 (Annexure-12 to CMP No.1464 of 2023). The facts narrated above are not disputed by learned counsel for the parties. 5.
Legal Reasoning
Mr. Bhuyan, learned counsel appearing along with Mr. Nayak, learned counsel for the Petitioner vehemently argued that the rescission of the agreement, as aforesaid, is void and illegal. The Opposite Party No.3 would in the worst case have imposed penalty for non-completion of work within the stipulated time. There is also an extension clause in the agreement, by which the Petitioner was entitled to seek for extension of time for completion of the work. In fact, the Petitioner had sought for extension of time CMP Nos. 1464 and 1071 of 2023 Page 4 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 5 // for completion of the work. Without adhering to the same, the agreement in question was rescinded. Hence, the suit has been filed for the aforesaid relief. 5.1 When the action of the Opposite Party No.3 in rescinding the agreement is illegal and void, the Petitioner should not be a victim of such rescission and be restrained from participating in future tender processes. But most illegally, the Petitioner was debarred from participating in the subsequent tender process. As such, the Petitioner had no other alternative than to file the aforesaid IAs for temporary injunction to direct the Opposite Parties to allow him to participate in the further tender processes. Rescission of the contract in question should not stand as a bar for the Petitioner to participate in future tender process. Neither of the Courts below could appreciate the grievance of the Petitioner in its proper perspective and rejected its petitions. 5.2 It is his submission that the case of the Petitioner squarely falls under Order XXXIX Rule 2 CPC and learned Civil Court has jurisdiction to pass order of temporary injunction to restrain the Defendants from committing the breach of contract or injury complained of, even in the event of pronouncement of judgment in the suit. By disqualifying the Petitioner from participating in the future tender processes is nothing but continuation of the injury to the Petitioner in furtherance of breach of contract rescission of which is impugned in the suit. 5.3 He further submits that in disqualifying the Petitioner from participating in the future tender processes, which is in furtherance CMP Nos. 1464 and 1071 of 2023 Page 5 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 6 // of to the breach of contract, irreparable injury is being caused every time the Petitioner is debarred from participating in subsequent tender processes. Thus, IA Nos.15 and 16 of 2023 were filed seeking for protection from irreparable injury, which is being caused to the Petitioner by denying his participation in the tender processes. 5.4 Learned Courts failed to appreciate that due to force majeure for outbreak of COVID-19 pandemic, the Petitioner could not achieve proportionate required progress in the work. While considering the claim of the Petitioner, both the Courts failed to take into consideration the aforesaid important aspects. He, therefore, prays for setting aside the impugned orders in both the CMPs. 6. Mr. Mishra, learned ASC referring to the prayers made in the plaint contended that no prayer for permanent injunction is made in the suit. He also referred to the prayer made in IA No.23 of 2022 and IA No.16 of 2023. Elaborating his argument, it is contended that in IA No.23 of 2022, following prayer was made. “It is, therefore, humbly prayed that the Hon’ble Court be pleased to allow the I.A. and pass an order restraining the Opp. Parties /Defendants from not allowing the petitioner to participate in the tender process during pendency of the suit and pass such other order(s) as the Hon’ble Court deems just and proper in the interest of justice.” In the said IA, the Petitioner essentially prayed for an injunction in giving effect to the order of rescission of the contract dated 31st December, 2020. The said application being rejected the Petitioner preferred FAO No.1 of 2020 and the appeal was also dismissed. CMP Nos. 1464 and 1071 of 2023 Page 6 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 7 // The subject matter of IA No.23 of 2022 is pending for consideration in CMP No.1071 of 2023. During pendency of the said CMP, the Petitioner again filed two petitions, i.e., IA No.15 and 16 of 2023, i.e., one under Order XXXIX Rules 1 and 2 CPC and another under Section 151 CPC. The prayer made in both IA No.23 of 2022 and IA No.16 of 2023 under Section 151 CPC was for suspending with the order of rescission of contract. In IA No.16 of 2023, the following prayer was made:- “Under the above circumstances the Petitioner prays that your honour would be graciously pleased to pass an order under section 151 of CPC in restraining the Opp. Party from taking any coercive action in furtherance of order of recession dated 31st December, 2020 and its communication letter dated 14th January, 2021 in respect of work namely “HL Bridge over River Indravati 18th KM on Kodinga Chirma Nadighat Road in the district of Nabarangpur under Biju Setu Yojana” till final adjudication of aforesaid IA.” Learned appellate Court dismissed the appeal taking note of the rival contentions of the parties and that no pleading in respect of future tender process was made and that there is no prayer in the suit in respect of disqualification of the Petitioner in the future tender process. In view of the order passed in IA No.23 of 2022, the petitions in IA Nos.15 and 16 of 2023 are hit by principles of res judicata. 6.1 Rule 2 of Order XXXIX CPC has no application to the case of the Petitioner as it does not deal with a contingency stated in either of the petitions filed by the Petitioner. As such, he prayed for dismissal of both the CMPs. CMP Nos. 1464 and 1071 of 2023 Page 7 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 8 // 7. Heard learned counsel for the parties; perused the materials on record. On perusal of the plaint in CS No.58 of 2021, it is crystal clear that no prayer (quoted above) for injunction is made in the suit. Although the Petitioner prayed to declare the decision to rescind the contract in question to be illegal and void, but no pleading or prayer with regard to disqualification of the Petitioner to participate in future tender process is available in the plaint. Order XXXIX Rule 2 CPC reads as under:- “2 . Injunction to restrain repetition or continuance of breach— (1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary from to restrain committing the breach of contract or injury complained, of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right. the defendant injunction (2) The Court may be order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the Court thinks fit.” Mr. Bhuyan, learned counsel for the Petitioner made an endeavour to bring his case under Rule 2 of Order XXXIX CPC. It is his contention that there is a continuance of breach from which the Petitioner should be protected. In course of argument, he strenuously urged that rescission of the contract in question is in breach of the terms and conditions of the said contract. The Opposite Party No.3 was only empowered to impose penalty for non-completion of the work within the stipulated period. He was not authorised to rescind the contract in view of the terms and conditions of the contract for non-completion of the work within the stipulated period. Thus, the Defendant No.3 committed breach of the CMP Nos. 1464 and 1071 of 2023 Page 8 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 9 // contract in rescinding it. The same breach continues when the Petitioner is debarred from participating in future tender processes. Thus, according to him, Rule 2 of Order XXXIX CPC is squarely applicable to the facts and circumstances of the case. Mr. Mishra, learned ASC on the other hand refuted the same. 8. Rule-2 of Order XXXIX CPC deals with a situation when the suit is filed with a prayer to restrain the Defendants from committing a breach of contract or other injury of any kind. In such event, the Plaintiff may at any time during pendency of the suit or even after judgment, apply the Court for a temporary injunction to restrain the Defendants from committing the breach of contract or injury complained of. The instant suit is not for injunction to restrain the Defendants from committing the breach of contract. The disqualification of the Petitioner from participating in future tender process is also not the subject matter of dispute in the suit. 9. If the case of the Petitioner is accepted, it would amount to suspending order of rescission of the contract, which would amount to granting the ultimate relief made in the suit. Until an order of rescission of the contract in question is existing, the necessary consequences will certainly flow from the said action unless it is set aside in due course of law. Thus, entertaining an application to restrain the Opposite Parties from acting upon the order of rescission in question would amount to pre-judging the issue involved in the suit. Upon hearing learned counsel for the parties and on perusal of record placed before this Court, it appears that the Petitioner is intending to get a blanket order to CMP Nos. 1464 and 1071 of 2023 Page 9 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 10 // participate in future tender process which is not the subject matter of the instant suit. 10. As rightly contended by Mr. Mishra, learned ASC, the prayer in IA No.23 of 2022 vis-(cid:224)-vis prayer in IA Nos.15 and 16 of 2023 are one and the same. In all the interim applications, the Petitioner essentially prayed for participating in future tender process during subsistence of the order of rescission of the contract impugned in the suit. Law is well- settled that principle of res judicata applies to different stages of the same suit or proceeding. As such, the relief claimed in IA Nos.15 and 16 of 2023 are hit by the principles of res judicata. 11. Mr. Bhuyan, learned counsel for the Petitioner vehemently argued that if the Petitioner is not allowed to participate in future tender processes, he will suffer irreparable loss. This submission of Mr. Bhuyan, learned counsel cannot be accepted, as it is not the case of the Petitioner that the decision in rescinding the contract in question was without jurisdiction. Legality of the decision taken by the authority, namely, Opposite Party No.3 is under challenge in the suit. Since the authority, i.e., Engineer in Chief -Opposite Party No.3 is competent to take a decision in rescinding a contract the only question that remains to be adjudicated is with regard to legality of the said action. Until the order of rescission of contract is declared illegal or void, it continues to be in force. 12. In view of the discussions made above, this Court finds that learned Courts have committed no error in rejecting the prayer made by the Petitioner in all the aforesaid interim applications, i.e., IA No.23 of 2022 as well as IA Nos.15 and 16 of 2023. Accordingly, both the CMPs CMP Nos. 1464 and 1071 of 2023 Page 10 of 11 Signature Not Verified Digitally Signed Signed by: SASANKA SEKHAR SATAPATHY Designation: A.R.-CUM-SR. SECRETARY Reason: Authentication Location: HIGH COURT OF ORISSA CUTTACK Date: 02-Apr-2024 15:23:35 // 11 // being devoid of any merit stand dismissed. But in the facts and
Decision
circumstances, there shall be no order as to costs. Issue urgent certified copy of the judgment on proper application. ……………………… (K.R. Mohapatra) Judge Orissa High Court, Cuttack, Dated 28th March, 2024/ss CMP Nos. 1464 and 1071 of 2023 Page 11 of 11